Appendix A. Crisis Indicators and Infrastructure Lending

Transcription

1 Appendix A. Crisis Indicators and Infrastructure Lending APPENDIX A Table A.1. Crisis Indicators (Case Study Countries) Country % as Share of GDP Share of in Bank Crisis Severity Score (principal factor score) Score rank averages) Forecast vs. Actual GDP Exchange Rate Reserves Stock Market Returns EMBI Spread Credit Deposit Export Domestic Investment Consumption Ukraine 141% 0.35% 0.10% High Latvia 0.99% 0.40% High Russian Federation 100% 0.01% 0.61% High Montenegro 88% 0.43% 0.01% High Mongolia 23% 0.23% 0.06% High Kazakhstan 2092% 1.89% 2.70% High Romania 54% 0.19% 1.53% High Venezuela, Republic 100% 0.00% 0.01% High Armenia 102% 1.03% 0.02% High Bulgaria 57% 0.29% 0.21% High Serbia 158% 0.64% 0.09% High Seychelles 0.47% 0.01% High Antigua and Barbuda 0.00% 0.00% High Georgia 423% 2.29% 0.25% High Belarus 1199% 0.53% 0.34% High Bosnia and Herz 160% 0.65% 0.04% High Croatia 10% 0.06% 0.69% High Turkey 69% 0.19% 1.47% High Jamaica 1595% 1.30% 0.27% High Tajikistan 35% 0.46% 0.06% High Moldova 49% 0.52% 0.05% High Sao Tome and Principe 23% 0.30% 0.00% High Pakistan 14% 0.12% 2.84% High Solomon Islands 1.08% 0.01% High Slovak Republic 100% 0.00% 0.01% High Fiji 0.00% 0.00% High Maldives 28% 0.38% 0.03% High Macedonia, FYR 29% 0.27% 0.18% High South Africa 93875% 0.71% 3.53% High

2 Country % as Share of GDP Share of in Bank Crisis Severity Score (principal factor score) Score rank averages) Forecast vs. Actual GDP Exchange Rate Reserves Stock Market Returns EMBI Spread Credit Deposit Export Domestic Investment Consumption Hungary 16859% 0.58% 1.31% High Mexico 487% 0.43% 5.75% High Mauritania 49% 0.58% 0.09% High Argentina 23% 0.11% 1.87% High Chile 67% 0.02% 0.18% High Kyrgyz Republic 12% 0.16% 0.10% High Congo, Dem Rep 42% 1.42% 0.43% High Barbados 0.45% 0.03% High Sudan 24% 0.09% 0.37% High Namibia 9% 0.00% 0.01% High Colombia 50% 0.24% 1.12% High Zambia 24% 0.17% 0.19% High Trinidad and Tobago 0.00% 0.00% High Honduras 32% 0.22% 0.22% High Samoa 317% 1.90% 0.01% High Ecuador 100% 0.29% 0.50% Medium St. Lucia 16% 0.11% 0.01% Medium Gabon 100% 0.17% 0.07% Medium Iran 100% 0.08% 0.78% Medium Costa Rica 1111% 1.13% 0.43% Medium Ghana 49% 1.13% 0.40% Medium Malaysia 0.00% 0.00% Medium Cambodia 21% 0.07% 0.06% Medium St. Vincent and Grenadin 100% 0.47% 0.01% Medium Poland 738% 0.48% 2.69% Medium El Salvador 191% 1.22% 0.16% Medium Central African Rep 10% 0.24% 0.09% Medium Brazil 194% 0.22% 1.71% Medium Sri Lanka 68% 0.35% 0.15% Medium Peru 125% 0.52% 0.02% Medium Vietnam 125% 1.49% 0.05% Medium Albania 31% 0.20% 0.17% Medium Botswana 2.73% 0.58% Medium Madagascar 78% 2.55% 0.73% Medium India 115% 0.32% 0.34% Medium Angola 107% 0.14% 0.02% Medium Papua New Guinea 1% 0.00% 0.03% Medium

3 Country % as Share of GDP Share of in Bank Crisis Severity Score (principal factor score) Score rank averages) Forecast vs. Actual GDP Exchange Rate Reserves Stock Market Returns EMBI Spread Credit Deposit Export Domestic Investment Consumption Liberia 111% 4.84% 0.01% Medium Egypt, Arab Rep 311% 1.05% 1.32% Medium Korea, Rep. of 0.00% 0.00% Medium Dominican Repub 233% 0.37% 0.12% Medium Morocco 16% 0.09% 0.74% Medium St. Kitts and Nevis 0.00% 0.00% Medium Kenya 194% 1.47% 0.25% Medium Lesotho 97% 1.28% 0.01% Medium Ethiopia 102% 3.45% 0.20% Medium Guatemala 167% 0.77% 0.12% Medium Nigeria 164% 0.59% 0.40% Medium Swaziland 0.00% 0.00% Medium Senegal 70% 0.96% 0.13% Medium Thailand 0.02% 0.07% Medium Tanzania 50% 1.71% 0.70% Medium Jordan 367% 1.14% 0.22% Medium Azerbaijan 5% 0.05% 0.53% Medium Grenada 43% 0.34% 0.01% Medium Paraguay 104% 0.44% 0.01% Medium Panama 297% 0.63% 0.12% Medium Cape Verde 20% 0.31% 0.05% Medium Indonesia 225% 0.70% 2.17% Medium Tunisia 74% 0.27% 0.11% Medium Chad 62% 0.26% 0.09% Low Equatorial Guinea 0.00% 0.00% Low Congo, Republic 33% 0.15% 0.10% Low Mauritius 1090% 1.61% 0.18% Low Philippines 58% 0.16% 0.39% Low Cameroon 36% 0.11% 0.09% Low Dominica 100% 0.15% 0.00% Low Yemen, Republic 162% 0.68% 0.06% Low Libya 0.00% 0.00% Low Guinea Bissau 34% 0.49% 0.01% Low Nicaragua 34% 0.32% 0.08% Low Belize 0.00% 0.00% Low Burkina Faso 56% 1.26% 0.17% Low Burundi 67% 4.73% 0.07% Low Rwanda 114% 3.12% 0.01% Low Tonga 716% 0.80% 0.00% Low Afghanistan 19% 0.72% 0.80% Low

4 Country % as Share of GDP Share of in Bank Crisis Severity Score (principal factor score) Score rank averages) Forecast vs. Actual GDP Exchange Rate Reserves Stock Market Returns EMBI Spread Credit Deposit Export Domestic Investment Consumption Algeria 0.00% 0.00% Low Benin 25% 0.65% 0.35% Low Myanmar 0.00% 0.00% Low Suriname 0.00% 0.00% Low Comoros 179% 0.71% 0.00% Low Syrian Arab Republic 0.00% 0.00% Low Bhutan 19% 0.39% 0.05% Low Uruguay 71% 0.44% 0.12% Low Vanuatu 0.00% 0.00% Low Djibouti 24% 0.33% 0.03% Low Gambia, The 233% 2.64% 0.02% Low Niger 7% 0.13% 0.14% Low Mozambique 28% 0.74% 0.35% Low Sierra Leone 11% 0.56% 0.18% Low Bangladesh 108% 0.78% 0.12% Low China 35% 0.02% 2.32% Low Guyana 100% 0.64% 0.04% Low Cote d'ivoire 1.00% 0.34% Low Mali 34% 0.77% 0.23% Low Togo 1.99% 0.09% Low Uganda 9% 0.32% 0.78% Low Bolivia 39% 0.08% 0.07% Low Malawi 24% 0.59% 0.14% Low Eritrea 100% 2.04% 0.10% Low Iraq 43% 0.24% 0.78% Low Nepal 210% 1.81% 0.13% Low Lebanon 139% 0.10% 0.01% Low Haiti 21% 0.29% 0.13% Low Guinea 154% 1.25% 0.02% Kiribati 100% 0.52% 0.00% Kosovo 22% 0.07% 0.04% Lao People's De 60% 0.82% 0.06% Marshall Islands 0.00% Micronesia, Fed. Sts. 0.00%

5 Country % as Share of GDP Share of in Bank Crisis Severity Score (principal factor score) Score rank averages) Forecast vs. Actual GDP Exchange Rate Reserves Stock Market Returns EMBI Spread Credit Deposit Export Domestic Investment Consumption Palau 0.00% Somalia 0.01% Timor Leste 66% 2.04% 0.04% Turkmenistan 0.00% 0.00% Uzbekistan 373% 0.38% 0.09% West Bank and G 1% 0.11% Zimbabwe 0.07% 0.01% Sources: IMF (2008, 2010); Bloomberg; Datastream; UN National Accounts Statistics. Data on World Bank lending comes from internal databases. Note: Rankings are based on all eligible Bank clients in FY09-10 (147). Ranks are in descending order of severity (that is, a rank of 1 implies most severe stress/crisis). For definitions and details, see appendix B, section

6 Infrastructure Lending during the Crisis This appendix briefly describes the World Bank s new lending for infrastructure during the period of the crisis. It also points out that much of that lending was not related to the crisis, and much had been under preparation before the crisis. Most crisis-related infrastructure lending was concentrated in a handful of large loans approved late during the crisis period. Infrastructure lending included were approved during FY09 10, with an infrastructure-related sector content of at least 25 percent a database of INFRASTRUCTURE CRISIS PROJECTS PORTFOLIO OVERVIEW There was a large increase in the numbers of new infrastructure lending operations during the crisis, and a much greater increase in infrastructure commitments by value, reflecting a large increase in average project size. The number of operations with infrastructure content rose from an annual average of 115 in FY05 07 to 147 in FY Annual new commitments grew to $23 billion in FY09 10, compared with $10 billion committed on average, in FY The surge in commitments came from a near doubling of average project size, from $87 million in FY05 07, to $157 million in FY However, the share of with some infrastructure content approved during the crisis period increased very slightly, both in number, from 38 to 41 percent, and in value, from 42 to 44 percent of all commitments approved during the crisis period. Table A.2. Lending in Infrastructure during the Crisis and Before the Crisis IBRD IDA Fiscal year US$ billion % of total US$ billion % of total Annual average before crisis Annual average during crisis Change (%) Source: World Bank data. As in other sectors, International Bank for Reconstruction and Development (IBRD) financing for infrastructure during the crisis increased more rapidly than financing from the International Development Association (IDA). IBRD lending increased to 74 percent of total commitments in infrastructure, up from 61 percent before the crisis (table A.2). But un- 1 Including information and communications technology; energy and mining; transportation; and water, sanitation, and flood protection. The sector content definition is in some respects wider than a definition based on sector boards, which would lead to 195 infrastructure and omit 38 percent of the current sample. The present sample includes 94 percent of the with an Infrastructure Sector Board. 174

7 like other sectors, there was a difference in the regional lending pattern. About half of infrastructure commitments during the crisis were allocated to the Latin America and the Caribbean and Africa Regions reflecting largely a single loan to South Africa. Compared with the pre-crisis period, there was a decline in the share of the Europe and Central Asia and East Asia and Pacific Regions. CRISIS RELEVANCE OF INFRASTRUCTURE LENDING ALL PROJECTS About half (45 percent) of the infrastructure approved during the crisis were under preparation before the crisis. Projects in other sectors approved during the crisis had a somewhat shorter gestation period 39 percent had been initiated before the crisis (table A.3). However, despite their longer gestation, their preparation time was reduced somewhat during the crisis, by around 7 percent compared to the pre-crisis period. Projects in other sectors experienced a greater reduction in preparation time, by 12 percent on average. Table A.3. Initiation of Bank Projects Approved in FY09 10: Infrastructure and Other Sectors Infrastructure (number) Infrastructure (%) Rest of (number) Rest of (%) BEFORE THE CRISIS > 12 months before months before months before months before AFTER BEGINNING OF CRISIS 3 months after months after months after > 12 months after Source: World Bank data. Notes: The cut-off date for the beginning of the crisis is September 1, The planning stage is considered to start at the Concept Note Date. Infrastructure are those with at least 25 percent of commitments assigned to the infrastructure sector. One crisis infrastructure project did not have a Concept Note Date. The bulk of infrastructure crisis lending was clustered fairly late in the crisis period. More than a quarter of the infrastructure and commitments approved during the crisis period were approved in the last quarter of FY10. Fifty-nine infrastructure, amounting to $10 billion out of a total crisis period commitment of around $30 billion, were approved in the last quarter of FY09. The use of additional/supplemental financing increased during the crisis period. Both the number and commitment amounts of such had been increasing since FY05, but they surged further during the crisis. Of the 294 infrastructure approved in the crisis, 86, or 29 percent, were processed as additional financing, up from 18 percent in FY06-175

8 07. And 14 percent of FY09-10 commitments came from additional/supplemental infrastructure, up from 8 percent in FY In FY05 07 infrastructure supplements were 8 percent of new commitments and 18 percent of, while during the crisis period additional financing was 14 percent and 29 percent of all commitments and, respectively. The volume and number of supplemental at least doubled. Additional financing in the infrastructure portfolio during the crisis was more frequent than in the Bank s overall portfolio, but other sectors used it as or more extensively. Using the Sector Board classification, 2 about a third of the infrastructure approved in FY09 10 were additional financing. However, a few other sectors also had similar shares of additional financing health, agriculture, and social development. CRISIS RELEVANCE HIGH INFRASTRUCTURE CONTENT PROJECTS Fewer than half of the with high infrastructure content were explicitly identified as crisis-related. Of the 294 infrastructure identified in the sample that had a 25 percent or higher infrastructure content, another subset was identified that had at least 50 percent or more infrastructure content. These 245 high-content infrastructure accounted for 83 percent of the initial sample. Based on appraisal documentation, these were classified according to the strength of reference to the crisis in the description of each project s justification. Three-quarters of the with high infrastructure content did not refer to the crisis beyond the description of the context. Over half of commitments by value (59 percent) were from with no reference, or a low reference, to the global economic crisis. Table A.4. Crisis References in Projects with High Infrastructure Content, FY09 10 Number of Disbursements as of 12/2010 Crisis-related 51 16,450 4,631 Not crisis ,613 4, ,063 8,954 PERCENT OF TOTAL Crisis-related 21% 41% 52% Not crisis 79% 59% 48% 100% 100% 100% Source: World Bank data. However, crisis-related infrastructure disbursed faster. Six percent of with a high reference and 19 percent with a moderate reference to the global economic crisis disbursed more than 75 percent of their commitments within 3 months of approval, compared to half that share for with low or no reference to the crisis (table A.5). And 17 percent and 31 percent of with high or moderate reference to the global economic 2 Sector board classification. The infrastructure sector includes the following sector boards: Global Information/Communications Technology, Energy and Mining, Transport, and Water. 176

9 crisis respectively disbursed more than 75 percent of their commitments within 12 months of approval. Table A.5. Three Month Disbursement Rates of Infrastructure Projects during the Crisis, FY09 10 Disbursement ratio Crisis-related content High Medium Low Not crisis NUMBER OF PROJECTS <25% %-50% >75% SHARE OF TOTAL <25% 89% 81% 97% 98% 95% 25%-50% 6% 0% 0% 2% 2% >75% 6% 19% 3% 1% 3% 100% 100% 100% 100% 100% Source: World Bank data. Finally, crisis related infrastructure lending was highly concentrated, even more so than noncrisis lending. Seven countries accounted for 55 percent of all commitments in infrastructure during this period and 70 percent of crisis-related infrastructure commitments. And the five largest infrastructure approved in FY09 10 accounted for 24 percent of all infrastructure commitments and for 58 percent of crisis-related commitments in infrastructure. Table A.6. Country Concentration of Infrastructure Lending during the Crisis, FY09 10 Countries (in US$ million) Number of Disbursements as of 12/2010 (in US$ million) India 5, South Africa 3, China 3, Mexico 2, ,358 Brazil 2, Turkey 2, ,705 Kazakhstan 2, countries 21, ,696 Percent of total OF WHICH CRISIS RELATED India 2, South Africa 3, China Mexico 2, ,355 Brazil Turkey Kazakhstan 2, countries 11, ,128 Percent of total crisis-related

10 Table A.7. Project Concentration of Infrastructure Lending during the Crisis, FY09 10 Approval quarter Country Project ID Project name Commit ments FY10-Q4 South Africa P Eskom Investment Support Project 3, , FY09-Q4 Kazakhstan P South West Roads Project: Western Europe Western China International Transit Corridor Disbursements as of 12/2010 FY10-Q2 Mexico P Framework for Green 1,504 1,504 Development Policy Loan FY10-Q1 India P Financing Public- 1,195 3 Partnerships in Infrastructure through Support to the India Infrastructure Finance Company Limited FY10-Q1 India P Fifth Power System Development 1, Project 5 9,574 2,226 Percent of all Percent of crisis-related Source: World Bank data. 178