Exercise 2. Please decide whether the following statements are correct or not.

Please decide whether the following statements are correct or not.

Q1: The two unique development institutions within the umbrella of the World Bank are IBRD and IDA. C

Q2: The IBRD focuses on the poorest countries in the world, while the IDA focuses on middle income and creditworthy poor countries. I (vice versa)

Q3: The IDA provides interest-free loans and grants. C

Now click on “Operations”. After having read that part, please continue to answer the questions below.

Q4: The IBRD’s lending to developing countries is primarily financed by selling AAA-rated bonds in the world’s financial markets. C

Q5: The IDA is replenished every three years by 185 donor countries. I (Only 40 countries contribute to its fund.)

Q6: One of the roles of the lending institutions is to provide analysis, advice and information to the member countries, so they can deliver the lasting economic and social improvements that their people need. C

Q7: Development policy loans (formerly known as adjustment loans) are made to countries for goods, works and services in support of economic and social development projects in a broad range of economic and social sectors. I (this is the definition of “investment loans”)

Q8: IDA grants have been used to combat the HIV/AIDS pandemic among other things. C

Q1: By studying “lending net flows”, in which year did Afghanistan receive the largest amount of lending from the World Bank? (b) 2005

Q2: Regarding the “lending volume”, how many projects were financed in 2005 by the World Bank in Afghanistan? (a) 7

Q3: And how much money was paid for lending activities in 2006 (in millions of US$)? (c) 240

Q4: Official data are reliable in Afghanistan. I (61 reported cases versus 1000-2000 estimated cases)

Q5: The high level of illiteracy is one of the main risks and vCulnerabilities that play a major role in the spread of HIV. C

Q6: Afghanistan is the world’s fourth largest producer of opium. I (The country is the world’s leading producer.)

Q7: UNICE and WHO are both technically and financially supporting Afghanistan’s efforts to combat HIV/AIDS.C

Q8: The basic causes of AIDS/HIV are a combination of injecting drug use and unsafe paid sex. CQ9: Regarding health status, according to statistics, two in four children die before their fifth birthday. I (One in four children)

Q10: The basic priority areas are now rebuilding the primary health care system and addressing high-risk groups. C

C) The following short article, written by William McQuillen, evaluates the World Bank’s policy. It was published in Business Day, under the title of “Doubts about World Bank’s fast-aid policy”

http://www.businessday.co.za/articles/world.aspx?ID=BD4A422012

Please select the right answer (only one correct answer exists).

Q1: What has been the long-standing aim of the World Bank and especially its former president, Mr Wolfowitz? (a) Reducing corruption

Q2: What are the basic characteristics of the new support initiative of the World Bank? (b) To shorten the time that is needed to approve loans for those areas which are said to be “disaster areas”; moreover, to give recipients more flexibility in spending the money.

Q3: Which countries would be targeted by the new lending facility? (c) Disaster areas

Q4: According to the article, which country could be the first that can benefit from the new policy initiative? (b) The Democratic Republic of Congo

According to the article, the Democratic Republic of Congo is ranked among the most corrupt countries by Transparency International. Is this really the case? Please check the webpage of Transparency International to find out how corrupt the government in that country really is.

http://www.transparency.org/policy_research/surveys_indices/cpi/2006

Q5: What other countries are among the most corrupt ones? (c) Bangladesh, Sudan, Iraq, Haiti

Q6: Which of the following countries have proved to be the least corrupt in the last three years? (a) Iceland, Finland, New Zealand

Q7: How should the corruption perception index (CPI) be interpreted? (d) The score relates to perceptions of the degree of corruption as seen by business people and country analysts.

Q8: What score should a country receive if there is no corruption at all in that particular country (that is, the country is perceived as “highly clean”)? (b) 10

Q9: According to the map, which continent is seen to be the most corrupt on earth? (a) Africa

Q10: Going back to the article written by William McQuillen, how can the term “disaster areas” be interpreted in practice? (c) Countries that are struggling to recover from wars or natural disasters.

Q11. Under the new initiative, the World Bank’s evaluation process should move away from a consecutive one to a … (a) simultaneous one.

Q12: What does the following claim mean: “In fragile states, you need more oversight” – said by Bea Edwards, international director of the Washington-based Government Accountability Project.. (b) In case of corrupt states, more scrutiny and caution is required in aid policies.

topic 11.

Changing role of the state in development

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