The World Bank Group’s Roles
in Regional Integration

In its work to foster regional integration, the World Bank Group plays three overlapping roles:

Enabler—providing “upstream” advisory and analytical support to create an enabling environment

Financier—financing “downstream” investments with World Bank financing and International Finance Corporation (IFC) investment services

Convener—engaging key government and private-sector stakeholders in dialogue to find collective solutions that support regional integration

Divisions between countries created by geography, insufficient infrastructure, and uncoordinated policies are impediments to economic growth. Regional integration allows countries to potentially overcome these costly divisions, to smooth the flow of trade, capital, energy, people, and ideas and to promote peace and security. Many of the World Bank Group’s client countries have turned to regional integration as a pathway to faster economic development and peace.

The World Bank Group’s fostering role to promote regional integration is valued by client countries, as we found in our new evaluation Two to Tango:  An Evaluation of World Bank Group Support to Fostering Regional Integration. This assessment by the World Bank Group’s Independent Evaluation Group (IEG) examined 867 projects carried out in the 15-year period from fiscal years 2003 through 2017. We concluded that the Bank Group’s support for regional integration led to mostly successful outcomes in improving connectivity, primarily regional infrastructure, in Sub-Saharan Africa.

Outside of Africa, however, Bank Group efforts were sporadic in strengthening public goods and supporting regional institutions. 

We can extract lessons that can be used to inform future regional integration operations by comparing some of the Bank Group’s successful efforts—in East Africa—with some challenges it faced—in Central Asia.

East Africa: high ambitions, well executed plans

East Africa is the continent’s fastest growing region, with a real gross domestic product (GDP) growth rate of 5.9 percent in 2017 that outpaced the continental average of 3.6 percent. Political unity has helped boost the region’s economy. The East African Community (EAC) was reestablished in 1999 and now comprises six member countries: Burundi, Kenya, Rwanda, Tanzania, Uganda, and (starting in 2016) South Sudan.

In this context, the World Bank Group contributed a couple of factors that led to positive outcomes of regional infrastructure projects, our evaluation found. First, the Bank Group developed a convincing strategic plan—the Africa Regional Integration Strategy, updated in 2008 and again in 2018. Second, the Bank Group worked successfully as a convener, specifically in the transport sector, where its regional integration efforts were focused in East Africa and elsewhere. The evaluation examined the perception of the World Bank Group’s influence in the transport sector by interviewing a group of stakeholders in the regional integration space in East Africa. (View the social network analysis diagram at the bottom of the page). The conclusion was that the Bank Group’s convening power was a considerable factor in the success of regional connectivity infrastructure interventions. The Bank Group’s strong convening power in regional issues results from its apolitical approach and neutral position during difficult conversations with clients, and from its combined strengths in regional knowledge and regional investment, the evaluation found.

With the support of the EAC, the Bank Group worked on a strong pipeline of projects in East Africa, investing a total of $5.7 billion to support regional transport development. For example, IFC invested in Magerwa, a logistics company that developed a business plan for logistics activities with infrastructure in the key East African ports of Mombasa, Kenya, and Dar-es-Salaam, Tanzania. Another example was the Lake Victoria Transport Program, a World Bank project to upgrade and maintain roads in Rwanda in order to improve the efficient and safe movement of people and cargo between Rwanda and the neighboring countries of Burundi, Democratic Republic of the Congo, and Tanzania.

Furthermore, the joint EAC/Bank Group efforts achieved some regulatory successes. For example, East African Community Customs Management Law was implemented in the transport sector and harmonized aviation safety and security regulations were achieved in EAC member countries.

Central Asia: a challenging path, untapped potential

Landlocked, mountainous Central Asia lies conveniently at the heart of the Eurasian continental space. The disintegration of the Soviet Union in 1991 removed political barriers that had held back the region’s economic integration with neighboring China, Europe, the Middle East, and South Asia. However, over the next three decades, several regional organizations with overlapping memberships and mandates were created in Central Asia, resulting in a “spaghetti bowl” of weak regional institutions.

The result of this history is that Central Asian countries have similar economic structures concentrated on the export of a few primary commodities, and low levels of intra-regional trade. Recently, some developments have opened a new space for regional integration in the region, which comprises Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan:

  • The president of formerly isolated Uzbekistan, Shavkat Mirziyoyev, signaled at a meeting of the region’s leaders in March 2018 that he was willing to break with the past and take the lead in promoting regional cooperation to boost economic growth.
  • Central Asia’s rapidly growing population will put pressure on the region’s limited resources and require the countries to create more economic opportunities.

In this context, the World Bank Group has sporadically supported regional integration projects in Central Asia in the road and water sectors, but has lacked a long-term strategy. For example, the World Bank’s Northern Aral Sea project, completed in 2005, managed to recover part of what was once the world's fourth-largest lake, but which had virtually disappeared because of extensive Soviet-era farm irrigation projects. However, because Uzbekistan and Kazakhstan didn’t agree on water management issues, the World Bank halted a new Aral Sea project.

Our interviews with key stakeholders in Central Asia revealed that the Bank Group’s work on regional integration has yet to meet the region’s demand, and that to develop a winning strategy, the Bank Group must consider political economy factors that include weak rule of law and regulations that aren’t harmonized across the region. 

Opportunities for the Bank Group that emerged from the stakeholder interviews are that Central Asian governments want to develop regional air connectivity and the tourism sectors. Furthermore, Kazakhstan government stakeholders identified saving the Aral Sea as a major benefit of future regional cooperation.

Toward a more unified and strategic approach for growth and peace

Our evaluation recommended that the Bank Group apply the following lessons learned from its successes in East Africa, to improve its regional integration efforts in Central Asia and elsewhere:

  • Where there is strong demand, such as in Central Asia, initiate high-level, strategic commitments to regional integration. To accomplish this, the Bank Group should start with an assessment of the integration strategies at the sub-regional level, following the example of the the 2008/2018 Africa Regional Integration Strategy
  • Intensify partnerships with traditional and nontraditional regional stakeholders to promote collective action and knowledge-sharing, both within and across regions. This would include crowding in from the start new partners for regional integration, most notably the private sector, industry associations, and regional institutions. In the case of Central Asia, the new partners could include private players in the transportation and tourism sectors. As for Central Asia’s regional organizations, given the existing “spaghetti bowl” of many overlapping organizations, this could be a challenge, but any step in this direction could help to clarify the relative roles of each institution and to create synergies, as did the Bank Group’s close collaboration with the East African Community in the areas of transport and regulatory reforms

Read the evaluation | Two to Tango: World Bank Group Support to Regional Integration

To assess the Bank Group’s convening power role more closely in a specific sector, the evaluation examined the perception of the World Bank Group’s influence in the transport sector among a group of stakeholders who were interviewed. An Influence Network Map was developed based on the responses obtained. The size of the WBG node below and its relatively centralized location reinforce our finding that the Bank Group’s convening power was a considerable factor in the success of regional connectivity infrastructure interventions.