By IPS Correspondents
WASHINGTON, Dec 21 2006 (IPS)

In recent months, the World Bank, the largest public lender, launched a significant overhaul of its organisational structure, merging its infrastructure investment network with the department that oversees compliance with environmental and social standards.

Some Bank watchdog groups have expressed concern that the new “Sustainable Development Network” will have to be monitored closely to ensure that it does not wrongly promote oil and gas projects, frequently the target of criticism about their negative environmental and social impacts, as “development” or “anti-poverty” projects.

Others, like the Nature Conservancy and the World Wildlife Fund, hailed the move as an important step in the right direction and said it signals that the Bank is taking its anti-poverty mission more seriously.

IPS spoke with Kristalina Georgieva, currently the Bank’s country director for Russia, who will serve as director for strategy and operations in the new Sustainable Development Vice Presidency, about the lender’s evolving approach toward its projects.

IPS: What are the functions of your new job?

K. GEORGIEVA: The main focus of my new job under the leadership of Vice President Katherine Sierra is to bring together our staff working on environment, social development, infrastructure and agriculture – united by a shared vision for sustainable development, and equipped with operational tools to implement this vision.

This defines the two main functions of this position – first, allocating the network’s resources to strengthen the sustainability of our portfolio and enhance our role in areas like access to clean energy, addressing countries’ vulnerability to climate change, sustainable infrastructure and urban development and natural resource management.

Second, leading our outreach to partners in governments, civil society, business and international organisations, to explore synergies and tap into cutting-edge knowledge on sustainable development outside the Bank.

IPS: How do you think the so-called “common vision for sustainable development and operational alignment” often spoken of by Bank officials can be achieved in the coming years?

GEORGIEVA: We have completed at this point the first process of realignment by establishing our organisational units both at the corporate level and at operational level in the regions, and selecting the management team that will lead the new Sustainable Development Network.

Next, we are moving towards defining specific indicators for the integration process, and then hold ourselves accountable to achieving them. We are also working on developing incentives for our staff to work across sectoral boundaries.

IPS: Some observers have questioned the amount of influence your new post will have.

GEORGIEVA: This is a new position, created by President Wolfowitz and Katherine Sierra, the vice president of sustainable development, as part of the new organisational design focused on putting sustainability at the forefront in World Bank operations.

I am privileged to enjoy the trust of the network’s leadership and am confident that we will make the best out of the opportunity presented by the integration to strengthen our performance as an institution committed to fighting poverty with lasting results – which can only be done in the framework of sustainable development.

IPS: Do you approve of the Bank’s moves to increase infrastructure investments?

GEORGIEVA: With the reorganisation, the Infrastructure Department was merged into the Sustainable Development Vice Presidency. One of the reasons for this was to make sure we can deliver on this commitment to increase the portfolio in an environmentally sound manner. I concur that infrastructure investments need to be increased – if we want to achieve the Millennium Development Goals and reduce poverty by 50 percent by 2015, infrastructure is indispensable. We have to respond to the legitimate demands of our clients – and do it in the right way, incorporating social and environmental concerns into infrastructure development.

IPS: But how do you plan to reconcile the Bank’s push for greater investments in infrastructure [such as energy and transport] and a cleaner environment?

GEORGIEVA: As I said, the new network makes sustainability everybody’s responsibility – and a comparative advantage of working with the Bank. Infrastructure will continue to be built, and we want the Bank to be in the lead of doing it with the utmost care for the environment.

IPS: Wouldn’t the new expanded network be an invitation for bureaucracy?

GEORGIEVA: We have carefully reviewed risks and opportunities of the integration and concluded that the opportunities in terms of operational synergies, improvements in outcomes in terms of sustainability and elimination of overlaps outweigh the risks. Synergies among various sectors should simplify, not complicate our work, and lead to leaner and more streamlined processes.

IPS: There was some talk about an external advisor with special expertise, or a council of advisors. Where does that stand?

GEORGIEVA: Yes, we are thinking of creating an advisory group that will help us and the president in getting external feedback on key issues of the sustainable development agenda. The modalities of how this will be operating will be ready by March 2007 when I take charge of my new position.

IPS: Many fear that the Bank will only pressure poor and developing nations whose contribution to environmental pollution and damage is minimal compared to powerful nations like the United States and Britain.

GEORGIEVA: We recognise the principle of common but differentiated responsibility, meaning that rich countries have the obligation of helping developing countries in moving forward towards a low carbon economy. It is also in developing countries’ own interest to move in this direction, but we are aware that investments are needed and we are working through the Clean Energy and Development Investment Framework to facilitate capital flows from both international financial institutions, regional banks and the private sector to developing countries.

IPS: How big of a role does investing in new energy sources and technologies play in your strategy?

GEORGIEVA: It is a key component of the energy strategy of the Bank. We have increased our energy efficiency and renewable energy portfolio by more than 20 percent during the last two years. However, we need to recognise that fossil fuels will be still part of the energy mix for the next 20-30 years, so we need to support countries in using cleaner technologies in order to mitigate the impacts on the environment, both in terms of local pollution and its impact on health, and with regard to climate change.

IPS: Critics note that the Bank has sometimes ignored recommended changes to better accommodate social and environmental needs. What reasons can you give to convince them your operation will be any different?

GEORGIEVA: Why do I think we will do better? Because the stakes are high, the challenges growing, and we have been learning from the past to do better and serve development the way the Brundtland Commission saw it, which defined sustainable development as “development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs.”

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