economics project (2)

8/3/2019 Economics Project (2)

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WORLD BANK AND ITS AID TO BOLIVIA

MADE BY:Sugandha Arora 3288 Jaimeen Baxi 3258Rahul Pandit 3274


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WORLD BANKy TheWorld Bank is an international financial

institution that provides loans to developingcountries for capital programmes .

y The World Bank's official goal is the reductionof poverty.

y All of its decisions are guided by a commitment topromote foreign investment, internationaltrade and facilitate capital investment.

y The world bank comprises of two institutions:International Bank for Reconstruction and

Development (IBRD)

International Development Association (IDA)


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y The International Bank for Reconstruction andDevelopment (IBRD) has 187 membercountries,

y the International DevelopmentAssociation (IDA) has 168 members.

y Each member state of IBRD is also a member ofthe International Monetary Fund (IMF)

y Only members of IBRD are allowed to joinother institutions within the Bank.


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y For the poorest developing countries in the world, thebank's assistance plans are based on poverty reductionstrategies.

y World bank does an extensive analysis of the country's

financial and economic situation and develops a strategypertaining uniquely to the country in question

y The government identifies the country's priorities andtargets for the reduction of poverty, and the World Bank

aligns its aid efforts correspondingly.y Forty-five countries pledged US$25.1 billion in "aid for the

world's poorest countries", aid that goes to the WorldBank International Development Association (IDA) whichdistributes the loans to eighty poorer countries.


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BOLIVIAy Bolivia officially known as the Plurinational State ofBolivia is a landlocked country in central SouthAmerica.

y It is the poorest country in South America.y It is bordered byBrazil to the north and

east, ParaguayandArgentina to the south, Chile by thesouth west, and Peru by the west.

y Bolivia is a developing country, with a Medium HumanDevelopment Index score, and a poverty level around60%.


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y The main economic activitiesinclude agriculture, forestry, fishing, mining,and manufacturing goods such as textiles, clothing,

refined metals, and refined petroleum.y Bolivia is verywealthy in minerals, especiallytin.

y The population in Bolivia is approximately around 10million.


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PROBLEMS FACEDy Throughout the history, the people of Bolivia faced

many complex development problems, mostlystemming from the country's deep-seated poverty and

unreliable government.y The poverty and corruption of Bolivia's past continue

to plague the country today.

y The per capita income of Bolivia is around $2,800

whereas that of other Latin American countries isaround an average of $8,200.

y Bolivia stands as the poorest nation on the continent


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y Furthermore, real GDP per capita in Bolivia is lesstoday than it was 27 years ago

y 64% of the country lives below the poverty line.

y Due to these conditions numerous Bolivian citizensare unable to plan for the future, afford adequatehealth care, receive an education etc

y Most families are unqualified to take out much needed

loans that could help them get a step ahead.yAlso Bolivians lack basic job skills, and are therefore

unemployable.


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y For the number of Bolivians living below the povertyline, not having a reliable source of income preventsthem from receiving important health care services,

and also prevents them from access to education.y Deforestation, erosion, and poor land productivity

leading to environmental degradation in Bolivia isadding to the woes of the people whose survival

depends on land.


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BOLIVIA & THE WORLD BANKHealth Sector Reform Program: Phase Iy In 1999, Bolivia faced one of the most bleak health

conditions in Latin America.

y To curb this problem, the Bolivian government askedthe WORLD BANK to help it with a programme tobring better health care to poor families throughoutthe country.

y The World Bank agreed to give them $25 million for aHealth Sector Reform Program which focussed mainlyon reducing high maternal and infant mortality rates.


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y The project made immunization more widelyavailable.

y It also helped the poor gain better access to health care

services.y Coordination between Bolivian officials and donor

agencies improved, resulting in more effectivelytargeted health care delivery.


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Statistics showing Improvement

y Immunization cover jumped from 75% in 1998 to 86%in 2000.

y

Government spending on vaccines rose to $3 million in2000 from a mere $500,000 in 1999.

y The number of children treated for pneumoniaincreased by 65%

y The number of births carried out by trained healthworkers rose to 51% from 36%.


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Health Sector Reform Program: Phase 2y Due to the improvement in the health sector, and the

results of Phase 1 of the programme, the World bankin June 2001 approved $35million for the projects

second phase.y The Second phase focussed on almost complete

removal of infant mortality, around 48 for every 1000babies by 2008 from the earlier figure of 67 for each

1000 babies in 1998.y The programme also aimed at providing health care to

an additional 25% of the population or around 2million more people.


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y One of the methods of doing this was by assigningnew health teams supported by indigenous

community agents to the poorest regions of thecountry.


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IDTR Decentralized infrastructure for RuralTransformation.

y The project aims at providing new electricity service to

an estimated 130,000 people living on the outskirts ofcities and in rural areas of Bolivia.

y The financial backing is provided the InternationalDevelopment Association (IDA).

y

It plans on meeting its aim through grid extension andinstallation of solar home systems in individual homesas well as schools and clinics

y The reason behind the project is to reach out to the

poorest people in the country.


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Challengey Only 30 percent of Bolivia's rural population has access to

electricity, the second-lowest level of access in LatinAmerica.

y More than 1/3rds of the population lives in rural areasy The incidence of poverty in these areas is very high, with 82

% of the population classified as poor and 59% asextremely poor.

y The country has a sparse population (eight people persquare kilometer on average), and low per capita income.

y This results into high infrastructure costs, particularly inrural areas.

y The provision of infrastructure services to rural Bolivia istherefore a national priority, but also a costly one.


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Aidy Responding to this challenge, In 2003 IDA approved a

US$20-million credit for the Decentralized Infrastructurefor Rural Transformation (IDTR) project.

y It has been effective since 2005y The project seeks to expand and improve the delivery of

electricity as a catalyst for the development of rural areas inBolivia.

y It is an integral part of the government program called"Electricity to Live with Dignity".


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Approachy The project developed an integrated approach to

expand access to electricity in Bolivia's difficultgeographical conditions, by

y implementing a new model for providing electricitythrough installation of solar systems in isolated ruralareas and grid densification in peri-urban areas.

y putting into place the necessary regulatory framework

for sustainable rural electrification andy partnering with World Bank-managed trust funds to

provide technical assistance to the government forproject design and implementation


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y replicating the IDTR approach in the GPOBAsupported Decentralized Electricity for UniversalAccess Project, which will also pilot provision of "Pico-PV" solar lanterns to the poorest households.

y The IDTR approach uses innovative medium-termservice contracts to install solar PV systems

y It also provides operation and maintenance support forfour years after installation.

y These medium-term service contracts were awardedthrough a process of international competitive biddingin 2005.


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y The project also supported the adoption of anadequate regulatory framework,

(a) the Rural Electrification Regulations adopted in2005 to supervise and regulate the service contracts

(b) The Office of Technical Monitoring in 2007 formonitoring and evaluation, verifying outputs andother contractual obligations.

y

The Project also mobilized support from the EnergySector Management Assistance Program (ESMAP) tostrengthen design and implementation of theactivities.


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y The Global Partnership on Output Based Aid is nowfinancing a US$5.2 million grant to expand the IDTR

approach to 7,000 households.y It also provides technical assistance to design the

bidding documents for the solar component of theIDTR.


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Resultsy The project is providing new electricity service to an

estimated 130,000 people in rural and peri-urban areasof Bolivia.

y In remote areas of Bolivia, where grid electrification isnot economically viable, the project has developed anew model to provide sustainable access to solarelectricity.

y Since project inception in 2005, more than 9,200 solarhome systems have been installed in the poorest ruralareas of Bolivia

y The project has benefited an estimated 45,000 people


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yAround 87 solar home systems have been installed inschools and clinics, benefiting another 30,000 people.

y

Public lighting has also been provided for 20,000inhabitants in the large city of El Alto.

yApproximately 8,000 additional new electricityconnections benefiting an estimated 35,000 people areunder construction.


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The project also supported the government's program,"Electricity to Live with Dignity,"with two main

results:(i)the adoption of electricity service as a basic human

right under the Bolivian constitution in 2008

(ii) The elaboration of regulations for rural

electrification in 2005.


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BankContribution

y The IDA is providing a loan of US$20 million for the

IDTR Project, out of total costs estimated atUS$32.8million.

y The Global Partnership on Output Based Aid(GPOBA) is providing a grant of US$5.2 million for theinstallation of about 7,000 solar home systems.


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Partnersy The project has built partnerships at several levels:

(a) With municipalities who helped identify beneficiariesand provide co-financing;

(b) with the US and Bolivia branches of the US NationalRural Energy Cooperatives Association, which assisted withtraining and technical assistance for peri-urbandensification.

(c) with the German cooperation agency(GTZ) for the

testing and development of a market of small Pico-PVs andfor assisting in the development of a delivery model for theinstallation of efficient cook stoves

(d) with the Lighting Africa initiative regarding the PicoPV component.


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Moving Forward

y The second phase for the grid extension project, whichis expected to generate 7,000 additional connections,

has been launched and is under evaluation.y The Global Partnership on Output Based Aid

Decentralized Electricity for Universal Access biddingwas launched in July 2010.

y

The Project will prepare a request for additionalfinancing to further expand the provision of electricityto respond to considerable unmet demand.


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THANKING YOU

economics project (2)

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