For Official Use Only CLR Review Independent Evaluation Group 1. CAS/CPS Data Country: Republic of Belarus CAS/CPS Year: FY13 CAS/CPS Period: FY14 – FY17 CLR Period: FY14 – FY17 Date of this review: April 9, 2018 2. Ratings CLR Rating IEG Rating Development Outcome: Moderately Satisfactory Moderately Satisfactory WBG Performance: Good Good 3. Executive Summary i. This review of the World Bank Group’s Completion and Learning Report (CLR) covers the period of the original Country Partnership Strategy (CPS), FY14-17, and the Performance and Learning Review (PLR) discussed at the Board on June 30, 2016. The CPS period was not extended at the PLR stage. ii. Belarus is an upper middle-income country with a GNI per capita income of $5,600 in 2016. During 2014-16 the economy contracted at an average annual rate of -1.6 percent, compared with an average growth of 1.8 percent for the ECA region. The country’s Gini coefficient is 27.2 and its poverty headcount ratio based on the national poverty line was five percent on average in 2014-16, comparable with rates in advanced countries. Rural poverty during this period was 8.3 percent. While income distribution and poverty measures place Belarus with more advanced countries, human development remains a challenging area. The country ranks 52nd on the UNDP Human Development Index. iii. The IMF’s most recent Article IV Consultation Report (December 2017) reports that a broad- based economic recovery is now underway, supported by more favorable external conditions and stronger domestic demand. At the beginning of the CPS period, Belarus had a large public enterprise sector, an underdeveloped private sector, and policies for broad-based income distribution. These conditions have not changed during the CPS, and challenges remain to reform the state-owned enterprises (SOEs), improve labor and product markets to remove impediments for private sector growth, and develop more efficient social safety nets to support social stability. iv. The CPS corresponded well with the government’s stated development objectives and was aligned with the government’s Program of Social and Economic Development for 2011-2015 which has since been followed by a 2016-2020 Development Program and Action Plan. The CPS program had three pillars: (i) improving competitiveness of the economy by supporting structural reforms, including reducing the role of the state, transforming SOE sector, promoting private and financial sector development and integration into the global economy; (ii) improved efficiency and quality of public infrastructure services, enhanced and sustainable use of agricultural and forestry services, and increased public goods benefits; and (iii) improved human development outcomes through better delivery of education, health and social services. To this end, the CPS program sought to support some areas of government reforms, but with modest actual ambitions in line with the CLR Reviewed by: Peer Reviewed by: CLR Review Manager/Coordinator Nils Fostvedt Juan Jose Fernandez-Ansola Pablo Fajnzylber Consultant, IEGEC Consultant, IEGEC Manager, IEGEC Albert Martinez, Lourdes N. Pagaran Consultant, IEGEC CLRR Coordinator, IEGEC CLR Review For Official Use Only Independent Evaluation Group 2 government’s desired careful pace of reforms. The CPS program was further modified in the 2016 PLR. v. The original lending program (FY14-15) comprised of five operations for $380 million, of which three materialized during the CPS period for a total of US$ 290 million. Following the PLR, the overall expected program was $976 million for the FY14-17 period. At the end of the CPS period, total program lending amounted to $655.7 million, consisting of seven projects (all IPFs including two additional financings). Trust funds for $15.2 million were active during the CPS period. For the same period, IFC made net commitments of $205 million, of which trade finance accounted for a much-increased share of 75 percent. The bulk of IFC’s net commitment (73 percent) took place in the early part of the CPS (FY14). MIGA approved guarantee coverage of $115 million for the equity investment of an Austria-based bank in its subsidiary in Belarus. vi. On balance, IEG rates the overall development outcome rating as Moderately Satisfactory. Five of the seven objectives were rated Mostly Achieved. Focus Area I was Moderately Unsatisfactory. There was progress on structural reforms, but limited progress on transparent management of public resources, and increasing diversification of the financial market; however, there was little or no progress on improving the business environment or financial inclusion. All three objectives had shortcomings in their selected indicators. Focus Area II was Moderately Satisfactory. There was progress on the forestry sector roadmap, energy efficiency, improved quality of water, and road safety; but limited progress on waste water treatment and waste disposal. Focus Area III was also Moderately Satisfactory. There was only one objective for this focus area, which achieved improvements for a policy framework for health sector reforms. vii. IEG rates the WBG performance as Good. The CPS as designed addressed important areas for the development of Belarus, with an appropriate combination of lending and knowledge activities (ASA). The program sought to address (mostly through ASAs) some important areas of structural reforms while using investment lending operations to address other priorities in energy, agriculture and health and education. It was designed to be adaptable and flexible, and the CPS only identified planned lending operations for the first two years. The program adjusted or dropped initiatives when met with government lack of interest. Portfolio performance at exit has been good (albeit based on two projects) with respect to the ECA region and the Bank average. Fiduciary and safeguard issues have been well handled, and there were no major issues during CPS implementation. Risks were mostly adequately identified and reasonably addressed. The PLR came late in the CPS period, and led to the easing of some targets and the elimination of one objective, but otherwise the program was largely maintained. Several outcome indicators were pitched at the project rather than program levels, which could imply that these investments have limited additionality. The actual lending program was smaller than envisaged at the CPS and in the PLR. The actual IFC program was also smaller than in the previous period, with approvals concentrated in the first year, and heavily focused on trade finance. Overall, the WBG has had to work within the constraints of a quite narrow framework, although the program reasonably took some risks for reforms that largely were not achieved. viii. IEG concurs with a number of the CLR lessons including: (i) successes are associated with areas where the WBG was able to align support with the authorities’ reform plans, and which delivered concrete, easily measurable results and efficiency gains, and (ii) willingness to support reforms step by step but also willingness to understand detailed implementation practicalities and to develop acceptable financing mechanisms is important for long-term results. ix. IEG adds the following lessons: • First, programs aiming at policy or structural reforms supported through ASA may need to be balanced with other instruments such as “traditional” investment lending for service delivery in order for a program to go forward even if the reform components do not receive sufficient government buy-in. In the case of Belarus, the program rightly included components addressing required reforms, but these components were mostly delayed or CLR Review For Official Use Only Independent Evaluation Group 3 did not materialize, while the program’s IPF components provided vehicles for dialogue with the government and to work towards more limited sectoral objectives. • Second, program indicators need to be designed carefully to measure progress and achievements in the stipulated objectives. In the case of Belarus, the CPS used some indicators that were no longer monitored at the beginning of the CPS (EBRD transition indicators) or were based on surveys produced as part of other exercises (PEFA) that would not be delivered during the program period. Such indicators could have been retrofitted at the PLR and/or additional interim indicators provided to ensure monitoring and reporting of such indicators during and at the end of the CPS period. 4. Strategic Focus Relevance of the WBG Strategy: 1. Congruence with Country Context and Country Program. Belarus is an upper middle- income country with a GNI per capita income of $5,600 and a population at the time of the CPS of 9.5 million. The country ranks 52nd on the UNDP Human Development Index. The country’s Gini coefficient is 27.2—France had a Gini of 29 in 2015 for comparison—and its poverty headcount ratio based on the national poverty line was five percent on average in 2014-16, comparable with rates in advanced countries. During 2014-16, the economy contracted at an average -1.6 percent annual rate, compared with an average growth of 1.8 percent for the ECA region. In an effort to revive growth, beginning in early 2015 the exchange rate was floated (and depreciated), prices liberalized, and efforts made to address state-owned enterprise (SOE) inefficiencies. 1 The IMF’s most recent Article IV Consultation Report (December 2017) reports that a broad-based economic recovery is now underway, supported by more favorable external conditions and stronger domestic demand. 2. The CPS was well aligned with government’s Program of Social and Economic Development for 2011-2015, which has since been followed by a 2016-2020 Development Program and Action Plan. The CPS stated that “Comprehensive structural reforms will be critical to regaining competitiveness, maintaining macroeconomic stability and sustaining growth”. To this end, the CPS program sought to support areas of reforms to improve the competitiveness of the economy by supporting structural reforms, including the role of the state, transforming the SOE sector, and promoting private and financial sector development and integration into the global economy. However, as discussed later in this CLRR, the actual ambitions of the CPS program were more modest in practice as a reflection of the government’s desire for a gradual pace of reforms. Thus, the 2017 IMF report notes that in spite of the improved macroeconomic performance, pervasive government involvement in the economy- including government directed lending by state owned banks, price controls, and quasi-fiscal operations and subsidies- continue to distort resource allocation and efficiency. 3. Relevance of Design. Overall, the program covered a range of activities of importance for the economic development of Belarus. The objectives were of reasonable clarity and alignment with expected interventions (lending and non-lending). While there were linkages between outcomes (and their indicators) and stated objectives, the link between the two could have been tighter. For example, the results indicators for education and health dealt with organizational reforms and had no intermediate indicators for quality or results in the education and health sectors. Several outcome indicators were pitched at the project rather than program level, which could be a sign of lack of broader additionality beyond investment financing. The CPS program identified new lending only for the first part of the program period (FY14 and FY15), while the lending scope and specific projects for the outer years would be defined in the CPS Progress Report (now PLR). Since the PLR was only prepared in June 2016 – one year before the end of the CPS period – this gave little time for the additional lending in the PLR to contribute to or have a measurable impact on outcomes during the program period. There were no cross-cutting areas in the FY14-FY17 program, but the CPS 1 Monetary and fiscal policies were simultaneously tightened to contain the possible inflationary effects of these policies. CLR Review For Official Use Only Independent Evaluation Group 4 nevertheless flagged several thematic issues for the program - governance, social accountability and gender. Selectivity 4. The three focus areas and eight (later seven) program objectives were appropriate given the government’s priorities and limited Bank resources. The planned lending and ASA program covered a range of important topics, although the CPS identified possible lending operations only for the first two years of the program period in line with its flexible approach. The ASA work was well linked with lending operation and reforms supported by the Bank, although it lacked clear prioritization. For this period, two of five planned lending operations were for additional financing, two in areas where the Bank had a reasonable comparative advantage, and one (in public financial management modernization) for an area of reform; the latter only materialized later in the CPS period and in much reduced lending commitment. The additional operations identified in the PLR were for investment project financing (IPF) operations requested by the government and for which the Bank had significant experience. Alignment 5. IEG concurs with the assessment in the CLR that given low levels of extreme poverty and of inequality in Belarus, the Bank’s focus on shared prosperity and reduced vulnerability was appropriate. However, only one of the seven objectives in the Bank program addressed shared prosperity directly: Laying the ground for increased efficiency of health and education services delivery. The CPS also included ASA to analyze social impacts of policy reforms such as removal of subsidies on utilities tariffs. There was however an implicit tension in the program as originally designed between shared prosperity in the short to medium term and the need for improved competitiveness and increased reliance on market forces, although this became less clear given the lack of progress on such aspects as privatization. 5. Development Outcome Overview of Achievement by Objective: 6. Following the IEG-OPCS Shared Approach (SA) for Country Engagement, the assessment of the development outcome is based on the updated results framework at the PLR stage. In line with the SA, this review applies the following nomenclatures: focus areas and objectives corresponding to the CLR’s pillars and results areas, respectively. Focus Area I: Improving competitiveness of the economy by supporting structural reforms, including the role of the state, transforming state owned enterprise sector, promoting private and financial sector development and integration into the global economy. 7. Objective 1: Economic Stability and Competitiveness. This objective, with two outcome measures, was supported primarily through the FY16 Public Financial Management Modernization Project and technical assistance (TA) including through the Programmatic Structural Reform TA and TA for fiscal governance and trade policy. Inter alia, these items of TA supported policy dialogue with the government, capacity-building for officials, and various items of analytical work including on macroeconomic stability and fiscal sustainability, transformation of SOEs, private sector development, medium-term budgeting, heat tariff reform and social impact mitigation. The CLR also notes that the 2015 Roadmap of Structural Reforms was incorporated into government policy documents. 8. Outcomes: (i): Progress made in structural reforms (as measured by the scores of four EBRD transition indicators). Achieved. The outcome was based on achieving modest improvements FY14-17 in four EBRD transition indicators – three indicators (governance and enterprise restructuring; price liberalization; and competition policy) were reported as achieved and one (trade and forex system) as slightly exceeded. As defined, these indicators would underpin reasonably well the outcome. However, EBRD stopped reporting the transition indicators after 2014 (baseline year) and the CLR CLR Review For Official Use Only Independent Evaluation Group 5 data are based on Bank staff calculations using EBRD methodology. These calculations were not presented in the CLR, but the country team has subsequently provided a comprehensive explanation to IEG on the calculations. (At the PLR, the components of the EBRD indicator for small scale and large scale privatization were dropped from the calculations.) (ii) More transparent management of public resources. Not Verified. There were two indicators: (a) The PEFA PI-10 score for public access to key fiscal information was targeted to increase from C in 2009 to B in 2017; and (b) PEFA PI17 – recording and management of cash balances, debt and guarantees – improved from C+ in 2009 to B+ in 2014, which was the target for 2017. Since PEFA indicators were not available after 2014, these indicators were not well chosen. The country team indicates that the indicators may have been achieved but IEG could not validate this information. 9. The chosen indicators, particularly the EBRD transition indicators, provided in principle significant but still only partial support for the objective of economic stability and competitiveness. However the PEFA scores as indicators were poorly chosen since they would not be produced after 2014. Additional information from the 2018 Doing Business Report shows improvements in the Belarus’ ranking from 63 in 2014 to 38 in 2017, although the country still lags significantly in the areas of getting credit and paying taxes. The 2017 IMF Article IV Consultation report notes that near-term external financing pressures have eased, and that the key macroeconomic and financial policy frameworks have improved somewhat, although external and public debts are high and medium-term financing needs are significant. Overall, based on additional information, Objective 1 was mostly achieved. 10. Objective 2: Deepening financial intermediation on market-based terms. This objective, with two outcomes, was supported primarily by an update in FY16 of the Belarus Financial Sector Assessment, together with other TA under the Programmatic Financial Sector Monitoring TA and the Consumer Protection TA. Bank technical support provided inputs and guidance, but it would not be reasonable to expect a one-to-one link between ASAs and results achieved under this objective. 11. Outcomes: (i) Improved financial inclusion. Not Achieved. The achievement of this outcome was to be measured by the share of population with savings account at a formal financial institution. The target was to reach 30 percent by 2017; instead the percentage declined to 11 percent by 2016 (below the baseline of 19 percent). This indicator was probably affected by overall macroeconomic difficulties during the CPS period. (ii) Increased diversification of financial market. Achieved. There were two indicators for this outcome: (a) Reduced flow of government directed lending on non-market terms (lending not using market rates). Achieved. The flow of government directed lending dropped from 7 percent of GDP in 2013 to 2.6 percent in 2016, compared to the target of 4 percent by 2017. The CLR notes that the 2015 ASA on directed lending helped guide the establishment of a comprehensive database at central and local government levels. (b) Increased availability of financing for micro, small and medium enterprises (MSMEs) of up to $10 million per annum. IFC made available in 2014 a credit of $13 million to one bank to support MSMEs and to support exporting companies through several banks. However, an indicator that can be achieved solely through WBG activities – as in this case - says little about conditions on the ground (activities of commercial banks or demand/supply of credit for MSMEs). 12. On balance, with one outcome Achieved and one Not Achieved, Objective 2 was Partially Achieved. 13. Objective 3: Liberalized environment for private sector investment. This objective was supported primarily by IFC TA for regulatory simplification and investment climate improvement, and by the Pilot Enterprise Privatization TA. The WBG’s intervention for this objective was largely advisory services, and its contribution to the very modest achievements could not be verified. 14. Outcomes: (i) Improved business environment for private entrepreneurs/investors. Not Achieved. This outcome had two indicators: (a) Growth (per annum) in newly created private enterprises and individual entrepreneurships was expected to increase from eight percent in 2010 to 12 percent in 2017. Between 2015 and 2016, the growth in new businesses was impacted by a CLR Review For Official Use Only Independent Evaluation Group 6 recession which resulted in a decline in registration of new individual entrepreneurs by 21.3 percent (compared to the targeted increase of 12 percent in 2017) while the registration rate of legal entities only grew by 1.9 percent. (b) The rate of legal entities stating unstable legislation as a severe obstacle to business declined to 40.9 percent (from a baseline of 59 percent in 2012) against a target of 34 percent by 2017 according to the Business in Belarus 2016 Report prepared by the IPM Research Center, (ii) Stronger reliance of the economy on the private sector. Not Achieved. This outcome was measured by one indicator – growing share of MSMEs in employment, with a target from 26.3 percent in 2012 to 30 percent in 2017. The share grew to just 26.7 percent in 2014 and then declined to 26.3 percent in 2016. It would have been preferable for this outcome to have been measured by more than one indicator (for instance, by also looking at private sector share of investments or exports). 15. With both outcomes Not Achieved, Objective 3 was Not Achieved. 16. For Focus Area I one objective was Mostly Achieved, one Partially Achieved, and one Not Achieved. Overall, Focus Area 1 was Moderately Unsatisfactory, and as noted above several of the outcomes and objectives were not fully supported by the chosen indicators. Focus Area II: Improved efficiency and quality of public infrastructure services, enhanced and sustainable use of agricultural and forestry services, and increased global public goods benefits. 17. Objective 4: Enhanced energy security and efficiency of resource use. This objective, with three outcomes, was supported primarily by the previous FY06 Post-Chernobyl Recovery Project (PCRP) and its FY11 Additional Financing, and the FY09 Energy Efficiency Project (EEP) and its FY13 Additional Financing. 18. Outcomes: (i) Increased energy efficiency in the Bank-supported projects. Mostly Achieved. The sum of energy savings from the two projects (PCRP and EEP) indicates that about 126 million M3 were saved by June 2017, against the target of 134 million M3. (ii) Reductions in carbon emissions through Bank-supported projects (tons/year, CO2 equivalent). Partially Achieved. The CLR reports achievement of 232,000 tons per year, compared to the target of 254,000 tons per year. However, only the savings under the PCRP could be validated by IEG since the June 2017 ISR for the EEP did not report on the reduction in carbon emissions in CO2 equivalent. (iii) Increased use of renewable energy resources in the Bank-supported projects. Achieved. Annual energy amount of renewable fuel used at about $264,000 MWh per year was well above the target of 200,000 MWh/year. 19. With one outcome Achieved, one Mostly Achieved and one Partially Achieved, Objective 4 was Mostly Achieved. 20. Objective 5: Improved standards in the agriculture and forestry sectors. This objective was supported primarily by the Forest Law Enforcement and Governance Programs I and II, implemented 2008-12 and 2012-16, respectively, that included Belarus among other ECA countries, and provided analytical background for the 2015-30 National Forestry Sector Strategic Plan. This support was followed up by the FY15 Forest Management Improvement project, which supported the implementation of the Strategic Plan. Support for the agriculture sector was provided through the TA for Strengthening Institutional Capacity for M&E of Agricultural policy and the IFC Belarus Food Safety Project. This objective had three outcomes. 21. Outcomes: (i) Forestry sector reform roadmap developed. Achieved. The roadmap (sectoral plan) was approved and is under implementation with support from the FY15 project. (ii) The cost of compliance for agri-business reduced (thus increasing the possibilities for agricultural exports). Mostly Achieved. This outcome had two indicators: (a) The system of food safety control to be aligned with EU practice as confirmed by IFC expert and EU missions. This indicator was met per the completion report of the IFC Belarus Food Safety Project. (b) Belarus dairy and poultry sectors get approved by EU for export. The CLR reports that the dairy sector has been certified for export to the EU, but not the poultry sector. The completion report for the IFC Belarus Food Safety Net Project reported that four dairy companies were approved for exporting to the EU, but does not report on the poultry sector. (iii) CLR Review For Official Use Only Independent Evaluation Group 7 Increased efficiency of food sector as measured by increased sales for client companies of the IFC Food Safety Project. Achieved. Sales for beneficiary companies increased to $34.2 million against the target of $30 million. 22. With two outcomes Achieved and one Mostly Achieved, Objective 5 was Mostly Achieved. 23. Objective 6: Improved public infrastructure and municipal public utility services. This objective, with five outcomes, was supported primarily by FY09 the Water Supply and Sanitation System project and its additional financing (FY14), the FY10 Integrated Solid Waste Management Project, and the FY11 Road Upgrading and Modernization Project. 24. Outcomes: (i) Improved quality of supplied water. Achieved. Population provided with access to drinking water compliant with national quality standards increased to more than 320,000 against the target of 277,000. (ii) Improved performance of wastewater treatment systems. Partially Achieved. The indicator was percent of regulatory treated wastewater samples complying with national standards for four cities at above 95 percent by 2017. IEG has validated the target for one city (Baranovitchi) as achieved, but data were not reported for the three other cities. (The September 2017 ISR for the FY09 project also reported that not all wastewater treatment plants had been completed). (iii) Reduced amount of waste disposed at landfill and higher rates of material recovery from solid waste. Partially Achieved. Tons of waste not buried at a landfill due to a new facility as of June 2017 is 4,735 tons against a target of 20,000 tons. (iv) Transport costs for road users on the upgraded sections of the M5 road reduced. Achieved. Vehicle operating costs were reduced by 14 percent by June 2015 against a target of six percent. (v) Road safety improved on the upgraded sections of the M5 road. Achieved. The number of fatalities dropped from nine to five between 2011 and 2015, and dropped further to two in 2016, against the target of five fatalities in 2014. 25. On balance, Objective 6 was Mostly Achieved, albeit with several outcome indicators pitched at the project rather than at program level. 26. Overall, Focus Area II was Moderately Satisfactory. All three objectives were Mostly Achieved. There was progress regarding forestry (sector reform roadmap developed) and agri- business /reduced cost of compliance), energy efficiency, quality of water, and road safety but limited progress in some areas such as waste disposal and reduction in carbon emissions. Focus Area III: Improved human development outcomes through better delivery of education, health and social services, with one objective. 27. Objective 7: Laying the ground for increased efficiency of health and education services delivery. This objective, with two outcomes, was supported primarily by the Programmatic Education Sector TA, the Strengthening Evidence-Based Policymaking for Education Sector TA, the FY17 Health Sector Modernization Project, and the Quality of Health Care Programmatic TA. 28. Outcomes: (i) Continued reforms in the area of school network reorganization. Partially Achieved. There were two indicators: (a) The roll-out of per-student financing started by 2017. From a small-scale pilot launched in 2015 there was scaling-up to 188 schools in 2016 and around 350-400 schools expected for 2017, although the available information does not permit IEG to validate that the pilot was implemented to 642 schools as reported in the CLR. (b) Increased school autonomy and increased efficiency indicators (class-size, student-teacher ratio) in pilots by 2016. The Completion Summary Note of the activities undertaken under the Programmatic Education Sector TA indicates that technical workshops were developed, but no specific baselines or targets were reported. (ii) Policy framework for health sector reforms improved. Achieved. A health sector reform strategy had been developed by 2017 as reflected in the government’s program of February 2017 - The Health of the Nation and Demographic Safety of Belarus for 2016-20 - a program that is expected to include reduced reliance on expensive hospital care and further development of primary health care. 29. With one outcome Achieved and one Partially Achieved Objective 7 was Mostly Achieved. CLR Review For Official Use Only Independent Evaluation Group 8 30. Focus Area III was Moderately Satisfactory. The sole objective was Mostly Achieved, with scaling up of the roll-out of per-student financing and the development of a framework for health sector reforms. Overall Assessment and Rating 31. On balance, IEG rates the overall development outcome rating as Moderately Satisfactory. Five of the seven objectives were rated Mostly Achieved. Focus Area 1 was Moderately Unsatisfactory. There was progress on structural reforms, but limited progress on transparent management of public resources and increasing diversification of the financial market; however, there was little or no progress on improving the business environment and financial inclusion. All three objectives had shortcomings in their selected indicators. Focus Area II was Moderately Satisfactory. There was progress on the forestry sector roadmap, energy efficiency, improved quality of water, and road safety; but limited progress on waste water treatment and waste disposal. Focus Area III was also Moderately Satisfactory. There was only one objective for this focus area, which achieved improvements for a policy framework for health sector reforms. Objectives CLR Rating IEG Rating Focus Area I: Improving competitiveness of the Moderately Not Available economy by supporting structural reforms. Unsatisfactory Outcome 1: Mostly Achieved; Objective 1: Economic stability and competitiveness. Mostly Achieved Outcome 2: Achieved Objective 2: Deepening financial intermediation on Outcome 1: Not Achieved Partially Achieved market-based terms. Outcome 2: Achieved Objective 3: Liberalized environment for private sector Outcome 1: Not Achieved Not Achieved investment. Outcome 2: Not Achieved Focus Area II: Improved efficiency and quality of public infrastructure services, enhanced and Moderately Not Available sustainable use of agricultural and forestry services, Satisfactory and increased global public goods benefits. Outcome 1: Achieved Objective 4: Enhanced energy security and efficiency of Outcome 2: Mostly Achieved Mostly Achieved resource use. Outcome 3: Partially Achieved Outcome 1: Achieved Objective 5: Improved standards in the agriculture and Outcome 2: Mostly Achieved Mostly Achieved forestry sectors. Outcome 3: Achieved Outcome 1: Achieved Outcome 2: Achieved Objective 6: Improved public infrastructure and municipal Outcome 3: Partially Achieved Mostly Achieved public utility services. Outcome 4: Achieved Outcome 5: Achieved Focus Area 3: Improved human development Moderately outcomes through better delivery of education, Not Available Satisfactory health and social services. Objective 7: Laying the ground for increased efficiency of Outcome 1: Mostly Achieved Mostly Achieved health and education services delivery. Outcome 2: Achieved CLR Review For Official Use Only Independent Evaluation Group 9 6. WBG Performance Lending and Investments 32. At the beginning of the CPS period, the outstanding lending volume was $548 million for seven lending operations, all Investment Project Financing (IPFs) including Additional Financing. Trust funded outstanding volume for the same period was $10.6 million. During the CPS period, total lending commitments of $655.7 million were approved for seven IPF operations. In addition, a total of $4.6 million trust funded commitments were approved for the same period. The original CPS lending program was only for FY14-15, consisting of five operations for $380 million, but the actual amount approved was for $290 million of which three materialized during the CPS period, while one was approved at the end of FY 13, and another – a proposed operation involving a $100 million loan for PFM (Public Financial Management) Modernization was delayed and scaled down to $10 million at the PLR. The indicative lending at the PLR included six operations for $755 million, of which four operations materialized for $435 million of new commitments. 33. Overall, the closed and active portfolio of Belarus showed good performance. During the review period, only two projects were closed and validated by IEG. Both were rated Satisfactory and with Moderate risk to Development Outcome. Both ratings compare favorably with ECA and Bank- wide averages, in terms of both value and number of projects. In terms of active portfolio, the disbursement ratio for Belarus at 22.1 percent for the CPS period was slightly above the average for the ECA region (21 percent) and the Bank (20.6 percent). However, the CLR notes that while the disbursement ratio is a bit higher than the ECA region, some projects were disbursing more slowly than anticipated at appraisal due to delays in procurement and the delivery of goods. For the same period, Belarus had projects at risk at 14.3 percent, well below the average for ECA (17.3 percent) and the Bank (23.9 percent). The CLR notes that disbursement profiles for investment operations would need to be adjusted to reflect the reality of slow start-ups and lumpy investments. 34. At the beginning of the CPS period, IFC had a net commitment balance of $453 million, of which major shares were for the Global Trade Finance Program (GTFP) (47 percent), financial markets (20 percent), and tourism, retail, construction, and real estate (TRP) (15 percent). During the CPS period, IFC made net commitments of $205 million (a lower amount than the $296.1 million committed during the previous CPS period (FY08-11)), of which the GTFP accounted for a much increased share of 75 percent. The bulk – 73 percent - of IFC’s net commitment activity during the CPS period came in FY14. Only one project has closed of the 20 projects that were active during the CPS period. 35. During the CPS period, IEG validated Expanded Project Supervision Reports (XPSRs) for two financial sector projects, with one rated Unsuccessful and the other Mostly Unsuccessful. Both projects were intended to provide demonstration effects to encourage entry and promote competition in the micro and small and medium enterprise (MSME) segment, but poor business performance limited their impact on sector development. A difficult economic environment, including a sharp depreciation of the local currency, contributed to the poor performance of these projects. Of the seven active projects with DOTS ratings, the latest ratings show that three are rated Moderately Successful, one Moderately Unsuccessful, and three rated Too Early to Tell. 36. During the CPS period, MIGA approved guarantee coverage of $115 million for the equity investment of an Austria-based bank in its subsidiary in Belarus. Analytic and Advisory Activities and Services 37. During the review period, the Belarus program delivered a total of 24 pieces of ASAs comprising four items of economic and sector work (ESW) and 20 items of Technical Assistance (TA). The ESW work included the delivery in FY15 of a study note on Tariff Reform and Social Impact Mitigation, and in FY17 of an FSAP Update (Financial Sector Assessment Program). The TA covered a wide range of activities such as for privatization, quality of health care, education, structural reform, fiscal governance, ICT strategy support, and shared prosperity. The CLR reports on the strong links CLR Review For Official Use Only Independent Evaluation Group 10 between ASA activities and lending and the roll out of reforms. But it further notes that the Bank could have done more in the consultation and dissemination of ASAs to a broader non-government audience. 38. At the beginning of the CPS period, there were three ongoing IFC Advisory Services (AS) projects amounting to $7.2 million. During the period, IFC approved two additional such projects totaling $3.5 million. One of these - the National Quality Infrastructure and Business Regulatory Program - accounted for more than 99 percent of that amount and aimed to support reforms in priority areas such as improving the investment climate. There were two IEG validations of AS Project Completion Reports (PCRs) during the CPS period. Development effectiveness was rated too early to judge for the support to a microfinance institution and not applicable for an energy survey project. Results Framework 39. The original CPS results framework with eight objectives was of reasonable size and complexity in relation to the WBG program. This was also the case for the revised PLR program that dropped one objective and reformulated the targets downwards for some indicators to reflect the developments on the ground. The CPS and PLR both reflected the links between the country development goals, issues and obstacles, the CPS outcome indicators and the WBG interventions, including both lending and ASAs, and activities of both IBRD and IFC. However, as discussed above some objectives were not well supported by the chosen indicators, and several outcome indicators were pitched at the project rather than program levels. Finally, some indicators were difficult to monitor and the attribution to WBG interventions was not always clear, as in the case of objectives under Focus Area 1. The CPS used some indicators that were no longer monitored at the beginning of the CPS (EBRD transition indicators) or were based on surveys produced as part of other exercises (PEFA) that would not be delivered during the program period. Such indicators could have been retrofitted at the PLR and/or additional interim indicators provided to ensure monitoring and reporting of such indicators during and at the end of the CPS period. Partnerships and Development Partner Coordination 40. The CLR reports that coordination with other development partners has been through professional contacts. Formal coordination mechanism among development partners has yet to be established. Nevertheless, the CLR notes that program implementation has benefited from growing partnerships, including with European institutions (including the EU, EBRD, the European Investment Bank (EIB), and the Nordic Investment Bank (NIB), with IMF on macro-economic issues in addition to joint work on the preparation of the Structural Reforms Roadmap – prepared in March 2015, and with UNICEF on the education, poverty, and health agendas. Belarus is also member of the Eurasian Economic Union, which facilitates trade and other economic reforms consistent with Russia’s membership of the WTO. Safeguards and Fiduciary Issues 41. During the review period, two projects (energy and transport) that were closed and validated by IEG triggered environmental and social policies. The CLR states that fiduciary and safeguard issues have been well handled, and that there were no major issues during CPS implementation. The ICRs and the ICRRs noted full compliance with the applicable safeguards and a faithful application of the requirements, with no major issues or adverse impacts on both the environment and the population. Regarding possible fraud and corruption, INT noted four complaints tin Belarus during the period FY14-17; three of these were not pursued but one (in the energy sector) remains open. Ownership and Flexibility 42. The CLR does not discuss ownership in any depth. Overall, the impression is that the government’s ownership of investment programs and their objectives has been significantly stronger than for structural reforms in the enterprise and financial sectors. For instance, most IPFs once approved were implemented at reasonable speed (although both civil works and TA contracts could be subject to delays), and project implementation delays have generally been resolved without affecting CLR Review For Official Use Only Independent Evaluation Group 11 the achievement of project outcomes. The Bank demonstrated flexibility by adjusting the program at the PLR stage. In cases where there was not sufficient dialogue with the government (such as on SOE restructuring, social assistance, labor market analysis, and unemployment insurance) or there were particular difficulties, planned programs were dropped, postponed or adapted. WBG Internal Cooperation 43. The CPS was a joint strategy of the Bank and IFC. The latter was envisaged to contribute to CPS objectives and outcomes in the following areas: financial market diversification, improved environment for private investors, improved energy efficiency, and reduced cost of compliance for agri- business. However, IFC’s scope for new activities was reduced due to downturns in the economic environment and slower progress in structural reforms and in privatization. Nonetheless, the CLR reports that the Bank and IFC collaborated in several areas, mainly through IFC’s advisory services, and though joint programmatic TA on SME development. These joint initiatives supported the CPS pillars on competitiveness and liberalized environment for private sector investment. In parallel, IFC also supported the Bank’s Transit Corridor Improvement Project by undertaking advisory work on reducing border clearance times, thus contributing to the implementation of the CPS objective on infrastructure. Risk Identification and Mitigation 44. The CPS and PLR identified and addressed appropriately the program risks. Thus the CPS identified as major risks the possible re-emergence of price and exchange risk instability, continued slow progress (or even reversals) of structural reforms, gas pricing, and deteriorating relations with the EU, which had remained strained since 1996 (with a few temporary reversals). The CPS document indicated that such risks could be managed to some extent through careful monitoring and consultations with key stakeholders. In case of reform stagnation, the CPS rightly indicated that WBG assistance would be calibrated, and in case of constrained reform space – which turned out to be the case – the Bank program would be limited to “traditional” uncontroversial investment projects for infrastructure needs, especially those with global public good benefits plus Bank ASA and IFC advisory services and (perhaps) investment in the private sector. The PLR confirmed that the risks (and responses) to program implementation identified in the CPS remained valid, saw the macro- economic risks to the CPS pillars as manageable, and noted that the risks arising from the strained relations with the EU and the West had become more manageable with the easing of the EU sanctions in February 2016. Overall Assessment and Rating 45. Overall, IEG rates the WBG performance as Good. 46. Design. The CPS as designed addressed important areas for the development of Belarus, with an appropriate combination of lending and knowledge activities (ASA). ASA products had strong links with lending operations and reform initiatives. The program was relatively broad, but with reasonable selectivity at the level of focus areas and objectives. It sought to address (mostly through ASAs) some important areas of structural reforms while using investment lending operations to address other priorities in energy, agriculture and health and education. It was designed to be adaptable and flexible to better respond to the government’s priorities and level of ambition. Hence, the CPS only identified planned lending operations for the first two years, and the program adjusted or dropped initiatives when met with lack of government interest. The choice of some indicators in the results framework was problematic, such as being based on surveys produced as part of other exercises (PEFA) that would not be delivered during much of the program period. Several outcome indicators were also pitched at the project rather than program levels, which could imply that these investments have limited additionality. 47. Implementation. The PLR came late in the CPS period. The CLR notes that the PLR should not have been allowed to slip into late FY16. The PLR led to the easing of some targets and the elimination of one objective, but otherwise the program was largely maintained. The actual lending CLR Review For Official Use Only Independent Evaluation Group 12 program was smaller than envisaged at the CPS and in the PLR. Portfolio performance at exit has been good (albeit based on just two projects) with respect to the ECA region and the Bank average. The active portfolio also showed good performance as measured by disbursement ratio and percentage of projects at risk. The actual IFC program was also smaller than in the previous period, and approvals were concentrated in the first year and heavily focused on trade finance. IFC also contributed through its advisory services in parallel to the implementation of some Bank operations, and Bank-IFC cooperation was regular and business-like. The Bank collaborated with development partners in a number of areas albeit collaboration was not formalized but through professional contacts. The government’s ownership of investment programs and their objectives appears to have been significantly stronger than for structural reforms in the enterprise and financial sectors, as indicated by their relative degrees of progress. Fiduciary and safeguard issues have been well handled, and there were no major issues during CPS implementation. Risks were mostly adequately identified and reasonably addressed. Overall, the WBG has had to work within the constraints of a quite narrow framework, although the program reasonably took some risks for reforms that largely were not achieved. 7. Assessment of CLR Completion Report 48. The CLR is well organized and well prepared, and it covers the most important aspects. The CLR reports on the more general thematic issues, although it does not cover governance, when the PLR (one year earlier) noted that supporting governance related measures and building capacity in the public sector had been an integral part of IBRD operations. It could also have discussed the lower than planned level of IFC’s activities and the issues for the Bank in working with a government focused on gradual economic and structural reforms. Finally, the CLR could have provided the Bank’s calculations of the EBRD transition methodology (later provided separately to IEG) and alternative sources of verifiable evidence especially for Objective 1. 8. Findings and Lessons 49. IEG concurs with a number of the CLR lessons including: (i) successes are associated with areas where the WBG was able to align support with the authorities’ reform plans, and which delivered concrete, easily measurable results and efficiency gains, and (ii) willingness to support reforms step by step but also willingness to understand detailed implementation practicalities and develop acceptable financing mechanisms is important for long-term. 50. IEG adds the following lessons: • First, programs aiming at policy or structural reforms supported through ASA may need to be balanced with other instruments such as “traditional” investment lending for service delivery in order for a program to go forward even if the reform components do not receive sufficient government buy-in. In the case of Belarus, the program rightly included components addressing required reforms, but these components were mostly delayed or did not materialize, while the program’s IPF components provided vehicles for dialogue with the government and to work towards more limited sectoral objectives. • Second, program indicators need to be designed carefully to measure progress and achievements in the stipulated objectives. In the case of Belarus, the CPS used some indicators that were no longer monitored at the beginning of the CPS (EBRD transition indicators) or were based on surveys produced as part of other exercises (PEFA) that would not be delivered during the program period. Such indicators could have been retrofitted at the PLR and/or additional interim indicators provided to ensure monitoring and reporting of such indicators during and at the end of the CPS period. Annexes CLR Review 13 Independent Evaluation Group Annex Table 1: Summary of Achievement of CPS Objectives - Belarus Annex Table 2: Belarus Planned and Actual Lending, FY14-FY17 Annex Table 3: Analytical and Advisory Work for Belarus, FY14-FY17 Annex Table 4: Belarus Trust Funds Active in FY14-17 Annex Table 5: IEG Project Ratings for Belarus, FY14-17 Annex Table 6: IEG Project Ratings for Belarus and Comparators, FY14-17 Annex Table 7: Portfolio Status for Belarus and Comparators, FY14-17 Annex Table 8: Disbursement Ratio for Belarus, FY14-17 Annex Table 9: Net Disbursement and Charges for Belarus, FY14-17 Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid for Belarus Annex Table 11: Economic and Social Indicators for Belarus, 2014-2016** Annex Table 12: List of IFC Investments in Belarus Annex Table 13: List of IFC Advisory Services in Belarus Annex Table 14: IFC net commitment activity in Belarus, FY14 - FY17 Annex Table 15: List of MIGA Activities in Belarus, 2014-2017 Annexes CLR Review 15 Independent Evaluation Group Annex Table 1: Summary of Achievement of CPS Objectives - Belarus CPS FY14-FY17: Focus Area I: Improving competitiveness of Actual Results IEG Comments the economy by supporting structural reforms 1. CPS Objective: Economic Stability and Competitiveness Outcome 1: Progress made in Various technical assistance (TA) The CPS original Focus structural reforms as contributed to this outcome such as the Area I was: « Improving measured by the following Programmatic Structural Reform TA competitiveness of the scores of the EBRD Transition (P143074, FY13-17) which supported economy by supporting Indicator: policy dialogue and analytical work in (1) structural reforms, Macroeconomic Stability and Fiscal including reducing the role Indicator 1: Governance and Sustainability; (2) Financial Markets and of the state, transforming Enterprise Restructuring Allocation of Resources; (3) Social SOE sector, promoting Baseline: 1.7 (2014) Expenditure Efficiency; (4) Factor and private and financial sector Target: 2.0 (2017) Product Market Reforms; (5) development and Transformation of State-Owned integration into the global Indicator 2: Price Liberalization Enterprises (SOEs) and (6) Private Sector economy ». Baseline: 3.0 (2014) Development (see Operations Portal). Target: 3.3 (2017) The Fiscal Governance TA (P143355, Before the PLR, Outcome FY13-16), supported policy dialogue with 1 also considered the Indicator 3: Trade and Forex the government, after the preparation of following EBRD Transition System the 2014 PEFA, which approved a Public Indicators: « Small Baseline: 2.3 (2014) Finance Management reform strategy in Scale Privatization, and Target: 2.7 (2017) 2015 in the areas of medium term Large Scale Privatization ». budgeting, program budgeting, treasury, In addition, the baseline Major Indicator 4: Competition Policy debt management, and accounting (see and target for all the EBRD Outcome Baseline: 2.0 (2014) Operations Portal). Transition Indicators were: Measures Target: 2.3 (2017) The Trade Policy Dialogue/WTO Baseline: 2.2 (2012) Accession TA (P133676, FY13-15) Target: 2.7 (2017) supported capacity-building for officials (PLR, page 24). and analytical work was also prepared under the Regional Development AAA As reported in the CLRR: (P148164, FY15 ; see working papers) “EBRD scoring captures and the Heat Tariff Reform and Social the progress in Impact Mitigation Study (P146249, FY14- constructing market 15, see working paper). economy. Score 1 designates limited reforms, The CLR reports that the four indicators while score 4 is for a were fully achieved – and the value mature market economy”. reported for the Trade and Forex System is 2.8, exceeding the target. As reported in the CLR, EBRD stopped reporting Transition Indicators after 2014 and the data presented in the CLR is based on WBG staff calculations using EBRD methodology. The calculations were not presented in the CLR, but the country team has subsequently provided a comprehensive explanation to IEG on the calculations. CLR Review Annexes Independent Evaluation Group 16 CPS FY14-FY17: Focus Area I: Improving competitiveness of Actual Results IEG Comments the economy by supporting structural reforms As reported in the CLR, a competition law was enacted in 2014 (see legal information). The WB also supported the liberalization of prices for goods and services and the development of a Roadmap for Structural Reform (see the December 2017 WBG Economic Update, the 2016 IMF Article IV and the WBG Country Program Snapshot) incorporated in the Government Program of Socio-Economic Development for 2016- 2020. However, as reported in the CLR, the action plan to address price liberalization was not prepared during CPS implementation. Achieved. Outcome 2: More transparent The TAs reported for Outcome 1 also The latest ISR: management of public contributed to this outcome, as well as the MS (February 2018) of resources as measured by: Public Financial Management project P14699 does not Modernization Project – PFMMP permit to validate the (P146997, FY16). information provided by the country team (the VC Indicator 1: PEFA PI10 - public Indicator 1: the CLR indicates that in 2016 minutes) since the ISR did access to key fiscal information public access to fiscal information was not present comparable Baseline: C (2009) improved by the introduction of mandatory indicators that would permit Target: B (2017) disclosure of contract award information to verify progress on and executive budget proposals. In indicators PEFA PI10 and addition, in December 2016 the PEFA PI17. Government approved a Medium-Term Financial Program for 2017-2019 that includes a break-down of expenditure for investment programs. The 2014 PEFA score for this indicator was B. PEFA data is only available for 2009 and 2014, not 2017 (see PEFA page) although additional information provided by the country team (video conference minutes on the status of the PFMMP activities implementation) , on project P146997, indicates that indicator PEFA PI-10 has been achieved. The information could not be verified. Not Verified. Indicator 2: the CLR reports that this indicator was achieved as a result of the expansion of the coverage of the Treasury Single Account and of improved control over loans and guarantees. The 2014 PEFA score for this indicator was B+. CLR Review Annexes Independent Evaluation Group 17 CPS FY14-FY17: Focus Area I: Improving competitiveness of Actual Results IEG Comments the economy by supporting structural reforms Indicator 2: PEFA PI17 - PEFA data is not available 2017 (see recording and management of PEFA page) although additional cash balances, debt and information provided by the country team guarantees (video conference minutes on the status of Baseline: C+ (2009) the PFMMP activities implementation), on Target: B+(2017) project P146997, indicates that indicator PEFA PI-17 has been achieved since” Recording and management of cash balances, debt and guarantees has improved due to expansion of the Treasury Single Account (TSA) coverage, as well as streamlining the mechanisms for borrowings and guarantees monitoring”. This information could not be verified from the ISR. Not Verified. 2. CPS Objective: Deepening financial intermediation on market-based terms Outcome 1: Improved financial The WBG supported the preparation of an The gender indicators were inclusion as evidenced by: update of the Belarus Financial Sector added at PLR stage. Assessment – FSAP (P157917, FY16). Indicator: Share of population Other TA approved between FY14-16 for with savings account at a formal this sector were developed under the financial institution increased: Programmatic Financial Sector Monitoring Baseline: 19% (2012) [18.6% TA (P147039, FY14); the Consumer male, 19.3% female] Protection and Financial Literacy Target: 30% (2017) [30% male, (P144749 and P152000, see working 30% female] paper) and the Regulation/ supervision of NBFIs (P153172, see the technical note). As reported in the CLR, in spite of progress on some aspects of the financial inclusion agenda, due to the economic slowdown and decline in real incomes, only 11% of the population had a savings account at a formal financial institution as of 2016. Not Achieved. Outcome 2: Increased The TAs that contributed to this outcome At PLR stage, Indicator 1 diversification of financial are also reported under Outcome 1. In was changed from: market as measured by: addition, the IFC Trade Finance (FY14) “Increased share of and MSME Lending programs supported mortgage lending Outcome 2. at market terms Achieved. Baseline: 20% (2013) Target: 40% (2017) ». Indicator 1: Reduced flow of Indicator 1: the CLR reports that the flow government directed lending on of government directed lending on non- non-market terms (% of GDP) market terms dropped to 2.6% of GDP in Baseline: 7.0% (2013) 2016. It also indicates that a multi-year Target: 4.0% (2017) plan for reduction of government directed CLR Review Annexes Independent Evaluation Group 18 CPS FY14-FY17: Focus Area I: Improving competitiveness of Actual Results IEG Comments the economy by supporting structural reforms lending by 2017 has been approved, as part of the Program of the Activities of the Government for 2016-2020 (see Financial Stability in the Republic of Belarus 2016 report). As reported in IMF 2016 Article IV the Government has begun to reduce the stock of directed lending, « beginning with a 1.6%of GDP cut in 2016, with planned cuts of 2.1 % of GDP in 2017 and of 2.2% of GDP in 2018 ». However, the reported information does not provide detail on « non-market terms ». Achieved. Indicator 2: in 2014 the IFC provided a Indicator 2: Increased availability of financing for MSMEs up to US$13 million credit line to Belnarodny US$ 10 million per annum (Y/N) Bank (BNB) to support the MSME sector (project 34287, XPSR development outcome rating: successful), complementing the US$175 million IFC program (project 37722), aimed at supporting Belarusian export companies (as part of the Global Trade Facilitation Program, GTFP and channeled through five commercial banks, see BNB information). Achieved. 3. CPS Objective: Liberalized environment for private sector investment Outcome 1: Improved business The IFC Regulatory simplification, The attribution of this result environment for private investment climate improvement TA to the WBG program is not entrepreneurs/investors (0057614, FY14) and the IFC Sector- verified, considering the evidenced by: specific business regulation (00576147, nature of the WBG FY15) as well as various TAs such as the program in the sector, Programmatic Private Sector mainly ASAs. Development (P147060, FY14-16, see draft report), which included TA on SME Although the following two Organization and Development indicators are rated Not Strategy (P151572); on National Quality Achieved and Partially Infrastructure (P151570) and on Minority’s Achieved, Belarus’ overall Shareholders rights (P151571) in addition ranking in Doing Business to the Pilot Enterprise Privatization TA improved from the 63rd (P125389, FY10, see ISR: MS of February position in 2014 (see 2017) supported this outcome. Not report) to the 37th position Achieved. in 2017 (see report). Indicator 1: Growth in newly Indicator 1: the CLR reports that growth in created private enterprises and new businesses was impacted by the individual entrepreneurships recession after 2015 which resulted in a Baseline: 8% (2010) 21.3% decline in the registration of new Target: 12% (2017) individual entrepreneurs between 2015 CLR Review Annexes Independent Evaluation Group 19 CPS FY14-FY17: Focus Area I: Improving competitiveness of Actual Results IEG Comments the economy by supporting structural reforms and 2016 (31,151 new individual entrepreneurs registration in 2016, compared to 39,610 new individual entrepreneurs registered in the same period in 2015) - while the registration rate of legal entities grew by 1.9%. Not Achieved. Indicator 2: the rate of legal entities stating Indicator 2: A number of legal unstable legislation as a severe obstacle entities stating unstable for business went down to 40.9% legislation as a severe obstacle according to the Business in Belarus 2016 for business report prepared by the IPM Research Baseline: 59% (2012) Center. Target: 34% (2017) Partially Achieved. Outcome 2: Stronger reliance The operations presented above for of the economy on private Outcome 1 also supported Outcome 2. sector evidenced by: The CLR reports that the target was not Indicator: Growing share of achieved since the share of MSMEs in MSMEs in employment employment grew to 26.7% in 2014 and Baseline: 26.3% (2012) decreased to 26.3% in 2016. Target: 30% (2017) Not Achieved. CPS FY14-FY17: Focus Area II: Improved efficiency and quality of public infrastructure services, enhanced and Actual Results IEG Comments sustainable use of agricultural and forestry resources and increased global public good benefits 4. CPS Objective: Enhanced energy security and efficiency of resource use: Outcome 1: Increased energy Through the Post-Chernobyl Recovery The following website was efficiency in the Bank- Project – PCRP (P095115, FY06 and consulted to convert MWh supported projects as additional financing P118376, FY11, IEG: to m3. measured by: S) about 365,000 MWH of energy were Major saved (heat energy and electricity savings) At PLR stage, the target Outcome Indicator: Reduced annual gross between FY06 and FY14, or an equivalent for was changed from the Measures consumption of energy of 34.41 million m3. original target: “by 155 ml resources m3/year (2017), including Through the Energy Efficiency Project – through: PCRP: by 20 ml Baseline: by 15 ml m3/year EEP (P108023, FY09 and additional m3/year; EEP: by 90 ml (2012, PCRP, Post Chernobyl financing P133442, FY13), 93.14 MW of m3/year and EEP AF: by Recovery Project) energy was saved as of June 2017 45 ml m3/year ». according to the June 2017 ISR: S or an equivalent of 8,780 m3. In addition, the CLR Review Annexes Independent Evaluation Group 20 CPS FY14-FY17: Focus Area II: Improved efficiency and quality of public infrastructure services, enhanced and Actual Results IEG Comments sustainable use of agricultural and forestry resources and increased global public good benefits Target: by 134 ml m3/year project permitted gas savings of 92, 314 (2017), including through: thousand cubic meters or an equivalent of PCRP: by 26 ml m3/year 92.314 million m3. The December 2017 EEP: by 87 ml m3/year (Energy Restructuring Paper of the EEP does not Efficiency Project), provide updated information but indicated EEP AF: by 21 ml m3/year that the project was reaching successful completion and that the PDO was expected to be achieved satisfactorily at project closing. The sum of the energy savings from these two projects indicates that 126.54 million m3 of energy was saved by June 2017. Mostly Achieved. Outcome 2: Reductions in Through the PCRP (IEG: S), the estimated At PLR stage, the target carbon emissions through total emission reductions were 121,147 was changed from: Bank-supported projects tons of CO2 equivalent between FY06 and “77,000 (2013, PCRP (tons/year, CO2 equivalent) FY14. +EEP); 142,000 (2014 PCRP Baseline: 40,800 (2012, PCRP) The June 2017 ISR: S of the EEP does not +EEP); report information on the reduction in 207,000 (2015 Target: 53,029 (2013, carbon emissions in CO2 equivalent but PCRP+EEP); PCRP+EEP) only on total efficiency and gas savings, as 232,000 (2016 PCRP, 66,381 (2014, PCRP+EEP) reported under Outcome 1. EEP); 125,427 (2015, PCRP+EEP) 322,000 (2017 PCRP, 213,621 (2016, PCRP+EEP) The target only mentioned emission EEP + Biomass DH) ». 253,675 (2017, PCRP+EEP) reductions from the PCRP and the EEP projects (see IEG comment). According to the January Consequently, only the emission reduction 2018 ISR: S of the achieved through the PCRP can be Biomass District Heating validated, which represents a total Project (P146194, FY14), emission reduction of 121,147 tons of CO2 1,154,620 metric ton of equivalent, compared to 232, 000 tons of CO2 emissions were CO2 equivalent reported by the CLR). saved as of June 2017 Partially Achieved. and according to the last ISR: S (April 2017) of the Forestry Development Project (P147760, FY15), 4.712 millions of metric tons of carbon were sequestered as of April 2017. Outcome 3: Increased use of Through the PCRP (P095115, FY06 and renewable energy resources in additional financing P118376, FY11, IEG: S), about 248,736 MWh/year of heat and CLR Review Annexes Independent Evaluation Group 21 CPS FY14-FY17: Focus Area II: Improved efficiency and quality of public infrastructure services, enhanced and Actual Results IEG Comments sustainable use of agricultural and forestry resources and increased global public good benefits the Bank-supported projects 15,800 MWh/year of electricity were saved as measured by: per year, between FY06 and FY13. Indicator: Annual energy amount In addition, according to the January 2018 of renewable fuel used ISR: S of the Biomass District Heating Project (P146194, FY14), 339,834 MWH of Baseline: 23,350 MWh/year lifetime energy savings as of October (2012, PCRP) 2017. Target: 200,000 (55,000 + Achieved. 145,000 MWh/year (2017, PCRP and BDHP) 5. CPS Objective: Improved standards in the agriculture and forestry sectors Outcome 1: Forestry sector The Forest Law Enforcement and In addition, as reported in reform roadmap developed as Governance (FLEG) Programs I and II – the ISR: S of project evidenced by: which included Belarus among other ECA P147760, Belarus countries – provided analytical background approved in 2017 a new Indicator: Forest sector reform for the new National Forestry Sector Forest Code that was strategy developed and adopted Strategic Plan 2015-2030 (see WBG supposed to enter into (Y/N) project page) that was endorsed by the force in 2017 as well as Baseline: No (2014) Government (see Management: MS for the the State Program Target: Yes (2017) ENPI East Countries FLEG II Program, Belarussian Forest 2016- P131138, FY14). 2020 (see the December 2016 country presentation The CLR reports that this plan was of the ENPI-FLEG). approved and is under implementation, with support from the Forestry Development Project (P147760, FY15) - the last ISR: S (October 2017) reports progress on the intermediate result indicator “reforms in forest policy, legislation or other regulations supported”, and mentions that since 2017 a new Forest Code came into force. Achieved. Outcome 2: The cost of The WBG supported the agriculture sector compliance for agri-business through the Strengthening Institutional reduced as evidenced by: Capacity for M&E of agricultural policy instrument TA (P120720, FY11-15) and the IFC Belarus Food Safety Project (00599215, delivered in FY14, completion report rating: Successful). Mostly Achieved. Indicator 1: The system of food Indicator 1: the completion report of the safety control is aligned with EU IFC Belarus Food Safety Project indicates practice as confirmed by IFC that this indicator has been achieved since expert and EU missions (Y/N) the country has adopted EU Hazard CLR Review Annexes Independent Evaluation Group 22 CPS FY14-FY17: Focus Area II: Improved efficiency and quality of public infrastructure services, enhanced and Actual Results IEG Comments sustainable use of agricultural and forestry resources and increased global public good benefits Baseline: No (2014) Analysis and Control Critical Control point Target: Yes (2017) (HACCP) compliant guidelines for the dairy and poultry sectors. Achieved. Indicator 2: Belarus dairy and Indicator 2: the CLR reports that this poultry sectors get approved by indicator has been partially achieved for EU for exports (Y/N) the dairy sector and not achieved for the Baseline: No (2014) poultry sector since only the dairy sector Target: Yes (2017) has been certified for export to the EU with the DG SANCO. The completion report of the IFC Belarus Food Safety Project indicates that four dairy companies were approved for exporting importing products to the European market and does not report on approval for the poultry sector. Partially Achieved. Outcome 3: Increased The CLR reports that this outcome has efficiency of food sector been achieved since there has been a USD 34 million increase in sales for client Indicator: US$30 ml in increased companies of IFC Food Safety Project sales for client companies of thanks to advisory services provided to Food Safety Project (Y/N) about 400 companies. Baseline: No (2014) The completion report of the IFC Belarus Target: Yes (2017) Food Safety Project confirms that beneficiaries had an increase in sales revenues over USD 34.2 million. Achieved. 6. CPS Objective: Improved public infrastructure and municipal public utility services Outcome 1: Improved quality of Through the Water Supply and Sanitation The project supports supplied water as measured System project (P101190, FY09 and compliance with national by: additional financing, P146493, FY14), 322, quality standards through 751 people were provided access to the removal of pollution Indicator: Population provided improved water, as of August 2017, as per loads in the drinking water with access to drinking water the ISR: MS of September 2017. systems by investing in compliant with national quality Achieved. wastewater treatment standards plants. Baseline: 0 (2013) Target: 277,000 (2017) Outcome 2: Improved The CLR reports that the share of At PLR stage the following performance of wastewater regulatory treated wastewater samples cities were removed from treatment systems as complying with the national standards for Indicator 1: “Rogachev, measured by: BOD, nitrogen and phosphor levels Glubokoye,Verkhnedvinsk: reached 100% on April 2017 in all target Baseline: 90% (2013) Indicator: % of regulatory treated communities. Target: >95% (2017) wastewater samples complying Berezino: CLR Review Annexes Independent Evaluation Group 23 CPS FY14-FY17: Focus Area II: Improved efficiency and quality of public infrastructure services, enhanced and Actual Results IEG Comments sustainable use of agricultural and forestry resources and increased global public good benefits with national standards for BOD, As per the ISR: MS of September 2017 of Baseline: 83% (2013) nitrogen and phosphor levels the Water Supply and Sanitation System Target: >95% (2017) » Dubrovno: project (P101190, FY09 and additional Baseline: 0% (2013) financing, P146493, FY14), all targets Target: >95% (2017) were achieved, in Baranovitchi (actual was Baranovitchi, Pinsk: 99%). Data was not reported for the other Baseline: 90% (2013) cities. Target: >95% (2017) The ISR also reported that the wastewater Gantsevichy: treatment plants were not all completed. Baseline: 80% (2013) Partially Achieved. Target: >95% (2017) Gorodok: Baseline: 71% (2013) Target: >95% (2017) Outcome 3: Reduced amount According to the last ISR: MS (June At PLR stage, the target of waste disposed at landfill 2017) of the Integrated Solid Waste date was changed from and higher rates of material Management Project (P114515, FY10), 2015 to 2017. recovery from solid waste as 4,735 tons of waste will not be buried in measured by: the landfill due to the new facility, as of June 2017. Indicator: Tons of waste that will The ISR also indicates that the separate not be buried in the landfill due to collection system will start operating in full the new facility on July; 1st 2017 and will need 8-12 Baseline: 0 (2013) months to mature. Target: 20,000 (2017) Partially Achieved. Outcome 4: Transport costs for The Road Upgrading and Modernization The CLR also reports that road users on the upgraded Project (P118375, FY11) supported this the VOC were reduced to sections of the M5 road Outcome. According to IEG: S, vehicle 79% in 2016 – this data reduced as measured by: operating costs (VOC) were reduced by was not reported in the 14% by June 2015, reaching 86%. ICRR that reports data Indicator: Reduced Vehicle Achieved. until 2015. Operating Cost, % Baseline: 100% (2013) Target: 94% (2014) Outcome 5: Road safety Project P118375 also supported this improved on the upgraded Outcome. According to IEG: S, the sections of the M5 road as number of fatalities dropped from 9 to 5 measured by: between 2011 and 2015 and the number of injured people decreased from 16 to 9 Indicator: Reduction in number during the same period. Additional of traffic fatalities information provided by the Ministry of Baseline: 12 (2010) Transport and Communications reports Target: 5 (2014) that the number of fatalities dropped to 2 in 2016, in the project M5 road sections. Achieved. CLR Review Annexes Independent Evaluation Group 24 CPS FY14-FY17: Focus Area III: Improved human development outcomes through better Actual Results IEG Comments delivery of education, health and social services 7. CPS Objective: Laying the ground for increased efficiency of health and education services delivery Outcome 1: Continued reforms The Bank supported this Outcome through Before the PLR, Focus in the area of school network the Programmatic Education Sector TA Area III had two original reorganization as measured (projects P144996; P152006 and P152007); Objectives: « Improved by: that included analytical work and capacity- social protection and building activities delivered between FY13 greater labor market and FY15, and through the Strengthening efficiency » Evidence-Based Policymaking for Education and « Increased Sector Reforms TA (P148814, FY15). efficiency of health and Mostly Achieved. education services delivery ». Indicator 1: Rollout of per-student Indicator 1: the completion Summary Note financing started by 2017 (Y/N) of the activities undertaken under the At PLR, the following Baseline: No (2014) Programmatic Education Sector TA Outcomes and indicators Target: Yes (2017) indicates that the roll-out activity for per- were taken out: « Long- student financing (PSF) was initiated in April term care services 2013 and that a small-scale pilot was reforms launched on January 1, 2015, in 34 urban roadmap developed as secondary schools throughout Belarus. evidenced by: The November 2016 ISR: S of project - Plan for developing and P148814 indicates that the pilot was scaled reforming long-term care Major up to 188 schools in 2016 and that, by services finalized (Y/N); Outcome 2017, the PSF was expected to increase to - Enhanced capacity of Measures around 350-400 schools. However, the national employment available information does not permit to service to use labor verify that, as of January 2017, the pilot market data for policy was implemented in 642 schools, as design sustained as reported in the CLR. Achieved. evidenced by: Continuous use of the Indicator 2: Increased school Indicator 2: the completion Summary Note Labor Force autonomy and improved of the activities undertaken under the Survey(Y/N) ». efficiency indicators (class-size, Programmatic Education Sector TA student-teacher ratio) in pilots by indicates that technical workshops on PSF The Education 2016 – were developed, covering principles of Modernization Project autonomy and accountability mechanisms (P148484, FY16) does Baselines and targets to be as well as on teacher remuneration. No not present indicators established under Education specific baselines or targets are reported in related to Indicators 1 Sector TA (Y/N) the Summary Note. and 2 (see last ISR: S of In addition, no publicly available information October 2017). permits to verify that, as reported in the CLR, average class size in participating schools increased by 0.5 students and that the ratio of the number of students and teachers of institutions of general secondary education in Baranovichi participating in the pilot project stood at 9.2 in 2015 and at 9.47 in 2017. Not Verified. CLR Review Annexes Independent Evaluation Group 25 CPS FY14-FY17: Focus Area III: Improved human development outcomes through better Actual Results IEG Comments delivery of education, health and social services Outcome 2: Policy framework As reported in the CLR, the Government of Before the PLR, the for health sector reforms Belarus adopted in February 2017 The original outcome and improved as evidenced by: Health of the Nation and Demographic indicator were: “Roadmap Safety of Belarus for 2016-2020 program for health sector reform Indicator: Health sector reforms (see Government’s press release). developed as evidenced strategy developed by 2017 with The WBG supported the health sector by: Health sector reforms design reflecting international through the Improving Quality of Health strategy developed by experiences (Y/N) Care Programmatic TA (P14761, FY15, see 2016 with design Baseline: No (2014) the overview of activities and results) which reflecting international Target: Yes (2017) supported the dissemination of best experiences (Y/N)”. international practices in the country and the design and implementation of health reforms in the following priority areas: primary care sector and rationalization of the hospital network; reform to the payment system for health providers; reforms to step up prevention activities and reduction of risk factors for cardiovascular diseases; and Reforms to develop Health Management Information System. Finally, the Health Sector Modernization Project (P156778, FY17), under implementation, supports the implementation of these reforms (although the last ISR: S of January 2018 does not yet report progress). Achieved. Annexes CLR Review 26 Independent Evaluation Group Annex Table 2: Belarus Planned and Actual Lending, FY14-FY17 Approved Proposed Approval Closing Proposed Proposed Outcome Project ID Project name IBRD FY FY FY Amount Amount Rating Amount Project Planned Under CPS/PLR FY14-17 CPS PLR Biomass-based District P146194 FY14 2014 2020 90 90 LIR: S Heating Water Supply/Sanitation P146493 FY14 2014 60 90 AF Forest Management P147760 FY15 2015 2021 40 40.7 LIR: S Improvement PFM Modernization FY15 100 Transit Corridor P149697 FY15 2015 2020 250 250 LIR: S Improvement Project Public Financial P146997 Management FY16 2016 2021 10 10 LIR: S Modernization Project*** Belarus Education P148181 FY16 2016 2021 50 50 LIR: S Modernization Project Moved ty Belarus Competitiveness FY17 120 FY18 Enhancement Project Development Policy DROPPED FY17 200 Operation Belarus Health System P156778 FY17 2017 2022 125 125 LIR: S Modernization Project Total Planned 290 755 655.7 Unplanned Projects during the CPS Period None Total Unplanned 0 0 Approved Approval Closing On-going Projects during the CPS/PLR Period IBRD FY FY Amount POST-CHERNOBYL P095115 2006 2014 50 RECOVERY POST-CHERNOBYL IEG: S P118376 RECOVERY - ADDL 2011 2014 30 FINANCING WATER SUPPLY AND P101190 2009 2019 60 LIR: MS SANITATION P108023 Energy Efficiency Project 2009 2018 125 LIR: S INTG SOLID WASTE P114515 2010 2017 43 LIR: MS MGT ROAD UPGRADE & P118375 2011 2016 150 IEG: S MODERN P133442 Energy Efficiency AF** 2013 2018 90 90 Total On-going 548 Source: CPS and PLR, WB Business Intelligence Table 2a.1, 2a.4 and 2a.7 as of 3/5/17 *LIR: Latest internal rating. MU: Moderately Unsatisfactory. MS: Moderately Satisfactory. S: Satisfactory. HS: Highly Satisfactory. ** Under the CPS planned but FY13 approval *** Scaled down to $10M in the PLR Annexes CLR Review 27 Independent Evaluation Group Annex Table 3: Analytical and Advisory Work for Belarus, FY14-FY17 Proj ID Economic and Sector Work Fiscal year Output Type P146249 Tariff Reform & Social Impact Mitigation FY15 Sector or Thematic Study/Note P148164 Regional Development Policy Notes FY15 Sector or Thematic Study/Note P152143 Scaling up EE in buildings FY16 Sector or Thematic Study/Note P157917 Belarus FSAP Update FY17 Financial Sector Assessment Program (FSAP) Proj ID Technical Assistance Fiscal year Output Type P125361 Belarus LFS FY14 Technical Assistance P144749 Belarus Technical Assistance on CPFL FY14 Technical Assistance P145222 Social Accountability Municipal Services FY14 Technical Assistance P122849 Belarus Privatization FY15 Technical Assistance P147612 Improving Quality of Health Care TA FY15 Technical Assistance P151570 Advice on Nat'l Quality Infrastructure FY15 Technical Assistance P151571 Advice on Minority Shareholders' Rights FY15 Technical Assistance P144996 Belarus Programmatic Education TA FY15 Technical Assistance Belarus Programmatic Education TA P152006 FY15 Technical Assistance (FY13) Belarus Programmatic Education TA P152007 FY15 Technical Assistance (FY14) P153172 Regulation/supervision of NBFIs FY15 Technical Assistance P155678 TA to Development Bank of Belarus FY15 Technical Assistance P147039 Programmatic FS Monitoring TA FY16 Technical Assistance P143074 Structural Reform TA FY16 Technical Assistance P143355 Fiscal Governance TA FY16 Technical Assistance P152000 Belarus Technical Assistance CPFL FY16 Technical Assistance P153870 Belarus Education PSIA FY16 Technical Assistance P157621 Strengthening Social Protection FY17 Technical Assistance P158105 Belarus Shared Prosperity FY17 Technical Assistance P160002 Property Valuation and Taxation Review FY17 Technical Assistance Source: WB Business Intelligence 3/5/18 *NO RAS **P133676 WTO Accession TA mentioned in Annex 1 has been delivered in FY13 Annexes CLR Review 28 Independent Evaluation Group Annex Table 4: Belarus Trust Funds Active in FY14-17 Project Approval Closing Approved Project name TF ID ID FY FY Amount P152636 Forestry Development Project TF A1173 2015 2021 2,739,726 Strengthening Evidence-Based Policymaking for P148814 TF 16518 2015 2018 340,000 Education Sector Reforms Improving Efficiency and Transparency of Public P147073 TF 15275 2014 2017 1,200,000 Finance Management Preparation of the Sixth National Communication for P146335 the Implementation of the United Nations TF 15501 2014 2015 300,000 Framework Convention on Climate Change ECA 3a - Incubation & Innovation Systems - P130186 TF 12046 2012 2014 75,000 Belarus - Mogilev Strengthening Institutional Capacity for Monitoring P120720 and Evaluation of Agricultural Policy Instruments - TF 98649 2012 2015 496,000 IDF P125389 Belarus Privatization TF 98603 2011 2019 4,600,000 P111110 Belarus POPs Stockpile Management Project (GEF) TF 96993 2011 2014 5,500,000 Total 15,250,726 Source: Client Connection as of 10/2/17 ** IEG Validates RETF that are 5M and above Annex Table 5: IEG Project Ratings for Belarus, FY14-17 Exit Total Proj ID Project name IEG Outcome IEG Risk to DO FY Evaluated ($M) * 2014 P095115 POST-CHERNOBYL RECOVERY 79.9 SATISFACTORY MODERATE 2016 P118375 ROAD UPGRADE & MODERN 146.1 SATISFACTORY MODERATE Total 226.0 Source: AO Key IEG Ratings as of 3/5/18 Annex Table 6: IEG Project Ratings for Belarus and Comparators, FY14-17 Total Total RDO % RDO % Outcome Outcome Region Evaluated Evaluated Moderate or Lower Moderate or Lower % Sat ($) % Sat (No) ($M) (No) Sat ($) Sat (No) Belarus 226.1 2 100.0 100.0 100.0 100.0 ECA 11,240.7 103 93.8 78.6 62.8 51.5 World 66,753.2 725 85.8 73.7 51.5 43.5 Source: WB AO as of 3/5/18 Annexes CLR Review 29 Independent Evaluation Group Annex Table 7: Portfolio Status for Belarus and Comparators, FY14-17 Fiscal year 2014 2015 2016 2017 Ave FY14-17 Belarus # Proj 5 7 8 8 7 # Proj At Risk 1 1 1 % Proj At Risk 20.0 14.3 - - 14.3 Net Comm Amt 647.5 938.2 848.2 930.7 841 Comm At Risk 42.5 42.5 43 % Commit at Risk 6.6 4.5 5.1 ECA # Proj 202 207 197 202 202 # Proj At Risk 36 30 40 34 35 % Proj At Risk 17.8 14.5 20.3 16.8 17.3 Net Comm Amt 26,638.2 26,192.1 27,213.5 25,219.5 26,316 Comm At Risk 2,619.0 3,507.2 4,288.2 5,460.1 3,969 % Commit at Risk 9.8 13.4 15.8 21.7 15.1 World # Proj 1,386 1,402 1,398 1,460 1,412 # Proj At Risk 329 339 336 344 337 % Proj At Risk 23.7 24.2 24.0 23.6 23.9 Net Comm Amt 183,153.9 191,907.8 207,350.0 212,541.7 198,738 Comm At Risk 39,748.6 44,430.7 42,715.1 50,837.9 44,433 % Commit at Risk 21.7 23.2 20.6 23.9 22.4 Source: WB BI as of 9/28/17 Note: Only IBRD and IDA Agreement Type are included Annex Table 8: Disbursement Ratio for Belarus, FY14-17 Fiscal Year 2014 2015 2016 2017 Overall Result Belarus Disbursement Ratio 36.9 11.9 15.4 28.4 22.1 Inv Disb in FY 108.5 43.7 94.5 163.6 410.2 Inv Tot Undisb Begin FY 294.0 366.1 615.2 576.9 1,852.3 ECA Disbursement Ratio 22.8 23.5 17.5 20.7 21.0 Inv Disb in FY 2,612.0 2,664.4 2,275.6 2,857.1 10,409.1 Inv Tot Undisb Begin FY 11,467.5 11,342.1 13,028.9 13,776.0 49,614.4 World Disbursement Ratio 20.8 21.8 19.5 20.5 20.6 Inv Disb in FY 20,757.7 21,853.7 21,152.9 22,129.9 85,894.1 Inv Tot Undisb Begin FY 99,854.3 100,344.9 108,600.3 108,175.4 416,974.9 * Calculated as IBRD/IDA Disbursements in FY / Opening Undisbursed Amount at FY. Restricted to Lending Instrument Type = Investment. Source: AO disbursement ratio table as of 9/28/17 CLR Review Annexes Independent Evaluation Group 30 Annex Table 9: Net Disbursement and Charges for Belarus, FY14-17 Period Disb. Amt. Repay Amt. Net Amt. Charges Fees Net Transfer FY14 107,499,583.3 11,111,224.8 96,388,358.5 3,217,878.7 225,000.0 92,945,479.8 FY15 43,555,609.3 14,725,698.9 28,829,910.5 3,268,653.7 1,075,000.0 24,486,256.8 FY16 93,836,706.2 33,789,310.0 60,047,396.3 4,669,468.0 1,003,766.3 54,374,162.0 FY17 162,962,490.9 62,156,415.3 100,806,075.6 9,930,295.7 1,203,591.1 89,672,188.8 Report 407,854,389.8 121,782,649.0 286,071,740.8 21,086,296.1 3,507,357.4 261,478,087.3 Total World Bank Client Connection 10/2/17 Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid for Belarus Development Partners 2014 2015 2016 All Donors, Total -4.8 -4.71 .. DAC Countries, Total -3.68 -3.64 .. United Kingdom -0.04 .. .. United States -3.64 -3.64 .. Multilaterals, Total 356.58 352.13 .. Non-DAC Countries, Total -1.12 -1.06 .. Kuwait (KFAED) -1.12 -1.06 .. Source: OECD Stat. DAC2a as of 10/3/17 * Data only available up to FY16 Annex Table 11: Economic and Social Indicators for Belarus, 2014-2016** Belarus ECA World Series Name 2014 2015 2016 Average 2014-2016 Growth and Inflation GDP growth (annual %) 1.7 (3.8) (2.6) -1.6 1.8 2.7 GDP per capita growth (annual %) 1.6 (4.0) (2.8) -1.7 1.3 1.5 GNI per capita, PPP (current 18,320.0 17,550.0 17,210.0 17,693.3 30,313.4 15,666.8 international $) GNI per capita, Atlas method 7,600.0 6,720.0 5,600.0 6,640.0 24,457.4 10,598.2 (current US$) (Millions) Inflation, consumer prices (annual %) 0.5 2.0 Composition of GDP (%) Agriculture, value added (% of GDP) 8.3 7.2 7.9 2.2 3.8 Industry, value added (% of GDP) 40.1 37.7 36.1 25.6 27.5 Services, etc., value added (% of 51.7 55.1 56.0 72.2 68.7 GDP) Gross fixed capital formation (% of 33.2 28.7 23.9 28.6 20.1 23.5 GDP) Gross domestic savings (% of GDP) 34.1 29.1 25.2 29.5 23.7 24.9 External Accounts Exports of goods and services (% of 54.9 58.0 62.7 58.5 41.5 29.8 GDP) Imports of goods and services (% of 55.7 57.9 62.8 58.8 38.3 29.2 GDP) CLR Review Annexes Independent Evaluation Group 31 Belarus ECA World Series Name 2014 2015 2016 Average 2014-2016 Current account balance (% of GDP) (6.6) (3.3) (3.6) External debt stocks (% of GNI) 54.3 72.7 .. Total debt service (% of GNI) 7.0 9.9 .. Total reserves in months of imports 1.3 1.4 1.8 7.4 13.1 Fiscal Accounts* General government revenue (% of 38.9 41.3 42.7 41.0 GDP) General government total 38.8 43.5 46.1 42.8 expenditure (% of GDP) General government net 0.1 (2.2) (3.4) -1.8 lending/borrowing (% of GDP) General government gross debt (% 39.5 53.3 53.9 48.9 of GDP) Health Life expectancy at birth, total (years) 73.0 73.6 .. 73.3 77.3 71.8 Immunization, DPT (% of children 97.0 99.0 98.0 98.0 93.1 85.4 ages 12-23 months) Improved sanitation facilities (% of 94.3 94.3 .. 94.3 93.1 67.3 population with access) Improved water source (% of 99.1 99.1 .. 99.1 96.0 84.2 population with access) Mortality rate, infant (per 1,000 live 3.5 3.4 .. 3.5 9.9 32.2 births) Education School enrollment, preprimary (% 105.0 103.2 .. 104.1 74.6 48.1 gross) School enrollment, primary (% gross) 99.0 101.3 .. 100.2 103.3 104.2 School enrollment, secondary (% 107.0 107.1 .. 107.1 106.0 76.4 gross) Population Population, total (Millions) 9,474,511 9,489,616 9,507,120 9,490,416 907,504,936 7,355,447,389 Population growth (annual %) 0.1 0.2 0.2 0.1 0.5 1.2 Urban population (% of total) 76.3 76.7 77.0 76.7 70.9 53.8 Poverty Poverty headcount ratio at $1.90 a - .. .. day (2011 PPP) (% of pop) Poverty headcount ratio at national 4.8 5.1 .. 5.0 poverty lines (% of pop) Rural poverty headcount ratio at national poverty lines (% of rural 7.9 8.7 .. 8.3 pop) Urban poverty headcount ratio at national poverty lines (% of urban 3.7 3.7 .. 3.7 pop) GINI index (World Bank estimate) 27.2 .. .. 27.2 Source: WB Development Data Platform as of 10/3/17 *International Monetary Fund, World Economic Outlook Database, October 2017 ** Data only available up to FY16 Annexes CLR Review 32 Independent Evaluation Group Annex Table 12: List of IFC Investments in Belarus Investments Committed in FY14-FY17 Project Cmt Project Greenfield Project Original Original Original Loan Equity Net Net Net Primary Sector Name ID FY Status Code Size Loan Equity CMT Cancel Cancel Loan Equity Comm 39687 2017 Active Finance & Insurance E 1,000 1,000 - 1,000 - - 1,000 - 1,000 31993 2016 Active Construction and Real Estate E 66,823 16,506 - 16,506 - - 16,506 - 16,506 35223 2016 Active Primary Metals E 16,775 16,814 - 16,814 - - 16,814 - 16,814 37676 2016 Active Wholesale and Retail Trade E 30,000 10,000 - 10,000 - - 10,000 - 10,000 37722 2016 Active Finance & Insurance E 20,000 758 - 758 - - 758 - 758 35068 2015 Active Construction and Real Estate G 41,805 10,000 - 10,000 - - 10,000 - 10,000 36250 2015 Active Finance & Insurance E 6,000 - - - - - - - - 33917 2014 Closed Nonmetallic Mineral Product Manufacturing E 18,793 13,799 - 13,799 11,210 - 2,589 - 2,589 34287 2014 Active Finance & Insurance E 7,000 7,000 - 7,000 - - 7,000 - 7,000 Sub-Total 208,197 75,877 - 75,877 11,210 - 64,667 - 64,667 Investments Committed pre-FY14 but active during FY14-17 Project CMT Project Greenfield Project Original Original Original Loan Equity Net Net Primary Sector Name Net Comm ID FY Status Code Size Loan Equity CMT Cancel Cancel Loan Equity 33389 2013 Active Wholesale and Retail Trade G 74,000 20,000 - 20,000 - - 20,000 - 20,000 31500 2012 Active Primary Metals E 31,009 31,009 - 31,009 1,871 - 29,138 - 29,138 28222 2011 Active Chemicals G 25,000 5,000 - 5,000 5,000 - - - - 28684 2011 Active Primary Metals E 78,931 30,031 - 30,031 - - 30,031 - 30,031 27112 2010 Active Finance & Insurance E 30,000 171,091 - 171,091 - - 171,091 - 171,091 28288 2010 Active Finance & Insurance E 30,000 146,088 - 146,088 - - 146,088 - 146,088 28582 2010 Active Finance & Insurance E 13,337 5,000 8,337 13,337 - 0 13,337 8,337 13,337 29436 2010 Active Finance & Insurance E 2,250 19,692 - 19,692 - - 19,692 - 19,692 26316 2009 Active Finance & Insurance E 10,000 6,196 - 6,196 - - 6,196 - 6,196 27716 2009 Active Finance & Insurance E 5,000 25,805 - 25,805 - - 25,805 - 25,805 25180 2008 Active Wholesale and Retail Trade E 110,400 26,000 - 26,000 - - 26,000 - 26,000 Sub-Total 409,926 485,913 8,337 494,249 6,871 0 487,379 8,337 487,379 TOTAL 618,123 561,789 8,337 570,126 18,080 0 552,046 8,337 552,046 Source: IFC-MIS Extract as of 6/30/17 Annexes CLR Review 33 Independent Evaluation Group Annex Table 13: List of IFC Advisory Services in Belarus Advisory Services Approved in FY14-17 Impl Impl Primary Project Project Total Funds, Project Name Start End Business ID Status US$ FY FY Line Belarus: National Quality Infrastructure and 599846 2015 2018 ACTIVE TAC 3,431,041 Business Regulatory Reform Program 2014 - 2016 599666 Belarus General & Administration 2014 2018 ACTIVE CAS 17,605 Sub-Total 3,448,646 Advisory Services Approved pre-FY14 but active during FY14-17 Impl Impl Primary Project Project Total Funds, Project Name Start End Business ID Status US$ FY FY Line Belarus: Regulatory Simplification and Investment 576147 2011 2014 CLOSED TAC 3,037,454 Generation 2010 - 2013 574207 Belarus Food Safety Project 2010 2014 CLOSED SBA 1,105,470 548425 Belarus Business Enabling Environment Phase 2 2007 2014 CLOSED IC 3,087,700 Sub-Total 7,230,624 TOTAL 10,679,270 Source: IFC AS Data as of 6/30/17 Annex Table 14: IFC net commitment activity in Belarus, FY14 - FY17 2014 2015 2016 2017 Total Financial Markets 7,002,611 (61,161) (2) 1,000,000 7,941,449 Trade Finance (TF) 136,788,257 11,249,226 1,886,391 4,851,178 154,775,052 Construction Manufacturing 13,747,667 (2,878,167) 3,458,583 - 14,328,083 Materials Tourism, Retail, Property Construction & Real (Construction & Real - 10,000,000 15,861,750 - 25,861,750 Estates (TRP) Estate) Retail (7,000,000) - 10,000,000 - 3,000,000 Total 150,538,535 18,309,898 31,206,722 5,851,178 205,906,334 Source: IFC MIS as of 10/3/17 Annex Table 15: List of MIGA Activities in Belarus, 2014-2017 Project Max Gross ID Contract Enterprise FY Sector Investor Status Issuance 12891 RBI Central Bank Mandatory Reserves Coverage 2016 Active Banking Austria 59 12891 RBI Central Bank Mandatory Reserves Coverage 2015 Active Banking Austria 56 Total 115 Source: MIGA 10/3/17