Annual trust fund implementation progress report to development partners Australia, Canada, European Commission, Finland, Germany, Norway, Switzerland, United Kingdom (English)

For countries endowed with mineral wealth, extractives sector management is a challenging task. However, one aspect of the sector that is predictable is the cyclical nature of commodity prices. Currently, the outlook for commodity prices shows an upward... See More + For countries endowed with mineral wealth, extractives sector management is a challenging task. However, one aspect of the sector that is predictable is the cyclical nature of commodity prices. Currently, the outlook for commodity prices shows an upward trend. The World Bank’s most recent Commodities Markets Outlook of October 2017 reported that in the oil market, inventories continue to fall amid strong demand, OPEC production restraint, and stabilizing U.S. shale oil production. Global gas demand has increased over the past decade and, with the increased interest in cleaner energy, is expected to grow by 2 percent per year between now and 2030. Looking ahead, demand for gas is expected to strengthen from new chemical and fertilizer capacity and from rising exports by pipeline to Mexico and via liquefied natural gas (LNG) worldwide. In 2016, global liquefied natural gas (LNG) demand reached 265 million tons, indicating an increase in net LNG imports of 17 million tons from the previous year. The World Bank’s Metals and Minerals Price Index surged by 10 percent in the third quarter of 2017 due to strong demand—particularly in China’s property, infrastructure, and manufacturing sectors—and various supply bottlenecks. Metals prices have risen in five of the past six quarters, and prices for the first nine months of the year averaged 26 percent higher than the corresponding period of 2016.These continued cycles of uncertainty faced by the sector and global economies in general continue to encourage World Bank client countries to push for reforms to improve the investment climate and sector governance transparency while improving economic, environmental, and social sustainability of the industry and increasing benefits from resource extraction to their citizens. The World Bank has abundant and diverse experience and expertise in supporting its resource-rich client countries to reform their extractives sector. It offers technical assistance on geodata collection and analysis; sector governance, including transparent licensing and tendering of assets; environmental and social management; local content development; fiscal policies; and overall legal, regulatory, and institutional frameworks. The World Bank Energy and Extractives Global Practice (Extractives Team—GEEX) annually produces approximately 50 knowledge products, which range from new research on extractives topics to communities of practice and just-in-time client support on a wide variety of sectoral issues. If the current upward trend in commodity prices persists, there will be greater need for reforms to prepare resource-rich developing and transition economies for potential new investments and sector development. Transparency and accountability, including adherence to the Extractive Industries Transparency Initiative (EITI) Standard, are key elements for an extractives sector to contribute to a sustainable, and equitable economic growth. Globally, EITI has gained enormous momentum with new countries joining the Initiative. At the same time, the EITI Standard has gone far beyond the initial scope of revenue disclosures. Over its two years of activities, the EGPS has managed to accommodate about 50 activities, with about 30 projects to be added during fiscal 2018. Through fiscal 2017, the EGPS followed a demand-based approach for financing within its four topical pillars. The EGPS offers a comprehensive approach to the reform needs of client countries and leverages, where possible, the World Bank’s broader portfolio in the extractives sector and other donor support. This approach ensures that the World Bank and developmentpartners will be better equipped to address the World Bank’s twin goals of ending extreme poverty and boosting shared prosperity.  See Less -