WASHINGTON, D.C., December 21, 1999 —
In a shift of emphasis that reflects the growing importance of private capital and investment to developing countries, the World Bank Group will restructure to better align and expand its work related to the private sector, Peter Woicke, Executive Vice President of the International Finance Corporation and a Managing Director of the Bank announced today. The announcement followed Board approval of the reforms, which will take effect January 1, 2000.
The reorganization will tighten the link between the World Bank Group's public sector work, and its private sector transactions in the developing world, which are made through IFC. The World Bank helps governments to formulate policy frameworks that encourage a positive environment for business to function as the primary engine of growth. IFC, the private sector arm of the Group, provides advice and makes loans and equity investments in companies in developing countries.
The reorganization includes both a new structure within the Bank Group and a new approach to "what is often described as one of the biggest challenges facing our client countries: How to create a favorable business environment and help finance small and medium enterprises," Mr. Woicke said. A new combined unit will consolidate and share the specialized knowledge needed to help meet this challenge of nurturing smaller businesses. The new unit has a mandate to coordinate Bank Group activities to disseminate the knowledge that will encourage creation of local intermediaries, to help capitalize those local financial institutions, and teach them the business of financing small and medium enterprises. The new unit, in combination with increased IFC investments in local intermediaries that finance small businesses, reflect significantly higher priority for this sector within the Bank Group.
The restructuring also involves the creation of joint World Bank-IFC departments, or product groups, for industries where there is a strong interface between public policy and private sector transactions. Three new industry groups -- telecommunications/informatics, oil/gas/petrochemicals, and mining -- will include both policy and transaction capacity. "The combination of the experience and expertise of the World Bank to help countries create a strong enabling environment for the private sector, and IFC's private sector knowledge and ability to execute successful investments, will make for a much more powerful agent for private sector development in our member countries," said Mr. Woicke. " Our clients recognize that business creates the jobs and the economic opportunities that are indispensable to fulfilling our mission to reduce poverty."
Beyond the new industry groups, the principal advisory services focused on the private sector in both the World Bank and IFC will now be coordinated under single management. The Bank Group's private sector advisory services include support for privatization, infrastructure, corporate restructuring, corporate governance, and advice on policies and regulations to encourage foreign investment.
Mr. Woicke announced the following appointments related to the new structure:
--James Bond, Director of Mining
--Rashad Kaldany, Director of Oil, Gas and Petrochemicals
--Mohsen Khalil, Director of Telecommmunications and Informatics
--Michael Klein, Director, Private Sector Advisory Services
--Ira Lieberman, Small and Medium Enterprise Unit
IFC is the part of the World Bank Group that finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice about the private sector.
