World Bank Document

cies and performance against the medium-term Finally, foreign direct investment is an important
growth objectives should provide a basis for aspect of the Bank's catalytic role and its function
encouraging the flow of new lending into high- in international capital flows. In the past, the Bank
priority sectors and investments.
Group has sought to encourage private investment
To ensure that the resumption of growth is sus- both directly, through the activities of the IFC and
tainable, the continuing adjustment efforts must certain specific Bank projects, and indirectly, by
be based on a stable economy and a sound financing investments in physical and human
medium-term policy framework. This requires that infrastructure and by helping governments revise
the Bank's relations with the International Mone- their foreign investment codes. Much of the work
tary Fund enable both institutions to provide con- the Bank does in support of structural adjustment
sistent, effective support to their members. This is also directly related to the prospects for private
objective is critical in resolving stabilization prob- investment. An important new initiative is the prolems
and in supporting the transition to sustain- posed Multilateral Investment Guarantee Agency,
able growth in major middle-income debtor coun- which would provide various forms of guarantees
tries whose economies have recently begun to to foreign investments, including multinationally
recover. This implies the need for a coherent financed investments, and reinsure guarantees
approach to policy issues and coordinated efforts written by national insurance agencies.
to mobilize support for policy reform.
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