The financial crisis triggered the great recession in advanced economies affecting growth, trade and capital flows for the rest of the world. Global trade contracted by 11 per cent in 2009 but made it up by 12 per cent in 2010. Trade is projected to grow by 8 per cent in 2011. But the global outlook is clouded with US economy hitting a soft patch and the euro-zone facing sovereign debt problems of peripheral countries with potential destabilizing consequences for other major economies.

Reverberations from the global crisis still send “shock waves through the world economy”, the Bank President Robert Zoellick noted. Even as the Bank’s strategy in fiscal 2011 was to promote growth recovery, fight poverty, and assist private enterprise, the developing world began to confront new challenges of high and volatile food and fuel prices, “putting vulnerable populations at risk”, Mr Zoellick said.

With food prices climbing to near their 2008 peak, the Bank estimates that some 44 million people have been pushed into poverty since June 2010. Financing on agriculture was stepped up to some 6 to 8 billion a year and a protection mechanism to help address price volatility was created giving consumers and commodity producers better access to hedging instruments. The Bank is also at the forefront in the Global Agricultural and Food Security Programme, set up at the request of G-20.

“The World Bank is honing its focus on areas where we can add most value: targeting the poor and vulnerable; creating opportunities for growth; promoting global collective action; strengthening governance; and managing risk and preparing for crisis. We are doing all this while making the Bank a more transparent, accountable and results-driven institution,” Mr Zoellick said. The Bank says it continues to integrate “our governance and anti-corruption agenda into all of the Bank’s work across countries, sectors and projects”.

The World Bank’s strong capital position before the crisis enabled it to provide massive support to member-countries in urgent need. By 2010, the Bank had already enlarged its capital base by 86.2 billion dollars, as approved by the Board of Governors (Member-Countries) to cope with future requirements of crisis-hit countries. Pre-crisis, the Bank Group's lending was relatively modest, Bank's own annual commitments averaging 13-14 billion dollars while IDA credits has risen from lower levels to10 to 11 billion dollars by 2006-07.

In fiscal 2011, World Bank loans on commercial terms reached 26.7 billion dollars following the record 44.2 billion in fiscal 2010 and 32.9 billion in 2009. Cumulative Bank commitments since the crisis (FY09-11) amounted to 103.8 billion. Of this, more than 40 per cent on average in this period was fast-disbursing development policy loans which included reforms to improve governance and increase transparency, the Bank said in a release.

Commitments from the International Development Association (IDA),which provides low-interest loans and grants to 79 of the world's poorest countries, rose to a record $16.3 billion in FY11 from 14.5 billion the previous year..IDA-15 Replenishment by donor nations was for 41.6 billion dollars for the three-year period ending fiscal 2011. Sub-Saharan Africa accounted for about half of the total IDA15 funding with IDA support focused on empowering and protecting the poor; strengthening institutions and governance; fostering gender equality; and addressing global challenges such as climate change, the Bank said..

IFC, the Bank’s other arm providing multilateral financing for the private sector in developing countries, in various sectors, invested about 18.7 billion dollars in 513 projects in fiscal 2011 - 12.3 billion from its own funds and 6.4 billion mobilized from other investors. The total value of the assisted projects was estimated at around 100 billion dollars. Continuing its innovative approaches, IFC is also taking up projects to increase job opportunity in the Middle East and North Africa, according to the Bank release. IFC and the Islamic Development Bank launched a program designed to mobilise some two billion dollars to promote Education for Employment, a vital project in a region where youth unemployment runs over 25 percent.

India has been a major borrower from the World Bank Group over decades, and the Bank’s country strategy reflecting 11th plan priorities covers projects in infrastructure besides other economic and social programmes. The Bank has also a special focus on economic development of seven low-income states (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, UP, Orissa and Rajasthan). From 2 to 3 billion dollar average in the past, the Bank Group committed a record 9.2 billion dollars in fiscal 2010 (inclusive of two billion dollars as budget support to help recapitalization of public sector banks). In fiscal 2011, the commitments came down to around six billion dollars (based on incomplete data) and the major projects being assisted include the Prime Minister’s Gram Sadak Yojana (1.5 billion dollars), National Ganga River Basin Project (one billion), Eastern Dedicated Freight Corridor (975 million) and Vishnugad Pipalkoti hydro-electric project in Uttarakhand (648 million).

According to its country strategy (2009-12), the Bank is building “strong partnership” with the above listed low-income states to help kick-start development so that they would attract investment and result in raising living standards and improving delivery of public services. While Bank assistance covers most states, it expects many of them to graduate to middle-income status, like Gujarat and Maharashtra in the West, Punjab and Haryana in the North and A P, Tamil Nadu and Karnataka in the South. Of the Bank Group’s cumulative commitments to India, the undisbursed funds stood at 21.4 billion dollars at the end of June 2010. Disbursements get related to progress of projects and programmes spread over infrastructure (mainly power and rural roads and sanitation and drinking water), agriculture and urban development.

At the beginning of the year, the Bank in a report said India's economic growth seemed to be back to the pre-crisis trend (around 9 per cent) but inflation was “worrying”. RBI was expected to continue its policy of cautious rate hikes in an uncertain environment. If core inflation was caused by more general demand pressures, it would be addressed with more aggressive policy tightening. More recently, in its Global Economic Prospects Report 2011, the Bank had warned of continuing inflation this year and said it remained elevated increasing again in March and April (9 and 8.7 percent respectively) due to accelerating non-food inflation and higher energy prices, and a surge in coal prices in April. The Report has projected 8 per cent growth for 2011 and 8.4 per cent in 2012. (IPA Service)