The World Bank Report No: ISR6220 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: 5 Status: ARCHIVED Archive Date: 08-Jul-2011 (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 08-Jul-2011 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 framework for formulating and implementing sustainable economic policies as well as in enhancing the capacity of public institutions responsible for the development and implementation of such policies to formulate and carry out the policies. [Objective as reflected in the Financing Agreement, which in substance is not different from the PAD but wordings are different. The most important project objectives are: a) contribute to government-wide coherent macro-economic policy development and decision making through establishing strong inter-ministerial coordination and interface; b) support process of economic policy development and implementation through enabling public institutions (and particularly the MEDT, through capacity building and restructuring) to formulate sound and analytically informed policy measure and proposals; and c) support reform of employment practices and wages in the civil service by building the capacity in a special task force in this area. [ These other main objectives are from the PAD but are 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: ISR6220 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 large extent in October 2009; among other changes, the "Central Agency on Development, Investment, and Innovation" (CADII) was established 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 various components and sub- components of the project. The majority of competencies that belonged to the Ministry of Economic Development and Trade (MEDT)--originally the main implementation partner for CBEM--were shifted to CADII. Consequently, CADII became the main implementing agency for CBEM. The second round of disruption was caused by the April and June events of 2010. The April 2010 political uprising forced the President to resign and led to the formation of an interim government headed by a coalition of opposition political and civic leaders. CADII was abolished. Then in June social tensions and inter-ethnic clashes broke out in the 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 the project (which had earlier moved from MEDT to CADII in October 2009) was shifted to the new Ministry of Economic Regulation, which has been assigned the majority of MEDT’s competencies. Again, the government restructuring that took place at end-2011 resulted in renaming of the MER into the Ministry of Economy and Anti Monopoly Policy. This round of government restructuring, however, is not expected to have a significant impact on CBEM implementation arrangements. From early 2011, project implementation has accelerated significantly. However, due to significant 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: ISR6220 Indicator Name Core Unit of Measure Baseline Current End Target Enhanced inter-ministerial coordination and Text Value No existing coordination in The Macroeconomic Policy High level coordination capacity to ensure a coherent economic policy policy making across central Coordination Council was committee operational, holds Public Disclosure Copy decision-making process. Governement. -date reflects established by government regular meetings with relevant Board date decree in 2011. However, the agenda for major economic Council has not been meeting policy decisions. on a regular basis. The Working Group, which has been established along with the Council is functional and meets regularly. Date 15-Jul-2008 08-Mar-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 reorganization of MEAMP MER reorganized consistent through capacity building and restructuring) are structure and low analytical (former MEDT) has started. with new structure. enabled to formulate sound and analytically capacity. informed policy measure and proposals. Date 15-Jul-2008 08-Mar-2012 31-Dec-2012 Comments Functional review prepared for reorganization of MEAMP (former MER). The process to reorganize MEAMP has not been completed. Policy Development Unit established and capacity of Macroeconomic and FiscalUnit has been strengthened. Progress has also been made in strengthening MEAMP's Public Disclosure Copy capacity to carry out Regulatory Impact Assessments. Capacity for carrying out a reform of wages Text Value No existing capacity to carry Salary Task Force has Salary task force presents and employment in the civil service, together out a pay reform prepared draft options for wage and with options developed recommendations for wage employment reform and employment reform. Date 15-Jul-2008 08-Mar-2012 31-Mar-2011 Page 3 of 7 The World Bank Report No: ISR6220 Comments Salary Task Force established and is fully functional. Public Disclosure Copy 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 Decree was adopted by Coordination procedures clearly defines roles & responsibilities in policy the government in 2011. formalized in decree or economic policy design, implementation & regulation. Agreement evaluation at central level (b) establishes an reached on composition and effective coordination agenda of coordination committee Date 15-Jul-2008 08-Mar-2012 30-Jun-2011 Comments Regular meetings of coordination group taking Text Value No coordination in economic The process to coordinate Coordination committee place, with appropriate agenda and relatively policy economic policies has started meeting regularly with few major economic policy decisions being with the creation of the substantive appropriate taken outside the mechanism. Macroeconomic Policy agenda. Coordination Council. Date 15-Jul-2008 08-Mar-2012 31-Dec-2012 Comments The Council does not yet meet on a regular basis. Publication of macroeconomic and fiscal Text Value Not currently published by The Government still Publication of more detailed forecasts with evidence that these forecasts Govt. publishes macroeconomic forecasts at least twice during provide the basis for budget and economic and fiscal forecasts on an the year,and evidence that policy discussions. annual basis. forecasts form the basis of budget planning. Date 15-Jul-2008 08-Mar-2012 31-Dec-2012 Comments New structure of MEDT corresponds to that Text Value Dysfunctional current The process to reorganize MEAMP reorganized proposed in the SDP structure MEAMP has started, but is consistent with new structure Public Disclosure Copy not fully complete. 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. Page 4 of 7 The World Bank Report No: ISR6220 Satisfactory implementation (according to Text Value No specific survey to measure No survey has been Surveys indicate progress in private sector surveys) of significant measures reforms proposed by the conducted. other areas of business to improve the business environment proposed investment council. environment and increase by the investment council. satisfaction with the Public Disclosure Copy 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, 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 The production of two policy At least six policy papers subsequently translated into policy decisions. papers has commenced. developed, of which three are judged to be of high quality and at least one forms the basis of a significant policy decision Date 15-Jul-2008 08-Mar-2012 31-Dec-2012 Comments Two more policy papers are expected to be launched within the next month. Pay and grading reform group established Text Value No existing taskforce The Salary Task force was Salary task force established established, is fully functional and basic data collected and has collected basic data on public sector wages and employment. Date 15-Jul-2008 08-Mar-2012 31-Jul-2010 Public Disclosure Copy Comments Staffing of the Salary Task Force is 100% complete. Options paper for pay reform is produced Text Value No current options for pay The Salary Task Force has Salary task force presents reform prepared draft options for wage and recommendations for reform. employment reform Date 15-Jul-2008 08-Mar-2012 31-Dec-2010 Comments Data on Financial Performance (as of 27-Jan-2012) Page 5 of 7 The World Bank Report No: ISR6220 Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P108525 IDA-H3880 Effective 01-Jul-2008 22-Sep-2008 18-Dec-2008 31-Dec-2012 Public Disclosure Copy Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P108525 IDA-H3880 Effective XDR 1.90 1.90 0.00 0.63 1.27 33.00 Disbursement Graph Key Decisions Regarding Implementation Several important decisions were made following the appointment of the interim government in April 2010 and the entry into office of a new government after the October 2010 Public Disclosure Copy elections. First, the project Steering Committee (SC)--the project oversight body with representation from other government agencies involved in its 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 implementation of the project component over which they preside. 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. These decisions have had a positive effect on project implementation. Restructuring History Level two Approved on 14-Nov-2011 Related Projects Page 6 of 7 The World Bank Report No: ISR6220 There are no related projects. 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