Change the World Model United Nations 2014, New York City World Bank Background Guide Chair: Shubhavi Arya Topic: Philippines – Social Welfare and Development Reform
History of the World Bank The World Bank was established in 1944 as the International Bank for Reconstruction and Development (IBRD), and since then, its role has evolved and broadened within the international community. Originally, the Bank was the single post-war institution promoting reconstruction and development. Now, the World Bank is an association of five developmental institutions: •
The International Development Association (IDA),
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The Multilateral Guarantee Agency (MIGA),
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The International Centre for the Settlement of Investment Disputes (ICSID), and
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The International Bank for Reconstruction and Development (IBRD).
Their main goal is to alleviate global poverty. Given the post-war devastation, the establishment of the organization in the final stages of World War II was hardly controversial. The organization helped rebuild much of Europe, which had been demolished during the war. On 9 May 1947, the IBRD approved its first loan for a sum of USD 250 million to France for reconstructive purposes. Loans to Denmark and other European countries soon followed.2 Member states govern the World Bank through two bodies: the Board of Governors and the Board of Executive Directors. To become a member of the International Bank for Reconstruction and Development (IBRD), a country must first become a member of the International Monetary Fund (IMF). Subsequent membership to the other four institutions of the World Bank is contingent upon membership to the IBRD. While most states qualify as members of all five institutions, a handful of countries only qualify for the IBRD and one or two of the other five institutions. A state’s membership to the IBRD allots it a certain amount of voting power. Additional voting power is allotted based on a state’s financial contribution to the World Bank Group. Thus, the number of shares a member state possesses determines voting power. France, Germany, Japan, the United States, and the United Kingdom are the five largest shareholders.
The global aim of the World Bank is to alleviate poverty. The IBRD and the IDA carry out this objective by providing low-interest loans to developing countries that otherwise would have a hard time obtaining a conventional loan. These low-interest loans are made possible in part because the World Bank does not operate for profit. Selling bonds on the international capital business generates the funds needed for IBRD loans. These bonds have a triple-A rating. This means that they are sustainable. The World Bank has reflected a credible reputation in meeting financial commitments. In addition to providing loans for developing countries, the income of the IBRD also covers the functional expenses of the World Bank Group and contributes to IDA debt relief. There are two types of loans: a) Investment operations: Loans for investment operations consist of projects for the improvement of social and economic sectors of a country such as transportation, health concerns, and disaster relief. b) Development policy operations: Loans for development policy operations consist of projects supporting a country’s governmental reforms. While the bank supervises and evaluates the implementation of the loan, the borrowing country carries out the project. Organization of the World Bank
Topic History and Introduction Philippines: Social Welfare and Development Reform
Overview The Philippines has enjoyed economic growth in the some of the past years, but many poor people of the society have been left behind. The 2009 official poverty statistics show that 1
about 23 million Filipinos are poor. The Government of the Philippines has taken the responsibility to mandate poor households through its Department of Social Welfare and Development (DSWD). The Philippines Department of Social Welfare and Development is the executive department of the Philippine Government responsible for the protection of the social welfare rights of Filipinos and to promote social development. However, due to limited resources the government needs to have a clear basis for knowing and identifying the poor and to be able to determine where they stand. Past programs and schemes included varying targeting mechanisms that turned out to be ineffective and expensive, with high estimated leakage rates. Leakage rates for subsidies for the cost of electricity runs as high as 72 percent; food-forschool program, 59-62 percent; subsidies for senior citizens, 61 percent; and the National 1
Food Authority rice price subsidy, 41 percent. Therefore, there is an urgent need for a better household development system that could properly identify who are the poor and thus preventing leakages of scarce resources to those who are not poor. Results and Actions by the Government
Pantawid Pamilya is the first program in Philippines that benefits from a uniform and transparent system of targeting poor household beneficiaries. Pantawid Pamilya provides cash grants to poor families in poor areas to encourage them to keep their children in school, have regular health checks, and pregnant mothers attended to by health professionals during child delivery.)
The government has adopted the National Household Targeting System for Poverty Reduction (NHTS-PR) as the database for identifying poor beneficiaries of all major social programs nationwide. Other programs including universal health insurance for the poor, cashfor-work, and pensions for senior citizens, to name a few, are using the NHTS-PR’s database to reach poor households.
From a survey of potential beneficiaries, the NHTS-PR grew to become the Philippines’ largest and most updated database of poor households. In June 2011, 10.9 million households were assessed, and 5.2 million households were identified as poor. Among those
identified, 2.3 million households were enrolled in the government’s CCT program by the end of 2011.
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Contribution by the World Bank About US$64.5 million were allocated for developing the initial infrastructure and management information systems of the NHTS-PR through the Social Welfare and Development Reform Program, financed by the World Bank. In 2010, technical assistance for the expansion and improving the efficiency of the NHTS-PR was also provided through a trust fund from the Australian Agency for International Development (AusAID), administered by the World Bank.
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ENDNOTES 1. "Resources For." East Asia & Pacific. N.p., n.d. Web. Mar. 2014. <http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/0%2C %2CcontentMDK%3A23173988~menuPK%3A2246553~pagePK%3A2865106~piPK%3A286 5128~theSitePK%3A226301%2C00.html>.