World Bank contracts 2017: Key sectors and regions

The World Bank Group is gearing up for its annual meetings, held together with the International Monetary Fund in October. Every third year, the meetings are hosted by a member country — this time, it’s Indonesia. For the bank, ending extreme poverty and boosting shared prosperity continue to be overarching goals. The annual meetings are paramount in bringing together a large number of member country officials along with other stakeholders such as central bankers, civil society, private sector representatives, and academics to deliberate on critical global affairs such as economic development, aid effectiveness, climate change, global financial stability, and poverty eradication. Borrowing countries, executing agencies, and project implementers will be looking at the outcomes of the meetings as a main indicator of where the bank will be investing in the near future. But what can we learn from its investments over the past year? Devex analyzed the World Bank’s contract awards data for fiscal year 2017 to find out, highlighting the best-funded sectors, the most competitive award areas, and which countries have moved in the ranks since 2016. The analysis is based on data covering major awards under International Bank for Reconstruction and Development and IDA investment projects, loans, grants, and related trust funds. Where the bank signed more contracts Each year, the World Bank’s lending across lower-income countries generates thousands of contract opportunities to support its 14 global practices and five cross-cutting areas. For fiscal year 2017, the total amount of contracts awarded stood at $11 billion and reached 131 countries. This represents a 22 percent decrease on the $14.4 billion worth of contracts awarded in 2016. The contracts were awarded toward four broad procurement categories: Civil works, goods, consultant services, and non-consulting services. In 2017, more than 60 percent of the dollar total went toward civil works, in-line with growing infrastructure needs around the world — especially to the fast-growing region of Asia, which will need $1.7 trillion invested in infrastructure per year until 2030 to maintain its growth momentum while addressing issues of poverty and climate change, according to the Asian Development Bank. The World Bank trend from 2006 onward shows that, on average, Asian countries have the highest investment in civil works contracts, both in terms of where the project is implemented, primarily Pakistan and India, as well as the contractor’s country of origin, primarily China and India. Although civil works took the highest value of contract awards, it is consultant services that proved to be the most competitive area, in terms of the number of contractors involved. Contractors for consultant services made up 55 percent of the total, followed by goods, then civil works. Main sectors In 2017, 33 percent of World Bank contracts went to water and sanitation — almost double that of the previous year — good news for advocates who stressed the urgent need for financing at Stockholm World Water Week last month. WASH has become a key focus area for the bank, which recently launched a bond series to raise funding for water and ocean resources. The second key sector in 2017 was transportation, making up 24 percent of the total value of contracts awarded. Contracts in this sector decreased by about half compared to 2016. The third key sector was energy, with contract awards more or less constant for 2016 and 2017. Regional breakdown The World Bank’s contract spending has become more geographically diversified over the past decade, although the direction of that diversification has remained fairly consistent. As a borrower, South Asia won the highest amount of contract awards in 2017, followed closely by Africa. When it comes to consultant contracts specifically, Africa won more than double the awards of the next highest region, Eastern Europe and Central Asia. Looking at countries, the Democratic Republic of the Congo received the highest number of contract awards at 251, followed by Vietnam and China. In terms of absolute value, though, Pakistan received the most, at $2.04 billion. The donor community’s trend toward working more with local partners is reflected in the World Bank’s contract awards. Four out of the top 10 contractor countries in 2017 are also the top borrowers. Chinese contractors won the highest value of contract awards at $4.29 billion but of that, only $600 million were for implementing projects on home ground. Although that still made China the second-leading destination for work implemented by Chinese contractors. The rest was for projects in 30 countries, the largest contract standing at $1.8 billion for a project in Pakistan. The second most successful contractors were from India, which received $750 million worth of contracts for projects within Indian territory and $224 million worth of contracts for projects in 17 other countries. As for Turkey, which takes third place on the list of contractors, $76.5 million of contracts were local and the remaining $593.5 million spread over seven countries.