Statement by Jiayi Zou at the executive directors' meeting of September 6, 2005

CONFIDENTIAL EDS2005-1105 September 2, 2005 03:09:11 PM Statement by Jiayi Zou, Executive Director for China Date of Meeting: September 6, 2005 Strengthening the Development Partnership for Achieving the MDGs: We welcome the Africa Action Plan (AAP), which comes at a conjuncture where African countries are reaching a turning point and international community is responding positively to it. We support the AAP’s general thrust and particularly appreciate the country-led and country-specific approaches, as well as the analytical and operational focus on the drivers of shared growth. We believe the AAP will serve as an important input to the upcoming Development Committee meeting. Africa continues to present the world with its most formidable development challenges. The number of poor people in Africa has doubled from 150 million to 300 million during the last two decades. It is the only region that remains behind on most of the MDGs. But there are some positive changes taking place in Africa, such as better leadership, better economic and social performance, and improvements in policies and institutions, which are spelled out in the AAP document. It is therefore very critical to capture this momentum and strengthen Africa’s efforts to accelerate progress towards the MDGs. In view of the daunting challenges facing the region and the huge financing gap confronted by African countries, we emphasize the utmost importance of availability of additional resources. We welcome G8’s commitments to double aid to Africa, from around $25 billion in 2004 to $50 billion in 2010, and to further augment debt relief to completion-point. The AAP outlines the Bank’s role in monitoring and reporting of aid commitment, which lacks details and enforcement. We think the Bank should engage in a more strengthened way to set up an effective monitoring mechanism and to ensure the actual delivery of aid commitments. We strongly support the emphasis on supporting the drivers of growth in the AAP. Identifying the drivers of growth is a crucial element to achieve faster growth for countries who are struggling with binding constraints. We encourage the Bank to develop concrete recommendations for policy reforms and public actions to accelerate growth based on country-specific growth diagnostics. We are also supportive of the Bank’s efforts on helping expanding exports, closing the infrastructure gap, scaling up regional integration, making agriculture more productive, and developing private sector. In the same vein, we would like to highlight the fact that Africa lags all other regions in infrastructure access and services. To achieve the 7% growth rate needed for achieving the MDGs, Africa’s infrastructure investment needs will amount to around $20 billion per year. Therefore, the financing scale for  2 infrastructure contained in the AAP seems still less than adequate. For the AAP to succeed, a larger proportion of the additional resources should be allocated for infrastructure and other development areas. We generally agree with the grouping of Africa countries into four categories and the different program schedules of the different categories. We also support scaling up activities in high-performing countries, turnaround situations, and regional cooperation, where “neighborhood” effect is high. Under any circumstance, country-owned and -led poverty reduction strategy (PRSP) should be an underpinning in the Bank activities. The Bank’s country assistance strategy (CAS) should always be in alignment with the country’s own development priorities. Country-ownership is the foundation of aid effectiveness, which is the central objective of the AAP. Lastly, we note and commend the Bank on the effort in exploring new line of business and new financing mechanism to meet client demand. We believe there is need to develop innovative instruments for dealing with regional projects and other special opportunities. We encourage the Bank to do more study work on the “catalytic fund”. In conclusion, we would like to stress that the successful implementation of the Africa Action Plan could make a substantial difference to the achievement of the MDGs. We call on development community to scale up aid and work together with African countries towards the MDGs. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without the consent of the Executive Director concerned.