For Official Use Only CLR Review Independent Evaluation Group 1. CPS Data Country: Poland CPS Year: FY14 CPS Period: FY13 – FY17 CLR Period: FY14-FY17 Date of this review: May 23, 2018 2. Ratings CLR Rating IEG Rating Development Outcome: Satisfactory Satisfactory WBG Performance: Good Good 3. Executive Summary i. Poland is a high-income country (HIC) with a GNI per capita of $12,680 in 2016. Poland’s annual economic growth accelerated to 3.3 percent during the CPS period (2014-2016) from 2.9 percent over the previous four years, 2010-13. The consistency of the country’s macro and structural policies has been the key driver behind the economy’s growth and helped its transition to HIC status in less than 15 years. Poland’s economic growth has been inclusive in the past decade, as evidenced by growing employment and earnings for all income groups, which led to a substantial reduction in poverty and stronger-than-average growth of the bottom 40 percent of the distribution. Between 2005 and 2014, Poland’s Gini coefficient fell from 0.351 to 0.343. The poverty rate measured at $5.00/day 2005 PPP stood at 4.4 percent in 2015. Poland’s strong economic growth is expected to continue in the near term; however, the longer- term prospects could be subdued by demographic and structural challenges – including a rapidly aging population, slowdown in total factor productivity, infrastructure gaps, low domestic private investment and regional disparities -- if left unaddressed. 1 ii. The CPS had 10 objectives that were organized around four engagement areas (or focus areas): (i) Economic Competitiveness, (ii) Equity and Inclusion, (iii) Climate Action, and (iv) Poland as a Global Partner. The CPS was broadly aligned with the Government of Poland’s (GOP) economic program called the “Responsible Development Plan” (RDP), which emphasized improving business conditions, promoting innovation, social inclusion, and more equitable regional development. iii. During the CPS period, IBRD approved a total of new commitments of $2.470 billion. The approved new lending was lower than the planned amount of $3.2 billion. The new lending commitments comprised of a series of two Development Policy Financing (DPF) on Resilience and Growth and one Investment Project Financing (IPF) on flood management. No new grants/trust funds were approved during the CPS period. However, nine were active at the beginning of the CPS period, with total commitments of $58.3 million, of which more than 80 percent were in green energy. During the CPS period, the Bank delivered a total of 49 advisory services and analytic (ASA) products, of which 42 percent were accounted by reimbursable advisory services (RAS). 1 See 2017 IMF Article IV Consultation. CLR Reviewed by Panel Reviewed by CLR Review Manager/Coordinator Lev Freinkman Albert Martinez Pablo Fajnzylber Consultant, IEGEC Consultant, IEGEC Manager, IEGEC Lourdes Pagaran CLRR Coordinator, IEGEC For Official Use Only CLR Review 2 Independent Evaluation Group iv. Over the CPS period, IFC significantly expanded its operations in Poland, making a total commitment of $401.6 million (compared to $27 million over the previous CPS period), of which 56 percent was in leasing and 37 percent in commercial banking. Investments in two leasing companies supported MSMEs in less developed regions of Poland while investment in a commercial bank were in various green projects. In addition, there were four global/regional IFC projects with about $65 million of IFC commitments in Poland. There was one active project with a MIGA guarantee of $3.7 million supporting investments in a data center. v. On balance, IEG rates the CPS development outcome as Satisfactory. Of the ten CPS objectives, five were rated Achieved and five were Mostly Achieved. Under Focus Area I, there was substantial progress in fiscal consolidation accompanied by rationalization of budget spending. On business environment, the program supported broad-based improvements in investment climate, but the specific outcome target for time needed for business registration was not achieved. On innovation, good progress has been made in supporting private sector led innovation and reflected in improvements in the overall Poland’s standing in innovation, but SME innovation capacity remains weak. Under Focus Area II, the program made exceptional progress in the area of labor markets by supporting across-the-board increases in employment rates in an inclusive manner. In the health sector, the program helped to accomplish several key reform steps to advance the transition to an integrated health delivery system. On regional development, four key regional planning instruments have been prepared and under implementation and important regional pilots have been launched and scaled up to eight regions with EC funding. Under Focus Area III, good progress has been made on enhancing flood protection, but implementation pace has been slower than expected to ensure full protection of the target areas. Road safety has improved as measured by reduction in the number of accidents and fatalities against the baselines. In the climate policy area, there is evidence of use of the PLACE model for setting the new country’s policy targets. In the area of development cooperation (Focus Area IV), Poland’s contribution to development cooperation and global public goods primarily with respect to knowledge generation and sharing. IFC investments in financial institutions contributed to progress towards program objectives on innovativeness, regional development, and climate policy. vi. IEG rates WBG performance as Good. The CPS addressed key development constraints and was aligned with government economic program and objectives. The CPS objectives were consistent with WBG poverty reduction and shared prosperity goals (e.g., by focusing on more inclusive labor markets). The CPS was selective, reflecting WBG’s comparative advantages as well as division of labor and complementarity with the EC. The selected mix of WBG instruments was appropriate: the emphasis on knowledge products was well-grounded in the country context and reflected the client’s preferences. The ASA products were well-integrated with lending under the DPL program. The use of RAS was blended with other ASA tasks funded by the Bank and TF sources to maximize overall impact. The CPS and PLR identified risks adequately and the proposed mitigation measures were appropriate. However, the design of the CPS results framework had shortcomings, with weak links between program objectives and output/intermediate outcomes. vii. Program implementation benefitted from Poland’s robust economic performance and continuity of policy dialogue with the government. The PLR introduced some adjustments to the program in response to shifts in government priorities. The changes introduced at the PLR to the results framework further weakened the link between the program objectives and corresponding outcome indicators. Most planned investment lending did not materialize, in part due to availability of the EU grant funding, while some additional ASA products were delivered to ensure progress towards the development outcomes. This shift towards more ASA tasks was in line with the WBG’s comparative advantage in Poland and in response to the government’s preference. The political risk, which materialized, was managed well by frontloading support for critical reforms under the DPLs. IFC has expanded its portfolio by emphasizing selectivity and innovation. Bank-IFC activities were largely separate and independent from each other. There were no major safeguard issues. No request for investigation was brought to the Inspection Panel. For Official Use Only CLR Review 3 Independent Evaluation Group viii. IEG agrees with CLR lessons and would like to emphasize the following two: (i) to become an established knowledge exporter, Poland needs external support to better structure both its export products and channels for knowledge transfer; and (ii) IFC could successfully expand its portfolio in HICs by emphasizing selectivity, innovation, and alignment with the Twin Goals. ix. IEG provides two additional lessons: • Inadequate reflection of the policy impact of ASA products in the results framework could negatively affect the assessment of the overall performance under WBG knowledge- based country programs. In the case of Poland, the quality of ASA was good, but the impact of ASA was largely not reflected in the results framework. In the context of a knowledge intensive program, it is important to put in place a robust mechanism to assess the quality and impact of completed ASA products and supplement the indicators in the results framework with additional evidence to reflect the contribution of the ASA to the program objectives. • The Bank could be quite successful in utilizing opportunities for reform following a financial crisis by providing a well-customized and flexible assistance package. In the case of Poland, the Bank responded effectively to the authorities’ concern related to growth slowdown in 2012-13 by helping to design a set of corrective actions in the areas of fiscal policies, investment climate, labor markets, etc. 4. Strategic Focus Relevance of the WBG Strategy: 1. Congruence with Country Context and Country Program. The CPS addressed key challenges facing Poland, including a need to accelerate a transition to an innovation-led growth model and address issues related to rapidly aging population, slowdown in total factor productivity, and regional disparities. It was well aligned with the Government of Poland’s 2015 economic program called the “Responsible Development Plan” (RDP), which emphasized improving business conditions, promoting innovation, social inclusion, and more equitable regional development. In addition, the CPS was aligned with Poland’s EU commitments, including on fiscal deficit reduction and climate policy, and improved compliance with EU standards. Finally, the CPS was also congruent with the priorities of the Poland-EC partnership agreement 2. 2. Relevance of Design. The CPS objectives were well-grounded on WBG’s s country and global knowledge and reflected its comparative advantage. The CPS objectives were supported by relevant WBG lending operations and ASA products. In most cases, the proposed WBG interventions could reasonably be expected to contribute towards the achievement of the CPS objectives. For instance, policy support and technical assistance (TA) in the areas of labor market deregulation and employment services could improve labor market flexibility and inclusiveness. The choice of instruments (including heavy reliance on knowledge products) was appropriate, given the country context and client’s preferences. There was a good synergy between the ASA products and the lending program (DPLs). The design also reflected close cooperation with other development partners, primarily the European Commission (EC), that provided related funding and technical assistance to the government directly or through co-financing. Furthermore, the design of the program was consistent with the principles of WBG engagement with Upper Middle Income Countries, 3 including its focus on lagging regions and prominence of reimbursable advisory services (RAS) in the advisory program. However, in a number of cases, the link was weak between the broad/country level program objectives (e.g., balanced regional development) and the WBG interventions and outcomes that were pitched at the output level. In addition, the results from some important activities (for 2 Summary of the Partnership Agreement for Poland, 2014-2020. EC. 2014 May. 3 World Bank. 2001. “Report of the Task Force on the World Bank Group and the Middle-Income Countries.” For Official Use Only CLR Review 4 Independent Evaluation Group example, TF-supported projects in green energy) were not reflected in the CPS’ results framework and linked to the CPS objectives. Selectivity: 3. The CPS was selective, given the country context and the nature of the partnership with the GOP. The program’s objectives and interventions were selected based on their congruence with the government’s long-term priorities, including those related to deepening European integration. The CPS covered several areas (fiscal management, labor markets, innovation, etc.) that are critical to long-term sustainability and inclusiveness of the country’s economic growth, reflecting the Bank’s comparative advantage. The program’s selection of CPS objectives and interventions were informed by strong partnership and division of labor with the European Commission: several interventions, primarily ASA products, were selected to provide strategic complementarity to the EC’s program in Poland and improve utilization of EU grant funding. Alignment: 4. The CPS objectives were well aligned with the corporate twin goals of poverty reduction and shared prosperity. Several program’s objectives (especially, on labor markets, lagging regions, and health services) are likely to make a direct contribution to the twin goals, particularly shared prosperity, which is more relevant for Poland. Specifically, the reform program supported by the Bank’s DPLs helped to improve inclusiveness of labor markets (raise employment opportunities for vulnerable groups, including youth and older workers). In addition, Bank support in the areas of fiscal management and investment climate contributed to the twin goals indirectly by strengthening institutional foundations for sustainable growth. 5. Development Outcome Overview of Achievement by Objective: 5. The assessment of CPS objectives is based on the updated program presented at the PLR document. This review uses the following structure and terminology: four focus areas (or Strategic areas of engagement), ten objectives, and fourteen outcomes. Focus Area I: Economic Competitiveness 6. Objective 1: Enhanced Business Environment. This objective was supported by a combination of WBG lending and ASA: the First (FY15) and Second (FY16) Resilience and Growth Development Policy Loans (DPLs), and several RAS in the following areas: ‘Doing Business in Poland 2015’ (FY15), on Construction Reform (FY16), Financial Reporting Capacity (FY17), Construction Licensing and Contract Enforcement (FY16). There was also the Public Policy Notes (FY16) and TA on Business Environment (FY15). This objective had two outcome indicators. • Improved performance under the Doing Business methodology. The targets were to reduce time needed for starting a business and for obtaining a construction permit. The 2018 Doing Business (DB) reports that 37 days are still needed to start a business (compared to the target of 21 days), while the time needed to obtain a construction permit was reduced to 153 days (compared to the target pf 200 days 4). • Under the reform program supported by the DPL series, the GOP established a “One-stop- shop” for streamlined business registration through the enactment in 2014 of the amendments to the Law on National Court Register. This initiative did not improve the traditional (paper- based) business registration: Poland continues to lag most other EU members on DB ‘Open business’ indicator and was ranked 120th globally in DB2018. 4 The above reduction in time needed for obtaining a construction permit in part reflects a change in the DB methodology. For Official Use Only CLR Review 5 Independent Evaluation Group • However, the above data may considerably underestimate actual progress made by Poland in the area of business registration. The DB methodology reflects only time required for business registration through the dominant, paper-based procedure and as such does not consider the results of online registration. The online registration platform launched by GOP in 2012 enables the processing of applications in 1-2 days 5. Its uptake has expanded gradually and, reached almost 50 percent of all filings in 2017, according to the Government’s website. • In 2015 the GOP enacted the amendments to the Construction Law to simplify and shorten the administrative procedures preceding the start of construction work. Poland’s rank on DB ‘Dealing with construction permits’ indicator improved from 88th in DB2014 to 41st in DB2018. 7. Overall, Poland made good progress towards the enhanced business environment. Its overall rank in DB has improved from 45th in DB2014 to 27th in DB2018. According to ‘Doing Business in Poland 2015’ report, between 2009 and 2015, Poland registered the most progress on the DB “distance to frontier” (DTF) metric—a measure of absolute performance with respect to the world’s best practices—of any EU country. On balance, IEG rates Objective 1 as Mostly Achieved. 8. Objective 2: Increased Innovativeness. This objective was supported by several WBG instruments, including the First (FY15) and Second (FY16) Resilience and Growth DPLs, RAS on RIS3 (innovation strategies) Needs Assessment (FY16), RAS ‘Review of Smart Specialization (RIS3)’ (FY15), RAS ‘Review of Smart Growth Operational Program’ (FY15), RAS on RIS3 in Swietokrzyskie region (FY14), and RAS ‘Guidance to Enhance Efficiency and Effectiveness of R&D Programs’ (FY17). IFC supported the introduction of two innovative bond issues by Poland’s financial institutions – a green bond and a gender bond to expand access to finance by women entrepreneurs. This objective had one outcome and associated indicator. • A policy instrument to effectively support private sector-led innovation (including through an increased focus on SMEs and the introduction of non-grant mechanisms) is adopted and used under the upcoming EU Financial Perspective. The new Smart Growth Operational Program (SGOP) for innovation was adopted by the EC in February 2015 for financing under the 2014- 2020 EU Financial Perspective and is being implemented. It brought Poland €8.6 billion in EU funding, which together with additional national co-financing, allowed for a major expansion in public support for innovation. • Additional information from the DPL-supported program in the innovation area indicates that R&D spending as percent of GDP increased from 0.9 percent in 2012 to 1 percent in 2015, but the level of R&D spending remains well below the EU-28 average of two percent and the EU target for 2020 of three percent. A Bank paper 6 (2017) found that one of the main instruments to support early stage innovation by SMEs, funded under the SGOP, has had a positive impact on science-industry collaboration. 9. Broader measures of Poland’s increased innovativeness suggest some improvements over the CPS period. Poland’s ranking on the Innovation Pillar slightly improved, from 65th out of 148 countries (with a score of 3.2 out of 7) in 2012, as per the World Economic Forum’s (WEF) 2013-2014 Global Competitiveness Report, to 59th out of 137 (score of 3.4/7) in 2016 per the respective WEF 2017-2018 Report. When measured by the EU innovation scorecard, Poland’s performance has improved by two percentage points relative to that of the EU average in 2010 – from 53 percent in 2010 to 55 percent in 2016. Moreover, progress has been faster than the aggregate on creating an innovation friendly environment as well as on availability of financing for firm R&D, areas relevant to the Bank engagement. At the same time, SME innovation capacity remains by far the weakest element of the nation’s innovation ecosystem and it did not show any progress recently. On balance, IEG rates Objective 2 as Mostly Achieved. 5 Doing Business in Poland 2015, p. 3. 6 Bruhn, Miriam and David McKenzie. “Can grants to consortia spur innovation and science-industry collaboration? Regression-discontinuity evidence from Poland.” January 2017. World Bank Policy Research Working Paper 7934. For Official Use Only CLR Review 6 Independent Evaluation Group 10. Objective 3: Effective Public Finance. This objective was supported by a combination of WBG lending and ASA instruments, including the First (FY15) and Second (FY16) Resilience and Growth DPLs, RAS on Financial Reporting Capacity (FY17), the Economic and Sector Works (ESW) ‘Is Poland Saving Enough?’ (FY14), TA on Public Spending Review (FY16), and TA on Public Finance Work (FY17). The Bank provided support in several areas of fiscal management, including expenditure rationalization, amendments to the tax laws, budget preparation, budget accounting, and equalization transfers. 11. This objective had two outcomes indicators. • An expenditure rule is adopted. The target was to put in place an expenditure rule to ensure the sustainability of fiscal deficit reduction and compliance with the EU’s Excessive Deficit Procedure (EDP). The new permanent fiscal rule was adopted in 2014, as part of the prior action supported under the DPL series, through amendments to the Public Finance Act. The rule is consistent with the common EU requirements. The latest IMF assessment (July 2017) acknowledges that Poland’s fiscal rules are effective. • Behavioral taxation pilots are conducted and assessed. Behavioral taxation pilot was deployed in two regions in 2015 as part of broader effort to improve revenue performance and compliance. The pilot results were evaluated by the Bank 7 and findings from the report show a noticeable increase in tax compliance (improved payments of income tax arrears). The pilot was rolled out at the national level in June 2017. 12. The Bank made significant contribution to broad improvements in Poland’s fiscal sustainability and effectiveness over the CPS period. Specifically, the budget deficit was reduced, while public debt has stabilized at the sustainable level (IMF’s assessment). Through the Bank supported DPO series, the GOP brought its budget deficit under three percent of GDP in 2014, which allowed the closing of the EDP by the European Council in 2015, one year ahead of the earlier agreed schedule. Meanwhile, the effectiveness of core expenditure programs, such as in social protection and education 8, improved, as evidenced by the recent Systemic Country Diagnostic (SCD) for Poland. On balance, IEG rates Objective 3 as Achieved. 13. On balance, IEG rates Focus Area I as Moderately Satisfactory. Of the three Objectives, two were rated as Mostly Achieved and one was rated as Achieved. Substantial progress was made on enhancing business environment, by reducing the time needed to obtain construction permit; but limited progress on reducing the time for registering a business. On innovation, good progress has been made in supporting private sector led innovation and reflected in improvements in the overall Poland’s standing in innovation, but SME innovation capacity remains weak. The program fully achieved the public finance objective: fiscal management has improved, new fiscal rules are effective, and fiscal risks were subdued. Focus Area II: Equity and Inclusion 14. Objective 4: Inclusive and Effective Labor Markets. This objective was supported by a combination of lending and ASA interventions, including the First (FY15) and Second (FY16) Resilience and Growth DPLs, TA on Activation and Employment Promotion (FY16), TA on Social Inclusion (FY16), TA on Poland Jobs Dialogue (FY16), TA on Public Spending Review (FY16), and the ESW on Social Inclusion (FY15). This objective had one outcome indicator. • A policy instrument to effectively support inclusion through the labor market (especially for older workers, women, and youth) is adopted and used under the EU Financial Perspective. The new Knowledge, Education and Development Operational Program (OP KED) was 7 Marco Hernandez, Julian Jamison, Ewa Korczyc, Nina Mazar and Roberto Sormani. Applying Behavioral Insights to Improve Tax Collection. Experimental Evidence from Poland. World Bank. 2017. June. 8 For instance, test scores for the Program for International Student Assessment (PISA) show that Poland’s increase in the quality of its education was one of the fastest among OECD countries in the last decade. For Official Use Only CLR Review 7 Independent Evaluation Group adopted in 2014 and has been funded under the 2014-2020 EU Financial perspective. It covers a range of policies and instruments aimed at strengthening labor market institutions, facilitating labor market flexibility, expanding employment opportunities for youth, women and families with children, etc. 15. Additional information from the DPL series related to the performance of labor markets indicates that the number of long-term unemployed was reduced by 7 percent in 2014-2015, with more than half of this reduction representing women. In addition, several important policy changes were introduced as part of the reform program supported by the DPL series, including (i) amendments to the Labor Code to increase flexibility of labor markets, (ii) legal amendments to strengthen employment services and promote employment amongst vulnerable groups, (iii) deregulation of almost 250 professions to ease access to the professions, and (iv) strengthening labor incentives for low-income families with children. Beyond the DPLs, the Bank provided policy advice and analytics to further strengthen the government’s labor market policies and institutions to facilitate equity and inclusion. 16. The broader picture suggests significant improvements in Poland’s labor market performance over the last decade, which is illustrated by increased labor market participation, reduced unemployment, and greater inclusiveness. These trends were sustained over the CPS period. The overall employment rate rose 8.2 p.p. over 2006-15, and 5.4 p.p. of this increase can be attributed to the older workers (aged 55-64) 9. A significant portion of the increase in the overall employment rate, 3 p.p., took place in 2013-15. The unemployment rate (seasonally adjusted) dropped to a historical low of 4.8 percent in April 2017 (compared to close to 20 percent in 2005). Still labor participation in Poland remains much lower than the EU average. 17. On balance, IEG rates Objective 4 as Achieved. 18. Objective 5: Balanced Regional Development. This objective was supported by a number of non-lending instruments, including the RAS on RIS3 (regional innovation strategy) in Swietokrzyskie region (FY14), TA on Regional Development Support – Review of Regional Strategies (FY14), TA on Regional Development Support – Mid-Term Financial Forecasts (FY15), the TA on Green Urban Transport Solutions (FY16), TA on Support to Subnational Governments in the Health Sector (FY14), the TF-funded TA on Catching-up Regions of Poland (FY17). IFC investments in two leasing companies focused on supporting MSMEs in less developed regions. This objective had one outcome indicator. • At least five key regional planning instruments (i.e., regional development strategies, regional operational programs, or subnational medium term fiscal plans), prepared with Bank support, under implementation. The CLR reports that four key regional planning instruments were prepared with WBG support and are under implementation. Those include strategies for Lubelskie (adopted in 2014), Swietokrzyskie (adopted in 2014), and Slaskie (adopted in 2013) regions, as well as the multi-regional strategy for Eastern Poland (adopted in 2013). The CLR also lists two additional strategies -- Transport investment plans for the cities of Lublin and Bialystok and updated urban transport strategies – that are municipal-level documents, and could not be counted as regional planning instruments. 19. The CLR reports that the WBG made significant contribution to promote balanced regional development through policy advice, strengthening capacity for development planning and through specific project interventions, as in the case of IFC interventions which were concentrated in less developed regions. Further support was provided through the identification of best regional practice in business regulation (benchmarking) and facilitation of knowledge exchange on good international practices in the area of equalization transfers. The Bank’s flagship activity includes the implementation of the pilot program in two lagging regions, Podkarpackie and Świętokrzyskie, in the context of EC Operational Policy ‘Development of Eastern Poland’ (adopted in 2014) to increase absorption and impact of the EU funds in these regions and inform policy in other lagging regions. Additional 9 “Population ageing, labour market and public finance in Poland”. EC Report, 2017. For Official Use Only CLR Review 8 Independent Evaluation Group information provided to IEG indicates that the pilots have been progressing well, as the EC extended its support for the second and third phases of the program and expanding its coverage to eight regions. Available evidence suggests that the tangible development outcomes were achieved during the first phase in the two pilot regions in the areas of vocational training, SME support, business registration, etc., and robust mechanisms were put in place for scaling up these results. 20. The selected indicator does not measure the broad development objective. At best, the indicator is an input to the achievement of balanced regional development objective. The objective itself takes longer time than the CPS period to be achieved. From a broader perspective, except for the fact that the pilots progressing well, there is no evidence that regional inequality has showed some decline over the CPS period. Although income differences between the richest and poorest regions in Poland are smaller on average than in other OECD members, four of Poland’s 16 regions, located in the eastern part of the country, persistently lag the rest of the country. These four regions remain among the 20 poorest regions of the EU (SCD, p. 46). Such within-country divergence in regional economic performance is consistent with the EU-wide trend 10. It is plausible, however, based on the initial results from the pilots, that over the longer period the ongoing WBG’s interventions would help accelerate economic development in the lagging regions and reduce income inequality. On balance, IEG rates Objective 5 as Achieved. 21. Objective 6: Integrated Health Delivery. This objective was supported by several ASA instruments, including ESW Regional Aging Flagship (FY15), TAs on Long Term Care Strategy for Poland (FY16), Health Financing and Delivery Innovations (FY16), and on Support to Subnational Governments in the Health Sector (FY14). This objective had one outcome indicator. • At least three (3) pilots on integrated health delivery launched. The CLR reports that three integrated health delivery pilots were designed through a RAS engagement reflecting three different models for integration of health service delivery. All three were accepted by the government counterparts. The first pilot is under implementation while the remaining two will be implemented sequentially so that the GOP will have an opportunity to learn from the first one. The first pilot covers about 300,000 patients and 45 primary health facilities (out of total 10,000 providers). The launching dates for two other pilots have not been specified. 22. The CLR also reports that Bank work on designing the pilots has informed the preparation of a new Health Law that was adopted in 2017. The Law provides a legal basis for scaling up the health pilots nationally. Other important Bank contributions to the transition to the new integrated health delivery system were made through analysis of the effects of ageing population on future demand for health services. 23. On balance, IEG rates Objective 6 as Mostly Achieved. Initial important steps have been completed towards the new system of integrated health delivery. 24. IEG rates Focus Area II as Satisfactory. Of the three objectives, two were rated Achieved and one was rated Mostly Achieved. On labor markets, there has been exceptional progress towards more effective and inclusive labor markets, supported by policy reforms and institutional building. On regional development, four key regional planning instruments have been prepared and under implementation and important regional pilots have been launched and progressing well and scaled up to eight regions with EC funding. On health, some critical initial reform steps have been undertaken to advance the transition towards an integrated health delivery system. Focus Area III: Climate Action 25. Objective 7: Informed Climate Change Policy. This objective was supported by several ASA products, including a TA on Building Economic Modeling Capacity for Climate Policy Analysis (FY15), an IDF grant on Low Emissions Strategy (FY13), and TF-financed Stargard Geothermal Project 10 ‘Poland Catching-up Regions. Key Regional Development Dynamics’. World Bank. 2017. p. 13 For Official Use Only CLR Review 9 Independent Evaluation Group (FY06, closed in FY14). IFC investment supported the first issue of green bonds by a Polish bank. This objective had one indicator. • Economic model to assess the impact on the overall economy of climate change-related policy options in use. The CLR reports that the PLACE 11 multi-sector computable general equilibrium (CGE) economic model was prepared with Bank technical assistance and used government counterparts to assess the economic impact of energy and climate policies. Specifically, the model has been used by staff of the National Centre for Emissions Management (KOBiZE), a public sector entity under the Ministry of the Environment, with a mandate for preparation of greenhouse gases (GHG) emission projections and developing methodologies for emission estimates. The CLR further reports that in recognition of importance of this initiative, in 2017 the KOBiZE Center received a sizable EU grant to continue PLACE-related modeling work. 26. The CLR further reports that the Bank’s support to the development of the model made sustainable impact on the technical capacity in evidence-based climate policy analysis inside the public administration. Available evidence points to the use of PLACE model for analysis of various hypothetical scenarios. Based on additional information made available to IEG, the results of this analysis were used to justify the recently agreed and negotiated with the EU target for Poland to reduce the country’s emissions not covered by the EU’s Emission Trade System (so-called non-ETS emissions) by 2030 by 7 percent in absolute terms relative to 2005. The broader environmental trends for Poland, however, remain of concern and do not indicate any recent shift towards a more environmentally friendly policy. While the GHG emission index decreased from 85.5 in 2012 to 82.8 in 2015 (Eurostat data), Poland still has one of the least emissions-efficient economies in Europe. Moreover, according to the Environmental Performance Index (EPI) 12 Poland’s environmental performance has been lagging relative to its peers recently. Poland was ranked 50th out of 180 countries by EPI2018, which is considerably worse than by EPI2014 (Overall ranking - 30th out of 178). On balance, IEG rates Objective 7 as Achieved. 27. Objective 8: Enhanced Protection Against Floods. This objective was supported by the Odra River Basin Flood Protection Project (FY07) and the Odra-Vistula Flood Management Project (FY16). This objective had one outcome indicator. • Reduction in risk for population in the Wroclaw area and in urban centers upstream of Wroclaw against 1-in-1000 years flood episodes, such as the 1997 flood. The target was to reduce flood-related risks for about 2.5 million people in the Wroclaw area. The CLR reports that full protection has been achieved only for the population living in Wroclaw. While protection for the urban centers upstream from Wroclaw has increased, full protection for these areas requires the completion of ongoing works under the FY07 project, which have been delayed due in part by unexpected geological challenges. The CLR further reports that the important by-product of the FY07 project was to enhance the capacity of various government levels to implement large infrastructure projects that helped to scale up the initial intervention to provide flood protection for a much larger population (15 million) under the FY16 project. 28. On balance, IEG rates Objective 8 as Mostly Achieved. 29. Objective 9: Road Safety Enhanced. This objective was supported by various ASA products, including TA on Poland Road Safety (FY17), RAS on GDDKiA (National Road Administration) Road Safety Practices Review (FY17), and TA on Piloting Green Urban Solutions in Transport (FY16). This objective had two outcome indicators. • Number of road accidents/fatalities decreased. The target (introduced at the PLR) was to reduce the annual number of road accidents and fatalities against the 2013 baselines (35,847 accidents and 3,357 fatalities, respectively). The CLR reports that in 2017 there were 11 PLACE stands for the Polish Laboratory for Analysis of Climate and Energy Policy. 12 https://epi.envirocenter.yale.edu/epi-country-report/POL For Official Use Only CLR Review 10 Independent Evaluation Group registered 32,705 accidents, or a decrease of 3,142 (8.8 percent) and 2,810 fatalities, or a decrease of 547 (16.3 percent), according to the websites of national police and the Secretariat of National Road Safety Council. 30. The Bank through its ASA work noted above provided recommendations to improve road safety funding, road safety education as well as to strengthen capacity of the Road Safety Agency, and it is plausible that this advisory work contributed to observed improvements in road safety. IEG notes that the link between Objective 9 and the focus area of Climate Action is weak. On balance, IEG rates Objective 9 as Achieved. 31. IEG rates Focus Area III as Satisfactory. Two objectives were Achieved and one objective was Mostly Achieved. On climate policy, the PLACE model improved national capacity for policy analysis, and there is some evidence that this improved capacity was used to set up the new country’s climate policy targets. On flood protection, good progress has been made, but the implementation pace has been slower than expected to ensure full protection for the target areas. Road safety improved with significant reduction in both the number of accidents and fatalities against the baselines. Focus Area IV: Poland as a Global Development Partner 32. Objective 10: Contribution to development cooperation and global public goods. This objective was supported by several ASA instruments, including a TA ‘Poland as a Global Partner’ (FY15) and the ESW ‘Lessons of experience from the Polish transition’ (FY17). IFC worked closely with Polish multinational companies to support their global expansion and made one co-investment in Romania. This objective had two outcome indicators. • The report “Lessons from Poland, insights for Poland” completed and disseminated. The report “Lessons from Poland, insights for Poland” was completed in 2017 and widely disseminated. It summarized the lessons of experience from Polish transition to the high- income country status and considered to be highly relevant for middle-income countries (MICs) that aim to complete similar transition. • At least two knowledge events with Eastern Partnership countries held. The CLR reports that two knowledge exchange conferences with the Eastern Partnership countries were organized jointly with the GOP on a cost-sharing basis – in Warsaw (June 2014) and Tbilisi (June 2015). IEG notes that both the events were held before the respective target was introduced in the PLR (July 2016). The CLR also reports that additional bilateral knowledge sharing events were organized with Eastern Partnership (Georgia, Azerbaijan, Belarus) and other (China, Mongolia) countries. • Additional evidence indicates that knowledge accumulated during Poland’s transition (and Bank support for the underlying reforms) has informed policy choices in other Bank client countries, as was the case for instance with the introduction of fiscal rules and with support to less developed regions. Moreover, most RAS outputs (funded by the GOP) were made publicly available and contributed to global knowledge. The CLR reports that Poland doubled its IDA contribution, although from a low base. It also acknowledges that Poland’s knowledge exports remain much below potential. 33. This CPS objective was too broad. The CPS proposed to clarify the specific targets for Objective 10 at the time of PLR. At the PLR, the Bank decided to keep the original objective intact, while selecting the two targets that do not reflect the initial ambition of building development partnership with Poland beyond knowledge generation and sharing. This was explained by lack of fiscal space and apparent limited interest of the new Government in expanding the country’s contribution to development cooperation. On balance, IEG rates Objective 10 as Mostly Achieved. 34. Based on the above rating for Objective 10, IEG rates Focus Area IV as Moderately Satisfactory. For Official Use Only CLR Review 11 Independent Evaluation Group Overall Assessment and Rating 35. On balance, IEG rates the CPS development outcome as Satisfactory. Of the ten program objectives, five were rated Achieved and five were Mostly Achieved. Under Focus Area I, progress was substantial in the area of public finance where fiscal consolidation gains were significant and accompanied by the rationalization of budget spending. On business environment, the program supported broad-based improvements in investment climate, but the specific outcome target for time needed for business registration remained unmet. On innovation, progress has been good in supporting private sector led innovation and reflected some improvements in the overall Poland’s standing in innovation, but SME innovation capacity remains weak. Under Focus Area II, progress has been exceptional in the area of labor markets where there was major advancement towards more effective and inclusive labor markets. On regional development, four key regional planning instruments have been prepared and under implementation and important regional pilots have been launched and scaled up to eight regions with EC funding. On health, some critical initial reform steps have been undertaken to advance the transition towards an integrated health delivery system. Under Focus Area III, good progress has been made on enhancing flood protection, but implementation pace has been slower than expected to ensure full protection for the target areas. There was also good progress on road safety as measured by reduction in the number of accidents and fatalities against the baselines. In the climate policy area, there is evidence of use of the PLACE model for setting the new country’s policy targets. In the area of development cooperation (Focus Area IV), Poland’s contribution has increased but was limited primarily to knowledge generation and sharing. Objectives CLR Rating IEG Rating Focus Area I: Economic Competitiveness Satisfactory Moderately Satisfactory Objective 1. Enhanced Business Environment Mostly Achieved Mostly Achieved Objective 2. Increased Innovativeness Achieved Mostly Achieved Objective 3. Effective Public Finance Achieved Achieved Focus Area II: Equity and Inclusion Satisfactory Satisfactory Objective 4. Inclusive and Effective Labor Markets Achieved Achieved Objective 5. Balanced Regional Development Achieved Achieved Objective 6. Integrated Health Delivery Mostly Achieved Mostly Achieved Focus Area III: Climate Action Satisfactory Satisfactory Objective 7. Informed Climate Change Policy Achieved Achieved Objective 8. Enhanced Protection Against Floods Mostly Achieved Mostly Achieved Objective 9. Road Safety Enhanced Achieved Achieved Focus Area IV: Poland as a Global Development Partner Satisfactory Moderately Satisfactory Objective 10. Contribution to development cooperation and Achieved Mostly Achieved global public goods 6. WBG Performance Lending and Investments 36. At the beginning of the CPS period, IBRD had total commitments of $1.492 billion, comprising of two operations: the Second DPL (FY13) ($1.308 billion) and the Odra River Basin Flood Protection Project (FY07) for $184 million. During the CPS period, IBRD had total commitments of $2.470 billion, comprising of three operations (two DPFs and one IPF). More than 80 percent of new commitments were development policy financing (DPF) with total commitments of $1.966 billion. The remaining For Official Use Only CLR Review 12 Independent Evaluation Group operation was an IPF - Odra-Vistula Flood Management Project (FY16) for $504 million in commitments. The new IBRD commitments were lower than planned due to availability of grant resources from the EU structural funds. At the beginning of the CPS period, nine Grants and Trusts Funds were active during the CPS period, with total commitments of $58.3 million. More than 80 percent of these grants supported investments in green energy. No new grants were approved during the CPS period. 37. Poland’s overall performance at exit was better than the comparators (ECA and Bank overall). The Second DPL (FY13) was rated satisfactory for development outcomes. However, the small size of the portfolio at exit does not allow for meaningful comparison. The small size of the active portfolio (two operations) also lends the comparison less meaningful. 38. At the start of the CPS period, IFC had two active projects in Poland – one in the service sector and the other a collective investment vehicle - with total net commitments of $5.8 million. IFC significantly expanded its operations in Poland over the CPS period, making a total commitment of $401.6 million (compared to $27 million over the previous CPS period), of which 56 percent was in leasing, 37 percent in commercial banking, 4 percent in collective investment vehicles, and 3 percent in agribusiness. The investments in the two leasing companies were earmarked for supporting MSMEs in less developed regions of Poland. The investment in the commercial bank supported various green projects including renewable energy, energy efficiency, and water efficiency. The equity fund supported by IFC focused on investments in medium size companies in Poland as well as in Central and Eastern Europe. In addition, there were four global/regional projects – three in agribusiness and one in manufacturing - with about $65 million of IFC commitments in Poland (out of a total of $208 million IFC total commitments in these projects). No Expanded Project Supervision Report (XPSR) was prepared for IFC investment projects during the CPS period. 39. During the CPS period, there was one active project with a MIGA guarantee of $3.7 million. The project was part of MIGA’s Small Investment Program and consisted of the establishment and operation of a data center providing connectivity services. The MIGA guarantee covered both the equity investment of a European telecommunications company and a non-shareholder loan from a foreign commercial bank. Analytic and Advisory Activities and Services 40. During the CPS period, 49 ASA tasks were completed, most of them were TA products. The Reimbursable Advisory Services accounted for 42 percent of the total ASA tasks. Completed tasks covered all ten CPS objectives of the program and were delivered in line with the thematic priorities outlined in the CPS. However, there were no ASA in several thematic areas listed in the CPS, including gender and subnational debt. Several of ASA products were closely linked to the CPS objectives supported under the DPL program and contributed to the implementation of policy reforms. The delivery of half of CPS objectives (including in health and road safety) was supported exclusively by ASA products. Some Bank advisory work was quite innovative, including in the areas of fiscal rules and tax administration. The ASA products provided a knowledge platform for preparation of the Systemic Country Diagnostic (SCD), completed in 2017. The ASA program benefitted from a strong dialogue with the authorities. Nineteen ASA products were RAS, funded by the GOP and delivered jointly with Polish counterparts. RAS products were blended with ASA funded by the Bank and TF sources to maximize overall impact. Most RAS outputs were made publicly available, contributing to global knowledge. As reported by the PLR, the RAS program focused on delivery of highly technical outputs intended to help the client with the detailed design of its reform plans. 41. The CLR did not report if there was a systematic effort to assess the quality and impact of completed ASA products despite the Bank’s commitment at the CPS stage: “the WBG will make a particular effort to develop adequate systems to monitor the impact and effectiveness of knowledge products”. However, the Bank conducted an impact evaluation of its policy advice in a number of cases (new innovation support instruments, behavioral tax pilots). These evaluations concluded that the Bank’s recommendations were effective and contributed to positive developments on the ground. There has been other indirect evidence of effectiveness of the Bank knowledge products, such as the For Official Use Only CLR Review 13 Independent Evaluation Group decision of the GOP and other partners (EU) to extend funding for continuation of work on specific ASA products beyond their initial stage. 42. During the CPS period, IFC had no active advisory services (AS) project, nor was there a Project Completion Report (PCR) for AS projects. Results Framework 43. The CPS objectives were well aligned with the country development goals and addressed several critical constraints. Broadly, the results framework reflected the link between the country development goals and issues and the CPS objectives, WBG interventions and outcomes. However, some of the CPS objectives (e.g., balanced regional development) were broad in scope and could not plausibly be achieved over the CPS period. In several instances, the link between the CPS objectives and the indicators and nature of WBG assistance was weak. At the PLR stage, this disconnect between objectives and indicators and WBG interventions was made even more pronounced when the original CPS program objectives were replaced with the country development goals in the original CPS document This change made the CPS objectives even broader in scope. For example, the original objective of strengthening regional capacity for strategic planning was replaced by “balanced regional development”. Neither PLR nor the CLR explained this change. In addition, the CPS result framework did not adequately reflect how the contributions or impact of results/recommendations of stand-alone ASA products would be assessed and measured. This is a significant shortcoming for a knowledge-based country program. The CPS recognized the challenge of developing a results matrix for the knowledge-intensive program and made a commitment develop an adequate system to monitor the impact of knowledge products, but this commitment did not materialize. However, the Bank evaluated the impact of its ASA products in limited number of cases, which concluded that the Bank’s recommendations were effective. Partnerships and Development Partner Coordination 44. The WBG has been a relatively small player by the size of its financial transfer to Poland. With $2.5 billion in lending over the four-year CPS period, IBRD lending amount was insignificant in comparison with the volume of EU grants to Poland (average annual allocation reached $14 billion over the 2014-2020 period). Thus, the strategic priority of the CPS was to further strengthen the WBG partnership with the EU and complement the EC’s program in Poland. Evidence of intensive consultation with the EC teams and alignment with the EU priorities includes the Bank’s policy advice and TA that helped the GOP secure significant EU grant funding and contributed to the rationalization of respective spending programs (e.g. in the area of innovation support). The Bank also helped to bring in considerable amounts of European co-financing for scaling-up the initial Bank projects (e.g. in flood protection, where the new project is co-funded by the Council of Europe Development Bank, CEB). There was also collaboration with the IMF on macroeconomic issues, especially in the context of DPLs, and with bilateral partners (Swiss and Korean Governments). Safeguards and Fiduciary Issues 45. During the CPS review period, no investment operations were closed and validated by IEG. The CLR reports progress regarding environmental and social safeguards that include local capacity building, problem solving and the improvement of national safeguards standards. The CLR further indicates that the Bank’s active response, effective design and implementation support helped preserve cultural heritage under the ongoing Odra River Basin Flood Protection Project (FY07), while showing best practice in resettlement processes, with full compliance with the safeguards requirements. No request for investigation was brought to the Inspection Panel during the review period. INT had no substantiated cases during the CPS period. Ownership and Flexibility 46. The Government’s ownership was strong, both at design and implementation. The CPS program was well-aligned with longer-term priorities of the authorities, while the GOP has shown strong commitment in the implementation of its reform program. Moreover, Poland’s transition was characterized by policy continuity across many government changes, which helped to sustain Bank’s For Official Use Only CLR Review 14 Independent Evaluation Group engagement over time. Nonetheless, there were some policy reversals (e.g. in pensions, social protection, and education) and excessive spending pressures. This resulted in the sovereign downgrade (to BBB+) by S&P in January 2016 and temporary reduction of market confidence. 47. The Bank demonstrated flexibility during the program implementation. This flexibility was demonstrated by the Bank’s readiness to provide additional budget support through DPLs in the event of a stronger fallout from the Eurozone crisis (which did not materialize). The CPS program was adjusted at the PLR in response to changes in government priorities. These include changes to accommodate the drop in demand from the government for new investment lending (due to availability of EU structural grants) by adding more ASA products and by adjusting some objectives when the planned investments did not materialize (for example objective on the railways replaced with road safety). Moreover, the Bank also modified the targets under Objective 10 (development cooperation) to reflect reduced government’s interest in this area. WBG Internal Cooperation 48. The CLR reports that IFC complemented IBRD’s lending and analytical work. However, it does not explicitly discuss the nature of WBG internal cooperation. Several CPS objectives were supported by IFC projects that complemented WB work. In particular, IFC investments in financial institutions contributed towards program Objectives 2 (innovativeness), 5 (regional development), and 7 (climate policy) by expanding access to finance for underserved segments of the economy, including MSMEs in less developed regions, women entrepreneurs, and green projects. These IFC projects also supported the shared prosperity and environmental sustainability corporate goals. However, CPS implementation did not contain joint IBRD/IFC/MIGA activities. The program provided opportunities for closer internal collaboration (e.g. in the investment climate field) that were not utilized. Risk Identification and Mitigation 49. The CPS identified four types of risks: political (potential government change), economic (impact of the Eurozone crisis), social (resistance to reforms), and implementation (administrative capacity) risks. The CPS presented some mitigation measures for all these risks except for the implementation risk (which was considered to be low). The PLR reconfirmed the relevance of these risks and discussed the extent to which they had materialized during the implementation period. In retrospect, the CPS risk identification and mitigation was adequate (except for implementation risk), for the risks have materialized. The political and social risks materialized, as the 2015 elections brought in a new Government with different policy priorities and a different vision in several areas (such as pensions). The CPS managed to reduce impact of this change by frontloading its support for critical reforms under the DPLs and by concentrating the policy dialogue in the areas where there was stronger internal consensus on the client side and thus poses less risk of policy reversal. With respect to the impact of European crisis, the Bank stood ready to expand its lending support, but it proved to be unnecessary: Poland managed to sustain solid economic growth despite weak performance within the Eurozone, in part due to the enabling macroeconomic framework being put in place with help from the Bank and other partners. Regarding the implementation risk, both the PLR and CLR point to delays in the implementation of flood protection projects due in part to change in administration, but the mitigation measures were not discussed. Overall Assessment and Rating 50. IEG rates WBG performance as Good. The CPS addressed key development constraints and was aligned with government economic program and objectives. The CPS objectives were consistent with WBG poverty reduction and shared prosperity goals (e.g., by focusing on more inclusive labor markets). The CPS was selective, reflecting WBG’s comparative advantages as well as division of labor and complementarity with the EC. The selected mix of WBG instruments was appropriate: the emphasis on knowledge products was well-grounded in the country context and reflected the client’s preferences. The ASA products were well-integrated with lending under the DPL program. IFC investments were aligned with the program objectives. The CPS and PLR identified main risks adequately and the proposed mitigation measures were appropriate. However, the design of the CPS For Official Use Only CLR Review 15 Independent Evaluation Group results framework had shortcomings, with weak links between program objectives and output/intermediate outcomes. 51. Program implementation benefitted from Poland’s robust economic performance and continuity of policy dialogue with the government. Government ownership was strong in most cases reflecting alignment of the program with government priorities and strong government commitment to its reform plans. The PLR introduced some adjustments to the program responding to the shifts in government priorities. The changes introduced at the PLR to the results framework further weakened a link between the program objectives and indicators. Most originally planned investment lending did not materialize (due to availability of EC structural funds), while some additional ASA products were delivered to ensure progress towards the development outcomes. The Bank evaluated the impact of its ASA products in limited number of cases, and these evaluations concluded that the Bank’s recommendations were effective. The political risk, which materialized, was managed well by frontloading the critical reforms under the DPL program. IFC has expanded its portfolio by emphasizing selectivity and innovation. Bank-IFC activities were largely separate and independent from each other. There were no major safeguard issues. No request for investigation was brought to the Inspection Panel. 7. Assessment of CLR Completion Report 52. The CLR provides a clear and concise assessment. It presents evidence on the extent to which all program specific targets were achieved as well on the WBG’s contribution to attainment of these targets. In several instances, the CLR goes beyond the analysis of selected indicators, but this is not done consistently across the whole range of program objectives. The CLR also presents insightful lessons from the program implementation. Other shortcomings include: (i) lack of discussion on the quality of the results framework; (ii) absence of the full list of planned ASA products, including those that were dropped in the course of CPS implementation, in Annex 3; and (iii) no explanation for the lack of progress with PPP transactions, which represents potentially a large market for the WBG. 8. Findings and Lessons 53. IEG agrees with CLR lessons and would like to emphasize the following two. First, to become an established knowledge exporter, Poland needs external support to better structure both its export products and channels for knowledge transfer. Second, IFC could successfully expand its portfolio in HICs by emphasizing selectivity, innovation, and alignment with the twin goals. 54. IEG provides two additional lessons: • Inadequate reflection of the policy impact of ASA products in the results framework could negatively affect the assessment of the overall performance under WBG knowledge- based country programs. In the case of Poland, the quality of ASA was good, but the impact of ASA was largely not reflected in the results framework. In the context of a knowledge intensive program, it is important to put in place a robust mechanism to assess the quality and impact of completed ASA products and supplement the indicators in the results framework with additional evidence to reflect the contribution of the ASA to the program objectives. • The Bank could be quite successful in utilizing opportunities for reform created following the financial crisis by providing a well-customized and flexible assistance package. In the case of Poland, the Bank responded effectively to the authorities’ concern related to growth slowdown in 2012-13 by helping to design a set of corrective actions in the areas of fiscal policies, investment climate, labor markets, etc. Annexes CLR Review 17 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Poland Annex Table 2: Planned and Actual Lending for Poland, FY14-FY17 Annex Table 3: Analytical and Advisory Work for Poland, FY14-FY17 Annex Table 4: Poland Grants and Trust Funds Active in FY14-17 Annex Table 5: IEG Project Ratings for Poland, FY14-17 Annex Table 6: IEG Project Ratings for Poland and Comparators, FY14-17 Annex Table 7: Portfolio Status for Poland and Comparators, FY14-17 Annex Table 8: Disbursement Ratio for Poland, FY14-17 Annex Table 9: Net Disbursement and Charges for Poland, FY14-17 Annex Table 10: Economic and Social Indicators for Poland, 2014-2016* Annex Table 11: List of IFC Investments in Poland Annex Table 12: IFC net commitment activity in Poland, FY14 - FY17 Annex Table 13: List of MIGA Projects Active in Poland, 2014-2017 Annexes CLR Review 19 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Poland CPS FY14-FY17: Focus Area I: Actual Results IEG Comments Economic Competitiveness 1. CPS Objective: Enhanced Business Environment Outcome 1: Significantly Mostly Achieved The CPS original improved performance as outcome also measured measured under the Doing Various WBG operations supported this the following: getting Business methodology in Objective such as: electricity (time reduced starting a business (time - the First (P146243, FY15) and Second from 186 days to 123 reduced from 32 days to 21 (P149781, FY16) Resilience and Growth days). days), and construction Development Policy Loans (DPL) which permits (time reduced from sought to improve private sector 2013 WBG Doing 301 days to 200 days) competitiveness and reduce the number of Business data reported days to start a business as well as to obtain 301 days to obtain Baseline: (2013) construction permits construction permits – (i) starting a business: 32 days - the Reimbursable Advisory Service (RAS) compared to a baseline (ii) construction permits: 301 Doing Business Poland 2015 (P149111, of 161 days reported in days FY15) the DPL series for 2013. Target: (2017) - the RAS Construction Reform (P156600, (i) starting a business: 21 days FY16, final output) which focused on The Doing Business (ii) construction permits: 200 supporting reforms to construction permits Poland 2015, which days framework reports data at sub- - the RAS Financial Reporting Program national level, indicates (P120361, FY17, final output) that that, as reported in the supported the country apply the European CLR, eight cities required Union (EU) Acquis Communautaire and less days (between 8 and Major international standards in the corporate 29 days) than Warsaw Outcome sector and auditing (30 days) to open a Measures - the Public Policy Notes – How Poland business. can Accelerate Growth with Inclusion (P156650, FY16, see final report) Management ICR: S for the DPL series 7 days needed for reports that the time to start a business business registration reduced from 32 days to 7 days between reported in the ICR for 2013 and 2015 and that the time to obtain a DPL represents only construction permit reduced from 161 days filings done through the to 156 days between 2013 and 2016. The online registration ICR also reports that the prior actions system. Online filings still related to the establishment of one-stop make less than half of all shops for quick business registration and to business registrations. the enactment of amendments to the The traditional, paper- Construction Law, to ease issuance of based filing takes much construction permits for Small and Medium longer (estimated at 37 Enterprises (SMEs), were fulfilled. days by DB2018). Data from the 2017 and 2018 WBG Doing Business reports indicate that 37 days are needed to start a business (target not met) and 153 days are needed to obtain a construction permit (target met). Annexes CLR Review 20 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Actual Results IEG Comments Economic Competitiveness 2. CPS Objective: Increased innovativeness Outcome 1: Instrument to Mostly Achieved The CLR also reports effectively support private Various WBG operations supported this that the SGOP largely sector-led innovation Objective such as: incorporates the (including an increased focus - The First (P146243, FY15) and Second recommendations of the on SMEs and the introduction (P149781, FY16) Resilience and Growth World Bank review of the of non-grant mechanisms) DPL which aimed at supporting private previous program (2014) adopted and used under the sector competitiveness and innovation, and ‘Innovation support upcoming EU Financial notably supporting better institutional review’ (2012) (P145109, Perspective arrangements and increasing support for see final output, and early stage innovation P145107 FY14, see final Baseline: No instrument (2013) - the RAS Entrepreneurial Discovery and output). Target: Instrument adopted and Needs Assessment (P150188, FY16, final used under the upcoming EU output) that supported an assessment of The ICR for the DPL Financial Perspective (2017) quality, coherence and fulfillment of ex- series also reports that ante conditionality for Research and R&D expenditures have Innovation Strategies increased from about - the RAS Review of RIS3s (innovation 0.87% of the GDP (2012) strategies) in Poland (P145109, FY15 final to about 1% of the GDP output) and RAS Review of Smart Growth (2015). Operational Program (P145107, FY15, As reported in the CLR, final output) WBG DEC January 2017 - the RAS RIS3 in Swietokrzyskie region Evaluation also found that (P148388, FY14, final output) some of the approaches - the RAS Guidance to NCBR to Enhance implemented through the Efficiency and Effectiveness of its R&D allocation of Smart Programs (P147652, FY17 final report) Growth funds have had a - IFC supported introduction of two positive impact. innovative bond issues by financial institutions (38703 and 38099) – a green According to the EU bond and a bond earmarked for gender innovation index, Poland’s and MSME finance. performance has improved by 2 percentage Management ICR: S for the DPL series points relative to that of reports that the Cabinet of Ministers the EU average in 2010 – approved, as a prior action, a resolution from 53 percent in 2010 supporting Poland’s Enterprise to 55 percent in 2016. Development Program (EDP). The EDP implemented a Strategy for Finally, Poland’s ranking Innovation and Efficiency adopted in for Innovation slightly January 2013. The ICR also reports that increased from 65/148 EDP has increased support to early stage (with a score of 3.2/7) in innovation, technological start-ups, and 2012 as per the WEF guided the development of the Smart 2013-2014 Global Growth Operational Programs (SGOP) for Competitiveness Report innovation financed under the 2014-2020 to 59/137 (score of 3.4/7) EU budget perspective, which was adopted in 2016 as per the WEF in February 2015 and that is designed as a 2017-2018 Global catalyst for sustained improvement in Competitiveness Report. Research and Development (R&D) and investments in innovation nationwide. Annexes CLR Review 21 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Actual Results IEG Comments Economic Competitiveness While the specific target was met, broader measures of Poland’s innovation potential suggest only a modest improvement. 3. CPS Objective: Effective Public Finance Outcome 1: Expenditure rule Achieved The CPS original in place ensuring the Various WBG operations supported this outcome was Adoption of sustainability of fiscal deficit Objective such as: a permanent fiscal rule reduction and compliance - The First (P146243, FY15) and Second ensuring the sustainability with the EDP. (P149781, FY16) Resilience and Growth of fiscal deficit reduction; DPL: one of the DPL’s prior actions introduction of an Baseline: No expenditure rule in (fulfilled) was the enactment of accounting system for place (2013) amendments to the Public Finance Act to farmers (as a step Target: Expenditure rule in place introduce a permanent fiscal rule limiting towards taxation of the (2017) growth of public expenditure that complies agriculture sector); with the provisions of the Treaty on the alignment of resource Functioning of the EU in the area of allocation with strategic budgetary policy priorities for the - the Economic and Sector Works (ESW) functioning of commercial Is Poland Saving Enough (P143627, FY14, courts. final output) - the TA Poland Public Spending Review Management ICR: S for Program (P150185, FY16, final output) the DPL series reports - the TA Public Finance Work on Poland, that the fiscal deficit Tax collection behavioral experiment reduced from 4.1% of (P157538, FY17, completion note and the GDP to 2.6% of GDP 2017 working Paper Applying Behavioral between 2013 and 2015. Insights to Improve Tax Collection: Experimental Evidence from Poland) The 2017 IMF Article IV - the RAS Financial Reporting (P120361, reports a 2.4% fiscal FY17, final output) deficit for 2016 and of 2.9% for 2017 and that As reported in the CLR, the expenditure “The 2017 general rule is in place and binding in Poland. government budget deficit Management ICR: S for the DPL series of 2.9 percent of GDP reports that the most important represents a pro-cyclical achievement of the DPL’s First Pillar stance and is only “Enhancing Macroeconomic Resilience” marginally below the was the effective introduction and Excessive Deficit implementation of the permanent fiscal rule Procedure (EDP) limit’’. limiting growth of public expenditures. The Finally, the EU new permanent expenditure rule, Commission Staff incorporated in the 2014 and 2015 Budget Working Document Laws was designed to put the fiscal deficit “Country Report Poland on a sustainable downward. 2018” indicates that the fiscal deficit is projected at 1.9% of GDP for 2019. Outcome 2: Behavioral Behavioral taxation pilot was delivered as The CLR added that the taxation pilots conducted and part of broader effort to improve revenue WBG delivered work on assessed. performance and compliance (see the public expenditure completion note of the TA Public Finance efficiency and on Work on Poland, Tax collection behavioral equalization transfers, not Annexes CLR Review 22 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Actual Results IEG Comments Economic Competitiveness Baseline: No behavioral taxation experiment (P157538, FY17). The pilot captured by the two pilots (2013) was rolled out at national scale after its indicators of CPS Target: Behavioral taxation pilots deployment in two regions in 2015. Objective 3. conducted and assessed (2017) Personal income taxpayers that were late in payment were targeted. The 2017 IMF Article IV reports that total tax The experiment contributed to revenue revenues increased by increases (notably through a 20.8% 1.2% of the GDP to increase in the number of compliant 20.8% over 2013-2017. taxpayers and in the payment amount by taxpayer) and that the pilot was assessed As reported in the CLR, positively as reported in Annex 1 of the many peer-to-peer events 2017 WBG Working Paper Applying in tax policy and Behavioral Insights to Improve Tax administration were held, Collection. Experimental Evidence from involving other EU Poland disseminated mid-June 2017. countries and Canada, including on equalization transfers (see WB document) CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Equity and Inclusion 4. CPS Objective: Inclusive and Effective Labor Markets Outcome 1: Instrument Achieved The 2017 EU designed to effectively support Various WBG operations supported this Commission report inclusion through the labor Objective such as: “Population Ageing, market (especially for older - the First (P146243, FY15) and Second Labour Market and workers, women, and youth) (P149781, FY16) Resilience and Growth Public Finance in adopted and used under the DPL through the Pillar Strengthening Poland” indicates that upcoming EU Financial Labor Market Flexibility and Employment employment probabilities Perspective Promotion among workers aged 55- - the AAA Tackling Social Exclusion in 64 has increased (pages Baseline: No instrument (2013) Poland: diagnostics and technical 23-25). Target: Instrument designed, assistance to support effective spending Major adopted and used under the of European Social Fund (P132529, FY13, The EU Commission Outcome upcoming EU Financial delivered in FY15, final report) Staff Working Document Measures Perspective (2017) - the TA Activation and Employment “Country Report Poland Promotion (P148022, FY16, Summary 2018” also reports that in Completion Note) the first half of 2017, falls - the TA Social Inclusion (P151200, FY16, in unemployment were final report) observed for the youth, - the Poland Jobs Dialogue TA (P148020, the elderly and women. FY16, Summary Completion Note) - IFC investment in BZ WBK Leasing (38099) earmarked for supporting women entrepreneurs and MSMEs in less development regions. Management ICR: S for the DPL series reports that the prior actions related to Annexes CLR Review 23 Independent Evaluation Group CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Equity and Inclusion Labor Market Resilience and Employment Promotion were achieved such as the enactment of amendments to the Labor code to increase flexibility of labor markets and the implementation of deregulations. The ICR reports the positive effects of such deregulations, notably for the young, the people older than 50 years, and support of the DPL to policies that improve services for job-seekers and parents’ access to the labor market. The specific DPL target related to the performance of labor markets was achieved: the number of long-term unemployed was reduced by 7 percent in 2014-2015, with more than half of this reduction representing women. The ICR also reports that these reforms are expected to have a positive impact on the income growth of the bottom 40% of the population, and in particular on women and on workers that are vulnerable. Poland’s current policies and instruments are in place under the 2014- 2020 EU Financial perspective--- Knowledge, Education and Development (OP KED) Operational Program. 5. CPS Objective: Balanced Regional Development Outcome 1: At least five key Achieved regional planning instruments Various WBG operations supported this (i.e., regional development Objective such as: strategies, regional operational - the RAS RIS3 in Swietokrzyskie region programs, or subnational (P148388, FY14, final output) medium term fiscal plans), - the Regional Development Support – prepared with Bank support, Mid-Term Financial Forecasts TA under implementation. (P147841, FY15, see technical output and the Assessment of Regional Development Baseline: No instrument (2013) Strategy for Eastern Poland) Target: >5 regional planning - the TA Green Urban Transport Solutions instruments prepared and under for Sub National Governments (P148489, implementation (2017) FY16, no final output found in the WBG systems) - the Strategic Support to Subnational Governments in the Health Sector TA (P132781, FY14, see overview of deliverables) - the Poland Catching-up Regions (P131821, FY16-19 Trust Fund, see inception report and the Overview Report) Annexes CLR Review 24 Independent Evaluation Group CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Equity and Inclusion - IFC investments in two leasing companies – BZ WBK Leasing (38099) and Raiffeisen-Leasing Polska (37365) – focused on MSMEs in less developed regions in Poland. As reported in the CLR, five key regional planning instruments were prepared with WBG support and were under implementation: - The Swietokrzyskie region research and innovation strategy 2014-2020 (approved in 2014, see document) - The Lubelskie Region Development Strategy 2014-2020 (adopted in 2014, see document) - The Slaskie Region Development Strategy 2020+ (approved in 2013, see document) - The Development of Eastern Poland Strategy till 2020 (adopted in 2013, see document) - Transport investment plans for the cities of Lublin and Bialystok and updated urban transport strategies (but these are municipal, not region- level strategies) The CLR also reports that the WBG has worked with the EU in two pilots to increase absorption and impact of the EU funds in lagging regions—Regional OP (see the July 2016 WBG Press Release). The two selected regions were Podkarpackie and Świętokrzyskie. The pilots were also to inform policy in other regions of the country and of Europe (notably Romania). A May 2017 WBG press release reported that, in one year, the initiative had successfully addressed a number of key developed challenges faced in these two regions. The Overview Report Poland Catching-Up Regions provides more details on activities carried out and on the development outcomes achieved over the first phase of the implementation. 6. CPS Objective: Integrated Health Delivery Outcome 1: At least three (3) Mostly Achieved The CPS original pilots on integrated health Various operations contributed to this outcome and indicator delivery launched. Objective: were: Reformed health Annexes CLR Review 25 Independent Evaluation Group CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Equity and Inclusion - the Health Financing and Delivery care sector in an aging Baseline: No pilot (2013) Innovations TA (P160303, FY16, see the society and a system Target: >3 pilots launched (2017) Health Map presentation) ensuring access to LCT - the ESW ECA Regional Aging Flagship (long-term care) services (P143978, FY15, final report) for those in need. - the Long Term Care Strategy for Poland Modern hospital TA (P156047, FY16, final output) networks in at least three voivodships (i.e. Three integrated health delivery pilots hospitals are were designed; the first one is under reorganized, networked, implementation and, as reported in the or merged using needs- CLR, the next two will be implemented based and spatial sequentially so that the Government will planning as well as be able to take stock and learn from the economic analyses to first one. The Pilot manuals are available concentrate specialized as WBG publications (see Pilot 1 Manual services and/or limit on the original scope of primary health duplications, improve care; Pilot 2 Manual on enhanced patients flows, integrate primary health care and Pilot 3 Manual in- and out-patient and/or to address the lack of integration between health and social care). healthcare and social care services). The CLR also reports that work on designing the pilots has informed preparation of a Health Law that was approved by Parliament (2017) (see WBG Country Snapshot). CPS FY14-FY17: Focus Area III: Actual Results IEG Comments Climate Action 7. CPS Objective: Informed Climate Change policy Outcome 1: Economic model to Achieved Additional information assess the impact on the overall Various operations contributed to this reported in the CLR economy of climate change- Objective: indicates that latest related policy options in use. - The TA Building Economic Modeling available data for Capacity for Climate Policy Analysis greenhouse gas (GHGs) Baseline: No economic model (P143120, FY12-15, final output) emission is 2015 and that (2013) - The IDF grant on low emissions time series for 1996- Major Target: Economic model in use Strategy (P129098, FY13, 2015, from Eurostat, Outcome (2017) Implementation Completion and shows absolute Measures Results Memorandum) decoupling of emissions - The Stargard Geothermal Project from economic growth (P078250, closed FY14, see Project meaning that the Completion Report) economy was growing - IFC investment in Bank Zachodni every year but GHG WBK (38703) was earmarked for emissions either declined supporting green projects or remained stable (with some exceptions). The Eurostat data shows that Annexes CLR Review 26 Independent Evaluation Group CPS FY14-FY17: Focus Area III: Actual Results IEG Comments Climate Action As reported in the CLR, the PLACE multi- GHG emission index sector computable general equilibrium decreased from 85.5 (CGE) Economic Model was delivered to (2012) to 82.76 (2015) – assess the economic impact of energy the data considers a base and climate policies and training was year of 1990 as 100. provided. The Economic Model is currently used by the public sector entities (see the Ministry of Finance’s Working Paper). The April 2016 WBG Poland Partnership Program Snapshot also reports that the WBG supported the development of a macroeconomic model to assess the economy-wide impact of climate change– related policy decision. 8. CPS Objective: Enhanced Protection Against Floods Outcome 1: Reduction in risk Mostly Achieved for about 2.5 million people in Two operations contributed to this the Wroclaw area and for urban Objective: centers upstream of Wroclaw - The Odra River Basin Flood against 1-in-1000 years flood Protection Project (P086768 , episodes, such as the 1997 FY07): the latest ISR: MS flood (December 2017) reports progress towards the project development Baseline: 0 (2013) objective (PDO)’s indicator of Target: Risk reduced for about 2.5 achieving full protection against million people (2017) floods of the 1997 magnitude although the target is not yet achieved, as of March 2017 – B1 and B2 contracts are completed (Works on the main Wroclaw Floodway System) and B3 contracts are in progress (construction of the main Widawa flap weir). The ISR also reported a 43% progress in the project’s intermediate results indicator related to reduction in area flooded, damages avoided and lives saved in cities and settlements between Raciborz and Wroclaw, - The Odra-Vistula Flood Management Project (P147460, FY16): the latest ISR: MS (December 2017) reports no progress in relation to the area and populations benefiting from enhanced protection and operational forecasts, as of November 2017 – all sub-projects were under preparation. Annexes CLR Review 27 Independent Evaluation Group CPS FY14-FY17: Focus Area III: Actual Results IEG Comments Climate Action 9. CPS Objective: Road Safety Enhanced Outcome 1: Number of road Achieved The CPS original accidents decreased according Various operations contributed to this outcome was Resource- to SEWIK BASE (Crash Injury Objective: efficient and safe Data Base held by Police) - The TA Poland Road Safety Technical infrastructure. Support (P150558, FY17, final output) Satisfactory Baseline (2013): accidents 35,847 - The RAS GDDKiA Road Safety implementation of the and 3,357 fatalities Practices Review (P157015, FY16, 2013 railways Target: reduced number of final report) for GDDKiA (national road infrastructure company fatalities and reduced number of administration) (PLK) reform program, accidents against the baseline - The TA on Piloting Green Urban especially as regards Transport Solutions in Transport staffing levels, safety Sector in Poland (P148489, FY16, no systems, and final output found in the WBG administrative capacity systems) for managing investment programs. The CLR reports that the targets set in the PLR were achieved as of 2015 and There has been some that progress has continued after 2015 inconsistency in the way since 32,705 accidents were reported as the PLR introduced the of 2017 and 2,810 fatalities were reported specific targets under as of 2017 according to the Police and this objective Secretariat of National Road Safety (discrepancy between Council websites and regular annual Tables 1 and 2). reports. . World Health Organization road safety data for Poland are available only for 2013 (see country profile). CPS FY14-FY17: Focus Area IV: Poland as a Global Actual Results IEG Comments Development Partner 10. CPS Objective: Contribution to development cooperation and global public goods Outcome 1: “Lessons from Mostly Achieved The CPS original Poland, insights for Poland” Various operations contributed to this outcome was completed and disseminated Objective: Memorandum of and at least two knowledge - The TA Poland as a Global Partner Understanding signed events with Eastern Partnership (P130088, FY11 and closed in FY15, and under Major countries held. final report) implementation to Outcome - The ESW Lessons of experience from develop partnerships in Measures Baseline: No report and no the Polish transition (P156326, FY17, at least three areas of knowledge events (2013) see the Sustainable and Inclusive common interest. Target: Report completed and Transition to High Income Status disseminated and two knowledge report). As reported in the CLR, the events hold (2017) Lessons from Poland, insights for Poland has been completed and disseminated. Annexes CLR Review 28 Independent Evaluation Group CPS FY14-FY17: Focus Area IV: Poland as a Global Actual Results IEG Comments Development Partner The CLR also reports that IDA doubled its IDA contribution and the realization of the following activities: - Two knowledge exchange conferences with the Eastern Partnership countries (Tbilisi Jun 2015 and Warsaw Jun 2014) - Experience sharing on national audit system with Georgia, Azerbaijan, China; on aspects of the national health system – Mongolia; energy efficiency – Belarus - The IFC has organized two conferences for the largest exporters trying to help Polish companies to become regional players While the specific target was met, overall expansion in Poland’s contribution to development cooperation was limited to the knowledge transfer. Annexes CLR Review 29 Independent Evaluation Group Annex Table 2: Planned and Actual Lending for Poland, FY14-FY17 Approved Project Instrument Proposed Approval Closing Proposed Proposed Project name IBRD ID Type FY FY FY Amount Amount Amount Project Planned Under CPS/PLR 2014-2017 CPS CPSPLR DPL 1 FY14 800 DPL2 FY15 800 Dropped Railways Restructuring FY14-15 100 Dropped Hospital Reform FY14-15 100 DPL FY16-17 1,200 Vistula River Basin Flood FY16-17 100 Protection Dropped Social Inclusion FY16-17 100 Resilience and Growth Dev Pol P146243 DPL1 (PL DPL FY15 2015 2016 966 966 Lend Resilience and Growth) Resilience and Growth Dev Pol P149781 FY17 2016 2017 1,000 1,000 DPL2 Lend Odra-Vistula Flood P147460 Investment FY16 2016 2024 506 504 Management Project Total Planned 3,200 2,472 2,470 Unplanned Projects during the CPS and PLR Period Total Unplanned - Approval Closing Approved On-going Projects during the CPS and PLR Period FY FY Amount Development Policy Dev Pol P130459 2013 2014 1,308 Loan 2 Lend ODRA RIVER BASIN P086768 Investment 2007 2020 184 184 FLOOD PROT Total On-going 1,492 Source: Poland CPS and PLR, WB Business Intelligence Table 2b.1, 2a.4 and 2a.7 as of 3/9/18 *LIR: Latest internal rating. MU: Moderately Unsatisfactory. MS: Moderately Satisfactory. S: Satisfactory. HS: Highly Satisfactory. Annex Table 3: Analytical and Advisory Work for Poland, FY14-FY17 Fiscal Proj ID Economic and Sector Work RAS Output Type year P156326 Lessons Learnt from Poland No FY17 Country Economic Memorandum (CEM) P149411 RAS Business entry & Property Registry Yes FY16 Sector or Thematic Study/Note P149412 RAS Construction Lic. & Enforce Contract Yes FY16 Sector or Thematic Study/Note P156650 Poland Policy Notes 2015 No FY16 Sector or Thematic Study/Note P132529 Poland Social Inclusion No FY15 Sector or Thematic Study/Note P143978* ECA Regional Aging Flagship No FY15 Sector or Thematic Study/Note P143627 Poland: saving and growth No FY14 Country Economic Memorandum (CEM) Annexes CLR Review 30 Independent Evaluation Group Fiscal Proj ID Technical Assistance Output Type year P120358 FBS - PUBLIC OVERSIGHT (SECO-PL) Yes FY17 Technical Assistance P120359 FBS - QUAL ASSURANCE (SECO-PL) Yes FY17 Technical Assistance P120360 FBS - TAX & ACCNTG (SECO-PL) Yes FY17 Technical Assistance P120361 FBS - FIN RPTING CAPACITY (SECO-PL) Yes FY17 Technical Assistance P120362 FBS - REGULATORY FRMWK (SECO-PL) Yes FY17 Technical Assistance P120364 FBS - ENGLISH TRNG (SECO-PL) Yes FY17 Technical Assistance P120365 FBS - ISA IMPLEM (SECO-PL) Yes FY17 Technical Assistance P120366 FBS - CONTINUING EDUC (SECO-PL) Yes FY17 Technical Assistance P146529 Poland - Road Safety TA 2 No FY17 Technical Assistance P147652 NCBiR Mid Term Eval and TA Yes FY17 Technical Assistance P150558 Road Safety Capacity Development Yes FY17 Technical Assistance P154754 Public Sector Accounting Enhancement Yes FY17 Technical Assistance P157015 GDDKiA Road Safety Practices Review Yes FY17 Technical Assistance P157538 Public Finance Work on Poland No FY17 Technical Assistance P158179 PL Innovation/Business Environment No FY17 Technical Assistance P161965 Poland Catching Up Regions - RGDV No FY17 Technical Assistance P161966 Poland Catching Up Regions - TVET No FY17 Technical Assistance P161967 Poland Catching Up Regions - SDBR No FY17 Technical Assistance P120363 FBS - M&E, A&A ROSC (SECO-PL) Yes FY17 Technical Assistance P148020 Poland Jobs Dialogue No FY16 Technical Assistance P148022 Activation and Employment Promotion No FY16 Technical Assistance P148489 Green Urban Transport Solutions No FY16 Technical Assistance P150185 Poland Public Spending Review Program No FY16 Public Expenditure Review (PER) P150188 Poland: Pilot RIS3 Needs Assessment Yes FY16 Technical Assistance P151200 Poland Social Inclusion TA No FY16 Technical Assistance P152813 Poland National Reform Program No FY16 Technical Assistance P154375 Poland National Reform Program (CMU) No FY16 Technical Assistance P156047 Poland LTC Strategy Preparation No FY16 Technical Assistance P156600 Poland - Construction reform RAS Yes FY16 Technical Assistance P160303 Health Financing & Delivery Innovations No FY16 Technical Assistance P130088 Poland as a Global Partner No FY16 Technical Assistance P143120 Economic Modeling for Climate Policy No FY15 Technical Assistance P145107 Smart Growth Operational Program Review Yes FY15 Technical Assistance P145109 Smart Specialization (RIS3) Review Yes FY15 Technical Assistance P147841 Regional Development Support No FY15 Technical Assistance P147903 Euro Adoption Support No FY15 Technical Assistance P153474 PL-Business Environment/Innovation No FY15 Technical Assistance P127916 ROAD SAFETY SUPPORT No FY15 Technical Assistance P132781 Support to Subnational Govts. in Health No FY14 Technical Assistance P133603 Moving to accrual based accounting/IPSAS No FY14 Technical Assistance P146072 RAS - Infrastructure Program Yes FY14 Technical Assistance P148388 PL Swietokrzyskie Voivodship RAS Yes FY14 Technical Assistance Source: WB Business Intelligence 3/9/18 RAS - Reimbursable Advisory Services *Regional project Annexes CLR Review 31 Independent Evaluation Group Annex Table 4: Poland Grants and Trust Funds Active in FY14-17 Project Approval Closing Approved Project name TF ID ID FY FY Amount Piloting Sustainable and Green Urban Transport P148489* TF16175 2013 2017 610,658 Solutions for Sub National Governments P129098 Economic Policy Sector Board TF 12225 2013 2016 434,000 PL - GIS - GREEN INVESTMENT SCHEME TF 13500 2013 2017 1,299,545 PL - GIS - GREEN INVESTMENT SCHEME TF 13479 2013 2019 26,010,847 P117333 PL - GIS - GREEN INVESTMENT SCHEME TF 10657 2012 2017 5,887,720 PL - GIS - GREEN INVESTMENT SCHEME TF 10551 2012 2017 17,106,693 P078251 WALBRZYCH FUEL SWITCH (PCF) TF 55855 2008 2014 2,587,957 P074546 Poland Puck Wind Farm Project TF 90394 2007 2014 2,971,898 P078250 POLAND - Stargard Geothermal Project (PCF) TF 55843 2006 2014 1,392,000 Total 58,301,317 Source: Client Connection as of 10/30/17 * P148489 / TF 16175 approved amount based on MyTF Portal ** IEG Validates RETF that are 5M and above Annex Table 5: IEG Project Ratings for Poland, FY14-17 Exit Total Proj ID Project name IEG Outcome IEG Risk to DO FY Evaluated ($M) 2014 P130459 Development Policy Loan 2 1,327.1 SATISFACTORY MODERATE Total 1,327.1 Source: AO Key IEG Ratings as of 3/9/18 Annex Table 6: IEG Project Ratings for Poland and Comparators, FY14-17 Total Total RDO % RDO % Outcome Outcome Region Evaluated Evaluated Moderate or Lower Moderate or Lower % Sat ($) % Sat (No) ($M) (No) Sat ($) Sat (No) Poland 1,327.1 1 100.0 100.0 100.0 100.0 ECA 14,204.1 121 93.7 80.2 60.1 50.8 World 75,191.5 821 85.8 74.5 52.0 43.0 Source: WB AO as of 3/9/18 Annexes CLR Review 32 Independent Evaluation Group Annex Table 7: Portfolio Status for Poland and Comparators, FY14-17 Fiscal year 2014 2015 2016 2017 Ave FY14-17 Poland # Proj 1 2 3 2 2 # Proj At Risk 1 1 % Proj At Risk - - - 50.0 50.0 Net Comm Amt 184.0 1,149.8 1,688.0 688.0 927 Comm At Risk 184.0 184 % Commit at Risk 26.7 19.8 ECA # Proj 280 290 279 292 285 # Proj At Risk 37 36 47 37 39 % Proj At Risk 13.2 12.4 16.8 12.7 13.8 Net Comm Amt 26,927.9 26,544.5 27,637.3 25,808.5 26,730 Comm At Risk 2,635.4 3,533.8 4,350.5 5,466.2 3,996 % Commit at Risk 9.8 13.3 15.7 21.2 15.0 World # Proj 2,048 2,022 1,975 2,072 2,029 # Proj At Risk 412 444 422 449 432 % Proj At Risk 20.1 22.0 21.4 21.7 21.3 Net Comm Amt 192,610.1 201,045.2 220,331.5 224,473.4 209,615 Comm At Risk 40,933.5 45,987.7 44,244.9 52,549.1 45,929 % Commit at Risk 21.3 22.9 20.1 23.4 21.9 Source: WB BI as of 3/9/18 Annex Table 8: Disbursement Ratio for Poland, FY14-17 Fiscal Year 2014 2015 2016 2017 Overall Result Poland Disbursement Ratio 24.5 48.3 14.1 18.6 Inv Disb in FY 29.8 41.9 77.2 148.9 Inv Tot Undisb 121.2 86.7 44.8 547.1 799.8 Begin FY ECA Disbursement Ratio 22.8 23.5 17.5 20.7 21.0 Inv Disb in FY 2,612.0 2,664.4 2,275.6 2,857.1 10,409.1 Inv Tot Undisb 11,467.5 11,342.1 13,028.9 13,776.0 49,614.4 Begin FY World Disbursement Ratio 20.8 21.8 19.5 20.5 20.6 Inv Disb in FY 20,757.7 21,853.7 21,152.9 22,129.9 85,894.1 Inv Tot Undisb 99,854.3 100,344.9 108,600.3 108,175.4 416,974.9 Begin FY * Calculated as IBRD/IDA Disbursements in FY / Opening Undisbursed Amount at FY. Restricted to Lending Instrument Type = Investment. AO disbursement ratio table as of 3/9/18 Annexes CLR Review 33 Independent Evaluation Group Annex Table 9: Net Disbursement and Charges for Poland, FY14-17 Period Disb. Amt. Repay Amt. Net Amt. Charges Fees Net Transfer FY14 1,356,804,934.7 500,134,063.9 856,670,870.8 49,249,074.4 3,578,525.2 803,843,271.2 FY15 940,881,230.9 167,111,464.9 773,769,766.0 49,390,415.1 2,440,609.2 721,938,741.7 FY16 1,025,327,180.0 142,608,882.8 882,718,297.2 36,900,616.9 4,606,391.8 841,211,288.5 FY17 77,240,451.0 128,745,012.3 (51,504,561.3) 26,935,409.3 1,216,060.7 (79,656,031.3) Report 3,400,253,796.6 938,599,424.0 2,461,654,372.6 162,475,515.7 11,841,587.0 2,287,337,270.0 Total World Bank Client Connection 11/2/17 Annex Table 10: Economic and Social Indicators for Poland, 2014-2016* Poland ECA World Series Name 2014 2015 2016 Average 2014-2016 Growth and Inflation GDP growth (annual %) 3.3 3.8 2.7 3.3 1.8 2.7 GDP per capita growth (annual %) 3.4 3.9 2.8 3.4 1.3 1.5 GNI per capita, PPP (current 24,760.0 25,850.0 26,770.0 25,793.3 30,313.4 15,667.0 international $) GNI per capita, Atlas method 13,680.0 13,340.0 12,680.0 13,233.3 24,457.4 10,598.2 (current US$) (Millions) Inflation, consumer prices (annual %) 0.1 (1.0) (0.6) 0.4 1.9 Composition of GDP (%) Agriculture, value added (% of GDP) 2.9 2.5 2.4 2.6 2.2 3.8 Industry, value added (% of GDP) 33.2 34.1 33.3 33.6 25.6 27.5 Services, etc., value added (%of GDP) 63.8 63.4 64.2 63.8 72.2 68.7 Gross fixed capital formation (% of 19.7 20.1 18.1 19.3 20.1 23.5 GDP) Gross domestic savings (% of GDP) 21.8 23.6 23.5 23.0 23.7 24.9 External Accounts Exports of goods and services (% of 47.6 49.5 52.3 49.8 41.5 29.8 GDP) Imports of goods and services (% of 46.1 46.4 48.4 47.0 38.3 29.2 GDP) Current account balance (% of GDP) (2.1) (0.6) (0.3) -1.0 External debt stocks (% of GNI) .. .. .. Total debt service (% of GNI) .. .. .. Total reserves in months of imports 4.2 4.5 5.3 4.7 7.4 13.2 Fiscal Accounts /** General government revenue (% of 38.8 39.0 38.9 38.9 GDP) General government total 42.3 41.6 41.3 41.7 expenditure (% of GDP) General government net (3.5) (2.6) (2.4) -2.8 lending/borrowing (% of GDP) General government gross debt (% 50.2 51.1 54.4 51.9 of GDP) Annexes CLR Review 34 Independent Evaluation Group Poland ECA World Series Name 2014 2015 2016 Average 2014-2016 Health Life expectancy at birth, total (years) 77.6 78.2 .. 77.9 77.3 71.8 Immunization, DPT (% of children 98.0 98.0 98.0 98.0 93.1 85.4 ages 12-23 months) Improved sanitation facilities (% of 97.2 97.2 .. 97.2 93.1 67.3 population with access) Improved water source (% of 96.9 96.9 .. 96.9 96.0 84.2 population with access) Mortality rate, infant (per 1,000 live 4.3 4.2 4.0 4.2 8.8 31.4 births) Education School enrollment, preprimary (% 79.2 .. .. 79.2 74.6 48.1 gross) School enrollment, primary (% gross) 100.6 .. .. 100.6 103.3 104.2 School enrollment, secondary (% 108.1 .. .. 108.1 106.0 76.4 gross) Population Population, total (Millions) 38,011,735 37,986,412 37,948,016 37,982,054 907,504,936 7,355,447,389 Population growth (annual %) (0.1) (0.1) (0.1) -0.1 0.5 1.2 Urban population (% of total) 60.6 60.5 60.5 60.5 70.9 53.8 Poverty Poverty headcount ratio at $1.90 a - .. .. day (2011 PPP) (% of pop) Poverty headcount ratio at national 17.6 .. .. 17.6 poverty lines (% of pop) Rural poverty headcount ratio at .. .. .. national poverty lines (% of rural pop) Urban poverty headcount ratio at .. .. .. national poverty lines (% of urban pop) GINI index (World Bank estimate) 32.1 .. .. 32.1 Source: WB Development Data Platform as of 11/1/17 * Data only available up to FY16 ** International Monetary Fund, World Economic Outlook Database, October 2017 Annexes CLR Review 35 Independent Evaluation Group Annex Table 11: List of IFC Investments in Poland Investments Committed in FY14-FY17 Project Cmt Project Primary Sector Project Original Original Original Loan Equity Net Net Net Comm ID FY Status Name Size Loan Equity CMT Cancel Cancel Loan Equity Agriculture and 37858 2017 Closed 18,401 11,112 - 11,112 11,403 - (291) - (291) Forestry Finance & 38099 2017 Active 150,000 150,000 - 150,000 - - 150,000 - 150,000 Insurance Finance & 38703 2017 Active 250,000 150,000 - 150,000 40 - 149,960 - 149,960 Insurance Finance & 37365 2016 Closed 75,000 75,000 - 75,000 - - 75,000 - 75,000 Insurance Collective 36207 2015 Active Investment 16,790 - 16,805 16,805 - - 16,805 16,805 16,805 Vehicles Sub-Total 510,190 386,112 16,805 402,917 11,443 - 391,474 16,805 391,474 Investments Committed pre-FY14 but active during FY14-17 Project CMT Project Primary Sector Project Original Original Original Loan Equity Net Net Net Comm ID FY Status Name Size Loan Equity CMT Cancel Cancel Loan Equity Accommodation 8125 1999 Active & Tourism 57,253 6,764 3,600 10,364 6,153 - 4,212 3,600 4,212 Services Collective 8198 1998 Active Investment 5,000 - 1,600 1,600 - - 1,600 1,600 1,600 Vehicles Sub-Total 62,253 6,764 5,200 11,964 6,153 - 5,812 5,200 5,812 TOTAL 572,443 392,876 22,005 414,881 17,595 - 397,286 22,005 397,286 Source: IFC-MIS Extract as of 12/31/17 Annexes CLR Review 36 Independent Evaluation Group Annex Table 12: IFC net commitment activity in Poland, FY14 - FY17 2014 2015 2016 2017 Total Commercial 9,200,504 - - 149,959,980 159,160,484 Banking Financial Markets Microfinance (10,671,307) - - - (10,671,307) NBFI - - 75,000,000 150,000,000 225,000,000 Agribusiness & Animal Protein - - - 11,402,500 11,402,500 Forestry Collective Investment Private Equity - 16,775,250 (197,967) 151,754 16,729,037 Vehicles Funds Total (1,470,804) 16,775,250 74,802,033 311,514,234 401,620,713 Source: IFC MIS as of 3/12/18 Annex Table 13: List of MIGA Projects Active in Poland, 2014-2017 Max Project ID Contract Enterprise FY Sector Investor Gross Status Issuance 9283 Linxtelecom Warsaw Data Center 2011 Active Agribusiness Netherlands 4 Total 4 Source: MIGA 3/12/18