For Official Use Only CPSCR Review 66739 Independent Evaluation Group 1. CPS Data Country: Ukraine CPS Year: FY08 – FY11 CPS Period: FY 08 – FY 11 CPSCR Review Period: FY 08 – FY 11 Date of this review: February 9, 2012 2. Executive Summary i. This review examines the implementation of the FY08-11 Ukraine Country Partnership Strategy (CPS) of FY08 and the CPS Progress Report (CPSPR) of FY10, and evaluates the CPS Completion Report (CPSCR). The strategy was joint between IBRD, IFC and MIGA and this review covers the program of the three institutions. ii. The World Bank Group (WBG) strategy, as updated by the CPSPR to take into account the global financial crisis, was grouped around two pillars. Under Pillar 1, restoring economic growth and improving competitiveness, the WBG strategy supported improving the business climate and invigorating private investment and trade; rehabilitating the banking sector and strengthening financial markets; bolstering energy security and improving energy efficiency; and promoting an export led recovery. Under Pillar 2, public finance and public sector reform and improved service delivery, the WBG strategy provided support to implement a fiscal reform consistent with a stable and sustained recovery; improve efficiency in service delivery; and improve governance and accountability. iii. IEG rates overall outcome of the WBG´s strategy as moderately unsatisfactory. On Pillar 1, Ukraine made some progress in cadastre and land titling, company inspections and operating permits, and this progress did not translate into an improvement in the country’s overall weak business environment. Ukraine succeeded in averting some of the critical aspects of its financial crisis, including the run on banks. Ukraine, though, has yet to address most of the fundamental aspects of the crisis. Some diversification of energy sources took place with the modest increase in hydropower, but the economy remains heavily dependent on imported gas. Ukraine became a member of WTO and its growth in exports contributed to rebound in GDP. Meanwhile, most legal changes to improve the business environment have yet to be implemented to have an impact. Also, no progress was made in strengthening financial markets, or in redressing the quasi-fiscal deficit stemming from energy and heating subsidies. Similarly, the cost of exporting attributable to energy efficiency and transport infrastructure has increased, according to some indicators. On Pillar 2, Ukraine made some progress in the administration of social assistance benefits, but targeting of these benefits did not improve. In piloted areas, Ukraine’s teachers were able to cover more students. Yet, the country did not adopt needed reforms in the budgeting of schools and hospitals, nor did utilities and municipalities improve their financial performance. Ukraine’s PEFA ratings improved with MTEF implementation, the new procurement law, the reduction of tax arrears, and introduction of risk-based audit. However, Ukraine’s broad governance indicators did not improve. More importantly, in the difficult circumstances of political uncertainty and little ownership, Ukraine did not adopt the fiscal reforms necessary for medium-term fiscal stability and sustainability. iv. IEG concurs with the lessons of the CPSCR, and underscores two additional points. First, with political uncertainty and frequent changes in governments, the timely use of the CPSPR to update the objectives of the strategy and adapt them to the new political environment appears essential—just as the CPSPR was used to adapt the WBG strategy to the global financial crisis, another exogenous development. For instance, several aspects of the approach to energy in the WBG strategy appeared CPSCR Reviewed by: Peer Reviewed by: CASCR Review Coordinator Shoghik Hovhannisyan, Michael Lav, Consultant, IEGCC Consultant, IEGCC Jaime Jaramillo-Vallejo, Surajit Goswami, Albert Martinez, Lead Economist, IEGCC Consultant, IEGCC Consultant, IEGCC For Official Use Only CPSCR Review 2 Independent Evaluation Group to have lost the necessary political backing and objectives could have been revised. Second, the WBG could align its strategy more closely with that of the country, to avoid weak ownership from becoming an obstacle to effectiveness. This appears to have been the case with the emphasis on the efficiency of service delivery, which was differed from Uk raine’s focus on the quality of the services. 3. WBG Strategy Summary Overview of CPS Relevance: Country Context: 1. After growing at an annual average rate of 7.5 percent, Ukraine faced a severe triple crisis in late 2008, which led to negative growth of 14.8 percent in 2009. First, the contraction in global demand led to an 80 percent fall in steel prices, affecting a sector that accounts for 40 percent of total exports and 15 percent of GDP. Second, weaker exports combined with a sharp increase in capital outflows to trigger a balance of payments crisis. Third, the banking system, which was already frail, faced a financial crisis. As a consequence of these shocks, the fiscal stance weakened, leading to a tripling of public debt from a low level of 12.4 percent of GDP in 2007 to 39.5 percent in 2011. The government, which accounts for about 40 percent of GDP and more than half of total employment according to 2004 data, reacted quickly and the economy returned to positive GDP growth of 4.2 percent in 2010. In addition, as a result of government’s crisis-response measures, the banking system has stabilized, and external arrears and sovereign default were avoided. At the same time, political instability complicated policy-making and contributed to the delays in structural and institutional reforms. 2. The Ukrainian Government’s strategy for the period of 2007-2011 has been laid out in the ―Stability, Competitiveness and Improved Livelihoods State Program of Economic and Social Development‖. The key priorities of the strategy include: (1) improving living standards and poverty reduction, including through pension reform; (2) promoting innovation and structural change, including through greater energy security and efficiency, better infrastructure, and building Ukraine’s transit potential; (3) promoting trade, by creating an efficient export structure and extending cooperation with EU; (4) fostering investment through tax and budget reform, financial market development, and state-owned enterprises (SOE) management improvement; (5) promoting small and medium enterprises (SME) and reducing cost of doing business; and (6) improving quality of public services. Objectives of the WBG Strategy: 3. The WBG strategy, as updated by the CPSPR to take into account the global financial crisis, was laid out around two pillars. Under Pillar 1, restoring economic growth and improving competitiveness, the WBG strategy supported improving the business climate and invigorating private investment and trade; rehabilitating the banking sector and strengthening financial markets; bolstering energy security and improving energy efficiency; and promoting an export-led recovery. Under Pillar 2, public finance and public sector reform and improved service delivery, the WBG strategy provided support to implement a fiscal reform consistent with a stable and sustained recovery; improve efficiency in service delivery; and improve governance and accountability. Relevance of the WBG Strategy: 4. The WBG strategy was relevant and addressed some of the key challenges faced by Ukraine. The WBG strategy was mostly aligned with Ukraine’s own, with one notable exception—while Ukraine focused on improving the quality of public services, the WBG strategy emphasized their For Official Use Only CPSCR Review 3 Independent Evaluation Group efficiency. The WBG strategy left aside other areas of interest for Ukraine, which have been long- standing challenges, such as improving the management of SOEs. The WBG strategy was revised in the CPSPR to support Ukraine in its efforts to address the impact of the global financial crisis. 5. Overall, the WBG strategy had objectives that were defined very broadly. While WBG interventions fell well within the realm of the objectives, some operations had a very narrow focus and could hardly contribute in a significant way to the higher-order objectives of the strategy. In some cases, the gap was made wider by low government ownership, delays in project implementation, and unsteady implementation of some structural reforms. Relevance of IFC Program: 6. IFC’s support to Ukraine was mostly pro-cyclical, short in volume at the time of the economic slowdown and expanded when the economy had rebounded. In a different dimension, IFC responded to the market when investing in expanding the capacity for retail and wholesale, including gasoline stations. IFC’s strategy focused a significant part of its support—investments and advisory services, on the agricultural sector, addressing the needs of the small farmers. Reflecting governance concerns, IFC withdrew from municipality finance, including financing of public infrastructure (such as in transportation). Relevance of MIGA Program: 7. With the prevailing political uncertainty, of the presence of three pre-CPS MIGA guarantees plus a new one provided support to investments in financial institutions (where IFC had invested in the pre-CPS period). There was an additional pre-CPS guarantee in manufacturing. However, MIGA’s explorative efforts in agribusiness, capital markets or infrastructure, which were foreseen in the CPS, did not bear fruit. 8. Risk Identification and Mitigation: As acknowledged by the CPSCR, risks in implementation as well as in political economy were appropriately identified in the CPS, but, in retrospect, the mitigation measures foreseen fell short from what was needed to deal with the risks that materialized. The potential impact of these risks was underestimated, and the capacity of the government to respond overestimated. In the case of implementation risks, mitigation measures appear to have missed the flaws the design and project readiness that became evident subsequently. In the case of the political economy risks, the CPSPR appropriately emphasized the risky political context and the uncertainties surrounding the adoption of reforms. However, the mitigation measures fell short of what was needed to bring about the expected major reforms and structural changes. A more operative way of adapting the objectives to a more challenging political environment would have been warranted. Overview of CPS Implementation: Lending and Investments: 9. IBRD approved financing for US$ 2,250 million in 9 operations during the CPS period in the form of investment lending and development policy loans. Total planned lending was US$ 4,373.0 million. The difference was accounted for by six operations that were dropped and two that slipped to future fiscal years. Under Pillar 1, restoring economic growth and improving competitiveness, IBRD delivered 7 projects, including DPL II, DPL III, Programmatic Financial Rehabilitation Loan 1, Power Transmission Project, Hydropower Rehabilitation Additional Financing Project, and Road Improvement and Safety Project. Also, the IBRD intended to provide assistance through an Energy Efficiency Project for which, however, the loan and guarantee agreements were signed in June 2011. Under Pillar 2, public finance and public sector reform and improving service delivery, IBRD provided For Official Use Only CPSCR Review 4 Independent Evaluation Group support through DPL II, DPL III, and the Urban Infrastructure and Public Finance Modernization projects. IBRD continued implementing 11 previously approved projects. 10. IBRD portfolio performance improved significantly during the CPS period with the share of commitments at risk declining from 60 percent in 2008 to 0 in 2011. This compares with 9.4 percent of commitments at risk in ECA and 13.9 percent of commitments at risk globally across all client countries. This progress reflected concerted efforts on the part of both Ukraine and IBRD to undertake joint measures and to monitor progress quarterly, as noted by the CPSCR. Of five projects that were evaluated by IEG over the review period, two were rated moderately satisfactory or better in terms of development outcome. 11. Nineteen IFC investment projects were in operation at inception of the review period, for US$506 million of net commitment. IFC had developed a sizeable investment portfolio in the pre-CPS period, which was maintained during FY08-11. During the review period, IFC committed another US$933 million for twenty-six projects, US$220 million of which was committed during the crisis years of FY08-09. These projects targeted mortgages, trade financing, credit to SMEs, and small farmers, as well as financing of existing IFC clients. 12. The performance of IFC operations evaluated by IEG followed sectoral lines. In general, financial sector projects did not perform well, while non-financial sector projects were successful. Investee financial sector institutions had problems maintaining sound currency matching of their portfolios and keeping nonperforming loans in check. These problems appear to predate the crisis of FY08-09; of two commercial bank investments evaluated by IEG, one was found to have unsatisfactory front-end work. For the nonfinancial IFC portfolio, the institutions concerned were generally successful in increasing revenues and cutting costs during the review period. 13. MIGA guarantees covered five operations for a maximum gross issuance of US$1,007 million. The operations covered financial institutions and manufacturing. The financial institutions in turn covered leasing and commercial banking, including microfinance. Analytic and Advisory Activities and Services: 14. IBRD delivered most of its planned analytic and advisory activities (AAA). IBRD delivered 15 pieces of ESW, eight of which were not planned, as well as 22 technical assistance, nine of which were not planned. IBRD dropped or postponed five pieces of AAA, as Ukraine’s interests changed. Showing flexibility, IBRD moved fast with unplanned AAA in response to the global financial crisis and the food crisis. IBRD’s AAA was aligned with Ukraine’s demand and with the lending program. 15. Approved before the CPS, IFC had three large advisory services projects, amounting to over US$14 million of total funds that are still active at the end of the review period. Improving the Business Enabling Environment was the focus of one of these projects, while the other two are to improve financial and insurance services to farmers. During the CPS period, IFC brought into stream another US$11 million of advisory services through four large projects, focusing on financing cleaner production and residential energy efficiency. Partnerships and Development Partner Coordination: 16. Coordination across multilateral institutions, including the IMF, EBRD, EU, and OECD, has evolved productively. In particular, there was good coordination in response to the global financial crisis with the IMF and other partners, as well as with the EU in governance, providing support to stabilize the banking system, address underlying vulnerabilities, rebuild confidence, improve governance, and reinforce social protection. For Official Use Only CPSCR Review 5 Independent Evaluation Group Safeguards and Fiduciary Issues: 17. There were no safeguard issues brought to the Inspection Panel’s attention regarding Ukraine during the CPS period. IEG is not aware of any fiduciary issues in the WBG portfolio. Overview of Achievement by Objective: Pillar 1: Restoring Economic Growth and Improving Competitiveness 18. Under this pillar, the WBG strategy was to improve the business climate and invigorate private investment and trade; rehabilitate the banking sector and strengthen financial markets; ensure energy security and improve energy efficiency; and reduce costs of trade to support export led recovery. 19. Improve business climate and invigorate private investment and trade. As measured in the balance of payments, private capital flows as a percent of GDP declined from 10.5 percent of GDP in 2007 to 7.3 percent in 2010, while foreign direct investment also declined from 6.9 percent of GDP to 4.7 percent over the same period. These broad trends suggest that there were no significant improvements in Ukraine’s business climate during the CPS period. Indeed, the Global Competitiveness Index (GCI) of the World Economic Forum (WEF) remained stable at 4.0 over 7.0 between 2007-2008 and 2011-2012. Nevertheless, the Basic Requirements sub-index of the GCI, which reflects the quality of institutions, infrastructure, macroeconomic environment, and health and primary education, improved slightly from 4.1 to 4.2 over the same period. On a related dimension, the International Property Rights Index, prepared by a conglomerate of international think tanks, remained unchanged at 4.0 over 10.0 between 2008 and 2011. The dismal progress in these indicators happened despite some progress in the number of individual rural land titles issued from around 6.5 million in 2006 to 6.8 in 2010. 20. IBRD support was provided through DPL II, DPL III, the State Tax Service Modernization Project, and the Rural Land Titling and Cadastre Project. This lending portfolio was assisted by two AAA tasks, including a Country Economic Memorandum and the Corporate Sector Restructuring TA. In addition, IFC provided advisory services on the business enabling environment. The WBG interventions focused primarily in promoting the following legislation: the joint stock company law, the law on the cadastre, the law on the control of entrepreneurial activity, the law on the permit system, and the law on inspections. Beyond the changes in the legal texts, which by themselves do not bring about results, IBRD support for implementation had some impact in cadaster and land titling, and, together with IFC, in reducing the number of companies subject to inspections as well as the time it takes to obtain the yearly operating permits. The general business environment, however, remained weak and without improvement during the CPS period, suggesting that the legal changes lacked the relevance or the implementation to bring about significant results. 21. Rehabilitate the banking sector and strengthen financial markets. The National Bank of Ukraine (NBU) has made some progress in addressing the banking system crisis that had begun before the global financial crisis. The NBU relaxed reserve requirements and provided emergency liquidity assistance amounting to 2.7 percent of GDP to the banking system. In addition, the NBU tripled deposit insurance coverage (to UAH 150,000), and prohibited the early redemption of time deposits. Since the fall of 2008, NBU has intervened around 30 banks that had deficient capital, revoking licences and putting into liquidation 19 of them. Moreover, the government recapitalized three banks that were regarded as systemic risks. Notwithstanding progress, several challenges remain to be addressed in tackling the banking system crisis, including the disposition of troubled assets, bank resolution rules, accounting standards and disclosure, and the exit of the state from intervened banks. On the stock market front, the Financial Development Index of WEF declined slightly from 2.7 out of 7.0 in 2008 to 2.6 in 2011, suggesting that no progress was made in For Official Use Only CPSCR Review 6 Independent Evaluation Group strengthening financial markets. 22. At the micro level, IFC’s investments in the financial sector faced the same challenges as the rest of the sector. Efforts on vehicle leasing and microfinance were slowed or halted by the crisis, and remain so. As for MIGA, all of its contract enterprises in the financial sector were also IFC investees, suffering the challenges of the sector’s crisis. 23. IBRD, in close collaboration with the IMF, delivered its support through the Programmatic Financial Rehabilitation Loan 1, and by AAA including: (i) Capital Market TA Partnership Program, (ii) two Accounting and Auditing ROSC Follow-up TAs, and (iii) an FSAP Update. IFC provided minor advisory services to some of its financial sector investees, and, raising concerns about conflict of interest, to the NBU on rules that affected its investees. MIGA provided one guarantee in the financial sector, but did not support, as planned in the CPS, any investments for capital market transactions. 24. Ensure energy security and improve energy efficiency. There was no improvement in energy efficiency in Ukraine. Although energy consumption decreased by 10 percent between 2008 and 2010, the decline was proportional to the drop in GDP. These developments reflect, for the most part, highly subsidized energy tariffs (covering at most a third of the import prices) that have led to an increase of the quasi-fiscal deficit in the gas sector from 1.0 percent of GDP in 2006 to 2.7 percent in 2010. In addition, Ukraine’s energy security was shaken in 2009, when Naftogaz (NG) had to renegotiate its gas contract with Russia’s Gazprom, its sole supplier, with less subsidized prices and after the repayment of NZ’s outstanding debt. On a different front, Ukraine managed to diversify its energy sources somewhat by increasing its installed capacity for hydropower by 98.5 MW in 2011— less than half of the CPS target of 225 MW. 25. Despite the dismal progress in energy security and efficiency, Ukraine moved on the regulatory front harmonizing with the EU, including by joining the Community’s Energy Treaty in 2011. Moreover, a draft electricity law is being considered. 26. IBRD supported the energy sector through DPL II, DPL III, the Power Transmission Project, and additional financing for the Hydropower Rehabilitation Project. Too recent to have had any impact, in June 2011, IBRD approved the Energy Efficiency Project. In the AAA front, IBRD provided a Gas Market Note and Coal Policy Note update TA. 27. IFC maintained its investments in the electricity sector, despite a testing regulatory environment. However, IFC did not pursue a dialogue with the government to address these regulatory framework issues. As for advisory services, IFC’s projects in these areas are relatively new and it is too-early to assess their impact. 28. Reduce costs of trade to support an export led recovery. Ukraine became a member of the World Trade Organization (WTO) in May of 2008. In addition, Ukraine’s exports played a key role in the rebound of economic activity, as their share of GDP grew from 44.8 percent in 2007 to 50.2 percent in 2010. Export growth reflected higher volumes in food, fuel, ores and metals. The share of manufactures in merchandise exports, however, declined from 74.5 percent in 2007 to 64.6 percent in 2010. Meanwhile, for this same period, the World Development Indicators report that the cost to export a container increased from US$1,375 to US$1,865, while number of days to export remained at 30. The WBG efforts to reduce the cost of trade within its strategy were meant to address issues stemming from energy efficiency and transportation infrastructure. 29. IBRD support included the Road Improvement and Safety Project, Export Development II Project, DPL II, DPL III, and Country Economic Memorandum ESW. The DPL II was instrumental in Ukraine becoming a member of WTO. Also, IBRD disbursed $US 120 million of credit line to provide medium and long-term working capital and investment finance to Ukrainian private exporting For Official Use Only CPSCR Review 7 Independent Evaluation Group enterprises. IBRD, however, dropped the work on modernizing Ukraine’s railway system . 30. IFC continued its support of various investees that export part of their output and which focus on agriculture and meat production. In addition, recently IFC approved an investment meant to work on deeper draft berths to handle larger container vessels. 31. IEG rates the achievement of the outcome of the WBG support under Pillar 1 as moderately unsatisfactory. Ukraine made limited progress in cadaster and land titling, company inspections and operating permits, but this progress did not translate in an improvement in the country’s overall weak business environment. Ukraine also made some progress in averting the critical aspects of its financial crisis, including the run on banks, but has yet to address most of the fundamental aspects of the crisis. Some diversification of energy sources took place with the modest increase in hydropower, but the economy remains heavily dependent on imported gas. Ukraine became a member of WTO and its growth in exports contributed to rebound in GDP. Meanwhile, most legal changes to improve the business environment have yet to be implemented to become effective. Also, no progress was made in strengthening financial markets, or in redressing the quasi-fiscal deficit stemming from energy and heating subsidies. Similarly, the cost of exporting seems to have increased, according to some indicators. Pillar 2: Public Finance and Public Sector Reform and Improved Service Delivery 32. Under this pillar, the WBG strategy was to support fiscal reform to secure stability and enable a sustained recovery; improving efficiency in service delivery; and improving governance and accountability. 33. Fiscal reform to secure stability and enable a sustained recovery. The WBG strategy focused on eliminating tax exemptions, increasing excise taxes, limiting the pay-a-you-go pension deficit to below 1 percent of GDP, and reducing the quasi-fiscal deficit brought about by subsidies in gas and heating. In the difficult circumstances of political uncertainty and little ownership Ukraine did not undertake the fiscal reforms foreseen by the WBG strategy. Moreover, the pension reform that was part of Ukraine’s own strategy did not materialize, and pension related expenditures rose from under 15 percent of GDP in 2007 to 18 percent in 2010. Gas prices were increased once, by 35 percent in late 2008, but later reduced for some specific industries in 2009. Heating tariffs remained broadly unchanged during the CPS period. 34. IBRD supported the fiscal reforms through DPL II and DPL III. Also, IBRD provided assistance through a Public Finance Review. 35. Improve efficiency in service delivery. The WBG focused on improving the administration and targeting of social assistance benefits, strengthening the budget system for schools and hospitals, improving the financial performance of utilities, and improving the quality of municipal services in selected municipalities. There were some improvements in the administration of social assistance benefits, with the application processing time falling to one third and the number of benefits processed per month per staff increasing albeit by less than targeted. However, there was no improvement in targeting, with the share of non poor families among beneficiaries still remaining high- 55 percent, as in 2006. In the education and health sectors, the reforms, which envisaged introducing school budgeting on a per capita basis and global budgeting for hospitals, did not materialize. In six piloted rural areas, Ukraine’s teachers were able to cover more students, and the student/teacher ratio, which is one of the lowest in the world, moved from a baseline of 8.4 students per teacher in 2008 to 9.0 in 2010. There was no progress in financial performance of utilities and physical and operational capacity in services of selected municipalities. 36. IBRD supported the service delivery reforms through the Social Assistance System For Official Use Only CPSCR Review 8 Independent Evaluation Group Modernization Project, the Equal Access to Quality Education Project, the Urban Infrastructure Project, the Lviv Water and Wastewater Project, and DPL II and DPL III. This financial support was complemented by several AAAs, including the Public Finance Review II, the HD Policy TA and the Pension Reform and Capital Market TA Partnership Program. 37. Improve governance and accountability. The governance related indicators weakened over the CPS period according to various data sources. The score for Institutions provided by the World Economic Forum as a sub-index for the GCI, worsened from 3.3 out of 7.0 in 2008-2009 to 3.08 in 2011-2012. Also, the Legal and Political Environment sub-index of the Intellectual Property Right Index declined from 3.7 over 10 in 2008 to 3.5 in 2011. 38. The ratings by the Public Expenditure and Financial Accountability (PEFA) Program show some progress, although weak on auditing and by less than envisaged in the WBG strategy. The rating of multi-year perspective in fiscal planning improved from C to C+ between 2006 and 2010, mainly reflecting improved implementation of the medium term expenditure framework. The public procurement rating rose from D+ to C+ based on enactment of a new procurement law in July 2010. The rating on the predictability in the availability of funds for commitment of expenditures increased from D+ to C+. The rating for the effectiveness of tax collections improved to C+ up from D+. In addition, Ukraine reduced tax arrears as a share of total taxes from 18% in 2006 to 5.7% in 2010. However, there were no improvements in the PEFA ratings on scope, nature and follow up of external audit. The main areas of improvement have been reduced tax arrears as a share of total taxes from 18% in 2006 to 5.7% in 2010, and introduction of risk-based audit. Beyond public financial management, in the education sector, Ukraine launched the international assessment Tests in Mathematics and Science Study (TIMSS) in 2007 and the National External Assessment in 2008. In addition, four industrial municipalities have adopted the human health risk assessment methodology. 39. IBRD, in collaboration with the EU, provided assistance through the State Tax Service Modernization Project, the Development of State Statistics System for Monitoring Social & Economic Transformation Project, the Public Finance Modernization, DPLs II and III, and the Equal Access to Quality Education. Also, there were several AAAs, including the Public Finances Review II, the Health and Demography ESW, and the Zaporizhzhia Environmental TA. In addition, IDF support was provided through the Legal Framework and Enhancing Institutional Capacity for Environmental Permitting ESW. 40. IEG rates the outcome of the WBG’s strategy under Pillar 2 as moderately unsatisfactory. Ukraine made some progress in the administration of social assistance benefits, but targeting of these benefits did not improve. In piloted areas, Ukraine had a slight increase in the student/teacher ratio, but did not adopt needed reforms in the budgeting of schools and hospitals nor did utilities and municipalities improve their financial performance. Ukraine’s PEFA ratings improved with the MTEF implementation, the new procurement law, the reduction of tax arrears, and introduction of risk-based audit. However, Ukraine’s broad governance indicators did not improve. More importantly, in the difficult circumstances of political uncertainty and little ownership, Ukraine did not adopt the fiscal reforms necessary for medium-term fiscal stability and sustainability. Achievement of CPS objectives Objectives IEG Rating Pillar I: Restoring Economic Growth and Improving Moderately Unsatisfactory Competitiveness Pillar II: Public Finance and Public Sector Reform and Improved Moderately Unsatisfactory Service Delivery For Official Use Only CPSCR Review 9 Independent Evaluation Group 4. Overall IEG Assessment Overall Outcome: Moderately Unsatisfactory IBRD Performance: Satisfactory IFC Performance: Moderately Satisfactory MIGA Performance Moderately Satisfactory Overall outcome: 41. IEG rates overall outcome of the WBG´s strategy as moderately unsatisfactory. On Pillar 1, Ukraine made some progress in cadastre and land titling, company inspections and operating permits, and this progress did not translate into an improvement in the country’s overall weak business environment. Ukraine succeeded in averting some of the critical aspects of its financial crisis, including the run on banks. Ukraine, though, has yet to address most of the fundamental aspects of the crisis. Some diversification of energy sources took place with the modest increase in hydropower, but the economy remains heavily dependent on imported gas. Ukraine became a member of WTO and its growth in exports contributed to rebound in GDP. Meanwhile, most legal changes to improve the business environment have yet to be implemented to have an impact. Also, no progress was made in strengthening financial markets, or in redressing the quasi-fiscal deficit stemming from energy and heating subsidies. Similarly, the cost of exporting attributable to energy efficiency and transport infrastructure has increased, according to some indicators. On Pillar 2, Ukraine made some progress in the administration of social assistance benefits, but targeting of these benefits did not improve. In piloted areas, Ukraine’s teachers were able to cover more students. Yet, the country did not adopt needed reforms in the budgeting of schools and hospitals, nor did utilities and municipalities improve their financial performance. Ukraine’s PEFA ratings improved with MTEF implementation, the new procurement law, the reduction of tax arrears, and introduction of risk-based audit. However, Ukraine’s broad governance indicators did not improve. More importantly, in the difficult circumstances of political uncertainty and little ownership, Ukraine did not adopt the fiscal reforms necessary for medium-term fiscal stability and sustainability. IBRD Performance: 42. IEG rates IBRD´s performance as satisfactory. IBRD was quick to react to help Ukraine face the global financial crisis, and it did so in close collaboration with the IMF. IBRD’s strategy was aligned with Ukraine’s own for the most part, with the exception of the area of service delivery, whe re Ukraine focused on the quality of services and IBRD on efficiency. IBRD chose the best avenues to provide support to Ukraine, given the difficult political environment, and was effective in delivering AAA as needed. IBRD’s collaboration with the IMF, the EU and other development partners was instrumental in enhancing the effectiveness of its interventions. Moreover, the performance of IBRD´s portfolio in Ukraine improved significantly, with no commitments at risk in 2011. While the results framework had some shortcomings, and the CPSPR could have been used to bring objectives to a more realistic level, IEG acknowledges that the overall performance was solid given the very trying political and economic environment. IFC Performance: 43. IEG rates performance of IFC as moderately satisfactory. The programs were relevant to the CPS objectives, and at the project level, particularly for non-financial investees. Financial investees seem to have followed the general deterioration of the system during the crisis, suggesting that better front-end work would be warranted for this sector, as noted in IEG evaluations of commercial bank For Official Use Only CPSCR Review 10 Independent Evaluation Group investees. IFC’s interventions at the policy level were few and less effective than expected. IFC’s advisories to the NBU on rules that affected its financial sector investees raises concerns of possible conflicts of interest. MIGA Performance: 44. IEG rates performance of MIGA as moderately satisfactory. MIGA was satisfied with a set of operations defined before the crisis, which was dominated by IFC investees in the financial sector. However, MIGA provided just a small guarantee to a European financial sector investee. The avenues of new business laid out in the CPS do not seem to have been pursued such as seems to have been the case in capital markets. Investees from non-traditional countries, such as Russia or countries from Asia did not benefit from MIGA’s support. 5. Assessment of CPS Completion Report 45. The CPSCR provides a comprehensive description of the WBG strategy implementation. Also, there is an extended discussion of the findings and lessons learned. However, the CPSCR does not provide enough information on whether the assistance achieved its objectives and focuses mostly on narrowly defined outcomes in the results framework. 6. Findings and Lessons 46. IEG concurs with the lessons of the CPSCR, and underscores two additional points. First, with political uncertainty and frequent changes in governments, the timely use of the CPSPR to update the objectives of the strategy and adapt them to the new political environment appears essential—just as the CPSPR was used to adapt the WBG strategy to the global financial crisis, another exogenous development. For instance, several aspects of the approach to energy in the WBG strategy appeared to have lost the necessary political backing and objectives could have been revised. Second, the WBG could align its strategy more closely with that of the country, to avoid weak ownership from becoming an obstacle to effectiveness. This appears to have been the case with the emphasis on the efficiency of service delivery, which was differed from Ukraine’s focus on the quality of the services. Annexes CPSCR Review 11 Independent Evaluation Group Annex Table 1a: Planned and Actual Lending, FY08-11 Annex Table 1b: Trust Funds, FY08-11 Annex Table 2: Planned and Actual Analytical and Advisory Work, FY08-11 Annex Table 3a: IEG Project Ratings for Ukraine, FY08-11 Annex Table 3b: IEG Project Ratings for Ukraine and Comparators, FY08-11 Annex Table 4: Portfolio Status for Ukraine and Comparators, FY08-11 Annex Table 5: IBRD/IDA Net Disbursements and Charges Summary Report for Ukraine (in US$) Annex Table 6: Total Net Disbursements of Official Development Assistance and Official Aid, 2008- 2010 (in US$ million) Annex Table 7: Economic and Social Indicators for Ukraine and Comparators, 2008- 2010 Annex Table 8: Ukraine Millennium Development Goals Annex Table 9: List of IFC’s investments in Ukraine that were active during FY08-11 (US$’000) Annex Table 10: List of IFC’s Large Advisory Services (above US $2 million) in Ukraine, FY08-11 Annex Table 11: List of MIGA’s Operations in Ukraine, FY08-11 (US$ ‘000) Annex Table 12: Summary of Achievements of the CPS Objectives Annexes CPSCR Review 13 Independent Evaluation Group Annex Table 1a: Planned and Actual Lending, FY08-11 Proposed Proposed Approved Project ID Approval FY FY Amount Amount Programmed projects P096207 Power Transmission Project 2008 2008 200.0 200.0 P096389 DPL II 2008 2008 300.0 300.0 Judicial System Support Project 2008 Dropped 40.0 0.0 P090389 Public Finance Modernization Project 2008 2008 50.0 50.0 P100580 Roads and Safety Improvement Project 2008 2009 400.0 400.0 P095337 Urban Infrastructure 2008 2008 140.0 140.0 Municipal Infrastructure Development (Euro 2012) 2009 Dropped 300.0 0.0 P107365 DPL III 2009 2009 400.0 500.0 Power Transmission II 2009 Dropped 250.0 0.0 Social Insurance Administration Project 2009 Dropped 113.0 0.0 P115143 Programmatic Financial Rehabilitation Loan 1 2010 2010 400.0 400.0 P115515 Hydropower Rehabilitation -- Additional financing 2010 2010 60.0 60.0 Railway Modernization Reform project 2011 Dropped 500.0 0.0 P116703 Programmatic Financial Rehabilitation Loan 2 2011 Moved to FY12 350.0 0.0 P112636 Development Policy Loan 4 2011 Dropped 500.0 0.0 P109649 Second Export Development project AF 2011 Moved to FY12 120.0 0.0 P096586 Energy Efficiency project 2011 2011 250.0 200.0 Total Programmed projects CAS FY08-11 4,373.0 2,250.0 Non-programmed projects NA Total projects CAS FY08-11 4,373.0 2,250.0 Approval Proposed Approved Project ID Closing FY FY Amount Amount Ongoing projects P035786 Lviv Water and Wastewater Project 2001 2008 24.3 P069858 Social Investment Fund Project 2002 2008 50.2 P069857 Tuberculosis and HIV/AIDS Control Project 2003 2010 60.0 P057815 State Tax Service Modernization Project (APL #1) 2003 Active 40.0 P035777 Rural Land Titling & Cadastre Development Project 2003 Active 195.1 Development of State Statistics System for Monitoring Social P076338 & Economic Transformation Project 2004 Active 32.0 P077738 Equal Access to Quality Education in Ukraine Project 2005 2011 86.6 P083702 Hydropower Rehabilitation Project 2005 Active 106.0 P075231 Social Assistance System Modernization Project 2006 Active 99.4 P076553 Access to Financial Services Project 2006 2010 150.0 P095203 Second Export Development Project 2007 Active 154.5 Total ongoing projects CAS FY08-11 998.1 Source: Ukraine Country 2008 CPS, 2010 CPSPR and WB Business Warehouse Table 2a.1, 2a.4 and 2a.7 as of 12/23/2011. Annexes CPSCR Review 14 Independent Evaluation Group Annex Table 1b: Trust Funds, FY08-11 Project Closing Approved Project Approval FY Product Line ID FY Amount P121654 Auditing Road Infrastructure Projects 2006 Active 476,000.0 IDF Alchevsk Steel Mill Revamping and P101615 2006 Active 14,958,830.08 Carbon Offset Modernization Reform of Legal Framework and P096591 Enhancing Institutional Capacity for 2006 2009 445,000.0 IDF Environmental Permitting in Ukraine Recipient Executed P094833 UA FSD/PSD Advis Services TA 2006 Active 1,828,500.0 Activities Hydropower Rehabilitation Proto-Carbon P094945 2007 Active 6,976,475.0 Carbon Offset Finance Project Total FY08-11 24,684,805.1 Source: Ukraine Country 2008 CPS, 2010 CPSPR and Client Connection as of 12/23/2011. Annexes CPSCR Review 15 Independent Evaluation Group Annex Table 2: Planned and Actual Analytical and Advisory Work, FY08-11 Project Proposed Delivered to Output Type ID FY Client FY Economic and Sector Work Planned (CAS FY08-11) Public Finance Review 2 P102035 2008 2008 Report FSAP Update P106412 2008 2009 Report ESMAP: Thermal Power Piant Rehabilitation P105332 2008 2009 Report Agricultural Policy Notes P112575 2008 2011 Policy Note Labor Demand and Skills Relevance P108435 2008 2009 Report Strengthening Demand for good governance P110419 2008 2008 Report Country Economic Memorandum - Growth & Competitiveness P107252 2009 2010 Report Improving Efficiency and Accountability in the HD sectors (in SAP P121315 2011 Measuring Governance in Health and Education) Forwarded to FY12 Report Non-planned Impact of FTA with the EU on Agriculture Sector P108968 2008 Policy Note Ukraine's Response to Global Food Crisis P112413 2008 Policy Note Competitiveness of Bioenergy Production in Ukraine P112414 2008 Policy Note FSAP Update Ukraine P106538 2008 Report SOE Financial Oversight P112825 2010 Report Health and Demography P112820 2010 Report ESMAP: Affordable Gas-Fired District Heating in Eastern Europe P105603 2010 Report Ukraine DB Sub-National P108388 2010 Report Technical Assistance Planned (CAS FY08-11) Private Sector TA Dialogue (linked to KE & Comp TA) 2008 Dropped Client Document Review Kyoto TA 2008 Dropped Knowledge Economy - Competitiveness Dialogue P108374 2008 2008 "How-To" Guidance GAC-Strengthening Demand for Good Governance P110532 2008 2008 "How-To" Guidance International Emissions Trading Institutions and Pilot Green P101403 Investment Schemes TA 2008 2008 "How-To" Guidance Financial Sector Dialogue P101596 2008 2008 "How-To" Guidance Environmental Protection TA (Zaporizhia) P101403 2008 2008 "How-To" Guidance Accounting and Auditing ROSC Follow-up TA P108972 2008 2008 "How-To" Guidance Financial Sector TA Dialogue P108184 2008 2008 Client Document Review Strengthening demand for good governance P110532 2008 2008 "How-To" Guidance Institutional Development P106931 2008 Capital Market TA Partnership Program 2008 Plan People’s Voice TA P083014 2008 2008 Model/Survey Housing & Municipal Utilities P113693 2008 2009 Knowledge-Sharing Forum Gas Market Note and Coal Policy Note update P117483 2009 2009 "How-To" Guidance HD Policy AAA P108537 2009 2010 "How-To" Guidance District Heating AAA- Belarus & Ukraine P112754 2011 Forwarded to FY12 Report Advisory Services P106881 2011 PFM TA (linked to Dutch TF on cap bud and PFM) Forwarded to FY12 Document Non-planned HD Sector TA P102279 2008 "How-To" Guidance Corporate Finance Reporting P112836 2009 "How-To" Guidance Environmental Protection TA 2 P114982 2010 "How-To" Guidance CTF Investment Plan P116729 2010 Client Document Review ROSC Follow Up TA P112849 2010 "How-To" Guidance HD Policy AAA P108537 2010 "How-To" Guidance Risk and Vulnerability Assessment Project - Ukraine P121663 2011 "How-To" Guidance PTAFTA P114090 2011 "How-To" Guidance Corporate Restructuring Resolution P096184 2011 "How-To" Guidance Source: Ukraine Country 2008 CPS, 2010 CPSPR and WB Business Warehouse Table ESW/TA 8.1.4 as of 12/23/2011. Annexes CPSCR Review 16 Independent Evaluation Group Annex Table 3a: IEG Project Ratings for Ukraine, FY08-11 Exit Project Total Evaluated IEG Risk to Development Project Name IEG Outcome FY ID (US$M) Outcome * 2008 P035786 LVIV Water/Ww 24.0 Satisfactory Moderate 2008 P069858 SIF 50.2 Moderately Unsatisfactory Moderate 2008 P096389 DPL 2 300.0 Moderately Satisfactory Significant 2010 P069857 TB/AIDS Cntrl 24.8 Unsatisfactory Significant 2010 P076553 Acc To Fin Servs (Apl 1) 5.8 Unsatisfactory High Source: WB Business Warehouse Table 4a.5 and 4a.6 as of as of 12/23/2011. * With IEG new methodology for evaluating projects, institutional development impact and sustainability are no longer rated separately. Annex Table 3b: IEG Project Ratings for Ukraine and Comparators, FY08-11 Total Total RDO % RDO % Outcome Outcome Region Evaluated Evaluated Moderate or Moderate or % Sat ($) % Sat (No) ($M) (No) Lower ($) * Lower (No) * Ukraine 404.8 5.0 80.0 40.0 18.3 40.0 Russia 562.4 9.0 93.0 88.9 49.5 55.6 Kazakhstan 220.9 3.0 100.0 100.0 100.0 100.0 Poland 350.2 6.0 72.4 66.7 80.2 66.7 ECA 6,294.3 139.0 88.9 80.9 72.0 61.8 World Bank 32,823.9 646.0 84.1 74.4 67.2 56.5 Source: WB Business Warehouse Table 4a.5 and 4a.6 as of as of 12/23/2011. * With IEG new methodology for evaluating projects, institutional development impact and sustainability are no longer rated separately. Annexes CPSCR Review 17 Independent Evaluation Group Annex Table 4: Portfolio Status for Ukraine and Comparators, FY08-11 Fiscal year 2008 2009 2010 2011 Russia # Proj 18 14 12 10 # Proj At Risk 1 5 2 3 % At Risk 6 36 17 30 Net Comm Amt 1,676 1,297 1,136 987 Comm At Risk 80 310 100 110 % Commit at Risk 5 24 9 11 Kazakhstan # Proj 13 12 15 15 # Proj At Risk 2 3 2 3 % At Risk 15 25 13 20 Net Comm Amt 618 2,598 3,663 2,666 Comm At Risk 59 83 48 67 % Commit at Risk 10 3 1 2 Poland # Proj 7 5 5 5 # Proj At Risk 1 2 1 1 % At Risk 14 40 20 20 Net Comm Amt 736 1,764 1,795 1,578 Comm At Risk 11 195 11 11 % Commit at Risk 1 11 1 1 Ukraine # Proj 13 12 12 12 # Proj At Risk 6 4 3 0 % At Risk 46 33 25 0 Net Comm Amt 1,209 1,431 1,430 1,573 Comm At Risk 726 347 295 0 % Commit at Risk 60 24 21 0 ECA # Proj 326 318 310 290 # Proj At Risk 40 55 52 40 % At Risk 12 17 16 13 Net Comm Amt 18,027 21,455 24,446 22,650 Comm At Risk 2,266 3,469 4,360 2,117 % Commit at Risk 13 16 18 9 World # Proj 1,832 1,925 1,990 2,059 # Proj At Risk 312 386 410 382 % At Risk 17 20.1 20.6 18.6 Net Comm Amt 110,836 135,706 162,976 171,755 Comm At Risk 18,968 20,859 28,963 23,850 % Commit at Risk 17 15 18 14 Source: WB Business Warehouse Table 3a.4 as of 12/23/2011. Annexes CPSCR Review 18 Independent Evaluation Group Annex Table 5: IBRD/IDA Net Disbursements and Charges Summary Report for Ukraine (in US$) FY Disb. Amt. Repay Amt. Net Amt. Charges Fees Net Transfer 2008 410,731,654.7 195,788,067.2 214,943,587.5 130,105,188.7 3,582,822.8 81,255,576.0 2009 620,701,760.9 218,748,183.5 401,953,577.4 93,261,874.5 3,923,389.1 304,768,313.8 2010 497,613,721.8 238,754,387.2 258,859,334.7 48,065,937.1 3,062,912.6 207,730,485.0 2011 - 181,977,223.6 255,665,797.1 -73,688,573.5 31,445,083.4 843,970.9 105,977,627.8 Total 1,711,024,361.0 908,956,434.9 802,067,926.1 302,878,083.7 11,413,095.5 487,776,747.0 (2008-2011) Source: WB Loan Kiosk, Net Disbursement and Charges Report as of 12/23/2011. Annexes CPSCR Review 19 Independent Evaluation Group Annex Table 6: Total Net Disbursements of Official Development Assistance and Official Aid, 2008- 2010 (in US$ million) Donor 2008 2009 2010 2008-2010 Bilaterals Austria 8.68 6.75 6.98 22.41 Belgium 0.05 0.9 0.14 1.09 Canada 18.71 17.97 20.2 56.88 Denmark 5.7 3.05 3.58 12.33 Finland 0.32 0.52 1.19 2.03 France 25.02 19.49 21.54 66.05 Germany 77.14 121.58 89.11 287.83 Greece 3.66 3.99 2.96 10.61 Ireland 0.46 0.22 .. 0.68 Italy 1.38 0.18 0.28 1.84 Japan 8.42 61.85 53.17 123.44 Korea 1.39 3.38 1.36 6.13 Luxembourg 0.16 0.11 0.03 0.3 Netherlands .. .. 0.13 0.13 Norway 4.68 3.11 3.77 11.56 Portugal .. 0.02 0.01 0.03 Spain 0.26 3.84 0.27 4.37 Sweden 21.5 36.05 31.43 88.98 Switzerland 6.63 8.55 15.46 30.64 United Kingdom 3.21 2.37 0.84 6.42 United States 98.92 103.01 140.16 342.09 DAC Countries, Total 286.29 396.94 392.61 392.61 Czech Republic 3.2 5.03 3.01 11.24 Hungary 2.35 1.81 3.86 8.02 Iceland .. .. .. 0 Israel 12.9 14.83 14.37 42.1 Poland 13.95 9.12 11 34.07 Slovak Republic 0.48 1 0.33 1.81 Slovenia 0.09 0.11 0.1 0.3 Thailand .. .. 0.01 0.01 Turkey 7.96 6.92 5.25 20.13 United Arab Emirates 0.03 .. 0.01 0.04 Other Partner Countries, Total 0.22 0.21 0.87 1.3 Non-DAC Countries, Total 41.18 39.03 38.81 119.02 Multilaterals EBRD 1.34 .. .. 1.34 GEF 2.01 14.41 .. 16.42 GAVI 0.12 0.02 -0.08 0.06 Global Fund 34.88 32.35 32.06 99.29 IAEA 1.67 0.66 0.56 2.89 UNAIDS 0.5 0.48 0.71 1.69 UNDP 1.87 2.24 1.97 6.08 UNECE .. .. .. 0 UNFPA 0.77 0.67 0.79 2.23 UNHCR 1.72 1.54 1.42 4.68 UNICEF 1.15 0.84 1.11 3.1 UNTA 1.79 .. .. 1.79 EU Institutions 242.29 177.02 153.02 572.33 Multilateral Agencies, Total 290.11 230.23 191.56 711.9 All Partners, Total 617.58 666.20 622.98 1,223.53 Source: OECD DAC Online database, Table 2a. Destination of Official Development Assistance and Official Aid - Disbursements, as of 12/23/2011. Annexes CPSCR Review 20 Independent Evaluation Group Annex Table 7: Economic and Social Indicators for Ukraine and Comparators, 2008- 2010 Ukraine Ukraine Russia Kazakhstan Poland ECA World Series Name 2008 2009 2010 2008-2010 Growth and Inflation GDP growth (annual %) 2.3 -14.8 4.2 -2.8 0.5 3.9 3.6 -0.4 1.1 GDP per capita growth (annual %) 2.9 -14.4 4.6 -2.3 0.6 2.1 3.5 -0.8 0.0 GNI per capita, PPP (current international $) 7,250.0 6,240.0 6,620.0 6,703.3 19,103.3 10,243.3 18,336.7 24,016.7 10,831.6 GNI, Atlas method (current US$ million) 148,780.4 130,812.9 137,771.1 139,121.5 1,366,945.7 109,643.4 465,155.3 20,711,238.0 59,985,944.0 Inflation, consumer prices (annual %) 25.2 15.9 9.4 16.8 10.9 10.5 3.6 Composition of GDP (%) Agriculture, value added (% of GDP) 7.9 8.3 8.2 8.1 4.4 5.7 3.6 1.9 2.9 Industry, value added (% of GDP) 33.6 29.6 30.9 31.4 35.5 42.0 31.6 26.0 26.2 Services, etc., value added (% of GDP) 58.5 62.1 60.9 60.5 60.1 52.3 64.7 72.1 70.8 Gross fixed capital formation (% of GDP) 26.4 18.4 19.0 21.3 22.1 26.2 21.1 19.3 20.1 Gross domestic savings (% of GDP) 20.0 15.4 16.6 17.3 30.8 41.7 20.0 20.8 20.0 External Accounts Exports of goods and services (% of GDP) 46.9 46.4 50.2 47.8 29.8 47.7 40.5 38.9 27.6 Imports of goods and services (% of GDP) 54.9 48.0 53.0 52.0 21.4 33.4 42.3 37.5 27.8 Current account balance (% of GDP) -7.1 -1.5 -2.2 -3.6 5.0 1.1 -5.1 External debt, total (% of GNI) 54.1 90.1 85.9 76.7 27.8 99.0 .. .. .. Total debt service (% of GNI) 10.0 19.9 22.1 17.4 4.4 30.2 .. .. .. Total reserves in months of imports 3.5 5.0 5.2 4.6 13.6 4.6 4.2 5.8 13.3 Fiscal Accounts /1 Revenue (% of GDP) 44.3 42.3 42.8 43.1 36.4 25.2 38.2 Total Expenditure (% of GDP) 47.4 51.0 50.2 49.2 38.1 24.9 44.4 Overall Balance (% of GDP) -3.1 -8.7 -7.4 -5.9 -1.6 0.4 -6.3 Public Sector Gross Debt (% of GDP) 20.0 34.8 39.5 27.4 9.7 9.5 51.0 Social Indicators Health Life expectancy at birth, total (years) 68.3 69.2 .. 68.7 68.2 67.7 75.6 75.3 69.3 Immunization, DPT (% of children ages 12-23 months) 90.0 90.0 90.0 90.0 97.7 98.7 99.0 95.7 84.4 Improved sanitation facilities (% of population with access) 95.0 .. .. 95.0 87.0 97.0 90.0 94.1 60.6 Improved water source (% of population with access) 98.0 .. .. 98.0 96.0 95.0 100.0 98.0 86.8 Mortality rate, infant (per 1,000 live births) 12.1 11.7 11.4 11.7 9.8 29.9 5.4 12.3 42.0 Population Population, total (in million) 46.3 46.1 45.9 46.1 141.9 16.0 38.2 886.9 6,763.7 Population growth (annual %) -0.5 -0.4 -0.4 -0.5 -0.1 1.7 0.1 0.4 1.1 Urban population (% of total) 68.0 68.0 68.1 68.0 72.8 58.2 61.3 69.9 50.4 Education School enrollment, preprimary (% gross) 96.8 98.7 97.4 97.6 89.9 38.6 63.7 74.5 49.7 School enrollment, primary (% gross) 99.4 98.5 99.2 99.0 98.1 111.3 97.0 101.7 107.0 School enrollment, secondary (% gross) 94.7 94.6 95.6 95.0 87.3 94.2 97.4 96.4 67.9 1/ IMF. Republic of Yemen: Article IV Consultations Years. Source: WB World Development Indicators (DATE update) for all indicators excluding those noted. Annexes CPSCR Review 21 Independent Evaluation Group Annex Table 8: Ukraine Millennium Development Goals 1990 1995 2000 2009 Goal 1: Eradicate extreme poverty and hunger Employment to population ratio, 15+, total (%) 57 57 49 54 Employment to population ratio, ages 15-24, total (%) 37 40 32 34 Income share held by lowest 20% 9.4 7.2 8.8 9.4 Malnutrition prevalence, weight for age (% of children under 5) .. .. 4.1 .. Poverty gap at $1.25 a day (PPP) (%) 1 1 1 1 Poverty headcount ratio at $1.25 a day (PPP) (% of population) 2 2 2 2 Prevalence of undernourishment (% of population) 5 5 5 5 Vulnerable employment, total (% of total employment) .. .. .. .. Goal 2: Achieve universal primary education Literacy rate, youth female (% of females ages 15-24) .. .. 100 100 Literacy rate, youth male (% of males ages 15-24) .. .. 100 100 Persistence to last grade of primary, total (% of cohort) .. .. 97 97 Primary completion rate, total (% of relevant age group) 94 95 92 99 Total enrollment, primary (% net) .. .. 93 89 Goal 3: Promote gender equality and empower women Proportion of seats held by women in national parliaments (%) .. 4 8 8 Ratio of female to male primary enrollment (%) 100 100 99 100 Ratio of female to male secondary enrollment (%) 104 107 101 98 Ratio of female to male tertiary enrollment (%) .. 132 114 125 Share of women employed in the nonagricultural sector (% of total nonagricultural employment) .. 50.7 52.9 54.7 Goal 4: Reduce child mortality Immunization, measles (% of children ages 12-23 months) 90 97 99 94 Mortality rate, infant (per 1,000 live births) 18 18 17 13 Mortality rate, under-5 (per 1,000) 21 21 19 15 Goal 5: Improve maternal health Adolescent fertility rate (births per 1,000 women ages 15-19) .. .. 36 28 Births attended by skilled health staff (% of total) .. 100 100 99 Contraceptive prevalence (% of women ages 15-49) .. .. 72 67 Maternal mortality ratio (modeled estimate, per 100,000 live births) 49 45 35 26 Pregnant women receiving prenatal care (%) .. .. .. 99 Unmet need for contraception (% of married women ages 15-49) .. .. .. 10 Goal 6: Combat HIV/AIDS, malaria, and other diseases Children with fever receiving antimalarial drugs (% of children under age 5 with fever) .. .. .. .. Condom use, population ages 15-24, female (% of females ages 15-24) .. .. .. 43 Condom use, population ages 15-24, male (% of males ages 15-24) .. .. .. 64 Incidence of tuberculosis (per 100,000 people) 41 51 84 100 Prevalence of HIV, female (% ages 15-24) .. .. .. 1.5 Prevalence of HIV, male (% ages 15-24) .. .. .. 2 Prevalence of HIV, total (% of population ages 15-49) .. 0.1 0.7 1.6 Tuberculosis case detection rate (all forms) 77 82 80 81 Goal 7: Ensure environmental sustainability CO2 emissions (kg per PPP $ of GDP) 2.3 2.7 1.9 1.0 CO2 emissions (metric tons per capita) 13.3 8.3 6.2 6.8 Forest area (% of land area) 16 16 16 17 Improved sanitation facilities (% of population with access) 95 95 95 95 Improved water source (% of population with access) .. 96 97 98 Marine protected areas (% of total surface area) .. .. .. 4 Terrestrial protected areas (% of total surface area) .. .. .. 3.4 Goal 8: Develop a global partnership for development Debt service (PPG and IMF only, % of exports, excluding workers' remittances) .. 6 14 2 Internet users (per 100 people) 0.0 0.0 0.7 10.5 Mobile cellular subscriptions (per 100 people) 0 0 2 120 Net ODA received per capita (current US$) .. .. .. 13 Telephone lines (per 100 people) 14 16 21 28 Other Fertility rate, total (births per woman) 1.8 1.4 1.1 1.4 GNI per capita, Atlas method (current US$) 1,610 920 700 2,800 GNI, Atlas method (current US$) (billions) 83.3 47.4 34.4 128.9 Gross capital formation (% of GDP) 27.5 26.7 19.6 17.1 Life expectancy at birth, total (years) 70 67 68 68 Literacy rate, adult total (% of people ages 15 and above) .. .. 99 100 Population, total (millions) 51.9 51.5 49.2 46.0 Trade (% of GDP) 56.4 97.2 119.9 94.3 Source: World Development Indicators database as of 12/23/2011. Annexes CPSCR Review 22 Independent Evaluation Group Annex Table 9: List of IFC’s investments in Ukraine that were active during FY08-11 (US$’000) Approval Closure Project IFC Sector IFC Sector Project Net Net Total Net Project ID FY FY Status Primary Explntry Size Loansi Equity Commitment Investments approved pre-FY08, but active during FY08-11 9758 & 2000, Financial 21077 Active Microfin. 2,300 2,300 2,300 2003 Markets (equity part) 22295 2005 2011 Closed MAS Retail 14,000 5,000 5,000 Infra. & Nat. Power 24305 2005 Active 27,600 17,000 17,000 Rscs. Dstrbtn. Infra. & Nat. Power 11134 2005 Active 54,600 33,000 33,000 Rscs. Dstrbtn. Financial 22762 2005 Active Comm. Bank 35,000 35,000 35,000 Markets Financial 24264 2005 Active Comm. Bank 50,000 50,000 50,000 Markets Financial 22500 2005 Active Pvt. Equity 76,000 7,500 7,500 Markets 24437 2006 Active MAS Wholesale 18,400 8,000 8,000 23961 2006 Active MAS Pharma. 7,000 3,500 3,500 24644 2006 Active MAS Palm Oil 165,000 17,500 17,500 Financial 24765 2006 2012 Closed Leasing 17,000 17,000 17,000 Markets 22739 2006 Active MAS Gas Stns. 115,000 25,000 25,000 Financial 21813 2006 Active Housing Fin. 7,000 7,000 7,000 Markets 24685 2006 Active MAS Steel 1,100,000 100,000 100,000 24084 2006 Active MAS Tourism 59,000 14,500 14,500 24656 2006 Active MAS Tiles 17,900 9,000 9,000 Bread & 25668 2007 Active MAS 45,200 30,000 30,000 Bakery 26396 2007 Active MAS Steel 3,000,000 100,000 100,000 25232 2007 2008 Closed MAS Soft Drinks 99,000 25,000 25,000 Subtotal 4,910,000 496,500 9,800 506,300 Annexes CPSCR Review 23 Independent Evaluation Group Annex Table 9 (Continued): List of IFC’s investments in Ukraine that were active during FY08-11 (US$’000) Project Approval Closur Project IFC Sector IFC Sector Project Net Total Net Net Loansii ID FY e FY Status Primary Explntry Size Equity Commitment Investments approved in FY08-11 26140 2008 Cnclld. MAS Wholesle 85,700 28,500 28,500 29086 2008 Active MAS Glass 40,660 20,700 20,700 26271 2008 Active MAS Palm Oil 240,000 45,000 45,000 Grocery 27059 2008 Active MAS 240,000 50,000 20,000 70,000 Stores 25694 2008 Active MAS Gas Stns. 340,200 100,000 100,000 Financial Mortge. 26026 2008 Active 85,000 75,000 10,000 85,000 Markets Credit line Financial 26569 2008 Active Microfin. 20,000 20,000 20,000 Markets Financial 26496 2008 Active Comm. Bank 160,000 80,000 80,000 Markets 28150 2009 Active MAS Wholesle 15,000 12,000 12,000 Financial 27044 2009 Active Trade 15,000 15,000 15,000 Markets Financial 27110 2009 Active Comm. Bank 20,000 16,200 3,800 20,000 Markets 27510 2009 Active MAS Agri. 25,000 25,000 25,000 29946 2010 Active MAS Meat Prdctn. 11,250 11,250 11,250 Infra. & Nat. Cmptr. Sys. 26294 2010 Active 3,500 3,500 3,500 Rscs. Dsgn 29195 2010 Active MAS Meat Prdctn. 94,000 25,000 25,000 Financial 27723 2010 Active Trade 30,000 30,000 30,000 Markets Financial 27865 2010 Active Trade 40,000 40,000 40,000 Markets 29204 2010 Active MAS Meat Prdctn. 118,000 68,000 68,000 28632 2010, + Active MAS Agri. 213,700 50,000 50,000 2011 30792 Financial 29774 2011 Active Leasing 5,000 5,000 5,000 Markets 30595 2011 Active MAS Pesticides 140,000 70,000 70,000 Financial 30100 2011 Active Leasing 10,000 10,000 10,000 Markets 30477 2011 Active MAS Gas Stns. 210,000 35,000 35,000 Financial 30112 2011 Active Trade 10,000 10,000 10,000 Markets 29758 2011 Active MAS Retail 50,000 22,000 22,000 2012 Infra. & Nat. 30003 Active Ports 119,100 32,000 32,000 (CY 11) Rscs. Subtotal 2,341,110 895,650 37,300 932,950 Grand Total 7,251,110 1,392,150 47,100 1,439,250 Source: IFC, June 2011- The list does not cover the regional projects. MAS: Manufacturing, Agriculture, and Services Annexes CPSCR Review 24 Independent Evaluation Group Annex Table 10: List of IFC’s Large Advisory Services (above US$2 million) in Ukraine, FY08-11: Project Project Primary Business Total ID Project Name Start FY End FY Status Line Funds, US$ Advisory Services operations approved pre-FY08, but active during FY08-11 532493 Vinnitsya Fruit 2005 (2012) Active Sus. Business Advisory 3,188,147 540163 Ukraine Ag. Insurance 2007 (2013) Active Access to Finance 6,153,896 552505 PEP Ukraine BEE (Phase III) 2007 (2012) Active Business Enblng. Env. 4,992,151 Subtotal: 14,334,194 Advisory Services operations approved in FY08-11 561634 Ukraine Food Safety Imrovement 2008 (2013) Active Sus. Business Advisory 2,269,043 564788 Ukraine Ag. Finance 2009 (2014) Active Access to Finance 2,764,118 568089 Ukraine Cleaner Production 2009 (2013) Active Access to Finance 3,000,000 566047 Ukraine Residential Energy Efficiency 2010 (2013) Active Access to Finance 3,330,000 Subtotal: 11,363,161 Grand Total 25,697,355 Source: Source: IFC, January 2012 Annex Table 11: List of MIGA’s Operations in Ukraine, FY08-11 (US$ ‘000): Project Project Investor Max. Gross ID Contract Enterprise FY Status Sector Issuance Poland 5326 Can Pack (Ukraine) LLC 2006,2008 Active Manufacturing 56,164 Austria 7438 Raiffeisen Bank AVAL 2008 Active Financial 380,000 Austria 7439 Raiffeisen Leasing AVAL 2008,2009 Active Financial 171,000 Austria 7585 UKROTSBANK 2008,2009 Active Financial 389,500 Germany 9161 ProCredit Bank 2011 Active Financial 10,188 Grand Total: 1,006,852 Source: Source: MIGA, January 2012 Annexes CPSCR Review 25 Independent Evaluation Group Annex Table 12: Summary of Achievements of the CPS Objectives CPS 08-11: Pillar 1 Actual Results Comments Restoring Economic Growth and Improving Competitiveness (as of current month year) Objectives 1. Improve business climate and invigorate private investment and trade 2. Rehabilitate the banking sector and strengthen financial markets 3. Ensure energy security and improve energy efficiency 4. Reduce costs of trade to support export led recovery Major 1. Improve business climate and invigorate private investment and trade Outcome Measures Increase productivity in selected agri-businesses There is no information available. Unknown Progress. Source: CASCR. Livestock sales increased by 4% in January 2011 yoy, while decreased in crops; export performance increased in livestock (32%), livestock and crop fats (41%) in 2010, however, crop exports decreased by 25% due to the grain export restrictions. Increase farm level productivity in selected supply chains: (i) Average crop yields have decreased Modest Progress. yields, (ii) quality of produce and (iii) farm gate prices by approx. 3% for grains, 9% for Source: CASCR. vegetables and almost no change for oil crops; fruit yields increased by 8%; (ii) There has been a tendency in productivity in livestock has been agro-holdings and individual growing and was 10% higher in processing companies to January 2011 yoy; and (iii) farm gate implement EU quality standards. prices increased by 15% in January 2011 yoy, in particular by 33% in crop and by 4% in livestock sectors. Ensure increase in number of individual rural land titles issued 6.81 million rural land titles have been Substantial Progress. from around 6.5 million in 2006 to 7 million by 2010 issued out of a total of 6.9 million. Source: CASCR. Reduce the share of enterprises that underwent at least one Last data available for 2010 show a Modest Progress. inspection during the year from 95% (2006) to under 60% decrease to 74% according to Source: CASCR. (2010) “Investment Climate in Ukraine as Seen By Private Businesses”. Decrease time spent to obtain all permits to operate during The average time required for High Progress. one year from 60 days (2006) to less than 35 days (2010) obtaining all permits has been Source: CASCR. reduced from 54 days in 2008 to just 24 days in 2010 according to “Investment Climate in Ukraine as Seen By Private Businesses”. Reduce to 30% the share of enterprises that have to comply It is reduced to 22% according to High Progress. with compulsory standards from 60% in 2007 “Investment Climate in Ukraine as Source: CASCR. Seen By Private Businesses”. Reduce the percentage of firms subject to planned tax audits In 2008 a risk based system for Unknown Progress. compared to the 2007 level as evidenced by the taxpayers planned inspection was piloted and Source: CASCR. surveys rolled out. Since the implementation of this program, according to taxpayer survey data, the share of legal entities that were subject to audits went from 23% in 2007 to 16% in 2008 and 14% in 2009. However, other surveys show still high levels of tax audits. For example, IFC survey shows that 46% of all enterprises were inspected by tax authorities in 2010. Annexes CPSCR Review 26 Independent Evaluation Group Reduce VAT Refund claims for more than 60 days/quarterly By the fall of 2010, the stock was Modest Progress. flow of VAT refund claims to below 30% reduced to below 30% of quarterly Source: CASCR. flow of claims. However, VAT refunds continue to be a problem and ratio fluctuates from month to month. 2. Rehabilitate the banking sector and strengthen financial markets Strengthen the capital adequacy of the system: NBU intervened in about 30 banks High Progress. - All banks comply with minimum established since fall 2008; 19 of them had Source: CASCR. capital levels; banks which do not comply are their licenses revoked and were resolved by bank resolution authority put into liquidation. A few banks Under the new legal and institutional remain in provisional framework established in 2009, the administration. All non-intervened Government recapitalized three banks comply with the minimum systemic troubled banks in July 2009 capital requirement. and is now implementing an exit strategy to minimize fiscal costs. Reduce stock of nonperforming loans in the banking system This outcome has not been Negligible Progress. from 35 % (2009) to15% (2011) achieved. Source: CASCR. Reduce share of majority state-owned banks in the banking This outcome has not been Negligible Progress. system’ assets and capital: achieved. Source: CASCR. - Baseline (2009) – 17% and 25% - Target (2012) -10% and 15% Make public ultimate controllers and essential participants This outcome has not been Negligible Progress. (with 5% and more) of all banks on a regular basis achieved. Source: CASCR. A relevant law has been adopted and enacted. Once fully implemented, it will tighten requirements for disclosure of information on beneficial owners and banking group activities. Ensure financial statements of all regulated financial market This outcome has not been Negligible Progress. entities are IFRS (International Financial Reporting Standards achieved. Source: CASCR. )-based and fully publicly disclosed Legal changes have been introduced to make IFRS standards applicable to all financial institutions – including banks – from 2012. Ensure capitalization and volume traded on all Ukrainian stock Capitalization of the stock market Substantial Progress. markets reaches 40 % of GDP (2012) from baseline (2009) 23 was around 37% of GDP at year- Source: CASCR. % end 2010. Trading volume during 2010 was around 17% of GDP. Ensure volume of new stock and bond issues reaches 15 % This outcome has not been Negligible Progress. (2012) of GDP from baseline 2 % achieved. Source: CASCR. 3. Ensure energy security and improve energy efficiency Ensure quasi fiscal deficit in gas sector is below 0.5% of GDP The outcome has not been Negligible Progress. (by 2010) from over 1% of GDP (2006) achieved. Source: CASCR. Restructure share of inherited power sector debts above 30% The outcome has not been Negligible Progress. by 2010 (from 5% in 2006) achieved. Source: CASCR. Ensure 20% of power market is supplied competitively by 2011 The outcome has not been Negligible Progress. achieved. Source: CASCR. Increase hydropower capacity by 225 MW and hydropower The outcome has not been Negligible Progress. production by 360 GWh between 2007-2011 achieved. Source: CASCR. Decrease Ukraine Energy Intensity by 15% by 2011 The outcome has not been Negligible Progress. achieved. Source: CASCR. Annexes CPSCR Review 27 Independent Evaluation Group 4. Reduce costs of trade to support export led recovery Reduce the share of exports and imports undergoing physical The data for 2010 are not Modest Progress. inspections from 11% at borders to 5% and available, but Q1 2010 shows Source: CASCR. from 80% inland to 50% significant progress with the share of inland inspections reduced to 55% in Q1 2010. Increase share of SMEs (up to 250 employees) involved in The outcome has not been Negligible Progress. export operations from 25% to 30% (BEEPS) achieved. Source: CASCR. Improve riding quality along the Boryspil-Lybny section of the The outcome has not been Negligible Progress. M03 road achieved. Source: CASCR. Works on Boryspil-Lubny section of M03 road are progressing well and will be completed in 2012. Results on improving riding quality on completed sections are excellent, with IRI reduced to 2 or lower. Reduce International Roughness Index (IRI) The outcome has not been Negligible Progress. from >5 in 2007 to 2 in 2012 achieved. Source: CASCR. Improve road safety on the network: at least 106 black spots The outcome has not been Negligible Progress. with highest accidents eliminated by 2012 achieved. Source: CASCR. Contracts for road safety works have finally been awarded after some initial tenders were unsuccessful due to lack of response by bidders. The project was restructured and the scope of the component reduced. Revise legislative framework for PPPs The Law on PPP was enacted in High Progress. 2010 and the rest of the framework Source: CASCR. has been adopted in 2011. Two Output- and Performance-based road pilot contracts (prepared with WB support but funded by EBRD) are about to be awarded. Ongoing P057815 State Tax Service Modernization Project Approved FY03. Active. Latest IR: Satisfactory. pre P035777 Rural Land Titling and Cadastre Project Approved FY03. Active. Latest IR: Moderately Satisfactory. CAS/CPS P083702 Hydropower Rehabilitation Project Approved FY05. Active. Latest IR: Satisfactory 08-11 P095203 Export Development II Approved FY07. Active. Latest IR: Moderately Satisfactory. Support New P096389 DPL II Approved FY08. Closed FY08. IEG Rating: Moderately Satisfactory Lending P096207 Power Transmission Project Approved FY08. Active. Latest IR: Moderately Satisfactory. Support P107365 DPL III Approved FY09. Closed FY09. IEG Rating: Moderately Satisfactory P115515 Hydropower Rehabilitation Approved FY09. Active. Project -- Additional Financing P100580 Road Improvement and Safety Approved FY09. Active. Latest IR: Satisfactory P115143 Programmatic Financial Rehabilitation Loan 1 Approved FY10. Closed FY10. P096586 Energy Efficiency Project Approved FY11. Active. Latest IR: Satisfactory Planned P106931 Capital Market TA Partnership Program Delivered to Client FY08. AAA P108972 Accounting and Auditing ROSC Follow-up TA Delivered to Client FY08. P117483 Gas Market Note and Coal Policy Note update Delivered to Client FY09. P106412 FSAP Update Delivered to Client FY09. P107252 CEM Delivered to Client FY10. Additional P112836 Corporate Sector Restructuring TA Delivered to Client FY09. AAA P112849 ROSC Follow Up TA Delivered to Client FY10. Annexes CPSCR Review 28 Independent Evaluation Group CPS 08-11: Pillar 2 Actual Results Comments Public Finance and Public Sector Reform and Improved (as of current month year) Service Delivery Objectives 1. Implement fiscal reform to secure stability and enable a sustained recovery 2. Improve efficiency in service delivery 3. Improve governance and accountability Major Outcome 1. Implement fiscal reform to secure stability and enable a sustained recovery Measures Ensure parametric changes to the pay-as-you go The outcome has not been Negligible Progress. system are implemented to reduce the deficit to achieved. Source: CASCR. below 1% of GDP in 2010 and help to achieve its sustainability Achieve higher levels of cost recovery on The outcome has not been Negligible Progress. household gas and heating tariffs achieved. Source: CASCR. Improve tax policy through the elimination of The outcome has not been Negligible Progress. inefficient tax exemptions achieved. Source: CASCR. Increase Excise taxes for alcohol and tobacco Higher excise taxes (mainly for Substantial Progress. alcohol and tobacco) were Source: CASCR. implemented. 2. Improve efficiency in service delivery Reduce application processing time for social In 2010, the average time for High Progress. assistance payments from 4.1 hours in 2007 to processing applications in the Source: CASCR. 1.5 hours in 2010 local welfare offices was 1.4 hours. Increase number of benefits processed per In 2010, the average number of Modest Progress. month per staff in Social Assistance (SA) offices benefits processed per month per Source: CASCR. from 290 in 2007 to 530 in 2010 staff of the SA office was 370. Decrease share of non poor families among The outcome has not been Negligible Progress. beneficiaries from 55% in 2006 to 45% by 2010 achieved. Source: CASCR. Ensure better targeting of HU program The outcome has not been Negligible Progress. expenditures achieved. Source: CASCR. Ensure schools are budgeted on per capita basis The outcome has not been Negligible Progress. achieved. Source: CASCR. Ensure No. of hospitals implement global The outcome has not been Negligible Progress. budgets achieved. Source: CASCR. Student/teacher ratios in pilot rural schools rise The student/teacher ratio of rural Modest Progress. significantly from baseline of 8 students/teacher schools in the pilot network for Source: CASCR. optimization increased from a baseline of 8.4:1 in 2008 to 9:1 in 2010. Improve financial performance of selected The outcome has not been Negligible Progress. utilities due to reduced operating expenses and achieved. Source: CASCR. improve efficiency Improve energy efficiency of municipal water The outcome has not been Negligible Progress. utility companies in targeted cities achieved. Source: CASCR. Annexes CPSCR Review 29 Independent Evaluation Group Reduce water losses in target cities The outcome has not been Negligible Progress. achieved. Source: CASCR. Improve quality of municipal services in selected The outcome has not been Negligible Progress. municipalities achieved. Source: CASCR. 3. Improve governance and accountability Ensure PEFA rating on multi-year perspective of This rating improved from C to C+ Modest Progress. in fiscal planning improves from C to B mainly reflecting improved MTEF Source: CASCR. implementation. The project appraisal requirement is established by Law on Investment Activities, the new Budget Code legislated elements of MTEF that are used for 2012 budget proposal. Ensure PEFA rating on public procurement The PEFA rating on public Modest Progress. improves from D+ to B procurement has improved to C+. Source: CASCR. Most notably, a new Procurement Law was passed in July 2010. In July 2011 amendments were passed (Law 3861) which further improved the system by introducing framework agreements, increasing accountability for use of non-competitive procedures, and reiterating requirement to pass parallel legislation governing procurement of utilities and by utility companies. Ensure PEFA rating predictability in the The PEFA rating on predictability Modest Progress. availability of funds for commitment of has improved to C+. Source: CASCR. expenditures improves from D+ to B Continuing weakness is the frequency and transparency of budget adjustments. Ensure PEFA ratings on scope, nature and follow The outcome has not been Negligible Progress. up of achieved. Source: CASCR. external audit improves from D+ to C+ Ensure PEFA ratings on effectiveness in The PEFA rating for the High Progress. collection of effectiveness of tax collections Source: CASCR. tax payments increase from D+ to C+ improved to C+ up from D+ in 2006. The main areas of improvement have been reduced tax arrears and introduction of risk- based audit. (Tax arrears as a share of total taxes has fallen from 18% (2006) to 5.7% (2010)). Improve governance in education sector: National External Assessment was Modest Progress. external assessment instruments are carried out launched in 2008. Ukraine Source: CASCR. regularly and accepted by education participated in TIMMS in 2007. stakeholders However, acceptance by education stakeholders has not been tested. It is also unclear whether the use of independent external testing will be sustained in the future. Increase capacity of public sector to manage Human Health Risk Assessment High Progress. environmental health risks by increasing number Methodology has been introduced Source: CASCR. of municipalities using risk assessment in 6 industrial municipalities and 4 methodology to inform public policy increased of them have adopted the from 1 in 2001 to at least 3 in 2010 methodology (Zaporizhya, Cherkassy, Drushkivka, Rivne). The fifth one - Kiev plans to adopt Annexes CPSCR Review 30 Independent Evaluation Group it in nearest future. Ongoing pre P035786 Lviv Water and Wastewater Project Approved FY01. Closed FY08. Latest IR: Satisfactory. CAS/CPS P057815 State Tax Service Modernization Approved FY03. Active. Latest IR: Satisfactory. 08-11 Project (STSMP) Support P076338 Development of State Statistics System Approved FY04. Active. Latest IR: Satisfactory. for Monitoring Social & Economic Transformation Project P077738 Equal Access to Quality Education in Approved FY05. Closed FY11. Latest IR: Unsatisfactory. Ukraine Project P075231 Social Assistance System Approved FY06. Active. Latest IR: Satisfactory. Modernization Project New P096389 DPL II Approved FY08. Closed FY08. IEG Rating: Moderately Satisfactory Lending P095337 Urban Infrastructure Approved FY08. Active. Latest IR: Moderately Satisfactory. Support P090389 Public Finance Modernization Project Approved FY08. Active. Latest IR: Moderately Satisfactory. P107365 DPL III Approved FY09. Closed FY09. IEG Rating: Moderately Satisfactory Planned P102035 Public Finance Review 2 Delivered to Client FY08. AAA P106931 Capital Market TA Partnership Delivered to Client FY08. Program P101403 Environmental Protection TA Delivered to Client FY08. (Zaporizhia) P108537 HD Policy AAA Delivered to Client FY10. Additional P112820 Health and Demography Delivered to Client FY10. AAA