The World Bank Report No: ISR7653 Implementation Status & Results Kyrgyz Republic Capacity Building for Economic Management Grant (P108525) Public Disclosure Copy Operation Name: Capacity Building for Economic Management Grant Project Stage: Implementation Seq.No: 6 Status: ARCHIVED Archive Date: 12-Sep-2012 (P108525) Country: Kyrgyz Republic Approval FY: 2009 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Technical Assistance Loan Implementing Agency(ies): Ministry of Economic Regulation Key Dates Board Approval Date 01-Jul-2008 Original Closing Date 31-Dec-2012 Planned Mid Term Review Date Last Archived ISR Date 26-Mar-2012 Effectiveness Date 18-Dec-2008 Revised Closing Date 31-Dec-2012 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to assist the Recipient in establishing and institutionalizing an efficient and effective frameworkfor formulating and implementing sustainable economic policies as well as in enhancing the capacity of public institutionsresponsible for the development and implementation of such policies to formulate and carry out the policies. [Objective asreflected in the Financing Agreement, which in substance is not different from the PAD but wordings are different. The mostimportant project objectives are: a) contribute to government-wide coherent macro-economic policy development and decision makingthrough establishing strong inter-ministerial coordination and interface; b) support process of economic policy development andimplementation through enabling public institutions (and particularly the MEDT, through capacity building and restructuring) toformulate sound and analytically informed policy measure and proposals; and c) support reform of employment practices and wages inthe civil service by building the capacity in a special task force in this area. [ These other main objectives are from the PAD butare not reflected in the legal agreement except item b. although broadly in line in substance ] Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Public Disclosure Copy Institutional and Technical Framework for Macro-Economic Policy 0.50 Strengthening the Capacity to Formulate and Implement Economic Policy 1.64 Building Capacity for Civil Service Reform 0.34 Project Management and Implementation Support 0.33 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Page 1 of 7 The World Bank Report No: ISR7653 Previous Rating Current Rating Overall Risk Rating Public Disclosure Copy Implementation Status Overview Two rounds of disruption in the government hindered project implementation. First, the government was restructured to a largeextent in October 2009; among other changes, the "Central Agency on Development, Investment, and Innovation" (CADII) wasestablished and empowered with competencies over most economic policy decisions, donor coordination, and all external assistance.These changes caused shifts in the role and responsibilities of the government agencies involved in the implementation of variouscomponents and sub- components of the project. The majority of competencies that belonged to the Ministry of Economic Developmentand Trade (MEDT)--originally the main implementation partner for CBEM--were shifted to CADII. Consequently, CADII became the mainimplementing agency for CBEM. The second round of disruption was caused by the April and June events of 2010. The April 2010political uprising forced the President to resign and led to the formation of an interim government headed by a coalition ofopposition political and civic leaders. CADII was abolished. Then in June social tensions and inter-ethnic clashes broke out inthe south of the country, disrupting the government’s operations and implementation of many projects, including CBEM. Subsequently, with the formation of the interim government in 2010, the primary responsibility for the implementation of theproject (which had earlier moved from MEDT to CADII in October 2009) was shifted to the new Ministry of Economic Regulation, whichhas been assigned the majority of MEDT’s competencies. Again, the government restructuring that took place at end-2011 resulted inrenaming of the MER into the Ministry of Economy and Anti Monopoly Policy. The last round of government restructuring, however,did not hinder project implementation. From early 2011, project implementation has accelerated significantly. However, due tosignificant initial delays and some capacity constraints, the implementation is still behind the original plan. Locations No Location data has been entered Results Project Development Objective Indicators Public Disclosure Copy Page 2 of 7 The World Bank Report No: ISR7653 Indicator Name Core Unit of Measure Baseline Current End Target Enhanced inter-ministerial coordination and Text Value No existing coordination in The PM has signed a decree High level coordination capacity to ensure a coherent economic policy policy making across central in June instituting regular committee operational, holds Public Disclosure Copy decision-making process. Governement. -date reflects monthly meetings of the regular meetings with relevant Board date Council. The Council met in agenda for major economic July alongside a regular policy decisions. government meeting. Another separate meeting of the Council is planned for August. Date 15-Jul-2008 16-Jul-2012 31-Dec-2012 Comments The next meeting of the Macroeconomic Policy Coordination Council is expected to be held in April 2012. Public institutions (and particularly the MEDT, Text Value MEDT has old dysfunctional The structure of MEAMP has MER reorganized consistent through capacity building and restructuring) are structure and low analytical been changed, following with new structure. enabled to formulate sound and analytically capacity. among other things, the informed policy measure and proposals. recommendations of the functional review. The analytical capacity within the ministry is still relatively weak and uneven across different units, but substantial progress in strengthening capacity has been made and continues to be made. Date 15-Jul-2008 16-Jul-2012 31-Dec-2012 Comments Functional review prepared for reorganization of MEAMP (former MER). The process to reorganize MEAMP has not Public Disclosure Copy been completed. Policy Development Unit established and capacity of Macroeconomic and FiscalUnit has been strengthened. Progress has also been made in strengthening MEAMP's capacity to carry out Page 3 of 7 The World Bank Report No: ISR7653 Regulatory Impact Assessments. Capacity for carrying out a reform of wages Text Value No existing capacity to carry End target has been fully met. Salary task force presents and employment in the civil service, together out a pay reform options for wage and Public Disclosure Copy with options developed employment reform Date 15-Jul-2008 16-Jul-2012 31-Mar-2011 Comments Salary Task Force established and is fully functional. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Presidential Decree/govt Regulation which (a) Text Value No coordination in economic The coordination process has Coordination procedures clearly defines roles & responsibilities in policy been formalized. At the formalized in decree or economic policy design, implementation & technical level, an institutional regulation. Agreement evaluation at central level (b) establishes an structure has been developed reached on composition and effective coordination to support the operations of agenda of coordination the political level committee Macroeconomic Policy Coordination Council. Progress is being made in developing capacity at the technical level. Date 15-Jul-2008 16-Jul-2012 30-Jun-2011 Comments Regular meetings of coordination group taking Text Value No coordination in economic The Prime Minister signed a Coordination committee place, with appropriate agenda and relatively policy decree in June institutiong meeting regularly with few major economic policy decisions being monthly meetings of the substantive appropriate taken outside the mechanism. Macroeconomic Policy agenda. Coordination Council. The Council met in July alongside a regular government Public Disclosure Copy meeting. The Council is scheduled to meet again in August, as monthly meeting mandate has been introduced. Date 15-Jul-2008 16-Jul-2012 31-Dec-2012 Comments The Council does not yet meet on a regular basis. Page 4 of 7 The World Bank Report No: ISR7653 Publication of macroeconomic and fiscal Text Value Not currently published by Forecasts are published twice Publication of more detailed forecasts with evidence that these forecasts Govt. a year on the website of forecasts at least twice during provide the basis for budget and economic MEAMP. The forecasts form the year,and evidence that policy discussions. the basis for the budget forecasts form the basis of Public Disclosure Copy development process. budget planning. However, the quality of the forecasts could be substantially improved. Date 15-Jul-2008 16-Jul-2012 31-Dec-2012 Comments New structure of MEDT corresponds to that Text Value Dysfunctional current MEAMP reorganized proposed in the SDP structure consistent with new structure Date 15-Jul-2008 08-Mar-2012 31-Dec-2012 Comments Functional review of MER was completed. The restructuring process started, but is not complete yet. The new Minister has expressed his commitment to this process. Satisfactory implementation (according to Text Value No specific survey to measure Surveys indicate progress in private sector surveys) of significant measures reforms proposed by the other areas of business to improve the business environment proposed investment council. environment and increase by the investment council. satisfaction with the performance of IC and MEDT. Date 15-Jul-2008 08-Mar-2012 31-Dec-2012 Comments Despite the team's insistence, there was no readiness to launch the survey. However, the new government is taking significant steps to improve the business environment, Public Disclosure Copy which would probably reflect well on the results of a survey it the new Minister decides to conduct it. High quality policy papers are produced and Text Value No policy papers At least six policy papers subsequently translated into policy decisions. developed, of which three are judged to be of high quality and at least one forms the basis of a significant policy decision Page 5 of 7 The World Bank Report No: ISR7653 Date 15-Jul-2008 08-Mar-2012 31-Dec-2012 Comments Two more policy papers are expected to be launched Public Disclosure Copy within the next month. Pay and grading reform group established Text Value No existing taskforce Salary task force established and basic data collected Date 15-Jul-2008 08-Mar-2012 31-Jul-2010 Comments Staffing of the Salary Task Force is 100% complete. Options paper for pay reform is produced Text Value No current options for pay Salary task force presents reform options for wage and employment reform Date 15-Jul-2008 08-Mar-2012 31-Dec-2010 Comments Data on Financial Performance (as of 23-Aug-2012) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P108525 IDA-H3880 Effective 01-Jul-2008 22-Sep-2008 18-Dec-2008 31-Dec-2012 31-Dec-2012 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P108525 IDA-H3880 Effective XDR 1.90 1.90 0.00 0.90 1.00 47.00 Disbursement Graph Public Disclosure Copy Page 6 of 7 The World Bank Report No: ISR7653 Public Disclosure Copy Key Decisions Regarding Implementation Several important decisions were made following the appointment of the interim government in April 2010 and the formation of a new government after the October 2010 elections. First, the project Steering Committee (SC)--the project oversight body with representation from government agencies involved in CBEM implementation--that had previously been disbanded--was reappointed and re-assigned the roles and responsibilities of leading and managing the project components. Second, more power was given to the heads of individual components within the SC to independently make decisions specifically related to the implementation of their respective project components. Third, the procurement plan was revised, allocating more funds to the activities where implementation progress was faster and additional funding was needed. Finally, a local Project Manager with the mandate to facilitate project implementation was hired in 2011. The Project Manager resigned in May 2012, but a new one has been appointed in July. These decisions have had a positive effect on project implementation. Restructuring History Level two Approved on 14-Nov-2011 Public Disclosure Copy Related Projects There are no related projects. Page 7 of 7