1 CHAPTER 12 INTERNATIONAL FINANCING AND NATIONAL CAPITAL MARKETS

2 DEVELOPMENT BANKS General Purpose - founded by governments to help finance very large infrastructure projects.

3 DEVELOPMENT BANKS Types of Development Banks 1.World Bank Group includes a. International Bank for Reconstruction and Development b. International Development Association c. International Finance Corporation d. The Multilateral Investment Guarantee agency e.The International Centre for Settlement of Investment Disputes

4 DEVELOPMENT BANKS Types of Development Banks (con’t) 2.Regional Development Banks finance industry, agricultural, and infrastructure projects 3.National Development Banks concentrate on a particular industry or region.

5 MULTILATERAL DEVELOPMENT BANKS World Bank Group Regional Development Group Other Multilateral Development Bank

6 Use & Source of Funds Long Term Loans, Based on Market Interest. Borrow From international Capital Market Very long Term Loans, Interest Well below Market Interest Rates. Funded Through Donor Countries Grant Financing, Mostly for Technical Assistance or Project Preparation

7 World Bank Priorities World Bank Is Changing It’s Priority To: - Health Projects - Poverty - Education - Debt Relief - Corruption

8 World Bank Project Malawi Emergency Drought Recovery Credit - Borrower: Republic of Malawi - Approval: November 5, Implementing Agency: Government

9 World Bank Project Severe Food Crisis Economic Cost of Crop Failure: US$150- $180 Million This year’s shortage follows prior year’s reduced harvest Deaths from Hunger Related Diseases Are Increasing

10 World Bank Project Chronic Malnutrition Rate is 49% 3.9 million people require humanitarian assistance Donation from member community will cover almost US$100 Million of cost, which will address the needs of 60% of population

11 World Bank Project World Bank Contribution: - Improving The Statistical Basis For Crop Estimates - Better Agricultural Technology - Providing Technical Assistance For Review Of The Government’s Food Security Policy

12 World Bank Project Proposed Operation: - Assist Government In Drought Recovery, $40 Million available - Services To Vulnerable Groups, Amount of $8 Million - Support For Implementation, Technical Assistance & Studies, Total Amount $2 Million

13 World Bank Project Financing - Borrower : US$10 Million - IDA : US$50 Million - IMF : US$22 Million

14 Regional Development Bank Post-conflict Multi-sector -Afghanistan - Establishing Clear & Well Defined Policy & Legal Framework For Agriculture, Social Sectors, Transport & Energy Sector - Establishing Regulatory & Market Based Pricing Policy

15 Regional Development Bank - Support For Agriculture Sector Rehabilitation - Rehabilitation Of Primary Schools & Other Facilities - Promote Economic Recovery - US$150 Million Aid