Page 358 - DECO503_INTERNATIONAL_TRADE_AND_FINANCE_ENGLISH

International Trade and Finance

Notes It is important to note that the implementation of projects is managed by the Government itself. The
government designates an office, referred to as the Implementing Agency, which is responsible for
aspects such as procurement and selection of consultants and day to day work, monitoring and
evaluation.
Operational Policies set guidelines to ensure that projects meet the World Bank’s own criteria such as
social and environmental standards. Project evaluations are conducted to capture and share lessons
for future reference.
India : Country Assistance Strategy

This Country Assistance Strategy (CAS) for the period FY05-08 seeks to build a strong partnership
with the Government of India, and, its overarching challenge will be how to maximize, and leverage
Bank resources, to significantly scale up impacts, improve the quality of life of the poorest citizens,
and help India achieve the Millennium Development Goals (MDGs). Three strategic principles will
underpin the Bank’s work : (1) focusing on outcomes; (2) applying selectivity; and, (3) expanding the
Bank’s role as a politically, realistic knowledge provider, and generator. This expansion will primarily
be in (a) infrastructure—transport, power, water supply and sanitation, irrigation, and urban
development; (b) human development—education, health, social protection; and, (c) rural livelihoods,
emphasizing on community-driven approaches. During the period, important shifts are envisioned
in the use of new approaches, i.e., cofinancing, and sector-wide approaches, where the Bank will
seek engagement, and partnerships for this assistance. While the strategy will retain a reform, and
performance-based approach to the states, it will change in the ways intended to engage with the
largest, and poorest states, through policy dialogues on cross-cutting reforms—fiscal management,
governance, service delivery, power sector, and investment climate. The CAS calls for enhanced
focus on major analytical work, and a substantially higher level of International Development
Association (IDA) resources, while the Bank’s lending would fall within a range limited by an upper
bound, which will require strong reform performance, and a strengthened pace of project preparation.
International Development Association

The International Development Association (IDA) is the part of the World Bank that helps the earth’s
poorest countries reduce poverty by providing interest-free loans and grants for programs aimed at
boosting economic growth and improving living conditions. IDA funds help these countries deal
with the complex challenges they face in striving to meet the Millennium Development Goals (MDGs).
They must, for example, respond to the competitive pressures as well as the opportunities of
globalization; arrest the spread of HIV/ AIDS; and prevent conflict or deal with its aftermath.
IDA’s long-term, no-interest loans pay for programs that build the policies, institutions, infrastructure
and human capital needed for equitable and environmentally sustainable development. IDA’s goal
is to reduce inequalities both across and within countries by allowing more people to participate in
the mainstream economy, reducing poverty and promoting more equal access to the opportunities
created by economic growth.
IDA’s Borrowers
IDA lends to those countries that had an income in 2002 of less than $ 865 per person and lack the
financial ability to borrow from IBRD. Some “blend borrower” countries like India and Indonesia are
eligible for IDA loans because of their low per person incomes but are also eligible for IBRD loans
because they are financially creditworthy. Eighty-one countries are currently eligible to borrow from
IDA. Together these countries are home to 2.5 billion people, half of the total population of the developing
world. Most of these people, an estimated 1.5 billion, survive on incomes of $ 2 or less a day.
IDA Lending
IDA credits have maturities of 20, 35 or 40 years with a 10-year grace period before repayments of
principal begins. IDA funds are allocated to the borrowing countries in relation to their income levels
and record of success in managing their economies and their ongoing IDA projects. There is no
interest charge, but credits do carry a small service charge, currently 0.75% on funds paid out.

352 LOVELY PROFESSIONAL UNIVERSITY