International finance corporation country partnership strategy
C. The Programmatic Development Policy Lending Program (PDPL)
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- D. Partnerships and Participation
- VII. Results-Based Monitoring and Evaluation
- VIII. Risks and Mitigation Remedies
C. The Programmatic Development Policy Lending Program (PDPL)The proposed policy lending under this CPS provides continuity with the 2003-2006 CAS and this new CPS. Under the 2003-2006 CAS, a new three-year PDPL series was launched. The first of the proposed three PDPLs was approved by the Board on October 27, 2005. The goals of the PDPL are in line with the new CPS. The program aims to promote economic growth and job creation through reforms to improve the investment climate and reforms to strengthen the governance and efficiency of the public sector. The PDPL reforms are being implemented in conjunction with a number of investment projects approved by the Board during the last CAS. The Health project, the Business Environment project, and the Legal and Judicial Reform project have all been designed and implemented in many respects to support the PDPL-supported reform program. All of these investment loans will have an implementation period which will carry them through this CPS. PDPL 2, the second in the series is being presented to the Board together with this CPS. A proposed PDPL 3 is envisaged for FY08. To ensure continuity with the next CPS, the first of a new multi-year PDPL series is envisaged to be launched in FY10, the last year of this CPS period. The scope of the new series will be informed by the core diagnostics envisaged for FY07-10 including the CEM, CFA, the programmatic poverty assessments, the PER and PER update, and the FSAP. Lessons learned from an evaluation of the current PDPL series will also inform the design of the new series. D. Partnerships and ParticipationExtensive consultations underpinned the preparation of the CPS (Annex 5). The country office started internal consultations in late 2005 with a Country Team retreat and continued throughout the year. A CPS government counterpart team was formed to guide the preparation of the strategy. Consultations with stakeholders took place throughout 2006. A Client Survey brought first hand information on the views of our clients on the areas that the Bank should focus on and confirmed the importance of the Bank’s work in the country. Four workshops with local authorities, private entrepreneurs and civil society representatives were held in different regions of the country, which were held to examine youth priorities and their expectations for the new CPS. The draft CPS outline was presented to other international partners in late January 2007.
The EU plays a central role in defining fYR Macedonia’s development agenda. The Bank enjoys a close relationship with the EU, both in Skopje and in Brussels. This close relationship has ensured a good match between EU and Bank activities (see Annex 10 for detailed information on Bank support in relation to the European Partnership program). As part of the CPS preparation process, Bank and EC country teams meet at least once every year for a “fYR Macedonia Coordination Day”. The meeting in 2006 focused on comparing the strategic direction of EC (progress reports, multi-annual program support [MIPS]) and WBG programs, as well as explored ways to deepen operational collaboration. At project level, Bank operations closely follow (sometimes evolving) EU requirements to ensure consistency in policy advice. The Bank will maintain coordination with the IMF, which is expected to continue to monitor the macroeconomic framework under its ongoing three-year SBA, and will continue macro monitoring even without an active arrangement. The PDPL program has been developed in close cooperation with the IMF. Also, sectoral advice and lending (for example health and energy) continues to be coordinated with Fund staff. Without a Fund arrangement, the Bank will have to take a more substantial role in assessing macroeconomic performance, and will initiate periodic assessments in this area. Harmonization with other development partners, in particular with the EC, USAID, the Dutch and Swedish Governments and the EBRD and the UN, is a critical element of the CPS implementation strategy. The need to leverage technical and financial resources provided by other development partners, often on a concessional basis, is crucial. In line with principles developed under the Paris agenda on Aid Effectiveness, the government takes an increasingly active role in aid coordination, organized through its Secretariat for EU Integration, which hosts monthly donor coordination meetings in all major reform areas, usually co-hosted by a leading donor in the area. In addition, line ministries and other institutions host donor meetings in their respective sectors, attended by the most active donors in their sectors. Accordingly, the Bank intends to design programs and projects that integrate the comparative advantage of the development partners and ensure an optimal investment impact for fYR Macedonia. In this framework, the Bank will continue to offer its international expertise and design systemic approaches which will enable other partners to participate in financing and cost sharing. VII. Results-Based Monitoring and EvaluationCPS results monitoring will be undertaken jointly with the government. Monitoring will track progress towards achieving outcomes influenced by Bank interventions agreed to be undertaken as part of the CPS. Box 3 puts forward the major results and outcomes to be influenced by the Bank and achieved by the government during the CPS period, with more details outlined in the CPS Results Matrix (Annex 1). More specific results frameworks will be built into the individual Bank interventions. The Bank will primarily depend on government systems and agencies for the compilation and verification of results and milestones. The statistical system of fYR Macedonia is capable of producing reliable and high quality statistics. The coverage of the vital registration system is relatively complete. With technical assistance from bilateral and multilateral agencies (including the World Bank), the Macedonian authorities have made significant progress in upgrading the statistical system, including basic data collection, standards, and methodology for economic and financial statistics. The sample-based household surveys are fairly up-to-date. The bank will also undertake a strategic AAA program to ensure good tracking of results, including: (i) macroeconomic monitoring; (ii) Programmatic Poverty Assessment (FY07-FY09); (iii) Public Expenditure Reviews (FY07 and FY09); (iv) FSAP (update in FY08 and full in FY10) and (v) Country Fiduciary Assessments (FY07 and FY10).
VIII. Risks and Mitigation RemediesRegional (in)stability in the region will greatly influence the sustainability of the economic reform efforts and EU accession ambitions of fYR Macedonia. Political instability and uncertainty in the region, mainly related to the resolution of the Kosovo status, affects the investment climate in fYR Macedonia and adverse developments in the region could spill over to fYR Macedonia, as was the case with the Kosovo crisis in 1999. The political consensus in the country on fostering peaceful cooperation with its neighbors and strong consent and cooperation with the international organizations are important preconditions for successful management of such risks. The prevailing political commitment across the region toward EU integration will further serve to mitigate political risks. The many initiatives to encourage further regional integration, such as CEFTA, should help mitigate these risks as well. The Bank will monitor regional developments closely and make necessary adjustments to the support strategy if warranted. Domestic political developments also pose a risk to the implementation of the reform program. Political divergence between the various ethnic parties can cause a slowdown of implementation of the reform program that will be supported by this CPS, and can delay critical reforms necessary for EU integration as well. Second, the government is composed of a coalition that includes several smaller parties. Regroupings within the coalition are possible, which in turn, may limit the government’s ability to pursue necessary far-reaching reforms that may require qualified majorities in Parliament. Flexibility in the CPS program will enable the Bank to adjust its support strategy should the political conditions warrant. A delay in EU membership could result in political turmoil that could adversely impact the implementation of the reform program. The EU accession process, a top priority for all political parties and strongly supported by the population at large, is a strong incentive to achieve consensus for key structural and institutional reforms. This strategic direction helps focus the government efforts on critical reforms, especially those identified in the EC Progress Reports. Also, strengthening institutional capacity to ensure effective absorption of EU funds is an important incentive for continuing progress in this area. These incentives will become weaker if progress on the road to Europe would slow down. The EC closely monitors progress on reforms regularly, and the monitoring of the Bank’s program can also help identify areas that require additional efforts to address this risk to the Bank program. Download 2.05 Mb. Share with your friends:
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