The Chongqing-Dadukou District Fiscal Sustainability Development Policy Financing Project of China had a satisfactory overall outcome, a satisfactory performance by the Bank and the monitoring and evaluation quality was satisfactory.
... See More + The lessons learned were: (1) This operation supports the view that the DPF can be a very effective instrument for facilitating deep cooperation around policies and reforms. (2) Fortunately, the absence of an explicit programmatic DPF did not prevent what became a necessary multi-year engagement. (3) This DPF also reaffirms the critical role of the Central Government for facilitating an environment where significant and valuable experimentation can occur. (4) Working for the first time at the level of a local (sub-provincial) government on debt sustainability issues provided a few important lessons.
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Implementation Completion and Results Report ICR4444 JAN 03, 2019
The Hunan Fiscal Sustainability Development Policy Financing Project of China had a highly satisfactory overall outcome, a highly satisfactory performance by the Bank and the monitoring and evaluation quality was highly satisfactory.
... See More + The lessons learned were: (1) This operation demonstrates that the DPF can be a very effective instrument for facilitating deep cooperation around policies and reforms. (2) Fortunately, the absence of an explicit programmatic DPF did not prevent what became a necessary multi-year engagement. (3) This DPF also reaffirms the critical role of the Central Government for facilitating an environment where significant and valuable experimentation can occur. (4) A more simplified debt sustainability assessment tool will be needed to scale up the experience of Hunan. (5) This operation demonstrated important potential links between World Bank projects and policy dialog with the government.
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Implementation Completion and Results Report ICR4445 JAN 03, 2019
The First, Second and Third Programmatic Resilience-Building Development Policy Financing of Grenada had a moderately satisfactory overall performance, a moderately satisfactory performance by the Bank and the monitoring and evaluation quality was satisfactory.
... See More + The lessons learned were: (1) The use of a programmatic instrument is appropriate when supporting a multi-stage program with a longer-term horizon, but even this approach requires realism in what is achievable over the implementation of three operations. (2) Public employment management (and downsizing) requires time. (3) Small countries have different dynamics that need to be considered when developing reform programs and selecting indicators and targets. (4) While appraisal of reform programs normally identifies sources of analytical and technical work that helped define the priorities together with sources of ongoing assistance in the respective fields, the analysis needs to consider carefully those areas in which hands-on, just-in-time technical support will be required to compensate for weak institutional capacity. (5) Policy operations that support fiscal consolidation and a reduction of the public sector should be cautious of requiring the establishment of separate new units or agencies to implement policies.
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Implementation Completion and Results Report ICR4551 DEC 21, 2018
Malawi’s external debt is assessed to be at a moderate risk of debt distress, but with some space to absorb shocks. While the mechanical results of the model point to low risk—with all four external debt burden indicators below the thresholds determined by Malawi’s debt carrying capacity —judgement was applied given vulnerabilities from high domestic debt.
... See More + Malawi is assessed to be at high overall risk of debt distress. This mainly reflects increasing amounts of domestic debt at high interest rates during recent years. The present value of total public debt is projected to decline throughout the program period but would breach the benchmark through 2025. The projected borrowing path and debt policies remain broadly unchanged since the last Debt Sustainability Analysis (DSA). Fiscal discipline should be strengthened to avoid accumulation of domestic debt at high interest rates. Close attention will be needed to the financing terms of any proposed infrastructure investments given limited headroom for further borrowing. To enhance resilience to shocks, efforts should be stepped up to further diversify the economy, particularly exports, broaden the revenue base, and strengthen public financial management.
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The external risk of debt distress for Solomon Islands remains moderate. All external debt indicators remain below the relevant indicative thresholds under the baseline scenario, which incorporates the average long-term effects of natural disasters on growth, the fiscal balance, and the current account balance.
... See More + However, an export shock would cause a prolonged breach of the threshold for the PV of PPG external debt-to-GDP ratio. The overall risk of debt distress is assessed as moderate, with the risk reflecting a deteriorating fiscal position. Though the PV of total public debt-to-GDP ratio remains below the 35 percent benchmark under the baseline scenario, the nominal debt-to-GDP ratio would breach the authorities’ target of 35 percent in 2028. Moreover, a shock to real GDP has the greatest impact on the PV trajectory, placing risk at moderate. A tailored natural disaster shock, which uses similar scale to the largest shock in Solomon Islands’ history, causes a significant deterioration in debt sustainability in the aftermath of the event. To rebuild fiscal buffers and to enhance resilience against shocks, including natural disaster shocks, both stronger revenue mobilization measures and expenditure rationalization are needed. While the mechanical signal of the DSA suggests there is space to absorb a shock, staff assess such space to be limited, as there are fiscal cashflow problems which are acute, with rising domestic expenditure arrears and a very low cash balance. The sharp cut in development spending for 2018 looks difficult to fully achieve given a significant infrastructure investment gap; and although the authorities made efforts to clear arrears through the Supplementary budget, staff expect pressure on domestic expenditure arrears to reemerge later in the year.
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