ICRR 10126 Report Number : ICRR10126 ICR Review Operations Evaluation Department 1. Project Data : OEDID : OEDID: L4115 Project ID : P044139 Project Name : Second Economic Reform and Development (ERDL II) Country : Jordan Sector : Other Non-sector Specific L/C Number : L4115 Partners involved : none Prepared by : David Greene (Consultant), OEDCR Reviewed by : Alice Galenson Group Manager : Ruben Lamdany Date Posted : 07/30/1998 2. Project Objectives, Financing, Costs and Components : ERDL II was the second in a series of three one -tranche adjustment operations designed to assist Jordan's medium term reform program. It provided US$ 120 million of balance of payments/budgetary support for improvements in trade policy, including adoption of measures to speed customs clearance, simplify tariffs and reduce the maximum rate to 40%; financial sector reforms, including strengthening of prudential regulation, gradual elimination of interest rate subsidies, and reduction of central bank intervention in commercial bank operations; and some actions designed to accelerate privatization and to modernize the legal framework affecting private enterprises . 3. Achievement of Relevant Objectives : Since this was a single tranche operation, all relevant actions were taken before loan approval . Continuity of the program is assured by the proposed follow on ERDL III . 4. Significant Achievements : Under ERDL II Jordan took modest, but significant steps towards establishing the policy framework required by a more competitive, market oriented economy . 5. Significant Shortcomings : Jordan's adjustment process seems to be moving relatively slowly and the measures supported by this project are modest by international standards . 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Highly Satisfactory Satisfactory Relatively modest reforms supported . Institutional Dev .: Substantial Substantial Sustainability : Likely Likely Bank Performance : Satisfactory Satisfactory Borrower Perf .: Highly Satisfactory Satisfactory Overall apparently slow progress of reform since 1989. Quality of ICR : Satisfactory 7. Lessons of Broad Applicability : The lessons the ICR indicates were learned from this project - the importance of "ownership" and the value of building on past success - are generic/. However, this project also demonstrates the potential usefulness of supporting adjustment with a series of one -tranche adjustment operations with actions taken before board presentations, provided the operations are built around a comprehensive, well thought through reform agenda . 8. Audit Recommended? Yes No 9. Comments on Quality of ICR : The ICR is satisfactory.