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The World Bank,transport restructuringand transport workers
What is the World Bank?
The World Bank is a public international organisationcomprising two agencies:
• The International Bank for Reconstruction and Development (IBRD)• The International Development Association (IDA)
Three other agencies are affiliated to the World Bank:
• The International Finance Corporation (IFC)• The Multilateral Investment Guarantee Agency (MIGA)• The International Centre for Settlement of Investment Disputes (ICSID)
The five agencies are collectively known as theWorld Bank Group
Who runs the World Bank? (1)The World Bank is run by 24 executive directors.
Their voting power depends on the number of shares owned by the countries they represent.
Five countries have their own executive director as of right, and between them they control more than a third of all the IBRD voting shares:• USA 16.41 %• Japan 7.87%• Germany 4.49%• United Kingdom 4.31%• France 4.31%
Who runs the World Bank? (2)China, the Russian Federation and Saudi Arabia also have their own executive director, while other countries are in groups sharing an executive director.
This causes many strange anomalies:
• India, Pakistan and Sri Lanka -one executive director:• 20% of global population• 3.4% voting rights
• United States of America – one executive director: • 5% of global population• 16.4% voting rights
The World Bank’s money
The World Bank has four sources of funds:• Selling AAA-rated bonds on the international financial markets• Interest on loans to middle income countries• Repayment of loans to middle and low income countries• Payments by 40 donor countries to replenish IDA funds
It also manages various trust funds
Most of the money is spent on project loans, of two main types:• to finance investments, especially in infrastructure• to promote reforms of government policies and institutions
The Bank also provides analytical and advisory services
What does theWorld Bank do?
”The World Bank is a vital source of financial and technical assistance to developing countries around the world.
“We help governments in developing countries reduce poverty by providing them with money and technical expertise they need for a wide range of projects—such as education, health, infrastructure, communications, government reforms, and for many other purposes.”
Source: World Bank website
Where does theWorld Bank’s money go?
Sub-Saharan Africa 23%Latin America & Caribbean 19%East Asia & Pacific 18%South Asia 17%Europe and Central Asia 17%Middle East and North Africa 6%.
Source: World Bank website
What does the World Bank do in the transport sector?
“The mission of the transport group in the Bank is to assist clients to reduce poverty by improving the efficiency and equity of transport policy and interventions.
“We will work with the public and private sectors and communities to enhance the capacity of transport institutions to provide sustainable infrastructure and services.”
Source: World Bank website
The World Bankand transport policy (1)
The World Bankand transport policy (2)
“Throughout the world, transport infrastructure and service delivery are shared by the public and private sectors. The public-private balance in each country stems from its history, culture, and circumstances.”
Source: Safe, Clean and Affordable: Transport for DevelopmentWorld Bank transport business strategy, 2007 – 2012 (our emphasis)
The World Bankand transport policy (3)
“The treatment of this issue is helped by drawing a broad distinction between transport services (for example, road haulage companies, shipping companies, airlines) and the transport infrastructure that service suppliers use (for example, roads, seaports, and airports).”
Source: Safe, Clean and Affordable: Transport for DevelopmentWorld Bank transport business strategy, 2007 – 2012 (our emphasis)
The World Bank and transport policy (4)
“Public sector supply of transport services has often been disappointing.“Experience suggests that private operation of transport services leads to a better outcome, if markets are competitive (or periodically contestable) and if the regulatory framework protects public interests from any misuse of market power.”
Source: Safe, Clean and Affordable: Transport for DevelopmentWorld Bank transport business strategy, 2007 - 2012
The World Bank andtransport policy (5)
“Transport infrastructure is more contentious. … Many countries are uncomfortable with fully private ownership or free-market operation of transport infrastructure. …Public ownership of transport infrastructure is a legitimate public policy choice.”
Source: Safe, Clean and Affordable: Transport for DevelopmentWorld Bank transport business strategy, 2007 - 2012
The World Bank and privatisation: road transport
Source: Safe, Clean and Affordable: Transport for DevelopmentWorld Bank transport business strategy, 2007 - 2012
The World Bank and privatisation: urban passenger services
Source: Safe, Clean and Affordable: Transport for DevelopmentWorld Bank transport business strategy, 2007 - 2012
The World Bank and privatisation: railways
Source: Safe, Clean and Affordable: Transport for DevelopmentWorld Bank transport business strategy, 2007 - 2012
The World Bank and privatisation:ports and maritime
Source: Safe, Clean and Affordable: Transport for DevelopmentWorld Bank transport business strategy, 2007 - 2012
The World Bank and privatisation:airports and aviation
Source: Safe, Clean and Affordable: Transport for DevelopmentWorld Bank transport business strategy, 2007 - 2012
The World Bank and privatisation:inland waterways
Source: Safe, Clean and Affordable:Transport for DevelopmentWorld Bank transport business strategy, 2007 - 2012
Employment Reductions in Brazil’s Railways: 1996-97
0
20,000
40,000
60,000
80,000
100,000
120,000
1975 1995 1996 1997
Approximate number of employees
preparation for concessions
after concessions
Source: Labor Issues in Infrastructure Reform – a toolkit, World Bank, 2004
Employment Reductions in Côte d’Ivoire and Burkina Faso
Railways: 1980-2000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1980 1984 1988 1992 1996 2000
Approximate number of employees
pre-privatisation restructuring
restructuring during privatisation
Source: Labor Issues in Infrastructure Reform – a toolkit, World Bank, 2004
Labour Productivity in Brazilian Railways
0
1,000
2,000
3,000
4,000
5,000
6,000
FCA MRS FSA TerezaCristina
Oeste Nordeste
Before concessioning
After concessioning
Traffic units (TUs) per employee ('000)
Divisions of Brazilian federal railways system: FCA - Midwest; MRS - Southeast; FSA - South;Tereza Cristina - Tubarão;Oeste - West; Nordeste - Northeast.
Source: Labor Issues in Infrastructure Reform – a toolkit, World Bank, 2004
Examples of effects ofports restructuring
Job losses:Buenos Aires 50% cutVenezuela: 10,280 jobsPanama: 75% UK - 40% to 60%
Changes in working conditions:Intensification: from 12 to 6 per gantry in Australia
Source: ITF
World Bank productivity data
Staff per bus:
Indian states
Karnataka: 6.03Andhra Pradesh: 7.12 Madhya Pradesh: 11.55Orissa: 16.08
Sri Lanka private 2 – 3 state 5- 13
Source: Labor Issues in Infrastructure Reform – a toolkit, World Bank, 2004
The World Bank project cycle