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Office of the Executive Director for

Australia, Cambodia, Kiribati, Korea, Marshall Islands, Micronesia FS, Mongolia,

New Zealand, Palau, Papua New Guinea, Samoa, Solomon Islands, Tuvalu and Vanuatu

Staff Changes Mr Hoan Uk Joo, Advisor

to the Executive Director

(ED) from Korea ended his

term in December 2012. The

ED and staff thanked Hoan

Uk for his service in the last

three (3) years and wished

him well in his next assign-

ment with the Korean au-

thorities.

We welcomed Mr Jye Hoon

Lee also from Korea who

took up his appointment as

Advisor commencing on the

10 December 2012.

Jye Hoon Lee

Hoan Uk Joo

Office Travel Mr John Whitehead, Executive Director (ED) visited the

Northern Pacific countries namely the Federated States of Mi-

cronesia (FSM), Palau and Republic of Marshall Islands for con-

sultations with authorities in December 2012. The Bank has

been particularly slow in connecting with the Northern Pacific

countries in the past but now changing and we should expect

greater Bank engagement in these countries in the near future.

The Alternate ED (AED), In-Kang Cho and Advisor Hoan

Uk travelled to Korea for consultations with authorities. The

AED again visited Korea for the period 13—18 November to

attend the International Financial Institutions (IFIs) Job Fair.

Our Advisor, Ms. Beth Delaney attended the IDA Mid Term

Review meeting held in Côte d’Ivoire for the period 11– 17

November, 2012.

As reported in our last constituency note, the ED and majority

of staff travelled to Tokyo, Japan to attend the WBG/IMF Annual

Meetings in October 2012.

Senior Advisor, Michael Willcock visited Cambodia in De-

cember to accompany the Bank’s then Vice President, Pamela

Cox, on her first visit to Cambodia as Vice President.

NEW VICE PRESIDENT EAST ASIA AND PACIFIC REGION (EAP) On the 18 December 2012, the World Bank Group announced the appointment of Mr Axel

van Trotsenburg as Vice President for the East Asia and Pacific Region. He will take over the

portfolio responsibilities from Pamela Cox who has been appointed to lead

the WBG’s change reform. Axel’s appointment will be effective on the 1

February 2013.

Axel is currently the World Bank’s Vice-President for Concessional Fi-

nance and Global Partnerships since August 2009. Previously, Axel

served as Country Director for Colombia and Mexico in the Latin America

and Caribbean Vice Presidency and prior to that he held a number of

positions at the Bank, including Country Director for Argentina, Chile, Paraguay and Uruguay,

and Senior Manager of the Heavily Indebted Poor Countries Initiative (HIPC) in Poverty Re-

duction and Economic Management Network (PREM). In this capacity, he helped design the

original and enhanced HIPC Initiative and supervised the preparation of debt relief packages

for 24 countries, yielding US$37 billion in debt relief. Our ED and several Advisors met with the

new VP earlier this year to discuss issues pertinent to our constituency especially the Pacific

NEW COUNTRY DIRECTOR FOR PAPUA NEW

GUINEA, TIMOR LESTE AND THE PACIFIC ISLANDS

The World Bank Group announced on the 30 November 2012 the appoint-

ment of Mr Franz Drees-Gross as the new Country Director for Papua New

Guinea, Timor-Leste and the Pacific Islands in the East Asia and Pacific

(EAP) Region based in Sydney, Australia.

Mr. Drees-Gross has since held various positions of increasing responsibility

in LCR (including a field assignment in Buenos Aires as Sector Leader) and EAP, with his

most recent assignment being Sustainable Development Sector Manager based in Jakarta. In

this position, Mr. Drees-Gross’s top priorities will be to: (i) lead the development of the Bank's

strategies for the Pacific and be responsible for relations with client governments, develop-

ment partners, civil society, the private sector, media, and other stakeholders; (ii) lead and

motivate the country teams with a focus on client orientation, results, and cross-sectoral coor-

dination; and (iii) be a strong contributor to the Regional Leadership Team.

Our office welcome the new Country Director and wish him well on his new assignment.

NEWSLETTER #35 OCTOBER - DECEMBER 2012

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WORLD BANK GROUP CHANGE REFORM

On 18 December 2012, World Bank Group President Kim announced the establishment of a WBG Senior Management Team and

changed management responsibilities designed to enhance bank effectiveness and results orientation. These changes include

some people changes. One of the most significant changes for our constituency has been the move of the Vice President for

East Asian and the Pacific, Pamela Cox, to a new position of Senior Vice President for Change Management, and her replacement

as regional vice president by Axel van Trotsenburg. These management changes reflect the next step in the reform processes

that President Kim initiated on taking office in July. He started his term with a commitment to strengthen the bank Group’s ef-

fectiveness at implementation and outreach so as to ensure that the Group is a more effective institution. He set in train consul-

tation processes within the institution – with staff, management and Executive Directors – as well as other stakeholders including

clients, partners and civil society.

These processes led to a consensus view within the Group that transforming an organisation of the size and complexity of the

WBG is challenging, and that senior management time and attention are essential to make the change process succeed this time.

This latter point recognises that past change efforts had often failed to achieve their full potential because of insufficient man-

agement attention.

President Kim has identified 5 areas as critical to enhance WBG effectiveness:

Enhancing strategic focus: to implement the vision of eliminating poverty and building shared prosperity, the WBG must

move towards a clear, unified strategy focused on results. Work is underway on setting targets that can be used to monitor

progress, and a strategy is being prepared to guide staff on how to translate the targets into operational work.

Promoting knowledge and solutions: while the WBG is highly regarded for its knowledge, more work is needed to devel-

op systems, technologies and structures supporting staff in generating and disseminating knowledge that provides the solu-

tions that clients need.

Improving leadership and talent management: staff are the WBG’s key resource and their development and leadership is

critical to the Group’s effectiveness. Accordingly, there will be more emphasis on investing in staff, providing incentives for

excellence and preparing the next generation of managers. This involves changes to the WBG’s human resources and per-

formance management systems.

Focusing of results, accountability and risk: current arrangements divert vital resources to internal bureaucratic processes

which would be better used on achieving results for clients. Reforms are needed to shift this focus from processes to results.

As a Group, we also need to be able to take calculated risks and be readier to acknowledge mistakes to learn lessons and

evolve more effective risk management.

Mobilising resources: all the reform efforts depend on a more effective use of WBG resources. Budgetary processes need

to be better aligned with WBG strategy. Bank products need to better match client needs.

Work on all 5 challenging areas continues, and the President hopes to be able to talk to Governors at the spring meetings about

the results of some of this work (for example, about proposed targets for eliminating poverty and building shared prosperity).

But the announced changes to the Bank’s management team and their responsibilities are designed to give every chance of suc-

cess to these change processes by ensuring more effective use of management time and attention. The people changes include

the following:

Managing Director Sri Mulyani Indrawati takes responsibility for co-ordinating the work of all regional and network vice

presidencies. This is designed to ensure that the WBG’s matrix structure operates under a common reporting structure and to

build synergies between Regions and Networks so that the Group operates more effectively to meet client needs.

Managing Director Caroline Anstey takes responsibility for ensuring that all the WBG’s internal systems, policies and opera-

tions are aligned to ensure maximum impact.

A new Managing Director for Finance and CFO, Betrand Badre, is responsible for all finance operations, control functions and

global partnerships and concessional finance.

Former Managing Director Mahmoud Moheildin has been appointed as the President’s Special Envoy with responsibility for co

-ordinating the Group’s agenda on Millennium Development Goals and the post-2015 agenda, as well as managing partnerships

with other multilateral development institutions and the G20.

As the new Senior Vice President for Change Management, Pamela Cox has responsibility for co-ordinating and sequencing

all initiatives undertaken as part of the change agenda, including addressing the 5 challenging areas set out above. This new role

ensures that there will be senior management focus on the change processes and that there is senior management accountabil-

ity for ensuring that progress is maintained.

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President Kim announced as part of the WBG change reform agenda, two (2) new senior management positions, realign-

ment of responsibilities among Managing Directors (MDs) and three (3) new Vice Presidents on 18 December 2012.

Sri Mulyani Indrawati, was appointed to take up the Managing Director role for Region and Network to include syner-

gies for Regions and Networks and upgrading efficiency in matrix organization.

Caroline Anstey, appointed as the Managing Director for Operation Policy and Services (OPCS) handling Human Re-

source, Information Technology and External Affairs Vice-Presidency.

Mahmoud Mohieldin was appointed as the President’s Special Envoy for MDG, G-20 and Cooperation with other devel-

opment institutions.

Axel Van Trotsenburg who is currently the VP for Concessional Finance and Partnership is the new Vice President for

East Asia and Pacific region.

Joachim Von Amsberg who is currently VP for Operations Policy and Country Services is the new Vice President for

Concessional Finance and Partnership.

Pamela Cox currently the VP for East Asia and Pacific is assigned the new role of Senior Vice President for Change Man-

agement.

Other new Senior Management staff include Bertrand Badre, appointed as the new Chief Financial Officer (CFO) WBG, he is a former

CFO of Credit Agricole and Ronald K Peters appointed as the new Vice President OPCS.

WBG SENIOR STAFF APPOINTMENTS & REALIGNMENT OF RESPONSIBILITIES

Senior Management Visit to Constituency Member Countries

Cambodia: 3–8 December 2012

Our Senior Advisor, Michael Willcock visited Cambodia during the period 3 – 8 December 2012. The main purpose of the visit

was to accompany the Bank’s then Vice President for the East Asia and Pacific region, Pamela Cox, on her first visit to Cambodia

as vice president. Ms Cox had intensive discussions with the Prime Minister of Cambodia and a number of other ministers in the

Royal Government of Cambodia including those responsible for finance and the economy, education, the interior, commerce and

anti-corruption. The focus of these discussions was to consider how Cambodia and the World Bank Group can strengthen and en-

hance the level of their cooperation to advance Cambodia’s development. As a result of Ms Cox’s visit, Cambodia and the Bank

has agreed on a process for identifying and developing new activities that are consistent with Cambodia’s development priorities.

As well as accompanying Ms Cox on her program of meetings, Michael had meetings with officials from the ministries of Econo-

my and Finance and of the Interior. He also undertook a field visit to a newly settled village in Kampong Thom province which has

been developed as part of the Bank’s Land Allocation for Social and Economic Development program with various Cambodian

agencies.

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World Development Report 2014 – Managing Risk for Development

Even before the launch of the World Development Report (WDR) 2013 on Jobs at the annual meetings in Tokyo in October, World Bank staff had started planning the next WDR, which is to look at the impact of risk and missed opportunities on devel-opment. An initial concept note on this topic was circulated for discussion by the Executive Board on 20 November 2012. The Board discussion provided an opportunity for Executive Directors to clarify with staff what the focus of the report would be, and for staff to obtain feedback on how best to take forward their work to ensure the best results for their work. Ahead of that discussion, our office joined with the Nordic/Baltic, British, Canadian and German offices to issue a Board state-ment that welcomed the topic; asked that the report highlight issues that relate not just to risk management but how to over-come risk aversion to ensure development results; argued that there needed to be emphasis given to fragile and conflict affect-ed states and how to better manage risks there; argued that there should be an explicit principle that risk be borne by the level of actor best placed to manage it and that therefore the report should focus on policy-oriented recommendations for govern-ments and development partners on how to shift the burden of risk where appropriate and ensure it is better managed for greater development impact; and we asked that the report have a strong operational focus. In the Board discussion itself, new Bank Chief Economist Kaushik Basu explained that:

The WDR will focus on risk management as a process rather than on specific risks. The report will demonstrate the bene-fits of a holistic approach to risk management in facilitating development and first-best policy choices, and in delivering results.

Bank staff appreciate that risk can never be eliminated and that it needs to be managed at the most suitable level and that policy-oriented advice on this will be a central value added of the report. The role for public action will therefore be dis-cussed throughout and the report will include concrete recommendations.

The report will also include tools available to governments to make decisions on systemic risks (e.g. to regulate the finan-cial system or deal with climate change) in the context of the uncertainty that surrounds these issues. The discussion will include a review of decision-making instruments that are available to deal with risk, from cost benefit analysis under un-certainty and expert panels to the precautionary principle and participatory approaches.

Finally, the WDR will address how government and donor policies can improve risk management in fragile and conflict affected states.

The timeline for this project involves a further discussion with the Board in April when preliminary findings will be exposed and discussed. A final draft of the report will be considered by the Board in July with the report itself to be launch around the time of the October annual meetings.

WBG POLICY & ANALYTICAL WORK OF INTEREST

Global Monitoring Report (GMR) 2013— Rural-Urban Dynamics and the Millennium Develop-ment Goals

This year’s GMR focusing on the theme of ‘Rural-Urban Dynamics and the Millennium Development Goals (MDGs) is antici-pated to further inform discussions about the post-2015 development framework in addition to assessing progress towards the MDGs. The Board of Executive Directors welcomed the opportunity to provide comments and seek clarification from the joint Bank/Fund team on the Concept Note on the GMR 2013 circulated ahead of the Board discussion on the 15 November 2012. Whilst the focus and scope of the proposed GMR 2013 was generally supported by Executive Directors including our constitu-ency office, the team felt specific comments and suggestions provide helpful inputs to the team. Some of the key points raised with explanation from the team led by the Bank’s new Chief Economist Mr Basu are provided as follows:

Importance of clear policy recommendations which would be evidenced-based and cover a diverse number of countries to be representative and as such could inform discussions on this topic at the upcoming Spring Meetings. The team is con-scious of the need to include evidence from a diverse set of countries ie. by region, income level, fragile situations etc.

To ensure the GMR will contribute to understanding the linkage between urbanization and gender gaps, drawing on the WDR 2012 on Gender Equality and Development.

To draw from lessons learned on successful job creation from the WDR 2013 on Jobs. This is the path the team will em-bark instead of reinventing the wheel.

To include more detailed information about progress towards the MDGs than has been in the past. The GMR team will provide a balanced view of progress towards the MDGs and will identify those MDGs and regions with some acceleration of progress might be able to reach the 2015 finish line.

To adopt a balanced approach in its treatment of rural and urban areas, of which the team emphasized the approach that urbanization is both an opportunity and a challenge to reduce urban poverty, an outcome of urban population growth and migration from rural to urban.

Avoid sending out the wrong message especially to poor people that migration to urban areas is the panacea for all hard-ship.

The draft report will be provided for the review of the Bank/IMF Board at a meeting of the COW in late March 2013 before further discussion at the Development Committee meeting on 21 April 2013 with the final report disseminated by end of June

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WBG POLICY & ANALYTICAL WORK OF INTEREST

World Bank Group Engagement at COP18-Doha

On Thursday January 10, 2013, the Executive Board of Directors was briefed on the outcomes of the 18th United Nation Conference Climate Change (UNCCC) or COP18 that took place in Qatar. The Global deal that was reached at Doha, now known as the “Doha Climate Gate Way”, was seen as a step forward in keeping the discussions and commitments progress on a number of critical elements of the Global Climate Change negotiations. These include: Kyoto Protocol extended until 2020 – Leaders were

able to secure a continued legal regime through a second commitment period.

Streamlining of negotiation process for a global deal – Leaders agreed to advance process to reach global agreement by 2015, and to come into effect as well as close the ambition gap by 2020.

Advancing the Green Climate Fund – South Korea was selected to host the Secretariat of the Green Climate Fund and the WBG was confirmed to be the interim trustee. The Green Climate Fund Board is in the process of concluding self-selection. Leaders agreed to affirm annual pledges (US$100 billion) by 2020. The UK, Germany, France, Den-mark, Sweden and EU Commission voiced a total pledge of US$8.5 billion of new finance.

The Gender COP – Gender equality goal was agreed in UNFCCC process and bodies.

Address loss & damage – Leaders agreed to ad-

vance and deepen the work program to address loss and damage prior to COP19.

The WBG by leveraging its knowledge platform also took the opportunity to echo science at the center of the de-bate in Doha. The Bank’s report on “Turn Down the Heat” received an unprecedented level of attention from parties and other stakeholders, including from the social media. The report that was released just before COP18 also captured the attention from the International Energy Agency (IEA), United National Environment Program (UNEP) and the 4 Degree Report to underscore urgency in negotiations. While in Doha, the Bank also jointly launched the Middle East and North Africa (MENA) Flag-ship report with the Government of Qatar on Adaptation to a Changing Climate in the Arab Countries. The Bank Group also led the discussion against Short Lived Climate Pollutants with partners at Climate and Clean Air Coali-tion (SLCPs). The Bank committed to expand the share of the WBG portfolio addressing SLCPs from 12 percent in 2012, to 15 percent in 2015, to 20 percent in 2020. The Board welcomed the progress made in Doha, Qatar COP18/CMP8, and commended government Leaders in taking essential steps forward. The Board also welcomed the progress made on the architecture of the Green Climate Fund (GCF). However, the Board was still uncertain on how the design of the GCF, and on various pledges made by countries will come into play soon. Therefore the Board called for a WBG constructive role to help inform the GCF design in deploying lessons learnt from CIF operation and other similar programs, especially to synthesize private sector finance at the heart of GCF.

Given the uncertainty on the timeframe when the new GCF will become operational, the Board requested the WBG to continue its engagements with client countries through existing WBG operation as well as other multilat-eral organizations. The Board also stressed the im-portance of linkages between the Climate Change discus-sion with the broader reform, and the ongoing strategic discussion within the WBG, as well as with the IDA17 replenishment dialogue. Our office through Alternate Executive Director, In-Kang Cho supported the engage-ment of the private sector; and the advancing of green growth technologies in the areas of agri/agro-business in developing economies. He further acknowledged through the Korean government the Global support to host the Secretariat of the GCF in Seoul. He also assured the Board of Seoul’s commitment to ensure the Secretariat support the work of the GCF Board. Poland will host COP19. The Bank is increasingly seen as a partner of choice on Climate Action, management and staff are looking forward to support Poland leading up to the next COP19 meeting.

IDA16 Mid-Term Review

IDA Deputies, including those from Australia, New Zealand and Korea, met on 13-15 November 2012 in Abidjan, Cote D’Ivoire to discuss IDA16 progress and to share ideas for the IDA17 replenishment. While welcoming progress, Deputies called for a rethink on IDA’s approach in fragile states and continued leadership on results, gender and climate proofing investments. There was gen-eral agreement to the principle of ensuring a smooth transition for graduating countries but a strong desire to see those coun-tries that were able to graduate do so as soon as possible. The meeting did not endorse proposals to reallocate unspent Crisis Response Window funding to regional or MDG4 and MDG5 programs or to eliminate the Multilateral Debt Relief Initiative (MDRI) netting out mechanism. The IDA17 replenishment process begins formally in March 2013 but there was some preliminary discussion of issues during the MTR many of which will require the close engagement of the Executive Board. The key issues for the IDA 17 replenishment dis-cussions are shaping up to be:

greater ambition on the IDA results agenda, including an emphasis on value for money changing the approach to fragile states; and, graduation policy

There is also expected to be discussion of whether there should remain special themes in IDA17. Many Deputies suggested dur-ing the MTR meeting the three themes of fragile states, climate change and gender should remain in IDA17 and be built upon. Other themes suggested which gained some traction were the role of the private sector and inclusive growth. The discussion of a rethink of how to approach fragile states provides a good avenue to push issues around the vulnerability of small states and to call for greater flexibility in this regard. Whilst this presents an opportunity there are also risks in any signifi-cant change and constituency countries will likely benefit from following (and contributing to) this aspect of the discussions closely in IDA17 negotiations.

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WBG POLICY AND OPERATIONAL ISSUES

World Bank Review of Procurement Policy

The first phase of the World Bank Review of Procurement Policy has now been completed. The Bank

has completed a series of studies and benchmarking exercises (three are remaining) and undertaken

consultations with internal and external stakeholders – including in Australia, Solomon Islands, New

Zealand and Korea. A number of consistent themes have emerged from the consultation process and dis-

cussions which will feed into the proposed new framework expected to be presented to the Board in

early 2013, including:

The need for robust principles and methods which reflect the importance of development effec-

tiveness, value for money, integrity and sustainability; and are context specific, proportional,

best-fit-for-purpose and create room for innovation.

The need for a risk-based approach that recognizes the different needs of different country con-

texts.

Give special attention to the needs of fragile and conflict affected countries, along with small

economies.

The need to underpin the procurement process with more upfront market-sector analysis, strategic

thinking, and due diligence about the shape of markets, competition, quality, sector/industry

practices, and impacts, especially on local industry.

Allow for increased use of country systems, where appropriate, with due caution and management

of risks. This should be a nuanced process – asking to what degree and in what way certain as-

pects of country systems be used, even if they are not in a position to take over the procure-

ment function entirely.

Make serious efforts in capacity building and professionalization, especially in lower income

countries. This should be seen as a core part of the development process.

Provide coverage of the full procurement cycle, from design through to contract execution, with:

- greater focus on results and performance rather than compliance. An intensive

“compliance” focus may remain appropriate for high-risk, high-value contexts;

- Support for borrowers through contract management as well as up-front procurement;

broader incorporation of fiduciary-governance alternatives, transparency, access to in

formation, use of civil society, controls, including more effective audits, and dis

pute resolution mechanisms; and,

- taking a new look and a fresh approach to issues of fraud and corruption, including

collusion.

Support procurement that takes account of quality and whole-of-life issues the assessment of

value-for-money;

Consider the global context for public procurement (e.g. harmonization around international

standards etc).

More information is available at the following website www.worldbank.org/

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CONSTITUENCY COUNTRY LEVEL PROGRAMS APPROVED

BY THE BOARD FOR QUARTER ENDING DECEMBER 2012

Papua New Guinea Country Partnership Strategy FY13—FY16

The Executive Board of Directors on Tuesday 11 December, 2012, endorsed the Joint IBRD/IDA/IFC/

MIGA Country Partnership Strategy (CPS) for the Independent State of Papua New Guinea, for the peri-

od FY2013-2016.Through partnership with the Papua New Guinean Authorities, gender issues was

placed at the “front” and “center” throughout the World Bank Group program in Papua New Guinea.

The joint partnership included IDA/IBRD investments in agriculture, transport infrastructure, telecom-

munications, with energy chosen as a selectively target “growth centers”, and IFC investment in private

sector development.

The partnership also included a selective program of analytical and capacity-building activities in eco-

nomic policy reform and extractive sector governance, and a niche role in health, education and social

protection.

The Board welcomed the joint partnership and valued the World Bank Group’s (WBG) active engagement

with the national authorities of Papua New Guinea to improve access to essential infrastructure services,

and business opportunities towards a more inclusive and equitable service delivery and development out-

comes.

Vanuatu—Increasing Resilience to Climate Change and Natural Hazards Project

The World Bank Group Executive Directors approved the co-financing of the Vanuatu project known as

‘Increasing Resilience to Climate Change and Natural Hazards’ on Tuesday 4 December 2012 from the

GEF LDCF Trust Fund to the amount of US$5.58 million The project aims to help increase the resilience

of communities in Vanuatu to the impacts of climate variability and change as well as natural hazards on

food, water security as well as livelihoods. The project aims to benefit smallholder communities through-

out Vanuatu.

Samoa—Enhancing the Climate Resilience of the West Coast Road (WCR)

On Tuesday, 18 December 2012, the Board of Executive Directors approved the proposed grant in the

amount of US$14.80 million from the Pilot Program for Climate Resilience (PPCR) of the Strategic Cli-

mate Fund (SCF) to assist the Independent State of Samoa with enhancing climate resilience of the West

Coast Road which is expected to benefit 31 villages located along the WCR of which 49% are female. The

project aims to enhance local capacity to develop more climate resilient road network in the country.

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Constituency Reports and Bank Publications The following list of documents and reports were published during the quarter. Please contact us if you would like us to resend any of these documents

World Investment and Political Risk 2012

International Debt Statistics 2013

World Bank Group Impact Evaluations: Relevance and Effectiveness

We’re on the Web!

www.worldbank.org/eds09

The World Bank 1818 H St., N.W.,

Washington DC, 20433 MSN MC11-1107

Fax: 1(202) 477-2007

If you want further information or an electronic copy of any of the documents discussed in this Newsletter, please contact: Beatrice Nguerekata Program Assistant bnguerekata@worldbank.org