Document of The World Bank Group FOR OFFICIAL USE ONLY Report No. 87054-JO INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL FINANCE CORPORATION PROGRESS REPORT ON THE COUNTRY PARTNERSHIP STRATEGY FOR THE HASHEMITE KINGDOM OF JORDAN FOR THE PERIOD FY12-FY15 June 23, 2014 Jordan Country Management Unit Middle East and North Africa Region International Finance Corporation Middle East and North Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization CURRENCY EQUIVALENT Unit of currency = Jordanian Dinar 1 US$ = 0.71 JD (as of May 2, 2014) Fiscal Year January 1 - December 31 ABBREVIATIONS AND ACRONYMS CPF Country Partnership Framework CPS Country Partnership Strategy CPSPR Country Partnership Strategy Progress Report CSOs Civil Society Organizations DPL Development Policy Loan ERFKE II Second Education Reform for the Knowledge Economy ESSRP Emergency Services and Social Resilience Project ESW Economic and Sector Work GCC Gulf Countries Cooperation GDP Gross Domestic Product GEF Global Environment Fund GENTF Gender Trust Fund GoJ Government of Jordan IBRD International Bank for Reconstruction and Development ICT Information, Communication and Technology IDF Institutional Development Fund IFC International Finance Corporation IMF International Monetary Fund JSDF Japan Social Development Fund MDTF Multi Donor Trust Fund MIGA Multilateral Investment Guarantee Agency MNAISA Middle East and North Africa Transition Fund MoF Ministry of Finance MOPIC Ministry of Planning and International Cooperation MSMEs Micro, Small and Medium Enterprises MW Megawatts NUR National Unified Registry and Outreach Program OTF Ozone Projects Trust Fund PPP Public Private Partnership PRG Partial Risk Guarantee SCD Systematic Country Diagnostic SPBF State Peace Building Fund TA Technical Assistance TFSCB Trust Fund for Statistical Capacity Building UNHCR United Nations High Commissioner for Refugees USAID United States Agency for International Development WBG World Bank Group ACKNOWLEDGEMENTS This Country Partnership Strategy Progress Report (CPSPR) was prepared by a team led by Tania Meyer under the guidance of Ferid Belhaj and Pilar Maisterra. The IFC team was led by Ahmed Attiga. The team is grateful for comments and inputs from the Ministry of International Cooperation and Planning in Jordan, in particular H.E. Minister Ibrahim Saif, H.E Dr. Saleh Al-Kharabsheh, Ms. Zeina Toukan and Ms. Hazar Badran. The joint CPSPR Core Team comprised of Mary Eunice Barroso, Husam Beides, Persephone Economou, Rapti Goonesekere, Victoria Gyllerup, Eric Le Borgne, Peter Mousley, Bushra Ghulam Mohammed, Anne Njuguna, and Haneen Sayed.   The preparation of this CPSPR involved contributors from many units of the World Bank Group, particularly members of the Jordan Country Team, whose experience and knowledge have been valuable in shaping the report, in particular: Ibrahim Al Dajani, Caroline Bahnson, Enis Baris, Simon Bell, Franck Bousquet, Marie Helene Bricknell, Hana Brixi, Rome Chavapricha, Loic Chiquier, Iulia Cojocaru, Mouna Couzi, Gustavo Demarco, Janet Dooley, Ferhat Esen, Anthony Gorman, Wissam Harake, Niels Harild, Tracy Hart, May Ibrahim, Ousman Jah, Maya Abi Karam, Sima Kanaan, Andrew Losos, Jana Malinska, Jad Mazahreh, Juan Manuel Moreno, Ziad Nakat, Sahar Nasr, Paul Prettitore, Setareh Ramzara, Chantal Reliquet, Steven Schonberger, Umar Serajuddin, Banu Setlur and Mona Ziade. IBRD IFC Vice President: Inger Andersen Dimitris Tsitsiragos Director: Ferid Belhaj Mouayed Makhlouf Task Team Leader: Tania Meyer Ahmed Attiga/Bushra Mohammad COUNTRY PARTNERSHIP STRATEGY PROGRESS REPORT (FY12-FY15) “Adapting to a Changing Context” TABLE OF CONTENT I.  INTRODUCTION ......................................................................................................................... 1  II.  COUNTRY CONTEXT ................................................................................................................ 1  III.  LEARNING FROM IMPLEMENTATION PROGRESS ............................................................. 4  IV.  CHARTING A WAY FORWARD ............................................................................................... 8  V.  MANAGING RISKS ................................................................................................................... 11  Tables Table 1: Selected macro-economic indicators ....................................................................................... 3  Table 2: Summary of CPS PR Findings on the FY12-FY15 CPS Results Matrix................................. 6  Annexes Annex I: Original CPS Results Matrix and Progress to Date ............................................................. 13  Annex II: Revised CPS Results Matrix................................................................................................ 21  Annex III: Specific Progress towards CPS Outcomes ......................................................................... 22  Annex IV: World Bank Program for the Period FY12-FY15 ............................................................ 27   CAS Annexes Annex B2: Selected Indicators of Bank Portfolio Performance and Management ............................. 28  Annex B8a: IBRD Operations Portfolio and Grants ........................................................................... 29  Annex B8b: Statement of IFC’s Committed and Outstanding Portfolio ............................................ 30  Annex B8c: Statement of MIGA’s Exposure in Jordan ...................................................................... 31  Map: IBRD 33424 I. INTRODUCTION 1. This progress report reviews implementation of the World Bank Group Country Partnership Strategy (CPS) for Jordan for FY12-FY15. The CPS was discussed by the World Bank’s Board of Directors on January 24, 2012 and supports Jordan in its efforts to lay a foundation for inclusive growth through: (i) strengthening fiscal management and increasing accountability to support public financial management; (ii) strengthening the foundation for sustainable growth with a focus on competitiveness; and (iii) enhancing inclusiveness through social protection and local development. 2. When the CPS was launched in January 2012, the Syrian conflict was just starting to impact neighboring countries but its spillovers had not reached the devastating and potentially long-lasting proportions witnessed since then. The worsening of the conflict over the last two years has profoundly changed the landscape in neighboring countries, in particular Lebanon and Jordan, in terms of the immediate security, social and fiscal challenges facing the countries and potential impacts on development gains in the medium to long term. In both countries, the large refugee influx from Syria has significantly strained the Governments’ capacity to deliver basic services and is putting pressure on social cohesion. 3. Jordan’s ability to adapt to the evolving regional context and move ahead with key reforms will be critical for the country’s success in the coming years. Such adaptability will be necessary for Jordan to turn regional challenges into opportunities and ensure the sustainability of its ongoing efforts as it responds to shocks. Addressing immediate and urgent stresses should not distract the government from undertaking the critical reforms needed to foster job-creating growth and promote social cohesion. The 10-year blueprint for economic development recently announced by King Abdullah II will provide an important integrated framework going forward and is congruent with the World Bank Group’s twin goals of reducing poverty and achieving shared prosperity. 4. While the overall thrust of the CPS remains relevant, the strategy should be adjusted to place a greater focus on the ways Jordan can mitigate the stresses to which it is being subjected. The analytical work that underpinned the CPS, including challenges and priorities identified in the 2012 Development Policy Review, are still valid. The strategy’s original focus on fiscal management and accountability, growth and competitiveness, as well as inclusiveness remains highly relevant and will be carried forward. However, since the strategy was approved, Jordan has been impacted by large exogenous shocks which are expected to persist over the remainder of the CPS period. As such, they need to be built into the Bank’s strategy which will accordingly focus on the following three key themes: (i) strengthening resilience to economic shocks; (ii) seeking opportunities to enhance competitiveness and achieve shared prosperity; and (iii) mitigating vulnerability to reduce poverty. 5. The World Bank Group’s engagement in the next two years will also reflect lessons learnt during the first years of implementation. While progress has been made on key CPS milestones, several factors have negatively impacted the performance of World Bank-financed projects and led to sub-optimal results for a country with Jordan’s capacity and previously strong track record. Lessons have been drawn from this experience to maximize chances of success in our future engagement. Key indicators of the CPS Results Matrix have been revised to better reflect intended outcomes. II. COUNTRY CONTEXT 6. The regional context has dramatically changed since the CPS was approved, most notably with the exacerbation of the Syrian conflict and its devastating impact on neighboring countries. The conflict has been raging for over three years with an intensity and scope that are having major, long lasting effects on the region. Lebanon and Jordan are shouldering a particularly heavy economic and social burden. The Syrian conflict has impacted key economic sectors in Jordan and poses a downside 1   risk to growth. International Monetary Fund (IMF) estimates show a negative impact of about one percentage point on Jordan’s real Gross Domestic Product (GDP) growth due to the conflict. Tourism and private investments have been directly impacted by the regional turmoil and the trade balance has deteriorated. Exports have also been hurt as the Syrian crisis resulted in the closure of Syrian export transit routes to Turkey, Lebanon and Europe. 7. The Syrian conflict has created a large scale population exodus which Jordan is struggling to absorb with significant adverse fiscal and service delivery impacts. Of the 2.5 million people who have fled Syria since the onset of the conflict, Jordan is hosting 597,328 registered refugees (as of June 2014). Eighty per cent of these refugees live in host communities, thereby driving prices up, especially rents. At about ten percent of Jordan’s population, the large influx of refugees is straining the availability and quality of public services, especially in the northern governorates. The additional demand for public services (electricity, water, solid waste management, education, and health) is adding a significant burden to Jordan’s already weak public finances1. While stimulating consumption and investments in the north, the influx of Syrian refugees is having a negative impact on Jordanians working in the informal labor market, both in terms of competition for jobs and downward pressure on wages. 8. The social and security spillovers from the Syrian conflict are large and growing. Social tensions between host communities and refugees, and within refugee camps, are mounting. The refugee crisis is characterized by its predominantly urban nature, and the concentration of a large number of refugees in the Northern Governorates is having a significant impact on the well-being of hosting communities. Jordanians have expressed increased frustration with the decline in levels of service delivery, quality of education in schools, competition for jobs and crowding in towns. In addition, tensions in the Zaatari refugee camp have resulted in protests and security incidents as the population in the camp exceeded maximum capacity (Zaatari has become the country’s 4th largest settlement and the world’s 2nd largest refugee camp). A new refugee camp was opened in April 2014 in Azraq to relieve overflow pressure at Zaatari. 9. Jordan’s economy remains open and relatively well integrated regionally, which makes it ever more vulnerable to changing regional circumstances. In addition to the effects of the Syrian crisis, the regional political upheaval had a significant impact on Jordan’s economy through the sharp drop in gas supplies from Egypt, which forced Jordan to substitute cheap gas with expensive oil imports (at an annual cost of about US$2 billion). This in turn led to a surge in the country’s current account and fiscal deficits. Jordan also depends to a large degree on foreign grants, in particular from Gulf Cooperation Council (GCC) countries whose support is influenced by the regional context. As highlighted in the Development Policy Review (World Bank, 2012) which analyzed key growth and competitiveness challenges for Jordan, the volatility and unpredictability of foreign grants make investment planning and budget management difficult and detract from reform momentum. 10. Jordan has suffered from multiple, large and successive exogenous shocks that have negatively affected its macro-economic situation. Since the CPS was presented to the Board, Jordan's macroeconomic performance has deteriorated from an already weak position (see table 1). The global financial crisis and the Arab uprisings have had an adverse impact on growth, the fiscal balance and the balance of payments. Faced with mounting macro-economic vulnerabilities, including a large deterioration in its foreign exchange reserves in large part driven by disruptions to gas inflows from Egypt, Jordan entered into an IMF Stand-by Arrangement in August 2012. Given the magnitude of the vulnerabilities and financing needs of the country, the Stand-by Arrangement required exceptional access from the IMF. In 2013, real GDP growth reached 2.8 percent which was on par with that achieved                                                              1 A recent study by the United States Agency for International Development estimates the 2014 fiscal cost of the refugees in Jordan to reach 2.4 percent of GDP, up from 1.8 percent of GDP in 2013 (The Fiscal Impact of the Syrian Refugee Crisis on Jordan dated January 5, 2014 produced for USAID). 2   in 2012 and 2011 but subdued compared to the 2000-2009 average of 6.5 per cent. At 12.6 percent, unemployment remains structurually high, particularly among women and the youth. 11. In line with consolidation efforts in the public sector, the government has been implementing important structural reforms since 2012. Subsidies on petroleum products were broadly eliminated in November 2012, and these were replaced with a broad-based cash transfer to households. In 2013 around 70 percent of the population benefitted from the transfers, and efforts are now underway to better target the program. Progress was also made in terms of cancelling tax exemptions and cutting government expenditures. Additionally, as part of a medium-term energy plan to eliminate losses of NEPCO, the national electricity company, by 2017, the government began implementing electricity tariffs on select businesses in 2013 and on households who consume over 600 kilowatt-hours. Similarly increases took place in 2014. Finally, a more progressive income tax law is being considered as a way to raise revenue. Despite this tightening of the public sector fiscal stance, the central government’s fiscal deficit widened in 2013 as the Government took over the servicing of NEPCO’s debt. Table 1: Selected macro-economic indicators 2010 2011 2012 2013 2014 2015 2016 Act. Act. Act. Est. Proj. Proj. Proj. Real sector (annual percentage change, unless otherwise specified) Real  GDP 2.3 2.6 2.7 2.8 3.1 3.5 4.0 Prices (annual percentage change, unless otherwise specified) CPI inflation (p.a) 5.0 4.4 4.8 5.6 3.3 3.0 2.7 Government finance (percent of GDP, unless otherwise specified) Revenue  (excluding grants and privatisation) 22.7 20.5 21.5 21.7 22.9 23.3 23.3   o/w. tax  revenue 15.9 15.0 15.3 15.5 16.1 16.4 16.4 Foreign Grants 2.1 5.9 1.5 2.7 3.4 3.1 3.2 Total  expenditure  and net lending 30.4 33.2 31.9 37.0 37.4 33.0 30.0 Capital  & NL 5.1 5.2 3.1 3.7 4.4 4.8 3.9 Overall  balance  (deficit (‐), excl. grants) -7.7 -12.7 -10.4 -15.3 -14.5 -9.7 -6.7 Overall  balance  (deficit (‐), incl. grants) -5.6 -6.8 -8.9 -12.6 -11.1 -6.6 -3.5 External sector (in million US$, unless otherwise specified) Current Account -1,887 -3,477 -5,376 -3,649 -4,536 -3,353 -3,016 Net Private  Investments (FDI and Portfolio) 2,399 1,736 1,787 2,748 2,748 2,987 2,987 Gross Reserves (Months of Imports GNFS) 8.4 6.3 4.1 6.4 6.4 6.2 6.1 Current Account balance  (% of GDP) -7.1 -12.0 -17.3 -10.6 -12.3 -8.5 -7.2 Total Debt (in million US$, unless otherwise specified) Total  Debt Stock 17,778 20,450 24,864 29,543 34,055 36,841 38,382 Debt to GDP Ratio (%)* 67.1 70.7 80.2 85.9 92.6 93.3 91.3 Memorandum Items Nominal  GDP (Billion JD) 18.8 20.5 22.0 24.4 26.0 28.0 29.8 GDP (in million US$) 26,492 28,913 31,015 34,390 36,768 39,473 42,024 Source:  Government Data and World Bank Staff Calculation * Government and guaranteed gross debt 12. Jordan’s high degree of regional integration presents major opportunities for the country. As one of the most open economies in the region, Jordan is relatively well integrated with its neighbors through trade, remittances, foreign direct investment, tourism, and has especially strong links to the GCC economies. Jordan’s relative stability in a tumultuous region is an advantage which the country could further build upon to enhance its position as a hub in key areas such as tourism, regional trade and FDI. 3   The country’s successes are to some degree contingent on its ability to turn regional challenges into opportunities, position itself vis-à-vis other players, carry through with structural reforms and draw on its comparative advantages, including human capital, to strengthen its position in the region. 13. The substantial level of grants received from the GCC countries represents an opportunity to spur growth, but implementation will be critical to realize this opportunity. GCC countries (Kuwait, Saudi Arabia, United Arab Emirates and Qatar) have pledged a total of US$5 billion in grants (US$1.25 billion from each country) to support the government’s capital investment projects over a five- year period. These grants have a known disbursement schedule (annually starting in 2012) and time horizon (2012-2016) which enable integration with Jordan’s budget and investment plans. Wise investment choices and speedy implementation of these projects will be crucial to stimulate growth and employment and make the most out of a rare opportunity. 14. On the political front, popular demands stemming from the Arab uprising have prompted some initial reforms. A new Parliament was elected in January 2013. These were the first elections in Jordan since the beginning of the Arab upheavals and there was a significant voter turnout.  Contrary to past practice, Parliament now plays a role in naming the Prime Minister. In August 2013, the country also held local elections for mayor and municipal councils. The cabinet was recently re-shuffled (February 2014) to include eight additional Ministers, including two women. A number of independent bodies were created (Constitutional Court, National Center for Human Rights) and some initial measures were taken to fight corruption2. An independent committee was also formed to evaluate Jordan’s privatization experience, and its findings were recently made available to the public to stimulate and broaden the policy debate. 15. As Jordan copes with various and complex shocks which are likely to persist in the long run, it is all the more critical for the country to continue to address underlying stress factors through two types of reforms: (i) social and political reforms to respond to citizen demands for greater voice, accountability, better services and representation. King Abdullah recently stressed that deepening citizens’ participation in the decision making process is a key priority; (ii) economic reforms to enable growth, job creation and economic opportunities for all. According to the World Bank’s most recent regional economic update3, Middle East and North Africa countries will benefit from stronger external demand in the near term as the global economy is set for a rebound in 2014. Jordan should seize this window of opportunity – while the outlook is positive – to continue pursuing longstanding structural reforms which will allow the economy to move to a higher and more sustainable growth path. III. LEARNING FROM IMPLEMENTATION PROGRESS CPS envelope and current portfolio 16. The original indicative IBRD envelope of US$500-US$650 million for the CPS period was increased to approximately US$1 billion to address emerging needs. A total of US$720 million in new IBRD lending has been approved since the beginning of the CPS period. This includes: (i) a programmatic series of two Development Policy Loans (DPLs) of US$250 million each which aim to mitigate the impact of the fiscal crisis and support private sector growth, governance and spending efficiency; (ii) a US$70 million loan to improve access to finance for Small and Medium Enterprises; and (iii) an emergency fast-disbursing loan of US$150 million to help GoJ maintain access to essential healthcare services and basic household needs in response to the Syrian refugees influx. The latter was complemented by a US$50 million grant-financed municipal services project that leveraged funding                                                              2 Formation of Royal Committee for Enhancing the National Integrity System and launch of Charter on National Integrity 3 ‘Harnessing the Global Economy, A Tough Road Ahead’, World Bank Middle East and North Africa Region, Regional Economic Update, April 2014  4   from bilateral donors (Canada, Switzerland, and the United Kingdom) and from the World Bank- administered State and Peacebuilding Fund. The project is helping municipalities strengthen their service delivery capacity, support local economic development and foster social cohesion in communities hosting Syrian refugees. 17. As of May 2014, the World Bank’s active portfolio in Jordan consisted of thirty five projects valued at US$670.5 million (loans and grants). The portfolio comprises investments in the Urban Development, Education, Energy, Environment, Local Development and Inclusion, Public Sector Governance, Public Administration, Social Services, and Finance/Private Sectors. A comprehensive technical assistance program covers poverty analysis and strategy formulation, subsidy reform, employment strategy formulation, competitiveness, and innovation. 18. The International Finance Corporation (IFC) has scaled-up its program in Jordan since the beginning of the CPS period. The total committed portfolio is close to US$1.2 billion as of April 2014 (US$688 million IFC own account and US$547 million in B-loans, parallel loans, and other forms of mobilization). The portfolio is mostly concentrated in the chemical and pharmaceutical sectors, followed by the transportation, power and financial sectors. From FY12 to FY14 to date, IFC committed a total of US$557 million in microfinance, manufacturing, renewable power, and trade finance to support growth and inclusion. In addition, IFC has provided a range of Advisory services to strengthen financial infrastructure (credit bureau, secured lending), build the capacity of microfinance institutions, improve corporate governance, simplify business inspections, and advance energy efficiency. 19. In FY 2013, the Multilateral Investment Guarantee Agency (MIGA) issued guarantees of US$13.1 million for the AS-Samra Wastewater Treatment Project in Jordan. The project involves the expansion of the existing wastewater treatment plant at AS-Samra on an extended 25-year build- operate-transfer basis and will include the addition of two more treatment lines to the existing four treatment lines. The total investment for the expansion is about US$205 million. The project will increase the wastewater treatment capacity by some 37 percent to meet the needs of Jordan's population. The project is aligned with MIGA’s strategic priority of supporting investments in complex infrastructure projects and with the Agency’s commitment to support investments in the Middle East and North Africa region during this time of transition. MIGA’s outstanding gross exposure in Jordan stood at US$212.9 million as of May 31, 2014. MIGA and the Bank will support the country's objective of attracting FDI by seeking to provide mitigation for non-commercial risks and support PPPs in infrastructure projects aligned with Jordan's priorities. Progress towards CPS outcomes 20. Progress has been made towards achieving CPS outcomes but the World Bank needs to sharpen its focus on key areas. While most CPS milestones were adequately selected and have been partially achieved (see below summary table), a number of outcomes and indicators have lost their relevance given the magnitude and multiplicity of shocks that Jordan has faced since the CPS was approved. The results framework has been simplified and indicators made more directly attributable to World Bank Group (WBG) engagement. Specific progress under each pillar is described in Annexes I and III.     5   Table 2: Summary of CPS PR Findings on the FY12-FY15 CPS Results Matrix (On the basis of original CPS pillars, outcomes and indicators)   21. The WBG has supported Jordan in improving gender equality. A Country Gender Assessment was conducted to understand why progress in human development indicators in Jordan over the last decades has not translated into progress in women’s economic, social and political participation. A follow up Action Plan was developed to improve women's labor force participation, agency and access to justice. The Bank is working with GoJ and civil society organizations (CSOs) to build capacity to collect and analyze gender data, and perform monitoring and evaluation of gender-related programs4. In addition, IFC investments and advisory services engagements in leading microfinance institutions in Jordan are helping promote inclusive growth by providing access to finance to low income entrepreneurs, especially women. A study on Gender Diversity in Jordanian Boards5 was launched to                                                              4 An impact evaluation of civil legal aid services on poor women has just been launched. 5 This IFC study is expected to be finalized and published by June 2014. 6   raise awareness on the value of such diversity and its influence on the performance of organizations across a variety of different types of businesses – including SMEs and these that are family-owned.     22. The cross-cutting theme of transparency, accountability and participation has remained an important feature of the CPS. The World Bank has helped promote transparency and accountability of public institutions and efficiency in the use of public resources through, inter alia, the DPL Programmatic Series and support for access to information, an ongoing engagement with the Anti- Corruption Commission and the Ombudsman Bureau as well as support to governance/public sector reform. Progress in these areas is taking place but remains slow with some setbacks on access to information, and attitudes towards transparency are evolving rather gradually. The World Bank has also engaged with various CSOs, in particular legal aid CSOs, to strengthen access to justice for the poor. In addition, the Affiliated Network of Social Accountability – Arab World has served as an important regional platform to strengthen capacity of non-governmental organizations in social accountability and the demand side of good governance. IFC’s Advisory has also helped relevant market institutions and regulators create a robust corporate governance framework6. 23. The World Bank and IFC have closely collaborated in a number of strategic areas, including investment climate and MSME support, in order to promote a more competitive private sector which is critical to Jordan’s long-term sustainable growth. In the context of the World Bank’s Second DPL, a number of important steps have been taken, in particular the adoption of the public private partnership (PPP) and Secured Lending draft laws and amendments by the Council of Ministers, as well as the establishment of a PPP Unit. Other important institutional changes which the World Bank and IFC have jointly supported include the planned establishment of One Stop Shops at the reorganized Jordan Investment Board. Joint work is also ongoing to increase access to finance through the MSME facility, and IFC has been leading some of the reforms to strengthen the financial infrastructure. Portfolio performance and lessons learnt 24. Jordan’s portfolio performance has declined but the bulk of problem projects have closed. The country used to be amongst the top performers in the region but portfolio performance started to deteriorate in 2010. As of June 2014, 7 IBRD projects had closed, 6 of which with unsatisfactory final outcome ratings. However, IBRD’s currently active portfolio (4 projects) and IFC’s portfolio are performing relatively well. The Ministry of Planning and International Cooperation (MOPIC) and the World Bank share a common desire to ensure that Jordan has a well performing portfolio and to examine candidly key constraints impeding project performance. In this context, this Country Partnership Strategy Progress Report (CPSPR) is a useful tool to draw lessons from project implementation. Some IFC clients have been affected by regional crisis, and IFC teams are working with them to see how to possibly restructure the projects as needed. 25. The World Bank and GoJ have identified a number of reasons for mixed portfolio performance.  Global slowdown of 2009/2010 and fiscal crunch brought on by slower growth and increased current spending;  Relatedly, lack of planning vis-à-vis the annual budget and line ministry spending ceilings (which resulted in IBRD disbursements being held back);  Uneven implementation capacity in line Ministries and challenges of inter-ministerial coordination, including lack of a defined implementation and accompanying resource plan, as well as communication strategy;                                                              6 In partnership with the Jordanian Ministry of Industry and Trade’s Companies Control Department, the first corporate governance code for SMEs was introduced based on a comply-or-explain principle. A corporate governance scorecard for listed companies was also launched with the Jordan Securities Commission. 7    Overly ambitious targets;  Complex project design limiting common understanding of reform activities;  Insufficient agility to restructure and adapt project design to changing circumstances during implementation (on both the World Bank and Government sides); and  Turn over (on both the World Bank and Government sides). 26. With the bulk of the IBRD investment program having closed, and a new, more selective program being contemplated, the CPS PR is an opportunity for the World Bank and GoJ to reflect on how they will work together differently. In this context, it will be critical to zoom in on key ingredients for success of the future portfolio, building on lessons learnt from past experience and with a view to maximizing development results. Key priorities moving forward will be to: A. Focus on fewer projects that are aligned with the Government’s overall plan and line ministries' priorities, are included in the budget and have clear champions in the government; o Engage in fewer projects: The World Bank and GoJ will consolidate their portfolio and ensure selectivity in the number of projects prepared; o Hold early discussions with MoPIC, Ministry of Finance (MoF) and line Ministries on priorities and budget: The World Bank and government counterparts will work together to ensure that: (i) new project demands emanate from, and are fully owned by, line Ministries; (ii) realistic and credible spending/disbursement project profiles are developed with a view to ensuring that corresponding allocations can be made by MoF; o Build on projects and design that have proven successful: Use approaches that demonstrate clear ownership and prioritization within line ministries’ budgets and work programs; and o Adopt a coordinated, programmatic approach to reform planning: Instead of supporting isolated reform initiatives, the WBG will seek a more systematic approach to identifying common reform objectives and engage all stakeholders through public-private dialogue. B. Ensure realism and be ready to restructure as needed; o Ensure flexibility and agility to restructure and adapt to changing country circumstances: The World Bank and GoJ will consider restructurings as early as necessary in the project’s life. IFC will continue to engage in active portfolio management and work with clients to restructure projects and repayments terms; o Avoid complex design and provide hands on implementation support: The World Bank and GoJ will focus on simple project design that can deliver results, while supporting as needed implementation capacity within line Ministries. An early warning system will be set up to identify problem projects that require extra attention, and hands-on implementation support will be provided to project teams; and o Ensure maximum staff continuity within Ministries and World Bank Team Leaders: When this is not possible, require that departing staff provide incoming staff with key successes/challenges on current project (beyond basic hand over) to avoid losing precious implementation time. IV. CHARTING A WAY FORWARD 27. The proposed new CPS framework builds on the World Bank Group’s current engagement but its pillars have been adjusted to reflect the evolving country context and to link with the World Bank Group’s twin goals. Strengthening its resilience to respond to shocks on the economic front will be critical for Jordan in order to ensure the economy can grow in this challenging period (Pillar 1). Seeking opportunities to enhance the underpinnings of competitiveness could considerably strengthen the country’s position as a regional hub in a troubled regional context and contribute to achieving shared prosperity (Pillar 2). Mitigating vulnerabilities at the central and local 8   level will be crucial for Jordan to help reduce poverty (Pillar 3). The Syrian crisis and complex pressures Jordan is subject to make structural challenges even more acute, the need for World Bank support as proposed in the original strategy even more critical, and the need for reforms even more urgent. The program will be more selective, zooming in on critical growth-enhancing sectors while responding to the challenges facing the country as a result of the Syrian crisis. 28. Jordan is faced with a unique set of challenges but also with a unique opportunity it should urgently seize to undertake long-standing reforms. Challenges stemming from the influx of Syrian refugees in Jordan, in particular increased demand for public services, stretched public finances, competition for jobs and heightened social tensions are to be addressed with urgency, and the international community has stepped up its assistance to help Jordan weather the impact of the crisis. This engagement has allowed the government to safeguard a space to move ahead on its reform agenda in order for the economy to grow. Specifically, Jordan benefits from strong support from the international community, in particular the United States and GCC countries. This support, combined with positive external growth and demand prospects, should not be seen as a substitute for structural reforms but on the contrary as a unique opportunity to move ahead while the outlook is positive.   29. The WBG will support Jordan move forward in critical reform areas. Looking ahead, the Bank will focus on some of the most important sectors to reform for the country’s economy and growth prospects, in particular energy (energy supply diversification), water (efficiency in use of scarce water resources) and transport (tariffs, highway rehabilitation and transport corridors). Sector DPLs and Policy-Based Guarantees could help focus the Bank’s support on a specific set of reforms with potential transformational impact. Close follow up on the implementation of the First and Second DPL over the coming 18 months will be critical to turn around initial slow progress and pave the way for further policy-based engagement. Such reform-oriented support would be informed by an important program of Analytical and Advisory Assistance and combined with investment lending to maximize short and long term impact in these sectors. Ongoing work on access to finance and inclusion, business legislation, and transparency and accountability of public institutions will also be carried forward. 30. These activities will be complemented by IFC’s program which will support Jordan’s private sector increase its competitiveness and promote more inclusive growth. IFC will continue to strengthen the financial infrastructure (e.g. secured lending, credit information, leasing), provide technical assistance to banks and microfinance institutions to better serve their clients as well as provide capacity building to SMEs through training, corporate governance and risk management support. IFC will build on its early engagements through its E4E Initiative for Arab Youth, aimed at better employability of youth in the region, including increasing vocational training and strengthening quality assurance frameworks across sectors. IFC will focus on addressing infrastructure gaps, through public private partnerships (PPP) and investments in renewable energy (solar and wind), ports and logistics, and water. IFC will continue supporting investment climate reforms and help create an efficient and modernized business inspection management system. IFC will also continue to mobilize South-South investments from regional and international investors. 31. The World Bank will continue to help Jordan respond to the impact of the Syrian crisis. In order to address challenges stemming from the large influx of refugees, the World Bank will continue to support implementation of two recently approved emergency projects (see paragraph 16) and will explore options to respond to additional demands. In collaboration with the United Nations High Commissioner for Refugees (UNHCR) and the European Union (EU), the World Bank also plans to conduct rapid household surveys in impacted communities to understand better the characteristics of refugees and host communities with a view to better inform policy making. 32. In addition, the World Bank is reviewing other ongoing projects to respond to the changed realities presented by the crisis. The portfolio is being examined with a view to factoring the refugee 9   crisis into existing programs, for instance by building on the education flagship project (ERFKE II) to address additional pressure on Jordanian schools and by using established vehicles such as the Regional and Local Development project to continue supporting southern governorates as a way to address equity issues presented by the focus of some recent programs on the north. 33. The World Bank will sharpen its focus on the key outcomes that are relevant to the evolving context and can realistically be targeted in the remaining CPS implementation period. The result framework has been revised to include indicators focusing on the Syrian crisis response in Jordan. It has also been simplified and made more selective to reflect the closing of a number of projects and zoom in on critical indicators for the remainder of the implementation period. Specific indicators for the Bank’s prospective policy-based engagement in the water, energy and transport sectors will be determined in the coming months as these potential new operations are designed. 34. The design and implementation of new projects will respond to government priorities7 and reflect challenges and opportunities stemming from evolving regional dynamics. For instance, the World Bank and GoJ will aim to contribute to trade and regional integration through the rehabilitation of roads and transport corridors between Jordan and Iraq, support transformational change and local economic development needs for the Greater Amman Municipality, and explore agriculture modernization and irrigation. 35. The World Bank will support the government’s efforts in mobilizing support for its National Resilience Plan and act as a catalyst for other donor engagements. Opportunities for leveraging further grant financing to help mitigate the impact of the Syrian crisis will be explored, following the successful model of the Emergency Services and Social Resilience Project. The World Bank will continue to participate in government-led coordination mechanisms aimed at harmonizing donor activities on the Syrian crisis response, such as the Host Community Support Platform. 36. The humanitarian-development nexus will remain critical in ensuring that all actors adopt comprehensive, integrated approaches to helping Jordan mitigate the impact of the Syrian crisis. The protracted nature of the conflict constitutes a significant challenge for neighboring countries but also presents an opportunity for international actors to think through how to maximize synergies between humanitarian and development responses in a context where they can no longer be approached in a linear manner8. The Bank will continue to work hand in hand with UN partners to build the foundations for sustainable development into the current humanitarian response and help Jordan put in place sustainable service delivery mechanisms to address the medium and long-term needs. 37. The existing cross-cutting theme of increasing transparency, accountability and participation will remain a priority across the portfolio. The Arab uprisings have triggered social aspirations and demands for greater voice and improvements in living conditions in Jordan. These are deep rooted and will constitute an important area for engagement. The World Bank will seek to help Jordan enhance inclusion, in particular for women and youth, increase good governance and accountability including by leveraging tools for strengthening citizen engagement at the project level and focusing on the demand side of governance, strengthening equal access to economic opportunities and service delivery as well as promoting transparency and accountability of public institutions9.                                                              7 As outlined in the Government Work Plan 2013-2016 and the new Economic vision for Jordan for the next 10 years 8 The Government’s National Resilience Plan (2014-2016), UNOCHA’s Comprehensive Regional Strategic Framework and UNHCR’s Syria Regional Response Plan (RRP6) provide useful platforms on which development actors can build as they design their strategies and programs. Collaboration in these areas will also be fostered by the joint UN-World Bank Syria Information and Research Initiative. 9 The new Multi-donor Trust Fund on governance for quality education and health which focuses on demand-side governance and citizen voice to improve quality of services will be an important tool to support these priorities. 10   38. This report proposes to leverage the World Bank’s financial and technical resources through a variety of instruments in order to scale up its engagement. Indicative financing options for the remainder of the CPS period include additional lending of up to US$700 million in investment projects or US$200 million in policy-based operations, depending on the mix of instruments. This support is subject to IBRD lending capacity, demand from other borrowers, Jordan's performance and priorities and global economic developments. Sector DPLs and Policy Based Guarantees could help drive policy reforms in key sectors with a potential transformational impact while bringing down Jordan’s borrowing costs and optimizing its use of World Bank financial instruments. 39. Looking ahead, the World Bank will start preparing for a new set of country partnership instruments. In line with ongoing WBG reforms, a Systematic Country Diagnostic (SCD) and a Country Partnership Framework (CPF) will be developed with Jordan between now and 2016. The SCD will be a robust diagnostic of where Jordan stands with respect to the twin goals of eradicating poverty and boosting shared prosperity. The CPF will draw its priorities from this diagnostic as well as from the government’s own development priorities and the comparative advantage of the WBG. It will feature more selectivity in sectoral engagements in alignment with the twin goals. 40. Reducing poverty and achieving shared prosperity will be a priority. While according to annual official estimates, 14.4 percent of the population in Jordan lived in poverty during 2010, a recent World Bank study of a within-year profile of poverty indicates that an estimated one-third of the population in Jordan lived below the poverty line in at least one quarter of the year. In other words, 18.6 percent of the entire population, which is classified as non-poor based on annual poverty estimates, experienced spells of poverty or transient poverty. A majority of those experiencing transient poverty are in the bottom 40 percent of population (in terms of per capita consumption). Jordan conducts household surveys on a regular basis which can form the basis for a more thorough analysis of the bottom 40 percent of the population, and the forthcoming SCD for Jordan will serve this purpose. 41. Synergies between these instruments and the King’s proposed economic blueprint will be sought. The 10-year blueprint for economic development is meant to provide a comprehensive, integrated framework targeting fiscal and monetary policies, economic competitiveness, productivity and self-reliance with an overarching goal of achieving comprehensive development and ensuring Jordanians a ‘decent living and hope for a better future’. The analytical work that will underpin this vision will be similar to the process leading to the SCD, and subsequently to the CPF. The World Bank will be ready to support GoJ’s analysis as this vision is being developed. V. MANAGING RISKS 42. Regional context. The volatility of the region and Jordan’s high degree of integration with its neighbors remain a major risk to the country. Developments in the Israeli-Palestinian conflict could also have important repercussions on Jordan. Similarly, the conflict in Syria, if exacerbated or prolonged, could significantly destabilize the country and negatively impact its economy. The recent escalation of violence in Iraq also adds another layer to the regional instability and further compounds the risks to Jordan. Finally, oil and gas supplies from Egypt and Iraq have proved unreliable and have increased the country’s vulnerability. While these risks are beyond the control of the World Bank, staff and management will remain informed about evolving political dynamics in the region in order to ensure proper decision making drawing from just-in-time analysis and the most up-to-date information. 43. Political and domestic risks. Domestic unrest is unlikely to abate in the medium term given tensions on both economic and political fronts, including chronic high unemployment and popular expectations. This could lead to further erosion of political commitment for needed structural reforms. Acknowledging that there are many social and political forces at play, the World Bank can support the process of reform, even in a difficult environment, by continuing to perform its role as a relevant, trusted 11   interlocutor, and by continuing to engage with a range of stakeholders (including parliament, civil society and academia) on the trade-offs involved in the critical policy choices that lie ahead. 44. Portfolio performance. In order to address underlying factors that have negatively impacted portfolio performance in the last few years, the World Bank and GoJ will ensure that the above- mentioned lessons (paragraphs 25-26) inform the design of all new operations and the implementation of the ongoing portfolio. In addition, the World Bank will keep in constant touch with MoPIC and other counterparts to determine which projects require enhanced implementation support, identify political obstacles hindering progress at the technical level, help resolve bottlenecks, and support its client make day-to-day progress on difficult projects and stay the course on structural reforms. 12   Annex I: Original CPS Results Matrix and Progress to Date PILLAR 1 – STRENGTHEN FISCAL MANAGEMENT AND INCREASE ACCOUNTABILITY Results Area 1.1: Improve Public Financial Management (PFM), Increase Efficiency of Public Expenditure, and Strengthen Accountability Original CPS Outcomes and Indicators Milestones Progress to Date on Milestones CPS Instruments (Status update in italic) Improved targeting of subsidies Adoption of new targeting mechanism that No decision was made to adopt the new Completed Activities: Indicator: Food, oil and water subsidies enhances poverty impact of the National Aid targeting methodology for NAF as proposed First Programmatic DPL retargeted to poor and lower middle class Fund (NAF) under the Bank financed project. However, the Ombudsman Capacity Building Support (IDF) Baseline: Food, oil and water subsidies are government is moving ahead from universal Governance Reform TA universal (2010) fuel subsidy to targeted cash assistance. To Target: Food, oil and water subsidies date the government has distributed cash Fiscal Consolidation Study (ESW) primarily benefit the poor and lower middle compensation for fuel price increases four times Distributional Analysis (ESW) class (2015) to about 70% of population with no significant opposition. Building blocks of the NUR are Ongoing Activities: Outcome remains relevant but indicator will being put in place. Partially achieved.  Second Programmatic DPL be changed to focus on current WBG support  Anti-Corruption Commission Case to the National Unified Registry. Management Improvement ( IDF)  Strengthening Capacity & Efficiency of Jordan Modern Internal Audit function established Undertake study that clarifies appropriate Steps have been taken towards strengthening Supreme Audit (IDF) in line ministries in accordance with balance between ex-ante and ex-post controls internal controls:  Statistical Capacity Building (TFSCB) international good practice and the organization required for such - Developing a unified financial controls by- Indicator: PEFA indicators P-20 on Internal arrangement law that is applied to all government  Public Procurement Reform (IDF) Control and P-21 on Internal Audit institutions;  Regional Program on Public Sector Complaints Baseline: P-20 was C [2009]; P-21 was B - A new Audit Bureau Law Mechanisms TA [2009] - An MoU between MoF and the Audit Bureau Target: P-20 rated B or higher [2013]; P-21 that articulates a road map to strengthen the rated A [2013] capacity of internal control units in the line ministries and agencies to allow the Audit Outcome remains relevant but will be Bureau to withdraw from ex-ante control simplified. There is no updated PEFA activities (pre-audit) and focus on ex-post assessment available and it is unlikely that audits. the CPS targets on PEFA scores related to These measures are clear steps in the right modernizing the internal control and audit direction but implementation is complex and functions will be met so indicator will be will take more time than initially anticipated. replaced (new indicator related to DPL II). Partially achieved. Increased effectiveness of Access to Information Law (ATI), in line with Adopt draft amendment to Access to The GoJ issued amendments to the by-laws international best practice Information Law in view of making it governing the work of the Legislative Bureau. Indicator: Global Integrity Country Score for more effective The amendments have been adopted by the Jordan CoM. As a result, all draft laws and by-laws Baseline: 55 out of 100 in 2010 have to be published on the LOB website for a Target: 60 out of 100 or higher by 2013 minimum period of ten days for public Outcome and indicator remain relevant but consultation. The LOB has started will be simplified and updated (new indicator implementing the by-law in February 2013. related to DPL II). Achieved. 13   PILLAR 2 – STRENGTHEN THE FOUNDATION FOR SUSTAINABLE GROWTH WITH A FOCUS ON COMPETITIVENESS Results Area 2.1.1: Support selected priority infrastructure (Energy, Transport) Original CPS Outcomes and Indicators Milestones Progress to Date on Milestones CPS Instruments (Status update in italic) New electricity generation capacity Thermal IPP3 tender is concluded with The IBRD Partial Risk Guarantee for IPP3 which Completed Activities: developed to meet growing demand selecting of a winning bidder and financial was originally foreseen was eventually not  Amman Development Corridor Indicator: Added power generation capacity closure by end 2012 included in the project financing plan of the  Energy Efficiency Investment Support (GEF) Baseline: 2603 MW [2011] preferred bidder (Korea Electric Power  Energy Sector TA Target: Minimum of 400 MW of new Corporation) so the activity was dropped by the generation capacity under construction Bank, but the milestone was achieved regardless.  Smart Grids for Green Growth TA [2014] Achieved. Ongoing Activities: Outcome will be merged with renewable  Amman East Power Plant (PRG) energy.  Promotion of a Wind Power Market (GEF)  IFC Tafila: total financing package of $221 Scale-up in implementation of renewable Fujiej Wind IPP tender is concluded with The government still has not yet awarded the million with included a mix of A, B and C-loans energy and energy efficiency activities selecting a winning bidder and financial contract for Fujeij Wind IPP. The preferred Indicator: Added renewable power closure by end 2013 bidder and its lenders want the government to generation capacity share more responsibilities related to bird Baseline: 1.4 MW10 [2011] migration risks at the project site. The Ministry Target: Minimum of 70 MW of New of Energy is awaiting a cabinet decision before Generation Capacity from renewable sources proceeding further with this project. However, under Construction [2015] another project Tafila Wind IPP was awarded and will start construction during 2014. IFC is a Outcome and indicator remain relevant and lender for Tafila Wind IPP. Partially achieved. will be merged with above. Efficient transport and logistics services Partial Opening of Amman Ring Road for Sections 2 and 3 are 100% completed. Section 1 is supported by removing key infrastructure Public Traffic 65% completed. Achieved. bottlenecks Indicator: Travel time GAM to Zarqa improved through use of Amman Ring Road Baseline: Travel Time to Zarqa 60 minutes [2010] Target: Travel time to Zarqa 40 minutes [2014] Outcome and indicator remain relevant but will be simplified and merged with other infrastructure services provided, notably energy.                                                                  10 Grid connected renewable sources, excluding hydro power 14   Results Area 2.1.2: Support selected priority infrastructure (Waste Management, Environmental Sustainability) Original CPS Outcomes and Indicators Milestones Progress to Date on Milestones CPS Instruments (Status update in italic) Better urban environment within the Greater Amman landfill equipped with landfill gas Works are ongoing under landfill gas (LFG) Completed Activities: Amman Region and leachate management system by 2013 collection and renewable energy production  Amman Solid Waste Management Project Indicator: Percentage of municipal solid contract. Partially achieved.  Ozone Depleting Substance Phaseout II (OTF) waste collected and disposed of in an  Integrated Ecosystems Management in the Rift acceptable environmental manner Valley (GEF) Baseline: 0% [2010] Target: 80% [2014] Ongoing Activities: Outcome remains relevant but will be  Coordination on Improved Water Resources simplified. Indicator was too ambitious and Management & Capacity Building Program will be replaced by more realistic indicator. (Regional GEF)  Desert Ecosystems & Livelihoods Knowledge Increased contribution of Jordan to the Landfill Gas Recovery component of Works are ongoing under landfill gas (LFG) Sharing & Coordination Project (DELP) climate change mitigation agenda Amman Solid Waste project implemented collection and renewable energy production (Regional GEF) Indicator: Reduced GHG emissions in the by 2013. contract. Partially achieved.  Red Sea & Gulf Aden Strategic Ecosystem City of Amman Management (Regional GEF) Baseline: 0 t CO2e [2010]  Badia Ecosystem & Livelihoods Project (GEF) Target: 300,000 t CO2e [2014]  Ozone Depleting Substance Phaseout III (OTF)  Pricing Irrigation Water in the Jordan Valley Outcome and indicator remain relevant. TA Outcome will be simplified and merged with waste management. No change to indicator.  IFC client (Nuqul group), established program to improve energy efficiency achieving 21,000 Better conservation and harnessing of values Increased coverage of ecosystem sensitive 3 Protected Areas (PAs) and 10 Special tCO2/year emission reduction over baseline from natural ecosystems land use planning and management Conservation Areas (SCAs) have been emissions Indicator: Production system managed including the establishment of 4 protected established. Achieved. sustainably in protected areas areas and 7 Special Conservation Areas Baseline: 15,500 ha [2011] (SCAs)   Target: 23,000 ha [2014] Outcome and indicator remain relevant but will be simplified. Results Area 2.2: Improve the business environment to enhance competitiveness and attract investment Original CPS Outcomes and Indicators Milestones Progress to Date on Milestones CPS Instruments (Status update in italic) Streamlined regulatory environment and Perform the institutional/legal work to reduce There has been no change to the number of Completed Activities: more equitable enforcement of rules the number of procedures to create a company procedures to create a company (7). Not  Economic Reform & Development Indicator: Cost of procedures for company achieved. TA/Privatization TA (USAID) formation as a % of GNI per capita:  Institutional Policy Support Development of Baseline: 13.9% [2011] PPP Program TA Target: 7 % [2014] (OECD level) 15    SME Investment Climate Assessment TA Indicator: Administrative steps to create a  Competitiveness & Innovation Partnership TA business  Development Policy Review (ESW) Baseline: 7 steps [2012] Target: 5 steps [2014] (OECD level) Ongoing Activities: Indicators will be dropped (overly  MSME Development Project for Inclusive ambitious and off track. The WBG will Growth instead focus on other areas of the  Jordan Association of Certified Public investment climate, for instance PPPs (see Accountants (JACPA) Capacity Building (IDF) below).  Strengthening the Regulatory & Institutional Framework for MSME Development SME financing facilitated through support to A credit bureau has been established and is A credit bureau was established but is still not (MNAISA) legal and institutional reforms operational operational. Partially achieved.  MSME Development TA Indicator: SME lending as a percentage of  Payment Systems TA bank lending  Partnership for Market Readiness TA Baseline: 13% as of end June 2010 Target: 16% as of end 2014  IFC working with Central Banl in establishing first credit bureau Outcome and indicator remain relevant and  Insolvency Reform IFC TA with USAID will be simplified in line with most recent  IFC Doing Business Reforms Advisory Services WBG MSME engagement. The revised  IFC investment climate advisory services indicator will include a particular focus on activities focusing on the creation of transparent access to finance for women. and efficient system for business inspections  IFC Investments in MSME finance and Suitable legal environment to regulate PPPs: Cabinet approval of adequate PPP by-laws Achieved advisory services to strengthen capacity of Indicator: Effective application of the new and implementing regulations of the PPP law SMEs PPP Law provisions in line with international best practice. Baseline: No small, innovative PPP transactions [2010] Target: Some small, innovative PPPs transactions in line with best practice [2014] Outcome remains unchanged. Indicator will be changed to ensure consistency with PPP indicators from DPL II. Results Area 2.3: Improve education quality, develop skills and address labor market constraints Original CPS Outcomes and Indicators Milestones Progress to Date on Milestones CPS Instruments (Status update in italic) Learning environment improved Construction of successive batches of 13 As of December 13 number of new schools Completed Activities: Indicator: Percentage of students in school buildings (end 2012) finished under ERfKE II was 16. Achieved.  Employer Driven Skills educational facility with two shifts  Employment for Young Women Graduate TA Baseline: 11.21% [2010-2011] (GENTF) Target: 10.8% [end of 2013]  Regional Network for Education Research (IDF) Indicator: School readiness in Grade 1: 120 new public kindergartens built and 40 Achieved Percentage of learners in Grade 1 being kindergartens renovated and furnished (2012)  Support to Higher Education TA  National Employment Strategy TA 16   “school-ready” as measured by the Early  Assistance in Defining Nationally Appropriate Development Indicators Mitigation Actions (NAMAs) TA Baseline: Girls 76.4% / Boys 69.8%  Youth Inclusion Poverty Social Impact Analysis [2009/10] (ESW) Target: Girls 79.5% / Boys 72.6% [end of 2013/14] Ongoing Activities:  ERfKE II Outcome remains relevant and will be merged with labor market access. First  Support to Building Active Labor Market indicator is now irrelevant as it has been (MNAISA) critically affected by the impact of the Syrian  IFC E4E initiative for Arab Youth; First conflict on the education sector11. This investment committed in FY14 (Luminus); and indicator will be changed accordingly. advisory support to Int@j Second indicator will be dropped as data is currently not available. Improved Response to labor market and New business and training model for the VTC Not achieved, but implementation of the ALMP employers’ requirement of labor skills developed and implemented (by 2012) project has started. Indicator: Employers’ satisfaction with Vocational Training Center graduates when entering employment Baseline: [baseline to be established in 2012] Target: yearly increase of 0.2 in the 1-5 likert scale Outcome remains relevant but will be simplified and merged with learning environment. Indicator was inadequate (as of 2014 there are still no baseline data) and will be changed accordingly. Enrollment in post-secondary technical Restructuring of community colleges Not achieved.    training enhanced (separating technical education from Indicator: Percentage of students enrolled in academic education) community college programs Baseline: 12% [2009] Target: 14.5% [end of 2013] Outcome and indicator will be dropped as the WBG no longer has any engagement in tertiary education (Higher Education TA completed in 2012) Effective operation and financial coverage Provision of loans up to 10,000 new entrants Not achieved.   by the Jordan Student Aid Fund annually                                                              11 According to the Ministry of Education, more than 110,000 Syrian students have been enrolled in Jordanian public schools, thereby increasing the percentage of students in educational facility with two shifts. 17   Indicator: Percentage of students benefitting from financial aid fund out of the general number of students Baseline: 35% [2010] Target: 50% [end of 2013] Outcome and indicator will be dropped as the WBG no longer has any engagement in tertiary education (Higher Education TA completed in 2012) PILLAR 3 – ENHANCE INCLUSION THROUGH SOCIAL PROTECTION AND LOCAL DEVELOPMENT Results Area 3.1: Enhance Social Protection Original CPS Outcomes and Indicators Milestones Progress to Date on Milestones CPS Instruments (Status update in italic) Adopt improved targeting mechanism by the NAF Renewal Plan under implementation and Some activities related to installation of MIS- Completed Activities: National Aid Fund (NAF) that reaches specifically the Management Information related software and hardware, and voice and data  Social Protection Enhancement higher number of the poor System (MIS) to establish a Database on Poor communications in the central and local NAF  Measuring the Impact of National Policies & Indicators: % of poor population (as defined and Vulnerable Population is operational offices, implemented but the Renewal Plan was Strategies on Gender Equality (IDF) by those under NAF threshold) reached by not implemented and the database is not  Gender Assessment/ Action Plan TA NAF assistance (as measured by operational. Not achieved.   consumption methodology)  Country Gender Assessment (ESW) Baseline: 20% of people under the NAF  Programmatic Work ESW/TA on Social threshold received benefits [2006] Insurance Target: 80% of people under NAF threshold  Nat’l. Health Accts. Institutionaliztn TA received NAF assistance [end 2013]  Housing Finance TA  System Approach for Better Educ. Results Outcome remains relevant and will be Workforce Dev’t. (SABER WfD) TA simplified. Indicator will be changed to  Health Policy Dialogue TA focus on current WBG engagement in safety net programs. Ongoing Activities: Better access to and quality of social care Integrated social care services will be None of the integrated social work and care  Enhancing Legal Aid Services to Iraqi & services operating in MOSD social care centers by centers of the Ministry of Social Development Palestinian Refugees (SPBF) Indicator: Percentage increase of vulnerable 2012 were fully functional.  Community-Driven Development of Legal Aid groups benefiting from services in the Standards of care developed but were not adopted Services (JSDF) targeted MOSD centers for implementation. Not achieved.  National Unified Outreach & Registry Baseline: 8,000 beneficiaries [2010] (MNAISA) Target: 9,000 beneficiaries 40% increase [2014]12 Outcome remains relevant and will be merged with safety nets. Indicator was too ambitious and will be replaced. Expanded access to Social Security Increase in the number of branches to Partially achieved.                                                              12 Changed based on MoSD comments 18   Coverage improve services in underserved areas Indicator: Population of workers covered by SSC Baseline: 810,000 [2010] Target: 1 million [2014] Outcome remains relevant; it will be simplified and merged with safety nets and social services. No change to indicator. Results Area 3.2: Pursue Local Development and Address Poverty Pockets Original CPS Outcomes and Indicators Milestones Progress to Date on Milestones CPS Instruments (Status update in italic) Enhanced operational performance and Implementation of new procedures and Achieved Completed Activities: project implementation practices in guidelines related to operation performance in  Cultural Heritage, Tourism & Urban municipalities other than Amman 16 municipalities by the end of 2012 Development Project Indicator: Percentage of approved sub-  Secondary Cities Development Strategy projects successfully implemented against Program (CITIES) plans/set criterion Cultural Heritage, Tourism & Urban Baseline: 80% [2009] Development TA (Tourism Dev’t. Prog. for Target: 100% [2014] Historic Cities of Irbid & Tafileh)  Poverty Reduction Strategy/PRS Work TA Indicator: Percentage of Municipalities Performance Based Block Grant system is Performance-based block grants system was outside GAM that improved as per institutionalized within MoMA in 2012 adopted by MoMA and has been applied for cycle Ongoing Activities: performance indicators of MoMA 2 municipal applications. Achieved. Performance Based Block Grant System  Regional & Local Development Project Baseline: 10% [2009]  Mitigating Impact of Syrian Displacement on Target: 52% [2014] Jordan  Badia Ecosystem & Livelihoods Project (GEF) Outcome and indicators remain relevant but  Emergency Services & Social Resilience will be dropped to focus on impact of Syrian (MDTF) crisis on municipalities. First indicator was  Displaced People in Jordan (SPBF) fully achieved.  Measuring Impact of Legal on Poverty TA Improved local development in four Increased rehabilitation activities in historic Several of the historic urban sites supported have  Poverty Reduction Program TA historically and culturally important cities – urban cores that complements the existing been drastically transformed through  Social Security Law-Employment Opportunities Jerash, Karak, Madaba, Salt, and Ajloun cultural heritage and thereby promotes rehabilitation activities. A study is currently for Women (ESW) region - through increased tourism activities economic and social development. being undertaken to assess further the economic Indicator: Increased visitation and stay in and social impact of the project. Partially targeted cities achieved. Baseline: 1.46 days [2009] Target: 2.7 days [2014] Outcome and indicators will be dropped tourism related outcomes have been critically affected by the Syrian refugee situation. 19   Implementation of an action plan (including Draft National Poverty Reduction Strategy Achieved. institutional set up and mechanisms) to produced by 2012 address poverty pockets. Indicator: Reduction in the number of poverty pockets. Baseline: 32 [2011] Target: Reduction by 5 percent [2014] It is not possible to directly monitor number of poverty pockets in Jordan at the moment (the latest household survey (HIES) is from 2010) so outcome and indicator will be revised to focus on improved protection of poor and transient poor households through better targeting.   20   Annex II: Revised CPS Results Matrix [Note: Indicators marked with * include a gender dimension] PILLAR 1 – STRENGTHEN RESILIENCE TO ECONOMIC SHOCKS Revised CPS Outcomes and Indicators 1.1 Improved basis for targeting of subsidies - A National Unified Registry (NUR) is in place and can be used by other agencies for targeting social assistance; Baseline: No [2013]; Target: Yes [2015] 1.2 Strengthened effectiveness of audit bureau - Question 59 of Jordan’s Global Integrity Country Score: “Is the supreme audit institution effective?”; Baseline: 63 [2009]; Target:75 [2015] 1.3 Increased public access to information - Jordan’s Global Integrity Country Score indicator 1.3 (public access to government information); Baseline: 64.6 [2011]; Target: 75 [2015] PILLAR 2 – SEEK OPPORTUNITIES TO ENHANCE COMPETITIVENESS AND SHARED PROSPERITY Revised CPS Outcomes and Indicators 2.1 Improved transport - Travel time from GAM to Zarqa improved through use of Amman Ring Road; Baseline: 60 minutes [2010]; Target: 48 minutes [2014] 2.2 Improved electricity generation, with a focus on renewable energy - Added renewable power generation capacity; Baseline:1.4 MW1 [2011]; Target: Minimum of 70 MW of New Generation Capacity from renewable sources under Construction [2015] 2.3 Improved solid waste services - Disposal capacity at Al Ghabawi landfill; Baseline: 6 million tons [2010]; Target: 8 million tons [2014] 2.4 Improved environmental sustainability - Production system managed sustainably in protected areas; Baseline: 15,500 ha [2011]; Target: 23,000 ha [2014] - Reduction of HCFC (hydrochlorofluorocarbons); Indicator: ODP tons; Target: 83.00 (annual reduction) 2.5 Improved access to finance for MSMEs - MSME beneficiaries financed under the line of credit; Baseline: 0 [2013]; Target: 1,000 (2015) with women-owned businesses to represent 35%; * - Number of micro loans outstanding: Baseline: 90,829 [2013] Target:108,000 [2015] 2.6 Suitable legal environment to regulate PPPs - The new PPP Law applies to all new PPP transactions and the PPP Unit has identified an initial pipeline of five potential PPP projects, subject to validation; Baseline [2011]: No PPP law and no PPP Unit; Target: By September 2015, effective application of the new PPP Law and effective use of the MoF’s PPP Unit 2.7 Improved learning environment - Schools that are implementing improvement plans (number); Baseline:789 [2008]; Target: 3,000 [2015] - Number of full time equivalent students in IFC client’s various programs; Baseline:5,663 [2013]; Target: 6,491 [2015] PILLAR 3 – MITIGATE VULNERABILITY TO REDUCE POVERTY Revised CPS Outcomes and Indicators 3.1 Improved access to safety nets and social services - Beneficiaries of safety net programs (subsidies), of which women (%); Baseline: 0 [2014]; Target: 2.5 million [2016], 48.5% women * - Population of workers covered by SSC: Baseline: 810,000 [2010]; Target: 1 million [2014] - Vulnerable households reached by social outreach workers hired by NGOs; Baseline: 0 [2013]; Target: 6,000 [2015] 3.2 Improved capacity of municipalities and communities to cope with impact of Syrian refugee inflow - Beneficiaries of efforts to address immediate service delivery impacts of Syrian refugee inflows in targeted municipalities (number); Baseline: 0 [2014]; Target: 545,000 [2016] of which: (i) women: 245,250; (ii) host population: 395,000; (iii) refugee:150,000 * - Municipalities most affected by the influx of Syrian refugees ensuring pre-crisis levels of per capita investments in at least two of the following areas: (i) solid waste; (ii) local roads; (iii) street cleaning; (iv) parks/ recreational space; (v) community services; Baseline: 0 [2014]; Target: 50% [2016] - Number of children immunized (0-6 years) to remain at or above baseline; Baseline: 1.1 million [2012]; Target: 1.1 million [2015] 3.3 Improved protection of poor and transient poor households in a cost-effective manner (transient poor are the officially non-poor that live below the poverty line at least one quarter of the year) - Number of poor and transient poor people benefitting from improved cash transfer targeting; Baseline: 0 [ 2012]; Target: 36,000 [2015] 21   Annex III: Specific Progress towards CPS Outcomes Pillar 1: Strengthen fiscal management and increase accountability Improved Targeting of Subsidies 1. Outcomes under this pillar have been partially achieved and further progress is expected in the remaining period of the Country Partnership Strategy (CPS). With a view to reducing the fiscal burden of consumer subsidies while at the same time better serving the poorest segments of the population, the CPS included the provision of technical assistance that analyzes the poverty impacts and policy implications of changes in subsidy regimes and an examination of options for improved targeting mechanisms. Several policy notes and analytical pieces were completed in this respect which informed the GoJ’s decision in November 2012 to eliminate fuel subsidies. To compensate households for large price increases on petroleum products, the GoJ simultaneously introduced a broad-based cash transfer scheme, implemented by the Ministry of Finance. As such, the GoJ was able to save some JD350 million in 2013. Aside from generating fiscal space, the shift from subsidizing petroleum subsidies to a means-tested cash transfer significantly improves the progressivity of public spending. 2. To support the reform, a US$9.5 million grant “Support to Implementation of a National Unified Registry and Outreach Program” (the NUR Project), financed by the Deauville Partnership Transition Trust Fund was approved in February 2013. This new project is assisting the GoJ to improve the accuracy of targeting, and particularly help introduce a national unified registry that will reduce fragmentation of databases across various agencies and help increase the quality, reliability and accuracy of the existing national database. The development of the National Unified Registry is critical for improving targeting of the compensation scheme for fuel subsidies reform, as well as other safety net programs in the future. As a next step with respect to subsidies, the GoJ is considering reform of the universal bread subsidy, converting it into a targeted cash compensation for eligible Jordanians. Modern Internal Audit Function 3. Jordan took some steps towards strengthening internal controls, including the internal audit functions as well as ex-post performance auditing by the Audit Bureau aiming to enhance the transparency and accountability in the use of public funds, but the withdrawal process of the Audit Bureau from ex-ante controls is not showing the anticipated progress, as it is conditioned on significant internal control strengthening of the government agencies, a complex endeavor that only a handful of ministries have achieved. Pillar 2 – Strengthen the foundation for sustainable growth with a focus on competitiveness Energy 4. Energy demand grew dramatically in the past years. This reflects both population and economic growth. Significant progress has been made but the diversification of Jordan’s energy sources remains one of the country’s critical challenges. Given declining gas imports (mainly for electricity generation) from Egypt, Jordan has signed an agreement to build a terminal for liquefied natural gas in the Port of Aqaba. The liquefied natural gas terminal is expected to start operations at the latest in mid-2015. Jordan is also considering an oil pipeline from the Iraqi Basra fields to the Jordanian port of Aqaba. 5. New electricity generation capacity has been developed to meet growing demand. The Jordan Renewable Energy and Energy Efficiency Fund has been established and helps provide financing support for renewable and energy efficiency projects. The authorities have introduced a fast track to streamline procedures and evaluated and pre-selected bidders under a framework agreement that included a pre-determined feed-in tariff for renewables. In addition to IFC-financed Tafila Wind Power Plant project, new wind and solar projects have been developed to produce clean energy and reduce dependency on hydrocarbon fuels and imports. 22   6. The International Finance Corporation (IFC) is leading the support of private sector participation in the power sector in Jordan, especially with a growing program in renewable energy. In FY14, IFC committed a US$221 million debt package to support development of a 117 MW wind farm in Jordan – the first privately- owned renewable energy facility. IFC also invested in a US$10 million equity in a South-South power project (ACWA Jordan) in FY12 to increase installed capacity and strengthen platform power-related investments in the country. Transport 7. Some infrastructure bottlenecks have been removed including through the partial opening of the Amman Ring Road, the ongoing expansions in the new Aqaba port, and the upgrade of the road corridor to the Saudi borders, but more needs to be done to support Jordan in enhancing its role as a regional trade and transport hub. This is particularly important given that fiscal constraints have led to underinvestment and the deterioration of important links of the network, such as the Amman to Aqaba R15 highway. Jordan’s efforts in improving public transport are also noticeable with the planned Bus Rapid Transit projects which need to be complemented by important policy and institutional reforms. Environment 8. Jordan continues to provide regional and global leadership in ozone-depleting substances phase-out, with the current intervention focusing on hydro chlorofluorocarbons phase-out in the residential air-conditioner sector. This work increases the energy efficiency of air conditioning units currently being produced for the domestic and export market, as well as indirectly provides net benefits to global climate change mitigation. The demand-size drawdown in Jordan's energy sector is critical to easing energy shortfalls. The Integrated Ecosystem Management (Global Environment Facility) project shifted the responsibility for nature conversation from government to local communities through the establishment of Special Conservation Areas. Special Conservation Areas improve management of habitat corridors and production ecosystems between protected areas while at the same time help to maintain or restore the integrity of natural ecosystems, linkages between critical habitats for wildlife, and ecological processes important for the goods and services they provide to nature and people. In FY12 IFC advisory supported Jordan's largest pulp and paper company, and IFC client (Nuqul group) to establish a program to improve energy efficiency achieving 21,000 tCO2/year emission reduction over baseline emissions across the group companies. Waste Management 9. The Amman Solid Waste Management Project, designed to strengthen the operational, financial, and environmental performance of municipal solid waste management in Greater Amman, closed on June 30, 2014, with only limited achievement, mostly due to the delays in the start of the US$25 million landfill gas (LFG) collection and renewable energy production contract, representing the largest portion of the loan. Recent progress was achieved however with works now progressing well. Discussions are under way to further develop collaboration with Greater Amman Municipality to support its overall role and needs in terms of economic development, service delivery, and environmental sustainability. 23   Business Environment 10. The business environment in Jordan has experienced a mixed performance over the past few years. The country’s Doing Business ranking has fallen to 119 (2014) from the 111 ranking at the start of the CPS period (2011). This includes a significant decline in one of the CPS outcome indicators (cost of company formation as a percent of Gross National Income) and no reduction in the other CPS indicator (number of business start-up steps). There has been some progress in terms of median and dispersion times on obtaining licenses. The recently prepared Investment Climate Assessment highlights the continuing challenges facing a private sector striving for competitiveness to support economic growth and job creation. Tax rates, macro-economic uncertainty and informal sector competition are the highest ranking constraints according to the results of the enterprise survey, followed by regulatory uncertainty and tax administration. 11. In the context of the World Bank’s Second Development Policy Loan (DPL), a number of important steps have been taken, in particular the adoption of the public private partnership (PPP) and Secured Lending draft laws and amendments by the Council of Ministers; the establishment and empowerment of a PPP Unit; the adoption of Sukuk legislation allowing the use of a new cost-reducing debt tool and enabling access to Islamic finance liquidity. Important institutional changes also include the planned establishment of One Stop Shops at the reorganized Jordan Investment Board once the new Investment Law is passed. 12. IFC is working with the Central Bank of Jordan on the establishment and supervision of the first private Credit Bureau in Jordan to enable greater access to finance for micro, small and medium enterprises (MSMEs). In June 2013, IFC and International Bank for Reconstruction and Development (IBRD) signed an agreement to jointly support the Jordan Loan Guarantee Corporation scale up its lending operation by helping build institutional capacity, increase its outreach, and develop new financial products tailored to the needs of MSMEs. IFC is also working to support the GoJ in the areas of debt resolution and business insolvency regimes by helping improve the regulatory framework and assisting the Company Control Department in introducing informal business out of court guidelines. 13. IFC’s Advisory has also helped relevant market institutions and regulators create a robust corporate governance framework. In partnership with the Jordanian Ministry of Industry and Trade’s Companies Control Department, the first corporate governance code for small and medium enterprises (SMEs) was introduced based on a comply-or-explain principle. A corporate governance scorecard for listed companies was also launched with the Jordan Securities Commission. 14. IFC investments in leading microfinance institutions in Jordan is helping promote inclusive growth by providing access finance to lowest income entrepreneurs, especially women. Between FY12-to present, IFC has committed a total of US$6 million in three microfinance institutions including US$2 million investment in one of the leading microfinance networks, FINCA Jordan, which focuses on frontier regions and women entrepreneurs (>95 percent of clientele are women). 15. Improving the business environment is a key part of Jordan’s development strategy towards a knowledge economy. Therefore, the GoJ created a committee to coordinate and facilitate faster improvement in the business environment headed by Ministry of Planning and International Cooperation (MOPIC). The Committee, which includes representatives from relevant ministries and agencies, devised recommendations to improve the business environment in Jordan on the basis of the framework provided by the Doing Business report and key areas of concern underlined in Investment Climate Surveys. 24   Education, Skills and Labor Market Constraints 16. Progress has been mixed and the education sector has been critically affected by the impact of the Syrian conflict and pressure stemming from the additional 110,000 students enrolled in public schools (percentage of Jordanian students in double shift schools has significantly increased instead of the intended decrease as per ERFKE II project indicators). This included quality of education, as measured by national and international achievement tests, which plummeted in 2011-2012, also as a result of the overall regional and national political events (which in Jordan entailed, among others, several months of teachers´ strikes). However, the deterioration of education quality appears to have stopped in 2012 and 2013. 17. Key education-related milestones have been achieved with schools and kindergartens completed; the same is the case for preschool and secondary education enrolment rates. Structural challenges remain, in particular regarding the mismatch between skills availability and private sector needs. Vocational Education and Training remains a fragmented subsector. As employability for secondary graduates becomes a priority, it is critical that the Ministry of Education establish a clear vision for Vocational Education and Training as an open path to both the job market and higher education. 18. Jordan is one of the key countries where IFC’s E4E Initiative for Arab Youth is currently under implementation through both investment and advisory activities. On the investment side, IFC has committed an US$11 million equity investment in Luminus, the leading TVET entity in the country, to support expansion of vocational training facilities in FY14. IFC Advisory has partnered with Int@j, the information, communication and technology (ICT) business association in Jordan, to decrease the skill gap in the ICT sector through (i) Strengthening Quality Assurance Framework; and (ii) establishing an ICT Continuing Education Academy which is estimated to reach 1,520 students. 19. The CPS included provision of technical assistance to the GOJ in the development of a National Employment Strategy which aims to identify the constraints to job creation. The National Employment Strategy was completed and approved by Cabinet with an implementation unit in Ministry of Labor established to follow up on its progress. 20. To help GoJ test a number of initiatives recommended by the National Employment Strategy, the new “Support to building Active Labor Market Program” project, financed by the Deauville Partnership Transition Trust Fund (US$4.75 million, approved in April 2013) aims to increase access to career guidance, job search, and on the job training among targeted youth. Pillar 3 – Enhance inclusion through social protection and local development Social protection 21. Outcomes under the safety net aspects of this pillar were not achieved. The Social Protection Enhancement Project, which closed in August 2013, was expected to improve the management and operations of the cash social assistance programs and to improve access to and quality of social care services. However, based on the finding of the recent Implementation Completion Report, although its project development objectives continues to be relevant, the project’s Overall Outcome Rating was rated Highly Unsatisfactory, and the project did not succeed in achieving its project development objectives, as measured by key outcome indicators. 22. To assist GoJ, a US$9.5 million grant “Support to Implementation of a National Unified Registry and Outreach Program” (the NUR Project), financed by the Deauville Partnership Transition trust fund, was approved in February 2013. This new project is expected to help the government improve the accuracy of targeting, and particularly help introduce a national unified registry that will reduce fragmentation of databases across various agencies and help increase the quality, reliability and accuracy of the existing national database. 25   Although the NUR Project is not the continuation of Social Protection Enhancement Project and its target population is broader than the target population of National Aid Fund, the development of the National Unified Registry is critical for improving targeting of the compensation scheme for fuel subsidies reform, as well as other safety net programs in the future. Looking forward, this Unified Registry needs to be institutionalized. Local Development 23. Important progress has been made under the Regional and Local Development Project designed to promote regionally balanced local development, principally through municipalities, in terms of policy reform (adoption of a new and more equitable municipal transfer fiscal formula, on-going restructuring of the Cities and Villages Development Bank) and through the performance-based block grants distributed to the municipalities. Local investments have had a significant economic impact and have contributed to improve living conditions among the population. A follow-up operation, designed to sustain the benefits of the Regional and Local Development Project is planned, consistent with the original objective of balanced regional and local economic development, targeting in particular the poorest regions. Poverty 24. According to official estimates, 14.4 percent of the population in Jordan lived in poverty in 2010. It is not possible to directly monitor number of poverty pockets in Jordan at the moment since the latest household expenditure and income survey is from 2010. However, the household expenditure and income survey does give some interesting and important insights into poverty and vulnerability in Jordan. A within-year profile of poverty indicates that an additional 18.6 percent of the entire population in Jordan, although non-poor according to the official definition, experiences poverty in at least one quarter during the year. This group of people can be considered “transient poor” in the sense that they experienced poverty in at least one quarter during the year, despite being officially considered as non-poor because their annual per capita consumption exceeds the annual poverty line. The existence of such transient poverty may help explain the perception that annualized poverty measures underestimate true poverty. The poverty rates based on year-long consumption levels mask the vulnerability that many households face, pointing to the challenges facing households and policymakers alike. Policy interventions will differ in effectiveness to reduce vulnerability versus poverty. For example, vulnerability could be addressed in part via interventions that help households smooth their consumption expenditures (e.g., cash transfers) whereas longer term investments in the poor, like increasing their human and physical assets, or the returns to those assets, are likely to be more appropriate for reducing chronic poverty. 26   Annex IV: World Bank Program for the Period FY12-FY15 1/   II. SEEK OPPORTUNITIES TO ENHANCE COMPETITIVENESS III. MITIGATE VULNERABILITY AT THE LOCAL LEVEL TO I. STRENGTHEN RESILIENCE TO ECONOMIC SHOCKS AND SHARED PROSPERITY REDUCE POVERTY COMPLETED ENGAGEMENT Amount Amount Amount IBRD (US$ m) IBRD (US$ m) IBRD (US$ m) First Programmatic DPL 250.0 Amman Development Corridor 71.0 Cultural Heritage, Tourism & Urban Devt. 56.0 Amman Solid Waste Management 25.0 Social Protection Enhancement 4.0 Employer Driven Skills Development 7.5 Total 250.0 Total 103.5 Total 60.0 Grants Grants Grants Ombudsman Capacity Bld Support (IDF) 0.25 Ozone Depleting Substance Phaseout II (OTF) 6.0 Secondary Cities Devt. Strategy Prog. (CITIES) 0.47 Eco. Reform & Dev't. TA/Privatization TA (USAID) 9.5 Measuring Impact of Natl. Policies/Strategies Gender Employment Young Women Graduate TA (GENTF) 1.02 Equality (Gender Monitoring) (IDF) 0.29 Reg'l. Network for Education Research (IDF) 0.48 Energy Efficiency Investment Support (GEF) 1.0 Integrated Ecosystem Mgt. Rift Valley (GEF) 6.2 Total 0.25 Total 24.2 Total 0.76 Diagnostic & Technical Assistance Diagnostic & Technical Assistance Diagnostic & Technical Assistance Governance Reform TA Energy Sector TA Poverty Reduction Strategy TA Fiscal Consolidation Study (ESW) Support to Higher Education TA Poverty Reduction Strategy Work TA Distributional Analysis (ESW) * National Employment Strategy TA Nat'l. Health Accts. Institutionalization TA * Assistance in Defining Nationally Appropriate Housing Finance TA * Mitigation Actions (NAMAs) TA System Approach for Better Education Results Smart Grids for Green Growth TA Workforce Dev't. (SABER WfD) TA * Inst'l. Policy Support Dev't. of PPP Prog. TA * Health Policy Dialogue TA * SME Investment Climate Assessment TA Cultural Heritage, Tourism & Urban Dev't. TA (Tourism Competitiveness and Innovation Partnership TA * Dev't. Prog. for Historic Cities of Irbid & Tafileh) * Development Policy Review (ESW) Gender Assessment/Action Plan TA Youth Inclusion Poverty Social Impact Ana. (ESW) Programmatic Work ESW/TA on Social Insurance Country Gender Assessment (ESW) ONGOING ENGAGEMENT Amount Amount Amount IBRD (US$ m) IBRD (US$ m) IBRD (US$ m) Second Programmatic DPL 250.0 Amman East Power Plant (Guarantee) 45.0 Regional and Local Development 20.0 Education Reform for Knowledge Economy II 60.0 Mitigating Impact of Syrian Displacement on JO * 150.0 MSME Dev't. Project for Inclusive Growth * 70.0 Total 250.0 Total 175.0 Total 170.0 Grants Grants Grants Anti-Corruption Com. Case Mgt. Imp't. (IDF) * 0.25 Promotion of a Wind Power Market (GEF) 6.0 Badia Ecosystem & Livelihoods Project (GEF) 3.3 Strengthening Cap. & Efficiency of JO Supreme Coordination Improved Water Res. Mgt. & Cap. Bldg. Enhancing Legal Aid Services to Iraqi & Palestinian Audit (IDF)* 0.25 Program (REGIONAL GEF) 1.05 Refugees (SPBF) 1.8 Statistical Capacity Bldg. (TFSCB) * 0.23 Desert Ecosystems & Livelihoods Knowledge Community-Driven Dev't. Legal Aid Services (JSDF) 2.6 Public Procurement Reform (IDF) * 0.25 & Coord. Proj. (DELP) (REG'L/est. GEF share) * 0.2 Emergency Services & Social Resilience (MDTF) * 50.0 Red Sea & Gulf of Aden Strategic Ecosystem Mgt. Nat'l. Unified Outreach & Registry(MNA Tran.Fund)* 9.5 (REG'L/est. GEF share) 0.5 Displaced People in Jordan/Lebanon (SPBF) * 1.2 Ozone Depleting Substance Phaseout III (OTF) * 2.8 Jordan Assn. of Cert. Public Accts. (JACPA) Cap. Bldg. (IDF) 0.25 Strengthening Reg. & Institutional Framework for MSME Dev't. (MNA Tran. Fund) * 3.0 Support Bldg. Active Labor Mkt.(MNA Tran. Fund) 4.75 Virtual Mkt Place for Dev't. of Export SMEs TA (MNA Tran. Fund) * 1.0 Total 0.98 Total 19.6 Total 68.4 Diagnostic & Technical Assistance Diagnostic & Technical Assistance Diagnostic & Technical Assistance Regional Program on Public Sector Complaints MSME Development TA * Measuring Impact of Legal Aid on Poverty TA Mechanisms TA Payment Systems Support TA * Poverty Reduction Program TA Partnership for Market Readiness TA * Social Security Law-Employment Opp. for Women (ESW) Pricing Irrigation Water in the Jordan Valley TA POTENTIAL NEW ENGAGEMENT Amount Amount IBRD (US$ m) IBRD (US$ m) FY15: Transport (R15) 75.0 FY16: Reg'l. & Local Dev't. Add'l. Fng./New Project 70.0 FY16: Urban Transport 100.0 FY17: Urban & Water Sanitation 70.0 Energy 200.0 Agriculture Modernization & Water Use 30.0 FY17: Renewable Energy 100.0 Total 505.0 Total 140.0 Grants FY15: National Ctr for Innovation (MNA Tran. Fund) 3.0 ERfKE Additional Financing / New Project TBD FY17: Partnership for Market Readiness (PMR) 3.0 Total 6.0 Diagnostic & Technical Assistance Diagnostic & Technical Assistance Diagnostic & Technical Assistance FY15: Public Financial Mgt. Engagement TA FY15: Investment Climate Assessment/PSD TA FY15: Programmatic Poverty Analysis (ESW) Public Investment Prog. Analytics TA Education PER Follow-up (ESW) Internal Audit Perf. Measurement Frwrk Transport Sector TA Health Financing TA Water Sharing/Red Sea TA Procurement Reform Impediments Study FY16: Strategic Country Diagnostic (ESW) FY16: Parliamentary Oversight Engagement TA Competitiveness & Investment TA Monitoring Nat'l. Educ. Strat. (NES)/Follow- to Active Labor Market Proj. (ALMP) TA Note: Projects with * represent new engagement under this CPS which were not included in the original CPS work program that have been delivered to client or are still ongoing activities. 1/ Formerly, Pillar 1-Strengthen Fiscal Mgt. & Inc. Acctablty; Pillar 2-Strengthen the Foundation for Sust. Growth w/ a Focus on Competitiveness; Pillar 3-Enhance Inclusion thru Social Pro. & Local Dev 27   Annex B2: Selected Indicators of Bank Portfolio Performance and Management as of May 31, 2014   Indicator 2011 2012 2013 2014 Portfolio Assessment Number of Projects Under Implementation a 10 10 11 16 Average Implementation Period (years) b 4.9 5.9 4.0 3.2 Percent of Problem Projects by Number a, c 40.0 30.0 36.4 22.2 Percent of Problem Projects by Amount a, c 28.3 6.7 16.0 5.3 Percent of Projects at Risk by Number a, d 50.0 30.0 36.4 22.2 Percent of Projects at Risk by Amount a, d 35.9 6.7 16.0 5.3 Disbursement Ratio (%) e 17.3 22.6 23.9 135.1 Portfolio Management CPPR during the year (yes/no) No Yes No No Supervision Resources (total US$) 921 947 1,060 1,380 Average Supervision (US$/project) 92 95 96 86 Memorandum Item Since FY 80 Last Five FYs Proj Eval by OED by Number 68 5 Proj Eval by OED by Amt (US$ millions) 2,502.1 371.0 % of OED Projects Rated U or HU by Number 20.0 75.0 % of OED Projects Rated U or HU by Amt 24.1 100.0 a. As shown in the Annual Report on Portfolio Performance (except for current FY). b. Average age of projects in the Bank's country portfolio. c. Percent of projects rated U or HU on development objectives (DO) and/or implementation progress (IP d. As defined under the Portfolio Improvement Program. e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: Investment projects only. * All indicators are for projects active in the Portfolio, with the exception of Disbursement Ratio, which includes all active projects as well as projects which exited during the fiscal year. 28   Annex B8a: IBRD Operations Portfolio and Grants as of May 31, 2014   Closed Projects 83 IBRD/IDA * Total Disbursed (Active) 245.02 of w hich has been repaid 2.76 Total Disbursed (Closed) 1,025.30 of w hich has been repaid 1,104.15 Total Disbursed (Active + Closed) 1,270.33 of w hich has been repaid 1,106.91 Total Undisbursed (Active) 74.33 Total Undisbursed (Closed) 4.75 Total Undisbursed (Active + Closed 79.08 Active Projects Difference Between Last PSR Expected and Actual Supervision Rating Original Amount in US$ Millions Disbursements a/ Development Implementation Project ID Project Name Fiscal Year IBRD IDA GRANT Cancel. Undisb. Orig. Frm Rev'd Objectives Progress P104960 Amman Solid Waste Management U MU 2009 25 20.0 20.0 P105036 ERfKE II MS S 2009 60 32.7 23.6 5.8 P070958 Regional & Local Development MS MS 2007 20 3.3 3.3 3.3 P132314 MSME Dev. Project for Inclusive Growt S S 2013 70 2.8 -67.2 P125483 Second Programmatic DPL - - 2014 250 0.0 P145865 Mitigating Impact of Syrian Displacement S S 2014 150 15.5 4.1 Sub-total IBRD 575.0 74.3 -16.3 9.1 P127861 Badia Ecosystem and Livelihoods MS MS 2013 3.3 2.5 0.1 P093201 Promotion of a Wind Power Market MS MU 2008 6.0 3.7 3.7 P127702 ODS III - HCFC Phase-out Project S S 2013 2.8 2.5 1.1 P108064 Energy Efficiency Investment Support - - 2009 1.0 0.9 P126689 Legal Aid Services to Iraqis and Palestinians MS MS 2012 1.8 1.2 P128689 Enhancing Community-Driven Legal Aid S S 2012 2.6 1.9 P132097 Displaced People in JO MS MS 2013 0.9 0.3 P122070 Ombudsman Cap. Bldg. Support MU MU 2012 0.25 0.18 P124154 JACPA Capacity Building S S 2012 0.25 0.15 P130517 Public Procurement Reform Support U U 2013 0.25 0.17 P130198 Anti-Corruption Commission Case Mgt. Improvemen - - 2013 0.25 0.17 P143478 Streng. Cap. & Effec. JO Supreme Audit Institute MS MS 2013 0.25 0.25 P133339 Statistical Capacity Building TF MU MU 2013 0.23 0.16 P147689 Emergency Services & Social Resilience MS MS 2014 50.0 39.5 P144832 National Unified Registry and Outreach S S 2014 9.5 8.5 P145241 Support to Building Active Labor Market S S 2014 4.8 4.3 P147875 Streng. Regulatory & Inst'l. Framework MSME Dev't - - 2014 3.0 2.6 Sub-total Grants 87.2 69.0 4.8 0.0 Overall Result 575.0 87.2 143.3 -11.4 9.1   29   Annex B8b: Statement of IFC’s Committed and Outstanding Portfolio as of April 30, 2014 Statement of IFC's Committed and Outstanding Portfolio Amounts in US Dollar Millions Accounting Date as of : 04/30/2014 Page 1 Region(s):Middle East and North Africa Country(s) : Jordan CommitmInstitution LN LN ET QL + QE GT RM ALL ALL LN ET QL + QE GT RM ALL ALL Fiscal YeaShort Name Cmtd - IFC Repayment - IFC Cmtd - IFC Cmtd - IFC Cmtd - IFC Cmtd - IFC Cmtd - IFC Cmtd - Part Out - IFC Out - IFC Out - IFC Out - IFC Out - IFC Out - IFC Out - Part 2012 ACWA Pow erJordan 0 0 0.97 8.03 0 0 9.00 0 0 0.97 8.03 0 0 9.00 0.00 2008 AIG Company 66.99 3.01 0 50.00 0 47.62 164.61 150.40 66.99 0 50.00 0 46.23 163.22 150.40 2014 Bank of Jordan 0 0 0 0 0.04 0 0.04 0 0 0 0 0.04 0 0.04 0.00 2001 Boscan Jordan 1.50 0.80 0 0 0 0 1.50 0 1.50 0 0 0 0 1.50 0.00 2013 CTI Group 14.28 10.54 0 7.00 0 0 21.28 0 14.28 0 7.00 0 0 21.28 0.00 2013 Cairo Amman Bank 0 0 0 0 7.49 0 7.49 0 0 0 0 2.97 0 2.97 0.00 2014 Capital Bank Jor 0 0 16.52 20.00 2.81 0 39.33 0 0 16.52 20.00 2.80 0 39.32 0.00 EDCO 31.10 7.49 0 0 0 0 31.10 0 31.10 0 0 0 0 31.10 0.00 2014 FINCA Jordan 2.00 0 0 0 0 0 2.00 0 2.00 0 0 0 0 2.00 0.00 2012 Hikma Jordan 105.71 25.91 0 0 0 0 105.71 0 55.71 0 0 0 0 55.71 0.00 2012 Hikma UK 0 0 27.50 0 0 0 27.50 0 0 27.50 0 0 0 27.50 0.00 2011 JIFCO 125.00 0 0 0 0 2.52 127.52 90.13 125.00 0 0 0 2.52 127.52 90.13 2014 JWPC 54.73 0 0 14.36 0 5.11 74.20 59.49 8.89 0 2.33 0 4.76 15.98 9.66 2010 Jordan Phosph... 37.49 12.51 0 0 0 0 37.49 44.99 37.49 0 0 0 0 37.49 44.99 2014 Luminus 0 0 11.09 0 0 0 11.09 0 0 0 0 0 0 0 0.00 1999 MAICO 0 0 0.25 0 0 0 0.25 0 0 0.00 0 0 0 0.00 0.00 2013 MEMCC 2.00 0 0 0 0 0 2.00 0 2.00 0 0 0 0 2.00 0.00 2002 MEREN 0 1.47 0.00 0 0 0 0.00 0 0 0.00 0 0 0 0.00 0.00 2013 Tamw eelcom 1.40 3.60 0 0 0 0 1.40 0 1.40 0 0 0 0 1.40 0.00 2010 Zara 22.98 20.76 1.28 0 0 0 24.26 0 22.98 1.28 0 0 0 24.26 0.00 Total Portfolio 465.19 86.08 57.62 99.38 10.35 55.24 687.78 345.02 369.35 46.27 87.36 5.80 53.51 562.29 295.19 30   Annex B8c: Statement of MIGA’s Exposure in Jordan as of April 30, 2014     31   IBRD 33424 35°E 36°E 37°E 38°E 39°E 34°N 34°N n Se anea r a er dit JORDAN Me 33°N 33°N To To Zefat Damascus Lake To Tiberias Baghdad Um Qais Irbid IRBID IRBI D Ar Ruwayshid AJLUN Ajlun Al Mafrak River JARASH Jarash MAFRAK n Arda Mahattat al Halif Jorda BALQA Az 32°N As Salt 32°N Zarka AMMAN ZARKA Azraq ash - - Shishan Madaba To Jerusalem MADABA AMMAN Dead Sea To Al Jawf Al Mazra’ah - Al Qatranah To Al Karak Beersheba KARAK -- As Safi 31°N 31°N Ard TAFILAH as At Tafilah Sa w - Al Rashadiyah - Ba’ir aa n Ash Shawbak MA'AN Petra Al Jafr 0 0 50 Kilometers Ma'an 0 25 50 Miles 30°N Ra’s an Naqb 30°N 38°E 39°E AQABA Ad Disi To Nuweiba JO R D A N Jabal Ram Aqaba (1,734 m) SELECTED CITIES AND TOWNS aba GOVERNORATE CAPITALS Al Mudawwarah of Aq This map was produced by NATIONAL CAPITAL To the Map Design Unit of The World Bank. The boundaries, Al B'ir RIVERS Gulf colors, denominations and any other information shown 29°N on this map do not imply, on MAIN ROADS the part of The World Bank To Group, any judgment on the RAILROADS Al B'ir legal status of any territory, or any endorsement or acceptance of such GOVERNORATE BOUNDARIES boundaries. INTERNATIONAL BOUNDARIES 35°E 36°E 37°E JANUARY 2005