BDO Training A2F Module 2005

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BDO Training A2F Module 2005

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Title: BDO Training A2F Module 2005

1
The World Bank Group In the Caucasus
Vincent Rague Senior Manager International
Finance Corporation
Black Sea Trade Development Bank, Annual
Meeting Yerevan, Armenia - June 6, 2005
2
The World Bank Group
IFC is owned by its 176 member countries, which
collectively determine policies.
International Bank for Reconstruction and
Development, 1945
International Finance Corporation, 1956
Multilateral Investment Guarantee Agency, 1988
International Centre for Settlement of Investment
Disputes, 1966
International Development Association, 1960
3
World Bank Group Institutional Roles

IBRD lends to governments of middle-income
developing countries.
IDA provides concessional loans to governments of
the poorest developing countries.
ICSID facilitates the settlement of investment
disputes between governments and foreign
investors.
MIGA provides guarantees to foreign investors
against noncommercial risk.
IFC promotes sustainable private sector
investment in developing countries.

4
COMMON CHARACTERISTICS in COUNTRIES of THE
CAUCASUS

BEYOND TRANSITION?
Systemic transformation to Market Economy
Rapid GDP Growth
IncLusion in various regional initiatives/programs
Aspiration of a common future to integrate into
regional, European and global economy.

5
COMMON CHARACTERISTICS in COUNTRIES of THE
CAUCASUS

LEGACY ISSUES
Shared geography, size, population
Previous non-market systems
Legacy of regional and enthnic conflict
Collapse in output
Weak local Institutions
Low living standards and similar profile of the
poor

6
KEY CHALLENGES TO HIGHER INVESTMENT

Reducing remaining ethnic tensions/resolving
political issues
Completing transition to market, with particular
efforts usually needed in reducing the size of
the public sector, restructuring/privatizing
large enterprises, improving the business
environment, and strengthening governance and
fighting corruption.
Mobilizing more trade, foreign and domestic
investment improving the business climate to
attract more FDI

7
KEY CHALLENGES TO HIGHER INVESTMENT (cont.)

Reducing unemployment/improving labor market
performance
Adjusting high current account deficits in the
face of declining aid flows
Complementing strong country-level reform with
movement on a common path to greater integration
into regional, European and world economies.

8
THE WORLD BANK IN THE CAUCASUS

The WBG has a presence in all countries and its
operations are based on agreed assistance
strategies for each country.
In each country, the WBG also focuses on donor
coordination, aid mobilization, and information
exchange on assistance.
THE WBG PROVIDES A PACKAGE OF SERVICES AND
PRODUCTS
WB provides IBRD loans, IDA credits,
analytical/advisory work, TA
IFC loan and equity investments target private
companies, SME credit lines through banks and TA
MIGA provides investment guarantees
WBI provides training and capacity building

9
WORLD BANKS POLICY AGENDA IN THE CAUCASUS

MACROECONOMIC STABILITY
GROWTH AND COMPETITIVENESS improve investment
climate, private sector development,
infrastructure and education
SOCIAL INCLUSION poverty reduction, MDGs, human
development and post-conflict issues
GOVERNANCE Weak public institutions, quality of
public services
GLOBAL ISSUES the Environment, Natural
Disasters, Money Laundering, Drugs, and Human
Trafficking.

10
FRAMEWORK FOR THE WORLD BANK IN THE CAUCASUS

Formulate individual Country Assistance
Strategies (CAS) to ensure programs have greatest
impact at country and regional levels
Identifies areas where there are cross-border
externalities economies of scale, and
opportunities for scaling up
Support Regional Cooperation through Knowledge
Generation and Sharing Regional Strategies, but
national projects Multi-country Facilities and
grants and Regional Projects, if conditions
permit
FOCUS on Transport and Trade, Water and Energy
Business Environment and Human and Social
Development, especially education

11
IFC Products and Services

To assist private enterprise in developing
countries, IFC
Provides loans and equity for viable projects
Mobilizes capital from other sources
Provides technical assistance and advisory
services

12
IFC Support to SMEs

Three focus areas are
Improving SMEs Access to Finance
Linking SMEs to Larger Companies
Technical Assistance through Project Development
Facilities (PEP, based in Moscow for this region)

13
How Big Is IFCs Investments in SMEs?
IFC Investments Targeting SMEs (FY04)
Banks Micro Finance Institutions Leasing Private
Equity Funds

718 Million (Commitments)
2.1 Billion (Outstanding)

14
IFC Has a Multi-Dimensional Strategy for the
Region

TA is now integrated, with appropriate
segmentation and focus on frontier areas
The PEP focuses on SMEs and business environment
but in line with the IFC medium/longer term
regional strategy
Emphasis is on infrastructure, especially
regional PPPs
Other TA selectively aims to gain IFC an
investment foothold/visibility, while addressing
country needs
Investment activities will continue a strategic
shift
More regional and industry investments
GM/FM Opportunistic moves
Focus on increase of activities in frontier areas

Going Forward
15
Project Development Facilities
PDFs are a key vehicle for IFC support to the
private sector, especially SMEs through targetted
interventions.
16
IFC in the Caucasus Region Armenia
17
IFC in the Caucasus Region Azerbaijan
18
IFC in the Caucasus Region Georgia
19
IFC in the Caucasus Region Ukraine
20
IFC Contact
Vincent Rague Senior Manager SOUTHERN EUROPE
CENTRAL ASIA DEPARTMENT ISTANBUL,
TURKEY Vrague_at_ifc.org Tel. (90-212) -
282-4001 Fax. (90-212) 282 -4002
21
PEP PROJECT PIPELINE