For Official Use Only CPSCR Review Independent Evaluation Group 64636 1. CPS Data Country: Bosnia and Herzegovina CPS Year: FY08 CPS Period: FY08 – FY11 CPSCR Review Period: FY08 – FY11 Date of this review: September 20, 2011 2. Executive Summary i. This review assesses the implementation of the FY08-11 Bosnia and Herzegovina (BiH) CPS, as well as the CPS completion report. The strategy was jointly implemented by IBRD/IDA, IFC and MIGA, and this review covers the joint program of the three agencies. ii. BiH is a post-conflict state, whose governing structure complicates decision making and is prone to slow policy making and implementation. Poverty remains high for a European country, and political tensions have slowed progress towards EU accession, to which BiH aspires. The CPS and CPSPR were well aligned with BiH’s strategy, focusing on two pillars: improving the environment for private sector led growth; and improving the quality of government spending and delivery of public services. iii. This was an ambitious program with uneven results. Under Pillar 1 WBG assistance helped improve key infrastructure, partially succeeded in accelerating corporate restructuring and privatization, and had marginal success in improving the business climate. Under Pillar 2, WBG assistance helped deliver better municipal services and primary healthcare, and partially succeeded in strengthening municipal finance and reducing urban-rural income disparities. But the targeting of social services did not improve as expected under the program. Moreover, contrary to program objectives, government spending as a share of GDP increased (in part due to the 2008-9 financial crisis), while fiscal coordination among the entities that make up BiH has suffered setbacks. On balance, IEG rates the outcome of the WBG’s program as a whole as moderately satisfactory. iv. This review has three recommendations. The WBG could explore ways of dealing effectively with the political stalemate between the entities in program implementation, beyond the distinction between core and non-core areas. Maintaining a vigorous general and open policy dialogue on what is now labeled non-core seems as a more effective way of helping BiH move forward in its growth and development efforts in these particular areas. Second, strategy objectives could be better linked to the interventions of the program. Most projects completed in the evaluation period and assessed by IEG were rated satisfactory or moderately satisfactory, but a close review of achievement of CPS objectives in the respective areas shows a less rosy picture. This suggests either that objectives were over-ambitious given the interventions that were programmed, or that the chosen interventions were not the right ones for the objectives. Third, on strategy implementation, the WBG could do better by improving its understanding of the binding constraints on private sector development in BiH, and structuring its interventions accordingly. The strategy for private sector development fell well short of objectives, suggesting that WBG interventions—at business entry—did not deal with the main constraints impacting businesses at the operations stage (identified as mostly bureaucratic interference). CPSCR Reviewed by: Peer Reviewed by: CASCR Review Coordinator Juan José Fernández-Ansola Jorge Garcia-Garcia, Consultant, IEGCC Consultant, IEGCC Jaime Jaramillo-Vallejo Lead Economist, IEGCC Surajit Goswami, Steve B. Pirozzi Consultant, IEGPR Senior Evaluator, IEGCC For Official Use Only CPSCR Review 2 Independent Evaluation Group 3. CPS Summary Overview of CPS Relevance: Country Context 1 1. BiH is a post-conflict state, whose governing structure complicates decision making, turning policy consensus into an elusive target. Politics remains highly fragmented, with increasing tensions between the two entities, namely the Federation of Bosnia and Herzegovina (the Federation) and Republika Srpska (the RS). Poverty is high for a European country, and political tensions have slowed progress towards EU accession, to which BiH aspires. BiH remains in the IBRD/IDA blend category of the WBG. 2. Growth averaged 5-6 percent a year in BiH in 2000-08, driven by a boom in domestic demand financed from abroad. Foreign lending to BiH virtually came to a halt as a result of the financial crisis, pushing the economy into recession in 2009. A moderate recovery has taken place since then. Poverty declined slightly over the past decade, especially in urban areas, as rural areas are lagging. About 18 percent of the population lives in poverty and 80 percent of the poor live in rural areas. The main challenges facing BiH are to maintain growth through further diversification of the economy, to enhance capacity and productivity in the export sectors, and to improve the business and investment environment. 3. The BiH authorities’ medium-term development strategy (―the platform‖) calls for improving fiscal coordination and stability, creating a more conducive business environment, and promoting reforms that ensure sustainable development. Objectives of WBG Strategy 4. The CPS and CPSPR responded to country challenges by focusing on two pillars: (i) improving the environment for private sector led growth, and (ii) improving the quality of public spending and delivery of public services. This was to be done through balanced interventions to achieve the program’s objectives. The CPSPR introduced some changes in the results matrix to better align the performance of individual projects with the CPS pillars, introduce performance indicators that were not included in the original matrix, including adding new indicators on ―formal employment‖ and improved targeting of social benefits. It also responded to the changing country context in the aftermath of the global financial crisis with a development policy operation addressing public expenditure. IFC and MIGA interventions complemented IBRD/IDA interventions, with investment— including in privatization—and advisory services aimed at developing the private sector, and providing guarantees for a sizeable foreign direct investment in leasing and manufacturing, respectively. 5. The WBG strategy addressed some of the key challenges facing BiH, such as improving the business and investment environment. It also responded flexibly to the evolving global financial crisis at the CPSPR stage. The strategy appears to have under-estimated the time and efforts needed to build the consensus required to develop the institutional arrangements for project execution. Relevance of the WBG Strategy 6. Relevance of the strategy was modest. The CPS aimed at improving the business environment, and improving the quality of government spending and delivery of services. The 1 BiH consists of two autonomous entities—the Federation of Bosnia and Herzegovina (the Federation) and the Republika Srpska (the RS)—and a state-level government that acts as an umbrella organization. Policies are largely made and implemented at the entity level, but coordination of policies between entities and with the state is an ongoing challenge. The Federation is divided into ten cantons and seventy-four municipalities, and the RS is divided into sixty-three municipalities. For Official Use Only CPSCR Review 3 Independent Evaluation Group interventions were generally appropriate to achieve the proposed outcomes, except that in the business environment the WBG concentrated its efforts on processes for business entry. However, the main constraints, which the interventions left untouched, appeared to have been at the operating stage, with most of the problems caused by corruption and by excessive bureaucratic interference. The CPS and CPSPR went into some detail in the analysis of the political economy, and structured assistance around core areas where government commitment to reform was clear, and non-core areas where commitment was less certain. This distinction, which reflected pragmatism about the political stalemate between the entities, turned out to have little bearing on the delivery of the program and did not effectively mitigate the political economy risks. In addition, the link between IBRD/IDA- supported interventions and objectives was not always clear, as was the case with the expected increase in formal employment. 7. Consistent with the overall WBG strategy and congruent with market needs, IFC combined its investment operations with advisory services to improve access to finance and competitiveness of SMEs, develop trade finance to help trade flows during the global financial crisis, and explore opportunities for public-private partnership projects. MIGA provided guarantees for investments in the financial sector and manufacturing. Risk Identification and Mitigation 8. As noted above, the CPS identified as the main risk to the program the political polarization between the three constituent groups (Bosnians, Croats, and Serbs). Aside from distinguishing between core and non-core activities, the strategy intended to manage this risk by negotiating the degree and form of state-level involvement on a project-by-project basis in the non-core areas (the Federation generally wanted the state more involved, while the RS wanted it involved less or not at all). Ongoing tensions between the constituent groups did indeed result in a major slowdown of policy progress and program implementation, and, partly as a result, several projects in the original CPS had to be dropped or postponed. Overview of CPS Implementation: Lending, Investments and Grants 9. Fourteen IBRD/IDA and ten IFC projects were in operation in BiH at inception of the CPS for US$289 million and US$141 million, respectively. In all, including MIGA, the WBG program comprised six new IBRD/IDA lending operations for $306 million, additional project financial support of US$83 million for six IFC projects, over US$9 million in GEF grants, and three MIGA operations for US$61 million. About one-third of IBRD/IDA lending was devoted to an unplanned Public Expenditure Crisis DPL in response to the global financial crisis; and, of the remainder, most was used for infrastructure and SME competitiveness, with a small amount devoted to the health sector. IFC’s support was in the financial sector, health, and chemicals. Several IBRD/IDA projects were dropped from the original plan, and two were postponed to the next CPS period (Sava River/Brcko Port and Land Registration II). 10. Performance of the IBRD/IDA projects that made it through the difficult political environment was good, and the portfolio remained healthy. Outcomes of six of the seven projects completed in the evaluation period and assessed by IEG were rated satisfactory or moderately satisfactory. As of June 2011 the active portfolio consisted of 14 projects, with the amount of commitments at risk representing 6.3 percent, compared with an ECA average of 12 percent. The only project that is at-risk in implementation was rated as moderately unsatisfactory by implementation reports, and the project is being restructured to address the weaknesses identified. 11. IFC followed a strategy of further developing the firms it had supported before in financial markets (microfinance and trade facility) and in chemicals. However, IFC also initiated support to new For Official Use Only CPSCR Review 4 Independent Evaluation Group areas, as was building a private health facility. Development effectiveness (as indicated in the DOTS system) of about half of IFC investments have been rated moderately satisfactory or better, with another quarter that has not been rated or rated too early to tell. IFC appears to have pulled back its activities slightly as the country situation has been found to be increasingly risky. 12. In addition, MIGA approved three operations in support of investments in the manufacturing and financial sectors. Advisory and Analytical Activities and Services 13. While AAA pieces were well timed and served as input to lending, in some instances findings and recommendations did not find their way to implementation because of lack of buy-in and weak absorptive capacity. A policy note on social assistance transfers (FY09) and a poverty update (FY10) provided analytical underpinning for reforms of the social protection system that were initiated in late 2009 and early 2010. Additional advisory work focused on the investment climate assessment (FY08), the transport sector (FY10), and competitiveness. 14. During the review period, IFC approved eight advisory projects on renewable energy intended to promote small hydro-power plants, as well as on sustainable business, investment climate, and access to finance. Safeguards and Fiduciary Issues 15. The small-scale agriculture project triggered environmental and international waterways safeguards. According to the environmental assessment, environmental issues were linked to the rehabilitation and reconstruction of irrigation systems and water use, and direct impacts were likely to be small to insignificant. A local water institute in the RS supervised the operation of the contracts to ensure proper disposals of waste from the works of irrigation rehabilitation and monitoring of soil and water quality during construction. On international waterways, the water user associations collaborated with entity water agencies and shared information with the power companies based on the minimum flow in the Neretva and Tebisjica rivers. There were no fiduciary complaints that IEG is aware of. Overview of Achievement by Objective: Pillar 1: Improving the Environment for Private Sector-Led Growth and for Convergence with Europe 16. Under this pillar the WBG’s support was to focus on (i) expanding business activity and increasing economic opportunity; (ii) improving key infrastructure; (iii) strengthening regional cooperation to manage public goods, including environment and clean energy; and (iv) invigorating privatization and corporate restructuring. 17. Expanding business activity and increasing economic opportunity. In the World Economic Forum’s competitive index scale of 1 to 7, BiH’s business environment improved marginally from 3.6 to 3.7 in the evaluation period. WBG interventions helped reduce the number of days to register a business, cut the backlog of land registration, and improve agricultural information systems. However, the relevant ICR reviews noted that the main constraints in this area were at the business operating stage—rather than business entry, where the WBG concentrated efforts. Most of the constraints were due to corruption and excessive bureaucratic interference, which the interventions left untouched. BiH still lags behind other countries in South-Eastern Europe which have shown significantly faster improvement in the business environment. WBG support came in the form of a Business Environment Structural Adjustment Credit, Land Registration Project, and an Agricultural and Rural Development Project. For Official Use Only CPSCR Review 5 Independent Evaluation Group 18. IFC continued to firm the development of an alternative dispute resolution mechanism, which had been introduced under the previous CPS. In addition, an IFC investment project for automotive parts expanded business activity at Novi Travnik, Zenica, and Gradacac —through Cimos, a Slovenian firm, parts manufactured in BiH go into 4.5 million cars produced by BMW, Audi, Ford, and Toyota. 19. Improving key infrastructure. The WBG strategy focused on maintaining roads, improving commercial use of the Sava river corridor, and developing energy resources. Road rehabilitation made progress (70 percent of planned road sections rehabilitated); road user costs declined across the country (11 percent in RS and 18 percent in the Federation); and transport strategy implementation is advancing. Nevertheless, progress in the latter has been uneven—more advanced in the Federation than in RS. Energy generation and exports of energy have increased significantly, but the independent system operator is not functioning because of disputes between the Federation and RS. WBG support came through the Road Infrastructure and Safety Project, the Energy Community of South-East Europe Project, and a Transport Sector Review. The Sava river project was postponed. 20. Strengthening regional cooperation to manage public goods. Notwithstanding the broadness of the objective, which specifically mentioned environment and clean energy, the WBG focused on a small subset of the public good universe: protecting forests and enhancing the capacity for an effective response to avian influenza infection. The ecosystem protected area increased to 2.4 percent of the territory—against a 3 percent target—and interventions helped reach the target for safe handling procedures of avian influenza at risk population. The interventions were supported by GEF Forest and Mountain Protected Areas, and an Avian Influenza Preparedness Project. 21. Invigorating privatization and corporate restructuring. Little progress was made in this objective: only six strategic enterprises were privatized during the CPS period —less than half the target number—and enterprise restructuring made little headway in both entities, according to both CPSCR and the IMF. Underperforming state-owned enterprises (SOEs) and un-restructured privatized companies continue to be a significant drag on BiH’s economy. SOEs remain inefficient, and a source of corruption and political influence. Moreover, the dispersed structure of ownership resulting from voucher-to-share conversion has induced poor corporate governance and weak firm performance, which have not been abated due to the shallowness of capital markets. As a result many privatized enterprises remain undercapitalized, operate below potential, and have accumulated arrears to the government for worker pension obligations, taxes, and unpaid salaries to workers. Given the limited political commitment to privatization and enterprise restructuring, IBRD provided limited support through the administration of an EU-funded trust fund (Accelerating Enterprise Restructuring) and AAA in the form of an Investment Climate Assessment. 22. On a positive note, IFC, jointly with Turkish investors, was instrumental in the privatization of a glass manufacturing company. 23. WBG assistance contributed significantly to improving key infrastructure (core) and had partial success in improving cooperation to manage public goods (core). Corporate restructuring and privatization (non-core) made slight progress, and the business climate improved marginally (core). On balance, the outcome under this pillar was borderline moderately satisfactory. Pillar 2: Improving the Quality of Government Spending and the Delivery of Public Services for the Vulnerable 24. Under this pillar the WBG’s support was to focus on (i) improving the delivery of municipal services and strengthen municipal finance; (ii) improving the quality of social service delivery; (iii) reducing urban-rural disparities in income; (iv) increasing the targeting of social benefits; and (v) reducing the burden of government in the economy and strengthening fiscal coordination. For Official Use Only CPSCR Review 6 Independent Evaluation Group 25. Improving delivery of municipal services and strengthening municipal finance. During the CPS period water losses were reduced in all participating municipalities and twenty-four hour water supply extended to some places for the first time. It should be noted, however, that water service targets for some municipalities had already been achieved by the beginning of the CPS period. Six regional sanitary landfills are now fully functional, with the number of unregulated dumpsites reduced by 15 percent, less than the target of 20 percent. A community development project (CDP) helped improve basic services and facilities for low-income and poor communities in under-served municipalities. The project delivered a considerable number of outputs —construction and rehabilitation of facilities, enhanced social infrastructure such as libraries, youth centers and sports clubs—and there is some evidence of positive outcomes. A survey summarized in the project’s ICR reports that 52 percent of those interviewed in the Federation and 62 percent in the RS considered that their living conditions had improved as a result of the new services provided under the project. In addition to the CDP and a Solid Waste Management Project, IBRD/IDA helped improve the delivery of services in large municipalities through the Urban Infrastructure and Service Delivery Project. 26. Improving the quality of social service delivery. IBRD intended to help improve basic heath indicators through better primary health care in the country, which were lagging due to the excessive focus on specialists’ services. Following this support, there was a 75 percent increase in examinations by family doctors in the Federation (against a target of 55 percent). However, there is limited information on developments in the RS, and there is little hard evidence of improvements in health indicators as yet. WBG support was provided through the Health Sector Enhancement Project. 27. Reducing urban-rural disparities in income. The WBG sought to help increase rural incomes through its project on small-scale commercial agriculture. While agricultural production and productivity increased, the extent to which this translated into an increase in farm incomes and the extent to which commercialization occurred were not measured by the WBG or the authorities, and is not known. Available evidence suggests that rural-urban income disparities remain significant, because most agriculture sector activity is informal and subsistence agriculture still plays an important role. 28. Increasing the targeting of social benefits. The WBG intended to support the improvement of benefit targeting through the Social Safety Net and Employment Support Project (SSNES), aiming to ensure that social benefits reach 70 percent of the poorest quintile. In the event, legislation was approved establishing a needs-based approach. However, there are no measurable results yet, and there is significant pressure by interest groups to maintain the current levels of spending with no improvements in targeting. Less than 40 percent of the overall social assistance budget is targeted to the poorest 20 percent of the population (among the lowest in ECA), and over 16 percent of the benefits are captured by the richest fifth of the population. At the root of poor benefit targeting is the large preponderance of benefits that go to war veterans and their families, a legacy of the peace agreements. In addition to the SSNES project, the WBG supported BiH in this area through analytical work (Proxy Means Targeting for Equitable and Sustainable Social Assistance and Social Safety Nets). 29. Reducing the burden of government in the economy and strengthen fiscal coordination. Fiscal expenditure increased to over 50 percent of GDP in BiH over the CPS period— against the target of a reduction of 2 percentage points from a baseline of 41 percent of GDP. Higher expenditures were to some extent a response to the global financial crisis, which brought a decline in formal employment. Fiscal coordination improved in the initial stages of the CPS, but has suffered setbacks recently, amidst institutional gridlock resulting from political tensions. As a result, the Fiscal Council—a state-level institution that is supposed to strengthen fiscal coordination—has not adopted the 2011 fiscal envelope for the country. With political tensions increasing, coordination on fiscal policy is likely to weaken amongst the entities that make up BiH. IBRD provided support through the Public Expenditure Crisis DPL. The lead agency on macroeconomic and fiscal issues was the IMF, which remains concerned about fiscal developments and is requesting corrective actions. For Official Use Only CPSCR Review 7 Independent Evaluation Group 30. WBG assistance had partial success in improving the delivery of municipal services and strengthening municipal finance (core) and improving primary health care (non-core). But the WBG’s contribution to reducing urban-rural income disparities (non-core) is not known. Legislation notwithstanding, the targeting of social benefits (non-core) has not improved. The burden of government on the economy (non-core) has increased rather than declined, while fiscal coordination (non-core) has not improved. On balance, and based mainly on the results in the core area, the outcome under this pillar is rated moderately satisfactory. Objectives CPSCR Rating IEG Rating Pillar I: Improve the Environment for Private Sector-Led N/A Moderately Satisfactory Growth and Convergence with Europe Pillar II: Improve the Quality of Government Spending N/A Moderately Satisfactory and the Delivery of Public Services for the Vulnerable 4. Overall IEG Assessment Overall Outcome: Moderately Satisfactory IBRD/IDA Performance: Moderately Satisfactory IFC Performance: Moderately Satisfactory MIGA Performance: Satisfactory Overall outcome: 31. The overall outcome is rated moderately satisfactory. This was an ambitious program with uneven results. Pillar 1 had four core sub-objectives out of five, while Pillar 2 had only one out of five. Under Pillar 1, WBG assistance helped improve key infrastructure and regional cooperation to manage a few public goods, and had partial success in improving the delivery of municipal services and primary health care, and strengthening municipal finance. The business climate—a core area— improved only marginally, and corporate restructuring and privatization—the only non-core area under pillar 1—had limited success. Under Pillar two, the core area of municipal finance and services had some success in terms of outputs delivered, but beneficiary services show some gaps in reach. The remaining areas under pillar two—all non-core—showed some progress but fell short of program expectations. W hile WBG’s contribution to reducing urban-rural income disparities is not known, the targeting of social benefits has not improved in a measurable way, the burden of government in the economy has increased, and fiscal coordination has not improved. IBRD/IDA performance 32. IBRD/IDA performance is rated moderately satisfactory. The WBG’s strategy and program were well aligned with BiH’s development strategy, and well coordinated with the activities of other donors. The lending program underwent significant changes during implementation, including projects dropped or postponed, reflecting an adverse political environment to reform in some areas and the effects of the global financial crisis. The usefulness of the core/non-core distinction as a means to mitigate the risks of political stalemate between the entities is questionable, because it does not seem to have helped to improve program implementation and delivery. The WBG responded flexibly to the global financial crisis through an unplanned DPL introduced at CPSPR stage. However, the CPSCR provided little evidence of essential preparatory work to build consensus amongst all key entities to develop the institutional arrangements necessary for project execution. The results framework had deficiencies in monitoring and evaluation. AAA was generally well-timed, but findings and recommendations did not always find their way into implementation because of lack of buy-in by mid- For Official Use Only CPSCR Review 8 Independent Evaluation Group level staff and weak absorptive capacity. Safeguards and fiduciary issues were adequately dealt with. IFC performance 33. IFC performance is rated moderately satisfactory. On the investment side, it started the process of making BiH competitive again in two traditional industries, namely castings (for auto parts) and glass. IFC also contributed by continuing the development of alternative dispute resolution mechanism. Implementation of both investment and advisory services projects has been satisfactory. MIGA performance 34. MIGA performance is rated satisfactory. Its intervention to support a sizeable investment in leasing appears to have been appropriate, now that foreign investors consider BiH ripe for pursuing this activity. 5. Assessment of CPS Completion Report 35. This is a well-written CPSCR. The evaluation is detailed and comprehensive for the most part, although it could have dealt more in-depth with areas of the program where things did not go well, to find out the reasons and draw lessons. Although BiH has shown a good record of growth, there has been little progress in reducing poverty, and the CPSCR could also have explored this issue in greater depth because this may have implications for future WBG strategy. 6. Findings and Lessons 36. IEG agrees with the CPSCR lessons and recommendations for the next CPS, particularly on the need to maintain a policy dialogue in key areas in the absence of lending, and to build consensus during project preparation about institutional arrangements to be pursued during project execution. 37. The WBG could explore ways of dealing effectively with the political stalemate between the entities in program implementation, beyond the distinction between core and non-core areas. As compared to sticking to a particular project, maintaining a vigorous and open policy dialogue on what is now labeled non-core seems as a more effective way of helping BiH move forward in its growth and development efforts in these particular areas. While some resources will have to be allocated to this end, these expenses are outweighed by the potential benefits of helping bring about the political consensus to move on difficult topics and issues. The current approach of giving less weight to the non-core areas within the program seems to have reduced the IBRD’s incentives to move forcefully in these areas. 38. Strategy objectives could be better linked to the interventions of the program. Most projects completed in the evaluation period and assessed by IEG were rated satisfactory or moderately satisfactory, but a close review of achievement of CPS objectives in the respective areas shows a less rosy picture. This suggests either that objectives were over-ambitious given the interventions that were programmed, or that the chosen interventions were not the right ones for the objectives. 39. As for implementation, the WBG could do better by improving its understanding of the binding constraints on private sector development in BiH, and structuring its interventions accordingly. The strategy for private sector development (improving business climate; acceleration of privatization and enterprise restructuring) fell well short of objectives, suggesting that WBG interventions—at business entry—did not deal with the main constraints in the business environment having an impact at the business operation stage (mostly bureaucratic interference). Annexes CPSCR Review 9 Independent Evaluation Group Annex Table 1: Bosnia and Herzegovina Planned and Actual Lending, FY08-11 Annex Table 2: Planned and Actual Analytical and Advisory Work, FY08-11 Annex Table 3a: IEG Project Ratings for Bosnia and Herzegovina, FY08-11 Annex Table 3b: IEG Project Ratings for Bosnia and Herzegovina and Comparators, FY08-11 Annex Table 4: Portfolio Status for Bosnia and Herzegovina and Comparators, FY08-11 Annex Table 5: IBRD/IDA Net Disbursements and Charges Summary Report for Bosnia and Herzegovina, FY08-11 (in US$ million) Annex Table 6: Total Net Disbursements of Official Development Assistance and Official Aid, 2006-2009 (in US$ million) Annex Table 7: Economic and Social Indicators for Bosnia and Herzegovina and Comparators, 2006 – 2009 Annex Table 8: Bosnia and Herzegovina - Millennium Development Goals Annex Table 9: List of IFC’s investments in Bosnia & Herzegovina that were active during FY08-FY11 (US$’000) Annex Table 10: List of IFC’s Advisory Services in Bosnia and Herzegovina, FY08-FY11: Annex Table 11: List of MIGA’s Operations in Bosnia and Herzegovina, FY08-FY11: Annex Table 12: Summary of Achievements of the CPS Objectives Annexes CPSCR Review 11 Independent Evaluation Group Annex Table 1: Bosnia and Herzegovina Planned and Actual Lending, FY08-11 Proposed Approved PID Project Approval FY Proposed Amount FY Amount Programmed Projects P100792 Road Infrastructure and Safety 2008 2008 25 25 P107998 Solid Waste II 2008 2009 25 40 P090675 Sarajevo Waste Water (for Municipal Development Project) 2009 2010 25 35 P108000 Sava River / Brcko Port 2009 Pipeline 25 … Land Registration II 2010 Postponed 88 P089043 Privatization / Corporate restructuring 2010 Dropped … Bankruptcy Dropped … Regional / Urban Transport Project (Corridor VC) 2011 Dropped 205 P110910 Disaster Risk Management Project 2010 Pipeline … Public Sector / Administration Reform 2010 Dropped P116774 Social Safety Nets & Employment 2010 2010 15 P111780 SME Competitiveness and Access to Credit 2010 2010 70.0 P116951 Public Expenditure Crisis DPL 2010 2010 111 … Readiness for IPA accession funding 2011 Dropped … Rural / ED Conditional Cash Transfers 2011 Dropped P120285 Health Sector Enhancement Project Additional Financing 2011 2011 10.0 … Secondary Education for Rural Areas Dropped … Regional Energy Project Dropped … Electricity Market Development Dropped … Support for Corridor VC Dropped Total Programmed Projects CPS FY08-11 393.0 306.0 Non-programmed Projects NA Total projects CPS FY08-11 excluding Grants and Special Financing Projects 393.0 306.0 Approval Approved Closing FY On Going Projects During CPS Period FY Amount P071001 BUS ENABLG ENV SAC 2002 2008 44 P071004 SOCIAL INSURANCE AND AF TA 2003 2008 6.3 P058521 ELEC PWR 3 RECN 2001 2008 35 P084596 EMPLYMT 2 2004 2009 12 P070995 COMMUNITY DEVELOPMENT AND AF 2001 2010 17.8 P055434 SM SC COM AGRIC 2003 2010 12 P079226 EDUC RESTRUCTURING 2005 Cancelled 10 P057950 SOLID WASTE MGMT AND AF 2002 2010 26 P079161 FOREST DEVELOPMENT AND AF /CNSRV TA 2003 2011 7.0 P083353 URB INFRA & SERV DEL AND AF 2005 2011 25 P100415 AVIAN FLU - BA 2007 2011 5 P096200 LAND REGISTRATION 2006 2012 15 P090666 ECSEE APL3-BiH 2006 2012 36 P101213 AG & RURAL DEVT 2007 2012 21 P088663 HLT SEC ENHANC 2005 2015 17 Total On Going projects CPS FY08-11 289.1 Total projects CPS FY08-111/ 595.1 1/ Excluding Grants and Special Financing Projects Annexes CPSCR Review 12 Independent Evaluation Group Annex Table 2: Planned and Actual Analytical and Advisory Work, FY08-11 Delivered Proposed Project ID to Client Output Type FY FY Economic and Sector Work Planned (CPS FY2008-2011) P058521 Energy Sector Study 2007 2008 Report P096614 Strengthening Local Governance Study 2007 2009 Report P096211 Transport Sector Review 2008 2010 Report P102647 Investment Climate Assessment 2008 2008 Report P106864 Country Economic Memorandum 2008 2009-2010 Policy Notes P096552 Poverty Assessment 2008 2010 Report Regional Climate Change / disaster mitigation 2010 Report Evaluation of reform in selected areas of primary health care sector in P088663 Bosnia and Herzegovina 2011 Report Proxy Means Targeting for Equitable and Sustainable Social Assistance P110183 in Bosnia and Herzegovina 2008 Policy Note Annual Fiscal Updates 2009 Report P096211 Transport Sector Rev. 2010 Report Macro Monitoring 2008-2011 Regular updates Poverty Monitoring 2008-2011 Regular updates Non-planned P112985 Social Safety Nets / PMT Programmatic AAA 2009 Policy Note P107508 Trade & Integration Policy Notes 2009 Policy Note P113753 Report on the Observance of Standards 2010 Report Protecting the Poor During the Global Crisis: 2009 BH Poverty Update 2010 Report Technical Assistance Planned (CPS FY2008-2011) P073474 PPIAF Dropped Non-planned P109394 Bosnia & Herzegovina-ICT Competitiveness 2009 "How-To" Guidance P110299 Bosnia: Mun. Gov. Reform and Accountability 2009 "How-To" Guidance P110794 Advisory Services to the Stock Exchanges of Banja Luka and Sarajevo 2010 "How-To" Guidance P108100 PPP training follow-up 2010 Report/Technical Assistance WBI advisory services 2011 Technical assistance P122460 Bosnia Pension TA 2011 "How-To" Guidance P122930 Policy Roundtables 2011 "How-To" Guidance P113105 REPARIS and supervision Pipeline Technical assistance Source: Bosnia and Herzegovina 2008 CPS, 2010 CPSPR and WB Business Warehouse Table 8.1.4 as of 8/1/2011. Annexes CPSCR Review 13 Independent Evaluation Group Annex Table 3a: IEG Project Ratings for Bosnia and Herzegovina, FY08-11 IEG Risk to Total Evaluated Exit FY Project Name IEG Outcome Development Pin (US$M) Outcome * 2008 ELEC PWR 3 RECN 35.3 SATISFACTORY MODERATE P058521 2008 BUS ENABLG ENV SAC 51.9 MODERATELY SATISFACTORY MODERATE P071001 2008 SOC INS TA and AF 6.3 MODERATELY SATISFACTORY MODERATE P071004 2009 EDUC RESTRUCTURING 0.5 NOT RATED NON-EVALUABLE P079226 2009 EMPLYMT 2 10.7 MODERATELY UNSATISFACTORY MODERATE P084596 2010 SM SC COM AGRIC 11.2 MODERATELY SATISFACTORY MODERATE P055434 2010 COMM DEVT and AF 17.8 MODERATELY SATISFACTORY SIGNIFICANT P070995 Closed Projects Not Evaluated by IEG YET ICR Risk to Total Evaluated Exit FY Project Name ICR Outcome Development (US$M) Outcome * Pin Solid Waste Management LOW OR NEGLIGIBLE 2010 Project and AF 26 SATISFACTORY P057950 Forest Development & 2011 Conservation Project & AF 7 MODERATELY SATISFACTORY MODERATE P079161 Ongoing Projects. ISR ratings Closing Total Evaluated Project Name ISR DO ISR IP ISR Date PIN FY (US$M) URB INFRA & SERV DEL & MODERATELY MODERATELY 2011 5/25/2011 P083353 AF 26.5 SATISFACTORY SATISFACTORY MODERATELY 2013 11/1/2010 P085112 QUALITY PROTECT (GEF) 8.9 SATISFACTORY SATISFACTORY FOREST & MTN PROT MODERATELY MODERATELY 2013 6/1/2011 P087094 AREA (GEF) 3.4 SATISFACTORY SATISFACTORY MODERATELY 2015 2/28/2011 P088663 HLT SEC ENHANC 17.0 SATISFACTORY SATISFACTORY 2012 ECSEE APL3-BiH 36 SATISFACTORY SATISFACTORY 1/6/2011 P090666 Sarajevo Waste Water (for. 2016 11/6/2010 P090675 Mun. Dev.) 35 SATISFACTORY SATISFACTORY 2012 LAND REGISTRATION 15 SATISFACTORY SATISFACTORY 1/24/2011 P096200 2011 AVIAN FLU – BA 5 SATISFACTORY SATISFACTORY 2/25/2011 P100415 MODERATELY 2012 4/5/2011 P100792 ROAD INFRA & SAFETY 25 SATISFACTORY SATISFACTORY MODERATELY MODERATELY 2012 2/25/2011 P101213 AG & RURAL DEVT 21 SATISFACTORY UNSATISFACTORY MODERATELY 2014 5/11/2011 P107998 SOLID WASTE MGT 2 40 SATISFACTORY SATISFACTORY 2015 SME ACCESS TO 1/3/2011 P111780 FINANCE 70 SATISFACTORY SATISFACTORY SOCIAL SAFETY NETS & MODERATELY 2015 6/1/2011 P116774 EMPL 15 SATISFACTORY SATISFACTORY Public Expenditure Crisis 2011 111 SATISFACTORY SATISFACTORY 12/8/2010 P116951 DPL Source: WB Business Warehouse Table 4a.5 and 4a.6 as of as of 4/21/2011. * With IEG new methodology for evaluating projects, institutional development impact and sustainability are no longer rated separately. Annexes CPSCR Review 14 Independent Evaluation Group Annex Table 3b: IEG Project Ratings for Bosnia and Herzegovina and Comparators, FY08-11 Total RDO % RDO % Total Evaluated Outcome Outcome Region Evaluated Moderate or Moderate or ($M) % Sat ($) % Sat (No) (No) Lower ($) * Lower (No) * Bosnia and 134 7 92 83 87 83 Herzegovina Albania 31 3 100 100 33 33 Croatia 260 9 100 89 100 78 Montenegro 9 2 52 50 52 50 Macedonia 34 2 100 100 100 100 ECA 5,571 113 89 80 75 62 World 28,996 531 85 75 69 58 Source: WB Business Warehouse Table 4a.5 and 4a.6 as of as of 6/6/2011. * With IEG new methodology for evaluating projects, institutional development impact and sustainability are no longer rated separately. Annexes CPSCR Review 15 Independent Evaluation Group Annex Table 4: Portfolio Status for Bosnia and Herzegovina and Comparators, FY08-11 Fiscal year 2008 2009 2010 2011 Bosnia and Herzegovina # Proj 14 13 15 13 # Proj At Risk 1 1 2 2 % At Risk 7.1 7.7 13.3 15.4 Net Comm Amt 243.4 261.4 434.4 326.3 Comm At Risk 10.0 36.0 29.9 24.4 % Commit at Risk 4.1 13.8 6.9 7.5 Albania # Proj 18 17 14 14 # Proj At Risk 3 3 6 3 % At Risk 16.7 17.6 42.9 21.4 Net Comm Amt 310.5 300.5 265.6 285.6 Comm At Risk 59.9 61.6 120.4 59.1 % Commit at Risk 19.3 20.5 45.3 20.7 Montenegro # Proj 6 9 7 6 # Proj At Risk 1 1 1 1 % At Risk 16.7 11.1 14.3 16.7 Net Comm Amt 43.0 88.3 80.5 80.9 Comm At Risk 7.0 7.0 7.0 16.2 % Commit at Risk 16.3 7.9 8.7 20.0 Croatia # Proj 16 17 14 13 # Proj At Risk 2 2 3 2 % At Risk 12.5 11.8 21.4 15.4 Net Comm Amt 1,062.7 1,082.7 1,134.4 1,221.1 Comm At Risk 265.4 163.2 186.9 122.2 % Commit at Risk 25.0 15.1 16.5 10.0 Macedonia # Proj 13 14 14 9 # Proj At Risk 0 2 3 1 % At Risk 0.0 14.3 21.4 11.1 Net Comm Amt 282.6 307.6 319.7 282.4 Comm At Risk 0.0 25.5 41.8 5.5 % Commit at Risk 0.0 8.3 13.1 1.9 Europe & Central Asia # Proj 303 287 276 263 # Proj At Risk 38 52 50 45 % At Risk 12.5 18.1 18.1 17.1 Net Comm Amt 17,966.1 21,383.2 24,340.5 22,992.7 Comm At Risk 2,257.0 3,460.2 4,357.1 2,760.3 % Commit at Risk 12.6 16.2 17.9 12.0 World # Proj 1,525 1,552 1,590 1,637 # Proj At Risk 276 344 366 344 % At Risk 18.1 22.2 23.0 21.0 Net Comm Amt 106,761.7 131,076.4 158,287.4 168,436.7 Comm At Risk 18,428.2 19,929.9 28,186.1 22,895.8 % Commit at Risk 17.3 15.2 17.8 13.6 Source: WB Business Warehouse Table 3a.4 as of 6/2/2011. Annexes CPSCR Review 16 Independent Evaluation Group Annex Table 5: IBRD/IDA Net Disbursements and Charges Summary Report for Bosnia and Herzegovina, FY08-11 (in US$ million) Disb. Repay Net FY Net Amt. Charges Fees Amt. Amt. Transfer 2008 56.8 35.0 21.8 31.9 4.3 -14.4 2009 28.5 37.0 -8.4 22.3 8.0 -38.8 2010 43.5 42.5 1.0 8.9 8.3 -16.2 2011 168.9 42.2 126.6 7.3 8.0 111.2 Total (08-11) 297.7 156.7 141.0 70.5 28.7 41.8 Source: WB Loan Kiosk, Net Disbursement and Charges Report as of 6/2/2011. Annexes CPSCR Review 17 Independent Evaluation Group Annex Table 6: Total Net Disbursements of Official Development Assistance and Official Aid, 2006-2009 (in US$ million) 2006 2007 2008 2009 2006-2009 Bilaterals Australia .. 0 0 0 0 Austria 0 0 0 0 0 Belgium 0 -0.17 -4.86 -0.28 -5.31 Canada 0 0 0 0 0 Denmark -0.06 0 -0.1 -0.03 -0.19 Finland 0 0 0 0 0 France 0 0 0 0 0 Germany 0 0 9.73 1.07 10.8 Greece 0 0 0 0 0 Israel 0 0 0 .. 0 Ireland 0 0 0 0 0 Italy -0.14 -0.06 -0.06 0 -0.26 Japan 3.57 0 -0.65 -1.44 1.48 Korea 12.88 7.72 0 13.93 34.53 Luxembourg 0 0 0 0 0 Netherlands 0 0 0 0 0 New Zealand .. .. .. .. 0 Norway 0 0 -0.05 -0.01 -0.06 Portugal 1.7 12.55 18.16 3.1 35.51 Spain 32.46 6.85 32.98 30.99 103.28 Sweden 0 0 0 6.03 6.03 Switzerland 0 0 0 0 0 United Kingdom 0 0 0 0 0 United States 0 0 0 0 0 DAC Countries, Total 50.41 26.89 55.15 53.36 185.81 Czech Republic 0 0 0 0 0 Hungary 0 0 0 0 0 Iceland 0 0 0 0 0 Poland 0 0 0 0 0 Slovak Republic 0 0 0 0 0 Thailand .. .. .. .. 0 Turkey 0 0 0 0 0 United Arab Emirates .. .. .. 0 0 Arab Countries -1.6 -1.32 -1.68 -4.85 -9.45 Other Donor Countries, Total 0 0 0 0 0 Non-DAC Countries, Total -1.6 -1.32 -1.68 -4.85 -9.45 Multilaterals 0 Arab Agencies 6.27 3.17 -0.17 1.56 10.83 IAEA 0 0 0 0 0 IDB Spec. Fund .. .. .. .. 0 IFAD 3.94 2.6 1.59 4.02 12.15 Montreal Protocol .. .. .. .. 0 Nordic Dev. Fund .. .. .. .. 0 UNAIDS 0 0 .. 0 0 WFP .. .. .. .. 0 EU Institutions 3.69 0 0 0 3.69 EBRD 0 0 0 .. 0 GEF .. 0 0 .. 0 Global Fund 0 0 0 .. 0 IDA 22.86 47.96 16.53 18.02 105.37 UNDP 0 0 0 0 0 UNFPA 0 0 0 0 0 UNHCR 0 0 0 0 0 UNICEF 0 0 0 0 0 UNTA 0 0 0 0 0 Multilateral Agencies, Total 36.76 53.73 17.95 23.6 132.04 All Partners, Total 85.57 79.30 71.42 72.11 308.40 Source: OECD DAC Online database, Table 2a. Destination of Official Development Assistance and Official Aid - Disbursements, as of 6/2/2011. Annexes CPSCR Review 18 Independent Evaluation Group Annex Table 7: Economic and Social Indicators for Bosnia and Herzegovina and Comparators, 2006 – 2009 Bosnia and Macedonia Albania Montenegro Croatia Slovenia ECA World Series Name Herzegovina FYR 2007 2008 2009 Average 2007-2009 Growth and Inflation GDP growth (annual %) /1 6.2 5.6 -2.9 3.0 5.3 5.1 1.6 3.5 2.1 3.3 1.9 GDP per capita growth (annual %)/1 6.2 5.8 -2.9 3.0 4.9 5.2 1.7 3.4 1.6 3.1 0.71 GNI per capita, PPP (current international $) 3,790.0 4,520.0 4,700.0 4,085.0 3,555.0 5,625.0 12,600.0 3,775.0 22,227.5 5,960.0 8,281.0 GNI, Atlas method (current US mil. $) 8,140.0 9,000.0 8,770.0 8,315.0 7,935.0 12,592.5 18,345.0 9,772.5 26,685.0 11,998.6 10,251.4 Inflation, consumer prices (annual %) /1 5.0 3.8 0.0 2.9 2.7 5.4 3.6 3.5 3.1 … … Composition of GDP (%) Agriculture, value added (% of GDP) 10.1 9.1 8.0 9.4 21.0 9.6 5.8 11.4 2.4 7.6 2.9 Industry, value added (% of GDP) 27.4 28.5 28.1 27.2 19.7 20.6 27.8 33.3 34.3 32.7 27.5 Services, etc., value added (% of GDP) 62.6 62.4 63.9 63.4 59.3 69.7 66.4 55.3 63.3 59.8 69.6 Gross fixed capital formation (% of GDP) 29.6 28.2 19.7 25.6 28.9 29.8 26.1 20.8 26.8 22.2 21.1 Gross domestic savings (% of GDP)/2 -3.3 -1.0 -2.4 -3.3 2.5 -8.4 22.5 3.5 28.1 23.7 21.3 External Accounts Exports of goods and services (% of GDP) 38.9 36.7 33.4 36.5 27.9 41.6 40.7 49.6 65.7 31.9 27.6 Imports of goods and services (% of GDP) 73.3 69.4 58.0 66.9 53.5 81.6 47.3 71.2 66.6 31.3 27.7 Current account balance (% of GDP) -10.8 -14.4 -6.9 -10.1 -12.3 -40.5 -7.1 -7.0 -4.0 … … External debt (% of GDP) 56.1 43.5 54.6 52.7 30.6 38.4 … 54.2 … 38.5 … Total debt service (% of GNI) 2.8 2.3 3.7 2.9 1.8 2.2 … 7.3 … 7.2 … Total reserves in months of imports/2 4.7 5.7 5.3 5.2 4.2 … 5.1 4.3 1.0 11.0 12.0 Fiscal Accounts /2 Revenue (% of GDP) 46.7 45.9 44.6 45.7 26.2 46.1 39.4 31.8 40.8 Expenditure (on a commitment basis) (% of GDP) 47.1 49.5 50.2 48.9 31.6 45.7 41.9 32.8 42.7 Overall Balance (% of GDP) -0.3 -3.6 -5.7 -3.2 -5.4 0.4 -2.5 -1.0 -1.9 Total Public Debt (% of GDP) 32.9 30.8 35.4 33.0 56.3 33.4 32.3 22.9 27.1 Social Indicators Health Life expectancy at birth, total (years) 75.0 75.1 75.3 75.0 76.6 74.1 75.9 74.1 78.6 69.3 68.8 Immunization, DPT (% of children ages 12-23 months) 95.0 91.0 90.0 90.8 98.0 92.3 96.0 94.8 96.8 95.2 81.4 Improved sanitation facilities (% of population with access) .. 95.0 .. 95.0 98.0 92.0 99.0 89.0 100.0 89.1 60.6 Improved water source (% of population with access) .. 99.0 .. 99.0 97.0 98.0 99.0 100.0 99.0 95.5 86.8 Mortality rate, infant (per 1,000 live births) 12.9 12.7 12.5 12.8 14.8 8.4 4.9 10.8 2.8 20.8 44.9 Population Population, total (in millions) 3.8 3.8 3.8 3.8 3.1 0.6 4.4 2.0 2.0 402.4 6659.3 Population growth (annual %) -0.1 -0.1 -0.2 -0.1 0.4 0.0 -0.1 0.1 0.5 0.2 1.2 Urban population (% of total) 46.9 47.4 48.0 47.2 46.4 60.4 57.2 66.7 48.8 63.9 49.7 Education School enrollment, preprimary (% gross) 11.0 12.5 14.8 12.8 58.3 … 53.6 32.0 81.1 53.0 42.2 School enrollment, primary (% gross) 115.2 109.3 108.9 111.1 118.9 … 97.0 91.7 97.8 98.9 105.9 School enrollment, secondary (% gross) 86.2 90.2 91.2 89.2 72.4 … 92.7 84.0 96.4 88.7 66.3 1/ IMF. April, 2011. World Economic Outlook. 2/ IMF. Article IV Consultations for relevant countries Source: WB World Development Indicators for all indicators excluding those noted. Annexes CPSCR Review 19 Independent Evaluation Group Annex Table 8: Bosnia and Herzegovina - Millennium Development Goals 1990 1995 2000 2005 2009 Goal 1: Eradicate extreme poverty and hunger Employment to population ratio, 15+, total (%) 42 41 41 41 42 Employment to population ratio, ages 15-24, total (%) 17 17 15 14 18 GDP per person employed (constant 1990 PPP $) 12053 7414 19087 25432 26811 Income share held by lowest 20% .. .. 9 7 7 Malnutrition prevalence, weight for age (% of children under 5) .. .. 4 2 .. Poverty gap at $1.25 a day (PPP) (%) .. .. 0 0 0 Poverty headcount ratio at $1.25 a day (PPP) (% of population) .. .. 0 0 0 Vulnerable employment, total (% of total employment) .. .. .. .. .. Goal 2: Achieve universal primary education Literacy rate, youth female (% of females ages 15-24) .. .. 100 .. 100 Literacy rate, youth male (% of males ages 15-24) .. .. 100 .. 100 Persistence to last grade of primary, total (% of cohort) .. .. .. .. .. Primary completion rate, total (% of relevant age group) .. .. .. .. .. Total enrollment, primary (% net) .. .. .. .. 87 Goal 3: Promote gender equality and empower women Proportion of seats held by women in national parliaments (%) .. .. 29 17 12 Ratio of female to male primary enrollment (%) .. .. .. 102 102 Ratio of female to male secondary enrollment (%) .. .. .. 102 102 Ratio of female to male tertiary enrollment (%) .. .. .. .. 131 Share of women employed in the nonagricultural sector (% of total nonagricultural employment) .. .. .. 35.2 35.7 Goal 4: Reduce child mortality Immunization, measles (% of children ages 12-23 months) 52 53 80 90 93 Mortality rate, infant (per 1,000 live births) 21 19 14 13 13 Mortality rate, under-5 (per 1,000) 23 21 17 16 14 Goal 5: Improve maternal health Adolescent fertility rate (births per 1,000 women ages 15-19) .. .. 24 18 15 Births attended by skilled health staff (% of total) 97 .. 100 100 .. Contraceptive prevalence (% of women ages 15-49) .. .. 48 36 .. Maternal mortality ratio (modeled estimate, per 100,000 live births) 18 15 11 10 9 Pregnant women receiving prenatal care (%) .. .. 99 99 .. Unmet need for contraception (% of married women ages 15-49) .. .. .. 23 .. Goal 6: Combat HIV/AIDS, malaria, and other diseases Children with fever receiving anti-malarial drugs (% of children under age 5 with fever) .. .. .. .. .. Condom use, population ages 15-24, female (% of females ages 15-24) .. .. .. .. .. Condom use, population ages 15-24, male (% of males ages 15-24) .. .. .. .. .. Incidence of tuberculosis (per 100,000 people) 94 84 63 52 50 Prevalence of HIV, female (% ages 15-24) .. .. .. .. .. Prevalence of HIV, male (% ages 15-24) .. .. .. .. .. Prevalence of HIV, total (% of population ages 15-49) .. .. .. .. .. Tuberculosis case detection rate (%, all forms) 100 76 110 110 91 Goal 7: Ensure environmental sustainability CO2 emissions (kg per PPP $ of GDP) .. 1 1 1 1 CO2 emissions (metric tons per capita) 1 1 6 7 8 Forest area (% of land area) 43.2 .. 42.7 42.7 42.7 Improved sanitation facilities (% of population with access) .. 95 95 95 95 Improved water source (% of population with access) .. 97 97 98 99 Marine protected areas (% of total surface area) 1 1 1 1 1 Net ODA received per capita (current US$) 2 277 199 141 110 Goal 8: Develop a global partnership for development Debt service (PPG and IMF only, % of exports, excluding workers' remittances) .. .. 13 4 3 Internet users (per 100 people) 0 0 1.1 21.3 37.7 Mobile cellular subscriptions (per 100 people) 0 0 3 42 86 Telephone lines (per 100 people) 15 7 21 26 27 Fertility rate, total (births per woman) 2 2 1 1 1 Other GNI per capita, Atlas method (current US$) .. 870 1510 3000 4700 GNI, Atlas method (current US$) (billions) .. 2.9 5.6 11.3 17.7 Gross capital formation (% of GDP) .. 20 20.6 22 22.1 Life expectancy at birth, total (years) 67 68 74 75 75 Literacy rate, adult total (% of people ages 15 and above) .. .. 97 .. 98 Population, total (millions) 4.3 3.3 3.7 3.8 3.8 Trade (% of GDP) .. 91.9 104.2 106.6 91.4 Source: World Development Indicators database as of 6/2/2011. Annexes CPSCR Review 20 Independent Evaluation Group Annex Table 9: List of IFC’s investments in Bosnia & Herzegovina that were active during FY08-FY11 (US$’000) Project Approval Closure Project IFC Sector IFC Sector Project Net Net Total Net ID FY FY Status Primary Explntry Size Loans Equity Commitment Investments approved in the pre-CPS period, but active during the CPS period 7622 1997 2011 Closed Financial Mkts Pvtzn/VC - 2,000 2,000 10786 2001 2010 Closed Financial Mkts Pvtzn/VC 11,238 586 11,824 11602 11310 2002 2008 Closed MAS Cement 93,000 22,500 22,500 2002 Housing 25264 (Disb 2009 Closed Financial Mkts 18,614 18,614 18,614 Energy Eff 2006) Cons.& Soc. 24017 2005 2011 Closed Pharma. 19,790 10,000 10,000 Services 24543 2006 2009 Closed Financial Mkts Microfin. 3,667 2,426 1,241 3,667 24682 2006 2010 Closed Financial Mkts Microfin. 5,040 4,050 1,350 5,040 Multi. 2009 Comm. 2007 Closed Financial Mkts 36,933 36,933 36,933 inc. RI merger Bank 24611 2006 Active Financial Mkts SMEs 18,154 12,103 6,051 18,154 25557 2007 Active MAS Chemicals 65,222 23,500 23,500 Subtotal 271,658 130,126 11,228 141,354 Investments approved in the CPS period 26693 2008 Active MAS Auto parts 79,464 35,000 35,000 Cons.& Soc. 26191 2008 Active Hospital 23,046 3,745 864 4,609 Services 27425 2009 2010 Closed Financial Mkts Microfin. 11,000 11,000 11,000 27435 2009 2010 Closed Financial Mkts Microfin. 8,241 5,641 2,600 8,241 25602 2010 Active Financial Mkts Trade Fin. 2,513 2,513 2,513 29692 2011 Active MAS Glass Manf 42,141 22,000 22,000 Subtotal 166,405 79,899 3,464 83,363 Grand Total 438,063 210.025 14,692 224,717 Source: IFC, April 2011- The list does not cover the regional projects. MAS: Manufacturing, Agriculture, and Services Annexes CPSCR Review 21 Independent Evaluation Group Annex Table 10: List of IFC’s Advisory Services in Bosnia and Herzegovina, FY08-FY11: Project End Project Primary Business Total ID Project Name Start FY FY Status Line Funds, US$ Advisory Services operations approved in the pre-CPS period, but active during the CPS period 536963 CT R Celikovic (SME Direct Support) 2006 2011 Closed Sus. Business Advisory 78,823 ADR (Alternative Dispute Resolution) PEPSE 537507 BH 2006 2010 Closed Sus. Business Advisory 1,165,690 540183 Corp Gov Bosnia 2006 2010 Closed Sus. Business Advisory 834,250 543084 Recycling PEP SE BH 2006 2009 Closed Sus. Business Advisory 563,650 IntTechStdReg ((International Standards & 538383 Technical Regulations) 2006 2010 Closed Sus. Business Advisory 86,000 547667 CT RBBH (Housing/Energy Eff.) 2006 2010 Closed Access to Finance 560,658 548625 CT EKI 2007 2008 Closed Access to Finance 77,723 550587 GEM MI BOSPO (Microfinance Inst.) 2007 2010 Closed Access to Finance 83,846 555367 Bosnia Sub-national Competitiveness 2007 Active Investment Climate 2,982,452 Subtotal: 6,433,092 Advisory Services operations approved in the CPS period 564808 ISWM (Intgrtd. Solid Waste Mgmt.) 2009 2011 Closed Sus. Business Advisory 302,366 546045 Nova Banka TA 2008 Active Access to Finance 466,000 559505 WWB (Women’s World Banking) TA 2008 Active Access to Finance 205,600 ISTR (International Standards & Technical 565707 Regulations) BH Extn. 2009 Active Sus. Business Advisory 489,122 567010 CorpGovBOS-II 2009 Active Sus. Business Advisory 503,019 563647 ADR Construction BH 2009 Active Investment Climate 471,012 569807 Microfinance - Bosnia 2011 Active Access to Finance 880,000 575567 Renewable Energy – Small Hydro Power Plants 2011 Active Sus. Business Advisory 1,529,840 Subtotal: 4,846,959 Grand Total 11,280,051 Source: Source: IFC, April 2011 Annexes CPSCR Review 22 Independent Evaluation Group Annex Table 11: List of MIGA’s Operations in Bosnia and Herzegovina, FY08 -FY11: Project ID Project Name FY Project Status Sector Amount, US$ 7492 Coprotec sistemi d.o.o. Orasje 2008 Active Manufacturing 1,119,622 7591 Raiffeisen Leasing 2009 Active Financial Services 47,724,913 9161 ProCredit Bank AD 2011 Active Financial Services 12,488,700 Grand Total: 61,333,235 Source: Source: MIGA, 2011 Annexes CPSCR Review 23 Independent Evaluation Group Annex Table 12: Summary of Achievements of the CPS Objectives CPS 09-11: Pillar 1 Actual Results Comments (as of current month year) Improve the Environment for Private Sector-Led Growth and Convergence with Europe Objectives 1. Expand business activity and increase economic opportunities 2. Improve key infrastructure 3. Strengthen regional cooperation to manage public goods 4. Invigorate privatization and corporate restructuring -Major Outcome 1. Expand business activity and increase economic opportunities Measures Reduce the duration and number of procedures required According to Internal Review (IR) the Modest Progress. to register a business: number of days to register a business Source: P071001 Business Environment - Baseline: In June 2007 New Business Registration was reduced in both entities. The Structural Adjustment Credit. IR. June, 2008. System (BRS) launched – Average registration time 54 World Economic Forum days (DB), competiveness index increased from CPSCR, Doing Business of the WB, Heritage - Target: 30 days in the Federation of Bosnia and 3.55 to 3.7 during CPS. Foundation. Herzegovina (FBH) and 23 days in the Republika Srpska . (RS) (2008). According to the WB’s Doing Business, the FBH ranking for “Starting Business” dropped from 157 to 160, the number of procedures (12) remained unchanged over the period of 2008-2011, and the number of days increased from 54 to 55. The “Business Freedom” of the Heritage Foundation and the Wall Street Journal, which includes quantitative measures of the ability to start, operate, and close a business, dropped too. Develop transparent land markets through registration of As of June 2011, 1.45 million folders Substantial Progress. real estate: were completed. Backlog has been Source: P096200 Land Registration Project. IR. - Baseline: In 2006 150,000 registry folders completed reduced to 18,305 and 80% of cases January, 2011. in the automated database, 80,000 backlog cases, are now resolved in 5 working days in several months to complete real estate transactions. 16 Land Registration Offices (10 in CPSCR. - Target: 2 million folders completed, full reconciliation, FBH and 6 in the RS). Current no backlogs (2011). progress in implementing the Land Registration Project provides assurance that the program goal will be fully achieved as planned by the end of 2011. As of December 31, 2010 there were 211, 682 land transactions recorded or 223% increase compared to 2006. Support harmonization with the EU’s Common Rule books on farm and client registry Substantial Progress. Agricultural Policy by supporting establishment of and livestock registry completed Source: P101213 Agriculture and Rural agricultural information systems, and EU-compatible (although the latter is under Development Project. IR. January, 2011. payment systems for subsidies: amendment). In 2010, about 50% of - Target: EU-compatible payment system designed agriculture subsidies in RS and 30% in CPSCR. (2010). Initiating EU-compatible Rural Development FBH were structural (investment Grants (2011) grants) approximating IPARD requirements. Overall, establishment of registries at state and entity level for effective Agricultural Information System (AIS) required to administer IPARD payments is progressing. Ensure stakeholder-driven extension services are Extension agencies established, and Negligible Progress. operational: draft extension strategies have been Source: CPSCR. - Baseline: Limited in the RS, none in the FBH (2007), developed in both entities. However, - Target: Stakeholder managed, contracted public- the WBG assessed that drafts lack private extension services reaching 20% of commercial strategic vision to develop sustainable farmers (2012). systems. The strategies are currently Annexes CPSCR Review 24 Independent Evaluation Group CPS 09-11: Pillar 1 Actual Results Comments (as of current month year) Improve the Environment for Private Sector-Led Growth and Convergence with Europe under revision based on comments from the WBG team. Services are not operational yet. 2. Improve key infrastructure Ensure road network is better maintained and safer: For the RS the average road user cost Substantial Progress. - Baseline: In 2006 road user costs US$0.25 per km (RUC) per vehicle-km has declined Source: CPSCR. per vehicle, from 0.284 Euros in 2007 to 0.253 - Target: Reduction in road user costs of at least 10% Euros in 2011. This represents an on rehabilitated roads (2011). average 10.90 percent decline in RUC, with variation on a section by section basis. RUC in Federation BiH reduced from 0.253 Euros in 2004 (baseline) to 0.208 Euros in 2011, or a decline of 17.75 percent. Sustain or increase BH electricity generation and exports Generation and export of power in High Progress. at corresponding hydrological conditions: 2009 has reached record levels and Source: P090666 Energy Community of South - Baseline: Power generation 12,800 Gwh (2006), the EPRS and EPBH have earned East Europe (ECSEE) APL3-Bosnia and - Target: Equal or greater generation and exchange record profits in spite of lower prices in Herzegovina Project. IR. January, 2011. import/export transactions between EPs in BH and other the regional electricity market. regional power utilities. CPSCR. Improve commercial use of the Sava river corridor: Sava River Navigability Project has Negligible Progress. - Baseline: 2007: sections of the river are not been postponed due to the need to Source: CPSCR. navigable. adjust the CPS lending program in - Target: Priority sections of the River Sava returned to response to the crisis. navigability. 3. Strengthen regional cooperation to manage public goods Protect and use critical forests, water and mountain Area under formal protection Substantial Progress. ecosystems in a sustainable way: increased to 2.4% or 123,000 ha. Source: CPSCR. - Baseline: Area under formal protection is 0.55% of the territory (2007), - Target: protected area 3% (2010). Enhance capacity for an effective response to avian Surveys and communications strategy High Progress. influenza infection: completed. It is estimated that 45 - Source: P100415 Avian Influenza Preparedness - Baseline: In 2007 weak and inconsistent safe poultry 50%% of at risk population practices Project. IR, June, 2011. handling procedures, safe-handling procedures. - Target: 50 % of at risk population practicing safe CPSCR. handling procedures in respect to poultry meat. 4. Invigorate privatization and corporate restructuring Advance privatization and corporate restructuring: 17 enterprises privatized in FBH (only Modest Progress. two strategic: Hepok – Mostar, and Source: CPSCR. - Baseline: FBH - 14 SOEs scheduled for privatization Tobacco factory Mostar). FBH in 2008. RS - privatization about 2/3 completed, 80 Privatization plan was not adopted. enterprises to be privatized in 2008. In the RS - 21 enterprises were - Target: FBH privatization policy adopted and privatized over the period 2008-2010 implemented. RS – policy adjustment to reflect lower (of which 4 were strategic enterprises). quality of remaining assets to be privatized. Complete restructuring of 12 enterprises to demonstrate possible Corporate restructuring made very methods and benefits of active approach -2009. little progress in both entities. Ongoing pre P071001 Business Environment Structural Adjustment CPS/CPS 07-10 Credit Approved FY 2002. Closed FY 2008. IEG rating: Moderately Satisfactory Support P096200 Land Registration Project Approved FY 2006. Active. Latest internal rating: Satisfactory. 1/24/2011. P101213 Agriculture and Rural Development Project Latest internal rating: Moderately Satisfactory, Approved FY 2007. Active. IR. 2/25/2011. P090666 Energy Community of South East Europe Latest internal rating: Satisfactory, IR. Annexes CPSCR Review 25 Independent Evaluation Group CPS 09-11: Pillar 1 Actual Results Comments (as of current month year) Improve the Environment for Private Sector-Led Growth and Convergence with Europe (ECSEE) APL3-Bosnia and Herzegovina Project Approved 2006. Active. 1/6/2011. P100415 Avian Influenza Preparedness Project Approved FY 2007. Closed FY 2011. Latest internal rating: Satisfactory. 2/25/2011. New Lending Support Approved 2008. Active. Latest internal rating: Satisfactory, IR. P100792 Road Infrastructure and Safety 4/5/2011. Non-Lending Support (Grants and P087094 Forest and Mountain Protected Areas Approved 2009. Active. Special P103242 Accelerating Enterprise Restructuring In Bosnia Financing & Herzegovina through Active Portfolio Management of Projects) PIFs Approved FY 2007. Closed FY 2011. Planned AAA P102647 Investment Climate Assessment Delivered to Client FY 2008. P096211 Transport Sector Rev. Delivered to Client FY 2010. Additional AAA Annexes CPSCR Review 26 Independent Evaluation Group CPS 09-11: Pillar 2 Actual Results Comments Improve the Quality of Government Spending and the Delivery of (as of current month year) Public Services for the Vulnerable Objectives 1. Improve the delivery of municipal services and strengthen municipal finance 2. Improve the quality of social service delivery 3. Reduce urban-rural disparities in income 4. Increase the targeting of social benefits 5. Reduce the burden of Government in the economy and strengthen fiscal coordination Major Outcome 1. Improve the delivery of municipal services and strengthen municipal finance Measures Improve delivery of water supply, sanitation and urban Current values for water supply in four Modest Progress. services: target large municipalities are: Banja Source: P083353 Urban Infrastructure & Service - Baseline: Water supply in four participating Luka - 100%; Posusje - 100%; Cazin - Delivery Project. IR. June, 2011 and January, 2008. municipalities (92%, 0%, 90%, 94%) in 2004 (these 100%; and Pale - 96% in June, 2011. indicators were respectively 100%, 0%, 100%, 95% in CPSCR. December of 2007), - Target: 100% in 4 large municipalities Improve administration of solid waste at municipal level: Six regional sanitary landfills have Substantial Progress. - Target: Six regional sanitary landfills established and been established and are now fully Source: P057950 Solid Waste Management Project. operational (2009); 20% reduction in wild dumpsites operational. The recent assessment IR. January, 2010. suggests that 15% reduction in the number of wild dumpsites was CPSCR. achieved. This result is somewhat below projected 20% due to lack of counterpart financing for this activity. However, results achieved seen as satisfactory given the large number of wild dumpsites. Promote sustainable mechanisms for municipal capital In 32 municipalities (14 in the FBH and Modest progress, as reflected in survey of investments: 18 in RS) a significant part of budget beneficiaries. - Baseline: Weak citizen participation in decision investments were made using the Source: P070995 Community Development Project. making at local level (2007), Participatory Budget Planning (PBP) IR. March, 2010. - Target: Improved participatory budgeting in 30 poor approach (70% in the FBH and 50% in municipalities (2009) RS meeting the target). Still a survey of beneficiaries showed that a substantial majority (72 percent) said that they had not participated in decision-making on community development, while sixty percent were not satisfied with participation in problem solving. 2. Improve the quality of social service delivery Significant increase in utilization of family medicine (FM) 75% increase in the FBH with Substantial Progress, although no hard evidence on in primary health care: 1,020,014 first examinations by FM improvement in health indicators. - Baseline: No. of first examinations by FM doctors doctors. Source: P088663 Health Sector Enhancement (FBH: 582,716; RS: 572,876 - 2005), Project. IR. February, 2011. - Target: increase by 55% in FBH; by 15% in RS (2010). CPSCR. In the RS 4,238,848 first and control examinations were made. 15% increase is believed to have been achieved although the health MIS does not differentiate between first and control visits. Importantly, the percentage of the population registered with upgraded FM teams increased from about 5% to about 58% of the population. Significant reduction in utilization of secondary and Over 10% decrease in the number of High Progress tertiary health services: referrals was achieved in the FBH in Source: P088663 Health Sector Enhancement - Baseline: No. of referrals to specialists in locations locations where FM model was Project. IR. February, 2011. where FM model was introduced FBH: 1,513,241 (2005), introduced (1,204,566 referrals in - Target: FBH: decrease by 10% (2010). 2009). CPSCR. Annexes CPSCR Review 27 Independent Evaluation Group CPS 09-11: Pillar 2 Actual Results Comments Improve the Quality of Government Spending and the Delivery of (as of current month year) Public Services for the Vulnerable 3. Reduce urban-rural disparities in income Increase in marketable horticultural produce in poor There is no information available. Negligible Progress. southern BH areas: Source: P055434 Small Scale Commercial - Baseline: 5% of farm production is marketed (2003), Agriculture Development Project. IR. October, 2010. - Target: 30 % of farm production marketed (2011) CPSCR. In southern parts of BH the area under vineyards has doubled, and area under horticulture has increased by 25%. Develop further small-scale market integrated US$4.4 million in long-term loans was High Progress. commercial agriculture and improve access to credit for disbursed to agri-businesses in the Source: P055434 Small Scale Commercial agribusiness/ agro-processing and small farmers - in less target area. US$ 11.5 million was Agriculture Development Project. IR. October, 2010. developed southern parts of the country: disbursed by partner microcredit - Baseline: 2006: US$2.15 million for agribusiness; organizations to small farmers. While CPSCR. US$1.5 million for microcredit, portfolio at risk remained low at 1.5%, - Target: - US$4.5 million long-term loans by 2010 for overall quality of portfolio and agri-business/agro-processing, US$7.5 million disbursed repayment rates fell in 2009 as a result as microcredit to small farmers and rural families with of the global financial crisis. 99.5% repayment rates 4. Increase the targeting of social benefits Increase targeting of social benefits: There are no data available. Negligible Progress. - Baseline: targeting accuracy of social benefits – Source: CPSCR. below 20% (2008). Social benefits reach only 18% among the poorest quintile. Some progress made in terms of revising the legal - Target: targeting accuracy of social benefits at least framework for non-insurance cash transfers in both 40%. Social benefits reach 70% among the poorest entities. Income testing was introduced for cash quintile (2012). Needs based approach. transfers to veteran categories to ensure sustainability of the system and adequate support to the most vulnerable. Although need based approach has now been legislated, the first results will be measurable in mid-2012. 5. Reduce the burden of Government in the economy and strengthen fiscal coordination Reduce the burden of Government on the economy and The state-level Fiscal Council Law was Negligible Progress. strengthen fiscal coordination: adopted in 2008 and the Fiscal Council Source: CPSCR. - Baseline: National Fiscal Council not established, and (FC) was established. The FC agreed fiscal targets not well coordinated between different on the overall fiscal envelope for the Bosnia and Herzegovina October 2010 Article IV levels of government. Current expenditures equal to 41% state and the two entities for 2009 and Consultations. IMF. of GDP (2007), 2010. These were an integral part of - Target: Fiscal Council established and functional. the Stand-by Agreement with the IMF Sound fiscal framework maintained. The share of current and have largely been observed. In a expenditures in GDP lower by 2pp (2011) pre-election context (elections in October of 2010) the FC postponed the adoption of overall fiscal envelope for 2011. Increase formal employment: Formal employment grew up to 2008, Negligible Progress. - Baseline: 687,445 employees (2007) but this trend was subsequently Source: CPSCR. - Mid-term: 5% growth (2008) reversed in 2009 and 2010 as a result - Target: 10.2% growth (2010) of impact of the global economic crisis on BH economy: - 2008: 706,088 (2.7% growth compared to 2007), - 2009: 686,044 (-0.2% growth compared to 2007), - 2010: 681,332 (-0.9% growth compared to 2007). Ongoing pre P083353 Urban Infrastructure & Service Delivery Project Approved FY 2005. Closed FY 2011. Latest internal rating: Moderately Satisfactory, CPS 07-10 IR. 5/25/2011. Support P057950 Solid Waste Management Project Approved FY 2002. Closed FY 2010. IR rating: Satisfactory. P070995 Community Development Project Approved FY 2001. Closed FY 2010. IEG rating: Moderately Satisfactory Annexes CPSCR Review 28 Independent Evaluation Group CPS 09-11: Pillar 2 Actual Results Comments Improve the Quality of Government Spending and the Delivery of (as of current month year) Public Services for the Vulnerable Latest internal rating: Moderately Satisfactory, P088663 Health Sector Enhancement Project Approved FY 2005. Active. IR. 2/28/2011. P055434 Small Scale Commercial Agriculture Development Project Approved FY 2003. Closed FY 2010. IEG rating: Moderately Satisfactory. New Lending Approved FY 2010. Closed FY 2011. Latest internal rating: Satisfactory, IR. 12/8/2010. Support P116951 Public Expenditure Crisis DPL P116774 Social Safety Net and Employment Support Approved FY 2010. Active. Latest internal rating: Satisfactory, IR. 6/1/2011. Project New non- P110183 Proxy Means Targeting for Equitable and Delivered to Client FY 2008. lending Sustainable Social Assistance in Bosnia and Support Herzegovina (Grants and P096614 Strengthening Local Governance Study Delivered to Client FY 2009. Special Financing Projects) Additional P112985 Social Safety Nets / PMT Programmatic AAA Delivered to Client FY 2009. AAA