88426
                                                                 Micronesia

                                       Country Partnership Strategy FY2014-2017

                                                               Chair Summary

                                                                May 29, 2014

      Executive Directors discussed the joint IDA/IFC Country Partnership Strategy (CPS) for
Micronesia for the period FY2014-2017.

        Directors acknowledged that the CPS is aligned with the Government’s strategy for
sustained growth and with the World Bank Group’s twin goals of eliminating extreme poverty
and promoting shared prosperity. They noted the challenges facing Micronesia, in particular
those related to geographical remoteness and climate change, a small and dispersed population,
and limited resources. They commended the Government of Micronesia for expanding its
dialogue with a broad range of development partners, focusing its efforts on fiscal adjustment
and broadening its economic base. This will be necessary in order to offset the reduction in
external financing that is projected to occur by 2023.

       Directors noted the lack of recent poverty data, and were pleased to note that
management intends to provide technical assistance to help the authorities conduct a poverty
assessment based on the upcoming Household Income and Expenditure Survey. This will help
measure progress towards the WBG’s twin goals of poverty reduction and boosting shared
prosperity, which Directors considered critical to future course correction.

        Directors welcomed the focus of the CPS on strengthening an enabling environment for
private sector development, particularly in energy, fisheries and information & communications
technology, and urged the World Bank Group to ensure that these efforts foster job creation.
They were encouraged to see targeted IDA/IFC activities in Micronesia, particularly in the
fisheries sector, and advised the IFC to look for further opportunities to increase its engagement
in Micronesia over the CPS period.

       Directors encouraged management to engage selectively in the social sectors, while
playing a catalytic role in working with partners and collaborating with other donors to ensure
meaningful impacts. They were pleased that the Public Expenditure Review would focus initially
on education and health, and that Micronesia would benefit from regional work on non-
communicable diseases.

        Finally, Directors encouraged the WBG to apply lessons learned from experience in other
small states on how best to engage and build the capacity needed to implement the program.
                                                            
*This summary is not an approved record.