URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

Udenrigsudvalget 2019-20
URU Alm.del Bilag 51
Offentligt

DRAFT

Strategy for Denmark’s

Cooperation with

the World Bank Group

2019 - 2023

Ver. 04.11.19

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

List of abbreviations

BoD

BoG

CODE

COGAM

CPF

FIF

HCI

HCP

IBRD

ICSID

IDA

IFC

MDB

MIGA

NBC

NBO

NDC

SCD

SDG

SORT

WBG

Board of Directors

Board of Governors

Committee on Development Effectiveness

Committee on Governance and Executive Directors' Administrative Matters

Country Partnership Framework

Executive Director

Financial Intermediary Funds

Human Capital Index

Human Capital Project

The International Bank for Reconstruction and Development

International Centre for the Settlement of Investment Disputes

International Development Association

International Finance Corporation

Multilateral Development Banks

Multilateral Investment Guarantee Agency

Nordic-Baltic Constituency

Nordic-Baltic Constituency Office

Nationally Determined Contributions

Systematic Country Diagnose

Sustainable Development Goals

Systematic Operations Risk-Rating Tool

World Bank Group

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

1. Objective

This Strategy for the cooperation between Denmark and the World Bank Group (WBG) forms

the basis for the

Danish contributions

to the organisation, and it is the central platform for

Denmark’s dialogue and partnership with the WBG. It sets up

Danish priorities

for the WBG’s

performance within the overall framework established by the WBG’s

own strategy. In addition, it

outlines key Danish priorities focused on climate, with special emphasis on sustainable energy

(SDG7), and sustainable development in Africa as the primary geographic focus area.

2. The Organisation

2.1 Mandate and Mission

Denmark sees the World Bank Group as main cogwheels in the institutional machinery that sup-

ports developing countries in reaching the Sustainable Development Goals (SDG)

and the cli-

mate targets. This includes helping countries to maximize the impact of the support they receive

from development partners such as Denmark bilaterally and multilaterally. The WBG can fulfil

this role due to its particular characteristics. The WBG:

is the biggest single provider of financing for development;

has unrivalled analytical capacity to produce new knowledge about development;

holds convening power and has privileged access to key decision makers;

combines almost universal country presence with a global outlook;

engages in countries over the very long-term with a direct stake in their development;

works across sectors and addresses the entire range of development issues;

has a holistic view of both the role of government and the private sector;

combines policy development support with system-wide reform and institution building;

mobilises private investment and funding for development;

deals with both the pace and inclusivity of growth, as well as its social, environmental

and climate dimensions;

inspires countries to undertake complex and long-term changes; and

uses systematic diagnostics that feed into country partnership frameworks and enables

the Bank to share lessons for the benefit of other countries.

The overarching mission of the WBG is a

world free of poverty.

The twin goals

set to achieve

this are:



End extreme poverty:

Reduce the percentage of people living on less than USD 1.90 a

day to 3 pct. by 2030

Promote shared prosperity:

Foster income growth of the bottom 40 pct. of the popula-

tion in every country.

The Bank pursues these goals through its support for sustainable growth with job creation, hu-

man capital development, institutional development, as well as addressing risks and resilience in-

cluding from climate change, conflict and pandemics.

The Wo ld

, De a k’s de elop e t a d p.

World Bank Group Strategy, 2013, p.1

This was originally set to USD 1.25 a day but has later been adjusted to USD 1.90 a day.

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

2.2 Organisation and Management

The WBG comprises

five entities:

the International Bank for Reconstruction and Development

(IBRD), which lends to middle-income countries; the International Development Association

(IDA), which lends on concessional conditions and provides grants to low-income countries; the

International Finance Corporation (IFC) that invests in and finances the private sector in low-

and middle- income countries; the Multilateral Investment Guarantee Agency (MIGA), which

provides guarantees on investments; and lastly the International Centre for the Settlement of In-

vestment Disputes (ICSID) dealing with settlements of contract disagreements.

Although these

are separate entities, they are governed by the same boards, guided by a common overall WBG

Strategy, operate under joint Country Partnership Frameworks and share the same administrative

and manpower resources to a significant extent. The WBG also mobilises resources through

Trust Funds,

financing about a third of its available resources. Over time, the IBRD and IFC

have provided financing for development that equals over 50

times shareholders’ paid-in

capital

The member countries, or shareholders, are represented by a

Board of Governors

(BoG). The

Minister for Development

is Denmark’s governor.

The governors delegate to 25 Executive Di-

rectors (ED’s), who work

as a resident

Board of Directors

(BoD). Denmark is part of the 8-

country

Nordic-Baltic Constituency

(NBC). The BoD meets

‘in continuous session’ to over-

see the WBG's business, including strategy development, country assistance strategies, approval

of loans, grants and guarantees, the administrative budget and other financial and policy deci-

sions. The Board also has five standing committees that meet regularly

. The BoD selects the

WBG President for a five-year, renewable term. The President chairs meetings of the BoD and is

responsible for overall management of the WBG.

IBRD/IDA are organised into units responsible for regions, sectors, and general management.

Their participation in so-called Global Practices and Cross-Cutting Solutions Areas facilitates at-

tention to transversal concerns and knowledge sharing throughout the organization. The regional

Vice Presidents have oversight over

Country Teams,

which are the chief contact points for bor-

rowing countries. Country teams draw on the operational and technical expertise of the Global

Practices to cater to client needs. These are outlined in 5-year

Country Partnership Frame-

works

(CPF’s), developed on the back of

Systematic Country Diagnostics

(SCD’s) designed

to identify constraints to and opportunities for the achievement of countries development priori-

ties, building on the SDGs and the Nationally Determined Contributions (NDC).

3. Key Strategic Challenges and Opportunities

3.1 WBG’s Strength, Relevance and Comparative Advantage

The WBG leverages both knowledge

and

finance - and it does it

at scale.

Other development in-

stitutions have deep knowledge on specific areas too; however, the World Bank has the mandate

and the ability

to impact practically the whole development agenda

within one single frame-

work. The overall conclusion of the 2016

MOPAN assessment

on the WPG’s performance

was that: “…

the World Bank is a mature and high-performing

organisation, which meets the requirements of

an effective multilateral organisation that is both fit for purpose and can anticipate and adjust to a changing world.

It is the primary source of funding for developing countries and provides strong intellectual leadership on a broad

See annex 2 for organigrams of the individual WBG-institutions

Report to Governors, Sustainable Financing for Sustainable Development, April 2018, p.7

Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden.

Committee on Development Effectiveness (CODE), Committee on Governance and Executive Directors' Ad-

ministrative Matters (COGAM), Audit Comm., Budget Comm. and Human Recourses Comm.

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

range of issues of global importance.”

These factors all contribute to the

strong and growing de-

mand

for the institutions services and are reasons why the member countries in 2017 agreed a

record 18

replenishment of IDA with 75 billion US$ - a 43 percent increase over IDA17 ob-

tained by allowing IDA to raise funds on the capital markets. They also motivated the agree-

ments in 2018 on an increase of 13 billion US $ paid in capital in IBRD and IFC, the largest in

the history of the organizations. These agreements were accompanied by stronger commitments

for WBG’s work on climate, in fragile contexts and on gender equality –

accomplished in no

small part

thanks to the work of Denmark and its constituency.

These capital injections will

allow the Bank to make available to developing countries an annual average of 100 billion US $

over the coming decade, reaching 130 billion US $ annually by 2030.

Over the years, shareholders have added to the broad mandate of the WBG with a long list of

additional development concerns, often backed with earmarked funding. The WBG has made an

effort to integrate the new tasks in its policies and operations. However, the continuous stream

of new expectations on the WBG must be managed to avoid mandate overload and undermining

of the institutions governance and administrative model. This calls for heightened shareholder

sensitivity to

the WBG’s

core mandate to avoid that the institution is sidetracked, away from its

demonstrated comparative advantages of fostering broad-based and sustainable economic devel-

opment. Management has undertaken reforms in order to consolidate the many smaller trust

funds in fewer umbrella facilities and bring them under tighter BoG scrutiny. Management has

also addressed the risks

of “mission-creep”

by setting out a long-term

vision for the WBG’s con-

tribution to the 2030 Agenda. This vision, known as the

Forward Look

, describes the critical

role that the WBG can play in fostering inclusive economic growth and a climate friendly future.

3.2. Adapting the WBG: Changing Framework Conditions, New Actors, and Better Col-

laboration with Partners

Like its sister organisation the International Monetary Fund (IMF), the WBG is the target of an

intense struggle for influence

amongst its member countries. The weight of developing coun-

tries in the world economy has grown considerably and now stands at around 40 percent in mar-

ket prices (in Purchasing Power Parity terms they surpassed advanced economies in 2008). The

gap to advanced countries is narrowing and, unsurprisingly, these countries demand stronger

voices in the two institutions. This was accommodated to some extent in the last quota and

shareholding reforms, though neither of the Bretton Woods Organisations yet fully mirrors the

new economic realities in the world in this respect. Currently, the BRICS-countries continue to

emphasise the importance of the WBG for their own development as a financier and knowledge

provider. This motivated their strong demand for the recent capital increases of the IBRD and

the IFC. Management is well aware of the need to balance the varied views and interests of the

broad membership in the day-to-day work of the institutions. Denmark has a strong interest in

maintaining the WBG as a representative and rules-based global institution for problem solving,

as the preferred alternative to smaller clubs of countries, such as the G7 and the G20 where

Denmark has no seat at the table. Consequently, Denmark and the other countries in its constit-

uency are supportive of a

stronger voice for emerging and developing economies,

which it

sees also as the most effective deterrent to moves to create alternative bodies

The Forward Look

positions WBG firmly within the overall SDG framework.

The way the

WBG has oriented its strategic outlook and organised its day-to-day work around the SDG's has

further strengthened the relationship between the WBG and the other parts of the international

development architecture, but calls for even better collaboration with key partners such as (a) the

The World Bank Institutional Assessment Report, MOPAN, p. VI

http://www.mopanonline.org/assess-

ments/worldbank2015-16/

Forward Look

–

A Vision for the World Bank Group in 2030, 2016 (October)

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

UN-family, (b) the African Development Bank and MDBs in general (c) civil society organisa-

tions and (d) the private sector as outlined below. Denmark will continuously underline the need

for strengthened collaboration, and - where possible - aim to bring relevant parties together.

(a & b)

Relations between the WBG and the members of the UN-Family have improved

considerably

particularly in fragile contexts and human development where Denmark has

been in front facilitating stronger links around the so-called Hum-Dev-Peace Nexus. The WBG

is fully aligned with

the Paris, Accra, and Busan agenda

. In the face of a weaker buy-in from

some development partners, calls have been made for MDBs to strengthen these in-country plat-

forms.

Fortunately, the WBG has a good working relationship with the other

multilateral de-

velopment banks,

including the AIIB and the New Development Bank ("the BRICS bank"),

but as the WBG is often right at the centre of in-country coordination, one should expect that

the WBG improves policy coordination amongst the

MDB’s

President convenes a town hall meeting once a year. At the country level, there are consultations

on the WBG SCD and CPFs, on the WBG environmental and social safeguards and their appli-

cation to specific projects and programs, where CSOs also often participate in Third Party Moni-

toring. Humanitarian CSOs are invited to regular consultations with the WBG in Washington

and have been contributing considerably to the formulation of the upcoming Strategy for Fragile

and Conflict Affected Countries. In demanding situations, CSOs are used as implementing or

Third Party Monitoring agents. Nevertheless, in light of the

Bank’s strengthened mandate to fo-

cus on countries affected by fragility, conflict and violence, and based on feedback from CSOs,

the WBG will need to further improve its efforts to proactively include input from civil society

and CSOs working in-country. Denmark leads by example by inviting relevant organisations to

the Ministry of Foreign Affairs ahead of annual and spring meetings to discuss the multilateral

agenda of these meetings.

(d) Over the last decade, the WBG has increasingly engaged with

new actors

on the global de-

velopment scene.

The WBG’s

strong tradition for reaching out to and collaborating with the

business sector has been taken to a new level as much more attention has been paid to

leverag-

ing private capital

for development by the international development community.

Maximiz-

ing Finance for Development

(MfD) is the denominator of the WBG’s

approach to systemati-

cally use all levers of finance for development. It is a relatively simple methodology applied to

determine whether (1) a given constraint to private sector development can be tackled by private

investors and financiers on their own, (2) requires participation with risk capital or concessional

finance by the WBG or (3) necessitates policy change and institutional or regulatory reform.

With this in mind, and based on feedback from Danish businesses, the WBG should increase ef-

forts in order to help countries (1) improve procurement processes to give more weight to qual-

ity compared to price and (2) refine the payment system to prevent payment delays. Denmark

works to facilitate on-going dialogue between Danish businesses and the Nordic-Baltic executive

director.

The WBG has created a position as Senior Vice President for the 2030 Development Agenda, United Nations

Relations, and Partnerships.

O e of the a eas the MOPAN

e ie looked i to as the WBG’s a ilit to e gage i i lusi e pa t e -

ships to support relevance, to leverage effective solutions and to maximize results in line with the Busan Part-

nerships commitments. The Bank received the highest marks.

Report on the G20 Eminent persons Group on Global Financial Governance, October 2018.

WBG P eside t Malpass’ spee h to the De elop e t Co

ittee, Ap il

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

3.3. The

WBG’s Ongoing

Reform Process Focuses on Relevance and Efficiency

The WBG has been in a continuous reform-mode since 2012 to stay relevant to its clients, in-

cluding through delivering better services and piloting new approaches, and to remain an attrac-

tive workplace for its staff. The

Forward Look

focuses on four pillars: 1) serving all clients; 2)

creating markets, maximizing finance for development, and expanding the use of private sector

solutions; 3) leading on global issues; and 4) improving the WBG business model

. The Forward

Look goes together with the

Agile Bank Initiative

encouraging a shift in mind-set towards

more flexible and adaptive approaches to problem solving and delegation of authority to the

front lines. The WBG is also harnessing its assets more efficiently

including better staff man-

agement, managing the budget for greater efficiency, and streamlining administrative services.

4. Priority Areas and Results to be Achieved

4.1 Denmark’s influence and WBG relevance in relation to Danish priorities

The overall Danish development and humanitarian strategy highlights that it is the broad man-

date of the WBG and the other MDB’s together, with their financial strength, their long track

record and capacity to leverage private and public resources that make them

vital partners for

Denmark

. The strong emphasis on the SDG-agenda means that the activities of the WBG

should be seen as a

multiplier

of the investments that Denmark makes in the organisation. With

its convening power and platform role in Denmark’s priority

countries, it also leverages the im-

pact of Denmark’s bilateral effort.

The latest MOPAN institutional survey pointed out that the

WBG’s comparative advantage lies in its capacity to provide

a tailored package of financing and

knowledge to its clients. Its internal structures, processes and procedures support the efficient

and effective delivery of these services in line with its mandate. Other surveys reach similar con-

clusions

. Still, the WBG could become more agile and flexible in adapting to the ever-changing

conditions in-country, which would also enable better collaboration with partners.

Although

Denmark’s influence

in the WBG can be formally defined by its voting power

, in re-

ality

Denmark has more influence in the WBG than the modest holding of shares would

suggest.

Denmark’s influence derives from three factors: the consistency of positions over time;

the large contributions to development in relation to GDP and; the selection of compelling pol-

icy themes that other donors also want to support. Because of the similarity of approaches, Den-

mark’s influence has been magnified through coordination,

particularly with the Nordic coun-

tries in its constituency in the Bank.

The Nordic–Baltic Constituency

has frequently been rec-

ognised for having

influenced the direction of the institution

to a degree that goes beyond

the constituency’s

actual share of votes. In the past, the Nordic countries were front-runners in

promoting

socially responsive lending.

In later years Denmark and other constituency coun-

tries have led the effort to make the WBG prioritise important areas such as

climate change,

the environment, renewable energy, gender equality, governance, fragile and conflict sit-

uations, disaster risk management, illicit financial flows

as well as

disruptive technolo-

gies.

These areas are today part of the mainstream work of the WBG, and Denmark aims to

push the Bank in the direction of even higher ambitions, not least with regard to climate. Much

of Denmark’s influence

goes through its constituency, which annually sets out its goals for the

The Forward Look

–

Implementation Update, April 2019

The WBG undertook a USD 400 million/3 year cost cutting reform in 2015-17.

The World 2030, p. 15

WBG was one of only five organisations

to deli e

exceptional results

i the DfID’s

Raising the standard:

the Multilateral Development Review 2016

De a k’s oti g po e is . i IBRD, . i IDA, . i IFC a d . i MIGA

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

coming year in a paper entitled

“Main thematic and operative priorities”.

This serves as a frame-

work for the constituency’s day-to-day

coordination of positions relating to the policies, strate-

gies, programmes and knowledge products that come to the Board for discussion and decision-

making, in which Denmark participates actively. In addition, Denmark also contributes to a

number of Trust Funds in the Bank, several of which have been catalytic for the integration of

new aspects in its work. Last, but not least, the numerous Danes employed or seconded in the

WBG are a valuable source of knowledge and learning.

4.2 WBG and

Denmark’s Strategic

Policy Priorities

The overall Danish priorities are (1) climate with a special emphasis on SDG7 sustainable energy

as well as (2) sustainable development in Africa. In addition, the Danish development and hu-

manitarian strategy “The World 2030” defines

strategic points

that govern Danish policy priori-

ties

and which therefore further guides Danish priorities within the broader WBG work. These

are: Security and development

–

peace, stability and protection; Migration and development; In-

clusive, sustainable growth and development, and; Freedom and development

–

democracy, hu-

man rights and gender equality.

The WBG contributes to the realization of all the 17 SDGs. In view of the WBG’s comparative

advantages in the multilateral development architecture

Denmark considers the following

seven

SGD’s

particularly pertinent

for the WBG during the coming strategy period:

SDG 1

No poverty;

SDG 5

Gender equality;

SDG 7

Sustainable energy;

SDG 8

Decent jobs and eco-

nomic growth;

SDG 10

Reduced inequalities;

SDG 13

Climate Action;

SDG 17

Partnership for

action.

Four Danish priority areas for the strategy period:

In line with the above, climate and sustainable development in Africa are the main overall Dan-

ish priorities throughout the strategy period. With Africa as the main

geographic

focus area, it is

relevant to

give special attention to ‘fragility and the Human-Development-Peace

Nexus (includ-

ing migration)’

as well as ‘inclusive

growth and job creation’. Finally, Denmark will remain com-

mitted to prioritise gender equality.

1. Climate change:

Denmark sees the WBG as a leading force in bringing climate change, miti-

gation and adaptation to scale in developing countries, and it will work with like-minded coun-

tries to ensure that the ambition is continuously raised both on the quantitative targets, on the

institutions engagement in the broader reforms and on leveraging private capital and finance.

With its privileged access to finance and other key ministers, the WBG also has a key role in as-

sisting countries in the costing and integration of their NDCs in the plans for public and private

investments as well as in their state budgets. Denmark will work for more ambitious quantitative

targets in IDA19 (28 percent proposed by IDA) and IFC (32 percent agreed annually to 2030).

However, Saudi Arabia, US and some borrowing countries may pull in the opposite direction.

More broadly, Denmark is committed to showing leadership in raising the global ambitions on

SDG7 (sustainable energy), and sees the WBG as a key actor in this regard.

2. Fragility and the Humanitarian-Development-Peace Nexus as well as migration:

Den-

mark has been and will remain a key partner for the WBG in its efforts to strengthen its role in

the humanitarian-development-peace-nexus, which is especially relevant for Africa. The upcom-

ing UNHCR-WBG

Joint Data Centre on Forced Displacement

to be placed in Denmark is

The Wo ld

, p.

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

one result of this partnership. Denmark will also encourage the WBG to further intensify its as-

sistance for development in communities hosting large numbers of refugees in developing coun-

tries.

3. Inclusive growth and job creation:

Denmark supports the WBG in its strong efforts to as-

sist poor countries, particularly in the Africa region, to enable them to reap the development div-

idend associated with the rapid rise in the proportion of people of working age in relation to de-

pendants. The WBG also has a critical role in assisting middle-income countries

–

some with

large groups of absolute poor, others with growing inequality or stalled economic transition.

4. Gender equality:

The WBG is now fully equipped with the analytical tools and instruments

needed for the group to address gender equality in all relevant operations. In the coming strategy

period Denmark will work to ensure that this capability is put to full use to close the gender gaps

through the policy dialogue and policy based lending and in its projects. Full attention must be

paid to deal with hard constraints

such as women’s ownership of assets and access to SRHR.

oooOooo

With strong support not least from the Nordic Baltic Constituency, the WBG engaged early on

in the climate agenda.

The IBRD surpassed a 28 percent target for climate co-benefits ahead

of time and has set a new annual target of 35 percent target for itself for the period 2020-2025,

doubling its climate investments to USD 200 billion. These percentages, however, are only part

of the story as they relate mainly to WBG investment lending. With its near universal presence in

developing countries, ability to support wholesale economic transformation and capacity to help

crowding

in private capital and finance, the WPG’s

potential impact is much bigger.

Although the WBG’s

articles of agreement prohibit its involvement in countries’ domestic politi-

cal affairs

, the boundaries of actual practice have been pushed over the last couple of decades.

Good governance and political economy issues are playing a much stronger role than previously.

After years of urging from Denmark and like-minded countries,

human rights

are now also part

of the WBG’s strategic outlook –

not with the Bank as a leading advocate of human rights at the

political level, but as a guarantor that relevant parts of the normative HR framework are inte-

grated in the guidelines applying to its programs and projects

Gender equality

has steadily

moved up the WBG-agenda, framed as both the normatively right thing to do, as well as being

smart business and good economic development

. The WBG gender strategy focuses on human

endowment, including sexual and reproductive health and rights; more and better jobs; owner-

ship and control of assets and; voice and agency. The Country engagements are the most con-

crete vehicles for promoting the

WBG’s

gender objectives and all

SCD’s and CPF’s are required

to address how to move forward in the four areas.

Born out of the destruction of World War II, the WBG is generally very aware of the role that

development plays in promoting

peace and stability

as global public goods. The WBG has con-

siderably stepped up its work in

fragile situations

where activities to stimulate growth and job

opportunities are often key to the success of the international efforts to stabilise the economic

IBRD Articles of Agreement, Article IV, Section 10. Last amended June 27, 2012

The full sentence in WBG-strategy

eads: It [the WBG] e

a es a tio to e o e a ie s agai st those

who are often excluded, such as women, youth, and minorities; to protect fundamental human rights and dig-

nity; and to ensure that the voice of all citizens can be

hea d . The Wo ld Ba k G oup St ateg ,

, p.

WBG Gender Strategy (FY16-23) : Gender Equality, Poverty Reduction and Inclusive Growth, p.7

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

and political conditions and help countries steer away from conflict. Denmark has been instru-

mental in encouraging the WBG to support efforts to ensure better integration of the develop-

ment and humanitarian dimensions in conflict affected countries and fragile states, including

through much closer collaboration between the WBG and the UN humanitarian organisations.

An important platform has been provided with the creation of the

Global Concessional Fi-

nancing Facility

providing long-term support for middle-income countries hosting large num-

bers of refugees

. Another initiative with strong Danish involvement is the

Humanitarian-De-

velopment-Peace Initiative

- a joint effort by the UN and the WBG to deliver comprehensive

and integrated responses to countries at risk, in protracted crisis and post-crisis situations.

In recent years,

migration and the plight of refugees

have come to the fore in WBG thinking

and operations. Mindful that its mandate is not humanitarian, the WBG has been looking for

ways to play a more active role as regards internally and externally displaced persons. Two areas

stand out: 1) Support for alleviating the economic strains put on hosting societies; and 2) Creat-

ing economic opportunities for migrants, refugees and displaced persons. In view of the priority

given to the topic by many shareholders, the Bank needs to intensify its work in these areas

where Africa is the main priority for Denmark.

The true strength and comparative advantage of the WBG, however, lies within the third of the

four areas identified by the overall Danish development and humanitarian strategy:

Inclusive,

sustainable growth and development.

On a global scale, the WBG views the differences in

countries’ level of development and demographic realities as comparative advantages that to a

large extent can be exploited through trade and Foreign Direct Investment to maximize SDG

outcomes globally. The fast rate of population growth now happening in

Africa

is the conti-

nent’s

window of opportunity for making a quantum leap in development. Helping countries

move along this trajectory is the key rationale for the WBG, and it is equipped with powerful

tools to influence policy, support reforms of the business environment, invest in human devel-

opment, institutions and infrastructure as well as to attract and leverage private investment and

finance for development

. In October 2018, the WBG launched its

Human Capital Project

(HCP) and Index (HCI). The HCP emphasizes the need to invest in health and quality education

and the HCI ranks countries according to their performance. In relation to human and animal

health Denmark is engaging with the World Bank to tackle anti-microbial resistance (AMR).

In line with the Danish strategy for

economic diplomacy,

which calls for international partner-

ships that can promote sustainable investment and open doors for Danish businesses

, the MFA

will work to ensure that Danish companies’

expertise

is utilised by the WBG in its quest for solu-

tions to development challenges. In the annual overview of contracts awarded with WBG financ-

ing, Danish companies generally perform very well compared to other countries in our constitu-

ency. The bulk of WBG financed projects are executed through borrowing countries own finan-

cial and procurement systems. Danish companies have complained about delays in payment

when governments are cash strapped, and a solution is being sought to this problem.

4.3 Monitoring

MOPAN is a joint entity financed by donor countries to undertake periodic, comprehensive as-

sessments of the efficiency of multilateral institutions. Its last assessment of the WBG covered

2015-2016 and it is expected that the next assessment will take place during the strategy period.

Middle income countries currently host around six million refugees worldwide but struggle to find affordable

and sustainable means of coping with the additional costs associated with an influx of refugees

G o th fo the Botto

Pe e t, The Wo ld Ba k G oup’s Suppo t fo Sha ed P ospe it , A i depe de t

Evaluation, IEG, March 2018

Government Strategy for Economic Diplomacy, MFA Denmark, March 2018, p. 13

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

Recently, steps have been taken to strengthen the monitoring of key multilateral institutions in

Denmark’s priority countries.

At the same time, the WBG extensive reporting on the results of

its work and of its evaluation department will be kept under continuous review. The Corporate

Scorecard - discussed in the BoD once a year - combines indicators and targets across the WBG

with a focus on both development effectiveness and organisational efficiency. For the purpose of

the current strategy period 2019-2023, four indicators chosen from the

Corporate Scorecard

(see annex 3) will be highlighted.

Target 1:

“Ending

extreme poverty” requires a collective effort by all countries. Nevertheless the

target is included

taking into consideration the WBG’s broad mandate and range of activities in

virtually all aspects of development. Target 2:

“Promote

shared prosperity” is defined as income

growth for the 40 percent poorest in each country. The target is beyond the control of the WBG,

but particularly for middle-income countries, it is

an indication of the WBG’s ability to

encour-

age decision-makers to stem the tide of inequality. Target 3: Greenhouse gas emissions reduction

is more directly attributable to the WBG. Target 4:

“WBG

effectiveness and impact on develop-

ment results” is directly

attributable to the institution’s

organizational efficiency and effectiveness

in meeting the needs, measured annually via the WBG Country Opinion Survey Program

Target 1.

Population living on less than

USD 1.90 a day (%)

Baseline

(2011)

13.5

Actual

(2013)

10.7

Target

(2020)

Target

(2030)

Target 2.

Median of growth rates of average real per capita in-

come of the bottom 40 pct. (%)

Target 3.

GHG emission reductions in tonnes of CO2eq/year

Baseline

(2011)

3.6

Actual

(2013)

3.1

Target

Awaits

WBG

Target

Awaits

WBG

Target

(FY23)

Awaits

WBG

Bench-

mark

(FY15-17)

15,558,331

Actual

(2018)

59,711,652

Target 4.

Client feedback/satisfaction on WBG effective-

ness and impact results (scale: 1-10)

Baseline

(FY13)

6.9

Actual

(FY17)

7.1

Results are made public on the WBG webpage: http://scorecard.worldbankgroup.org/

The WBG Country Opinion Survey Program includes government institutions and agencies, development

partners, private sector, civil society, nongovernmental organizations (NGOs), academia, and media. Stake-

holde s a s e the follo i g uestio s: a O e all, please ate ou i p essio of the Wo ld Ba k G oup’s

effe ti e ess i ou ou t . a d

To hat e te t does the Wo ld Ba k G oup’s o k help to a hie e de-

elop e t esults i ou ou t ? Usi g a

-poi

t s ale ith ei g ot effe ti e at all o to o deg ee

at all , a d

ei g e effe ti e o to a e sig ifi a t deg ee .

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

WBG’s organisational effectiveness

is also judged based on its approach to fighting

corruption

The WBG combines a proactive policy of anticipating and avoiding risks in its own projects with

a commitment to help clients and stakeholders identify and combat corruption, including

through support to reform of public financial management, procurement and external scrutiny of

public action. The World Bank has a

zero-tolerance

policy towards corruption in its projects.

Entities and companies involved in misconduct are debarred from engaging in any new Bank-

Group-financed activity

. Denmark will work with the WBG to ensure the mainstreaming of

anti-corruption into all parts of operations.

5. Budget

The following expected contributions to the core budgets of IBRD, IDA and IFC are based on

the Danish government’s priorities for development cooperation 2019-2022

where account

number 06.37.01 covers the WBG:

World Bank Group

DKK million

2019

763

2020

1056

2021

1005

2022

1021

The bulk of the foreseen financing will be made up of the scheduled Danish contributions to the

capital increases

in IBRD and IFC as well as

IDA replenishments.

Denmark is expected to

contribute USD 53.2 million in paid-in capital and USD 340.7 million in callable capital to the

capital increase in IBRD and USD 62.7 million in paid in capital to the capital increase in IFC.

Payments are expected to start in 2019 and continue to 2023. This strategy period will cover the

negotiations of both the 19

(December 2019) and 20

(December 2022) replenishment. Den-

mark’s

contribution to the 19

Replenishment of IDA is expected to be around 2.5 billion kr.

In addition to the contributions to the core budgets, Denmark provides considerable funding for

the WBG’s

thematic and crosscutting work through

trust funds.

Presently Denmark supports

68 trust funds

that either are run directly by the WBG or where the Bank is the caretaker of Fi-

nancial Intermediary Funds (FIF) (see annex 1). Mindful of the potentially corrosive effects of

earmarking and of the proliferation of new concerns pushed on to the WBG agenda by share-

holders through trust funds, Denmark will exercise restraint in this respect. Trust fund engage-

ment will be brought in line with standing guiding principles

and priority given to multi-donor

engagements

6. Risks and Assumptions

At the institutional level MOPAN 2016 described

the WBG as “a

highly risk-conscious insti-

tution”

and gave the Bank the highest grades of “evidence confidence”.

The external review of

the capital adequacy framework of IBRD indicated that the

WBG’s risk assessment and man-

agement is sound

and well fitted to protect the institution’s AAA-rating. To strike the right bal-

The approach is described here: http://www.worldbank.org/en/topic/governance/brief/anti-corruption

In the past 7 years, the World Bank Group has debarred 368 firms and individuals.

The Go e

e t’s P io ities fo Da ish De elop e t Coope atio

, Expenditure framework for Danish

development cooperation, 2019-2022

These includes 47 IBRD/IDA and 9 IFC trust funds as well as 11 Financial Intermediary Funds (FIF), where the

WBG is the caretaker of the trust funds.

Guiding Principles for Better Management and Quality of Earmarked Funding, MFA 2015

Guidelines for Management of Danish Multilateral Development Cooperation, MFA 2018, p. 16-17

URU, Alm.del - 2019-20 - Bilag 51: Ny strategi for Danmarks samarbejde med Verdensbanken for perioden 2019-2023

ance at the operational level between development impact and risks all WBG country engage-

ments are required to incorporate calculated risk assessments and include mitigation strategies

using the

Systematic Operations Risk-Rating Tool

(SORT). The tool is structured around a

matrix of nine risk categories, which includes development impact, environmental and social

safeguards, integrity and financial management, as well as credit, market and counterparty risks

amongst others. SORT also includes an accountability and decision making framework, which

applies to risk assessment and management throughout the project cycle to clarify responsibility

and ownership for different levels of risk. Since the organisational reform initiatives are still un-

der implementation, there is naturally some degree of uncertainty whether the new approaches

will yield all the benefits they promise

The tensions arising from the more direct competition between the US and China in the WBG

will require attention to mitigation from other shareholders. In the anticipation of a growing in-

fluence from new powers in the WBG, Denmark will work to uphold the Groups value proposi-

tion and safeguards.

oooOooo

"It remains too early to judge the

full effe t of efo s. MOPAN p.3.

The IEG has found that the prolonged

change process is yet to produce the desired institutional clarity, streamlined processes and enabling environ-

ment that motivates staff to strive for excellence