For Official Use Only CLR Review Independent Evaluation Group 1. CAS/CPS Data Country: Romania CAS/CPS Year: FY14 CAS/CPS Period: FY14-FY17 (CPS), FY14-18 (PLR) CLR Period: FY14 – FY18 Date of this review: June 7, 2018 2. Ratings CLR Rating IEG Rating Development Outcome: Moderately Satisfactory Moderately Satisfactory WBG Performance: Good Good 3. Executive Summary i. This review of the World Bank Group’s Completion and Learning Report (CLR) covers the Country Partnership Strategy (CPS) and the Performance and Learning Review (PLR) dated November 3, 2016. The original CPS period (FY14-17) was at the PLR stage extended by one year to cover FY14-18. The CLR and this review cover this extended period. ii. Romania is an upper middle-income country with a GNI per capita of $9,480 in 2016 and a population of 19.7 million. Romania’s per capita GDP had grown rapidly up to 2009, reducing poverty, but the global financial crisis of 2008 triggered a severe recession. The IMF Article IV report (May 2017) notes that Romania strengthened its economy considerably after the global financial crisis. Romania registered an average annual GDP growth of 3.9 percent during the review period (2014-2016). Public debt and fiscal and current account imbalances are moderate compared to many emerging markets, but significant challenges remain and the momentum of progress in policies has waned. Income convergence with the EU has slowed and poverty is among the highest in the EU. Romania has a Human Development Index (HDI) of .802 in 2015, placing the country in the very high human development category and ranking 50 (of 188) in HDI in 2015. Its Gini coefficient is 28.3 in 2016 (from around 35 in 2010) and its poverty headcount ratio based on the national poverty line is 25.4 percent (average 2014-2016). iii. At the time of the CPS, the country’s medium-term strategy was articulated through its 2013 National Reform Program with a Convergence Program (2013-16) and associated program of actions for economic, social and political reforms. The government’s medium-term strategy was framed within the broader context of economic convergence with the European Union (EU), the EU’s country specific recommendations, and the ability to access available EU funds. The WBG’s overarching CPS objective - to reduce poverty and foster sustainable income growth for the bottom 40 percent of the population - fit well within both the National Reform Program and the EU context. The CPS was structured around three pillars (or focus areas): (i) improving government effectiveness (“creating a 21st century government”), (ii) growth and job creation, and (iii) social inclusion. These were aligned within the context of Romania’s economic convergence process with the EU and its EU2020 “smart, sustainable and inclusive” agenda. CLR Reviewed by: Panel Reviewed by: CLR Review Manager/Coordinator Nils Fostvedt Jorge Garcia-Garcia Pablo Fajnzylber Consultant, IEGEC Consultant, IEGEC Manager, IEGEC Takatoshi Kamezawa, Lourdes Pagaran Senior Evaluation Officer, CLRR Coordinator, IEGEC IEGEC For Official Use Only CLR Review 2 Independent Evaluation Group iv. On balance, IEG rates the overall development outcome as Moderately Satisfactory. Of the 14 objectives, three were rated Achieved, five Mostly Achieved, five Partially Achieved and one Not Achieved. Focus Area I was Moderately Satisfactory. Good progress was made in improving debt management, strengthening strategic planning, and improving governance and organizational functioning and strategy formulation; but limited progress on health service delivery, and revenue and expenditure administration. Focus Area II was Moderately Satisfactory. There was good progress in aligning with EU requirements on environment and climate action, improving business entry and exit, and improving RCC performance in promoting and enforcing market competition (although this is still work in progress). However, there was limited progress on strengthening skills and education programs, creating an improved business environment and improving energy efficiency. Focus Area III was Moderately Unsatisfactory. Several process steps were completed and under implementation in support of the government’s program to tackle poverty and social exclusion while measures for a more streamlined, better targeted and more cost efficient social protection system were not achieved. v. On balance, IEG rates the WBG performance as Good. The CPS addressed important development challenges in Romania in the areas of improving government effectiveness, growth and job creation, and social inclusion. The original program design was based on a “selective approach” that would use in a flexible manner the full range of WBG instruments including financing, advisory services and analytics (ASA), reimbursable advisory services (RAS), and IFC operations; with positive synergy between advisory services and other WBG instruments. This design was ambitious but appeared appropriate at the time. The original program design was focused and selective, and was closely aligned with the twin corporate goals. The program that the Bank implemented was significantly different from what had been envisaged in the CPS and in the PLR, with a sharp reduction in lending due to changing government priorities, strong preferences for RAS, and some administrative weaknesses. However, the Bank demonstrated significant flexibility and attention to shifting government priorities in accommodating effectively the government’s desire for RAS. Close collaboration with European development partners and with the EU has been essential for the Bank’s work in the country. At the PLR, the results framework was revised, by increasing the number of objectives (from seven to 14) and indicators (from 16 to 43). The revised results framework had significant shortcomings. It had too many objectives and indicators, with unclear links to WBG interventions, had issues of WBG attribution for some indicators, and more focused on process indicators. Overall, the closed and active portfolio of Romania showed variable performance. The Bank and IFC in Romania worked independently of each other, with no significant areas of attempted or realized synergy. During the review period, there were no safeguards issues. INT substantiated three cases that have resulted in sanctions and referrals. vi. IEG concurs with some of the CLR lessons which are summarized as follows: i) WBG can continue to serve as a stable, neutral convener and knowledge broker in Romania to help identify development solutions and provide support for their implementation; (ii) Careful deliberation is needed for the right selection of WBG instruments to achieve development objectives;(iii) Continuous attention should be paid to implementation support under the new CPF. (iv) In the next CPF cycle it will be critical to undertake the PLR in a timely manner to assess implementation and implement the recommendations. vii. IEG adds the following lesson: • In countries with large RAS program, it is critical to be more careful and realistic in designing the results framework to ensure strong linkages between RAS, CPS objectives, and results; and ensuring appropriate monitoring and reporting of results. In the case of Romania, the results framework was drastically revised at the PLR and suffered from several cases of weak linkages between the stated objectives and their related indicators. For Official Use Only CLR Review 3 Independent Evaluation Group 4. Strategic Focus Relevance of the WBG Strategy: 1. Congruence with Country Context and Country Program. Romania is an upper middle- income country with a GNI per capita (2016) of $9,480 and a population of 19.7 million. Romania’s per capita GDP had grown rapidly up to 2009, reducing poverty, but the global financial crisis of 2008 triggered a severe recession. The IMF Article IV report (May 2017) notes that Romania strengthened its economy considerably after the global financial crisis. Romania registered an average annual economic growth of 3.9 percent during the review period (2014-2016). The country ranks 50 (out of 188) on the Human Development Index in 2016. Its Gini coefficient is 28.3 in 2016 (from around 35 in 2010) and its poverty headcount ratio based on the national poverty line is 25.4 percent (average 2014-2016). 2. At the time of the CPS, the government had produced a 2013 National Reform Program (NRP), a Convergence Program (CP) for 2013-16, and an associated Government Program (GP) of actions, covering economic, social and political reforms. The country’s medium-term strategy was framed within the broader context of economic convergence with the EU, the EU’s country specific recommendations, and the ability to access available EU funds. The WBG’s overarching CPS objective– to reduce poverty and foster sustainable income growth for the bottom 40 percent of the population - fit well within this context, and the three focus areas and objectives were within the context of Romania’s economic convergence process with the EU and its EU2020 “smart, sustainable and inclusive” agenda. 3. Relevance of Design. The proposed WBG interventions were expected to contribute to the achievement of the CPS objectives. The original program design was based on a “selective approach” that would use the full range of WBG instruments including financing through two DPFs and several IPFs and advisory services and analytics (ASA), including reimbursable advisory services (RAS). It was also assumed that IFC would contribute to the achievement of the CPS objectives through its long-term financing (with focus on growth and job creation), and that there would be synergies between RAS and other WBG instruments. Changes in government priorities led to a shift in the composition of WBG interventions that relied heavily on RAS. Accordingly, at the November 2016 PLR, the Bank had shifted its focus from lending to the RAS program that had expanded considerably. However, while the program remained largely unchanged in substance, there were many changes to the results framework, including increasing the number of objectives and indicators that were more process oriented. In addition, the expected IFC AS contributions and synergy with IFC’s lending instruments and other WBG interventions did not materialize. Overall, the changes at the PLR weakened the links between the WBG interventions, CPS objectives and results. Selectivity 4. The original program was selective, with three focus areas, seven objectives and 16 associated indicators, and was appropriate given the country context. The planned lending program was also selective in line with the WBG’s comparative advantage. At the PLR, the number of focus areas remained unchanged, but the number of objectives increased from seven to 14, and the associated indicators were scaled up from 16 to 43. The expanded RAS program reflected the Bank’s flexibility and responsiveness to country circumstances and government priorities, and was generally in line with the Bank’s comparative advantage. However, the changes at the PLR made the program lose some of the earlier focus and selectivity. Alignment 5. The overarching objective of the CPS was to reduce poverty in Romania and foster sustainable income growth for the bottom 40 percent of the population. This was an appropriate goal in light of the country’s high rate of poverty, and the focus areas on growth and job creation and social inclusion were well aligned with the twin goals. Specific objectives for improved health service delivery, program to tackle social inclusion and poverty reduction, and an improved social protection system supported the twin goals. However, as the CLR points out, the revised PLR framework was For Official Use Only CLR Review 4 Independent Evaluation Group developed to some extent in response to short term government priorities and needs, and this may have diluted somewhat the direct focus on the twin goals. 5. Development Outcome Overview of Achievement by Objective: 6. Following the IEG-OPCS Shared Approach (SA) for Country Engagement, the assessment of the development outcome is based on the updated results framework at the PLR stage. In line with the approach, this review applies the following nomenclature: focus areas and objectives corresponding to the CLR’s pillars and outcomes, respectively. Focus Area I: Creating a 21st Century Government. 7. This Focus Area had six objectives: (i) revenue and expenditure administration improved; (ii) strengthened debt management; (iii) improved strategic planning, prioritization and evidence- based policy making; (iv) enhanced strategy formulation, operationalization, monitoring and evaluation in preparation for the 2014-2020 period and beyond; and (vi) improved health service delivery. 8. Objective 1: Revenue and expenditure administration improved. This objective was supported primarily by the Revenue Administration Modernization Project (RAMP/FY13), the First and Second Fiscal Effectiveness and Growth DPLs (FY14/FY15) the IFC project Timisoara Municipality and an IFC AS project. This objective had four indicators: (i) Revenue Management System is procured. Not Achieved. The FY13 project has stalled since completing the first stage of the procurement of the Integrated Revenue Management System (IRMS). Hence, the IRMS has not been procured. (ii) Framework for introducing results informed budgeting (RIB) by 2018. Partially Achieved. The framework for RIB had been drafted by the end of 2017 and was in the process of clearances and approvals within the government. Additional information provided by the region indicates that the framework was revised in March 2018 and is now following the clearance process in the Ministry of Finance before being published for public consultation. (iii) Centralized procurement introduced for health medicine. Achieved. The procurement of centrally procured antibiotics and oncology drugs started after the Ministry of Health (MOH) had approved a centralized procurement plan for 2016 that included 31 antibiotics and 12 widely used oncology drugs. This indicator was also used in Objective 6. (iv) IFC investments in sub-nationals. Achieved. IFC has invested in two municipality projects (supporting the rehabilitation of transport and social infrastructure in a municipality, and in another the rehabilitation of heating systems and the construction of a new cogeneration plant and heat boilers). This indicator is not an appropriate measure for this objective. 9. Two of the above indicators, while achieved, were not appropriate measures for the objective. The two relevant indicators were either not achieved or partially achieved. On balance, this Objective was Partially Achieved. 10. Objective 2: Strengthened debt management. This objective was added at the PLR. It was supported primarily by the First and Second Fiscal Effectiveness and Growth DPL (FY14/FY15), and by a RAS to the Ministry of Finance for Strengthening Debt Management (FY14). This objective had one indicator: (i) Debt management strategy adopted and updated yearly in line with best practice. Achieved. A Debt Management Strategy (2014-2016) was approved and significant progress has been made in debt management practices. The Debt Management Strategy (2017-2019) was published in 2017 as a continuation of the 2016-2018 Debt Management Strategy and is in line with international practices. The Strategy has been updated yearly since 2015. Additional information suggests strengthened debt management. According to the IMF For Official Use Only CLR Review 5 Independent Evaluation Group Article IV for Romania, public debt in the country is relatively low (39.1 percent of the GDP in 2016), after having peaked (as per the CPS) at about 75.6 percent. In 2012. For 2016, EuroStat reports that public debt was 37.6 percent, the 5th lowest among the 28 EU member countries. 11. On balance, this objective was Achieved. 12. Objective 3: Improved strategic planning, prioritization and evidence-based policy- making. This objective and its five indicators were added in the PLR. It was supported primarily by a series of RAS, including Planning and Budgeting Capacity (FY16), Development of Capacity of the Central Public Administration to Carry Out Impact Studies (FY16), Strengthening the Regulatory Impact Assessment Framework (FY16), and the Implementation Support for the National Strategy on the Digital Agenda (FY14). (i) Development and use of a central dashboard in the Chancellery of the Prime Minister for monitoring high-level institutional Strategic Plans (ISP) priorities of selected ministries. Achieved. The CLR reports that the Dashboard is used in 13 ministries, which could not be verified by IEG. However, a March 2017 presentation from the General Secretariat of the government attests to the creation of an ISP dashboard for monitoring. (ii) Simplified framework for more effective implementation of regulatory analysis. Achieved. As reported in the CLR, the Prime Minister decision 297/2016 presents an updated guidance on regulatory Impact assessment (RIA) framework. (iii) 100 percent of public investment projects selected based on improved evaluation and selection criteria under PNDL (National Local Development Program). Achieved. The Ministry of Regional Development and Public Administration (MDRAP) reported on its website in February 2018, that 6,800 priority investments projects were funded across Romania, against a target of 4,000. The CLR informs that these priority investments are selected based on a new set of selection criteria that partly follow Bank recommendations. (iv) More effective inter-municipal investment planning and project selection criteria applied in at least three cities. Achieved. Four cities in Romania now apply new municipal investment planning and project selection criteria, against the target of three cities. (v) Digital maps drive investments for increased access to broadband. Partially Achieved. An FY 14 RAS for digital implementation supported the development of a tool to map village typology and enabled the design of tailored broadband supply solutions. However, the CLR reports that no funding has been made available to use the maps and implement solutions. 13. Overall, this Objective was Mostly Achieved. 14. Objective 4: Enhanced strategy formulation, operationalization and monitoring and evaluation in preparation for the 2014-20 period and beyond. This broad objective and its related two indicators were added at the PLR. The objective was primarily supported by various RAS, including for reducing early school leaving (FY14), for technical assistance for preparing a strategic framework for lifelong learning (FY14), preparing a strategic framework for increasing tertiary education attainment, quality and efficiency (FY14), for the provision of inputs for the preparation of a draft national strategy and action plan on social inclusion and poverty reduction (FY14), for a strategy for the elderly and active ageing (FY14), and for implementation support for the national strategy on digital agenda (FY14). (i) Five strategies adopted and contribute to government’s meeting EU ex-ante conditionalities for accessing EU funds under the 2014-20 period. Achieved. Additional information provided by the country team confirms that the five strategies have been adopted. (ii) M&E framework updated for the strategy on digital agenda. Achieved. The EC has assessed as fulfilled the related ex-ante conditionality. For Official Use Only CLR Review 6 Independent Evaluation Group 15. For Objective 4, both indicators were achieved, and this objective was thus Achieved. The reported achievement of both indicators had already taken place by the time of their inclusion at the PLR. 16. Objective 5: Improved governance, organizational functioning and efficiency of public institutions and SOEs. This objective with its six indicators was included at the PLR. The objective was supported primarily by the FY06 Judicial Reform Project and by several RAS including for a human resource strategy for the Ministry of Public Finance (FY14), for the establishment of a performance appraisal system for government officials managing EU funds (FY14), and for the administrative capacity of the Ministry of Education and Research (FY13). (i) Ministry of Public Finance (MoPF) Human Resources Management strategy adopted and in implementation. Partially Achieved. The medium-term strategy was approved in 2014. However, the CLR reports that the implementation of the strategy has been challenged by the latest pay law and that changes to the legal framework are needed. (ii) Performance appraisal system adopted and applied to government officials managing EU funds. Achieved. The performance appraisal system was established in 2015 and has been used by the Ministry of European Funds to assess the performance of about 1,000 civil servants involved in the management of EU funds. (iii) Improved delegation of authority capacity in the Ministry of Education and Research (MoESR) piloted and new Regulations for Organization and Functioning (ROFs) adopted. Achieved. The new ROFs were adopted in 2015 and the Bank’s recommendations including on delegation of authority were adopted in updated ROFs approved in May 2016. (iv) Romanian Competition Council (RCC) revised and adopted business architecture to increase operational effectiveness. Achieved. A new competition law was adopted in 2015 which helped in eliminating overlapping mandates between the RCC and other agencies and allowed the RCC to use resources more efficiently. (v) Increase in court hearings in courts rehabilitated and increase in number of council rooms since 2014. Achieved. An ICR for the FY06 reported a 77 percent increase in the total number of court hearings in the five courts rehabilitated under the project. The target of 15 court buildings was exceeded as 12 courts were renovated and four new ones built. (vi) Law adopted on SOEs corporate governance (to Approve the Emergency Government Ordinance 109/2011) in line with OECD principles. Achieved. A new Law on Corporate Governance of SOEs was approved in May 2016; its norms were published in October of that year. 17. This objective had three dimensions: governance, organizational functioning and efficiency of public institutions and SOEs. The indicators provide some elements of governance and organizational functioning but no indicator on efficiency. Also, much of the progress for these indicators had already been achieved by the time of the PLR, such as a competition law of 2015 and the law on corporate governance of May 2016. On balance, this Objective 5 was Mostly Achieved. 18. Objective 6: Improved health service delivery. This objective was reformulated at PLR – from the original (and more demanding) objective of rationalizing the hospital network and enhancing primary health care services. The objective was primarily supported by the FY 14 Health Sector Reform Project, the FY15 Second Fiscal Effectiveness and Growth DPL, and an IFC health sector AS project. IFC also invested in one of the leading Romanian healthcare providers. This objective had four indicators: (i) Reducing the ratio of public acute beds (beds that are available for curative care) per 1,000 inhabitants from 5.5 to 4.8. Mostly Achieved. The ratio of public acute beds has been reduced from the 2013 baseline of 5.5 beds per 1,000 inhabitants to 4.5 beds by 2017 (versus the target of 4.8 beds). The CLR reports that the reduction in ratio is due in part to the sudden decrease in population. For Official Use Only CLR Review 7 Independent Evaluation Group (ii) Introducing a new basic package of health care services with additional roles and payment incentives for primary care professionals. Not Achieved. The CLR reports that no new basic package or additional roles and payment incentives will be introduced during the CPS period. (iii) Centralized procurement introduced for health medicine. Achieved. Central procurement was introduced for antibiotics and oncology drugs. This indicator was also used for Objective 1. (iv) IFC’s health sector investments. Achieved. This indicator does not measure progress or achievement of the stated objective of improved service delivery. At best, this is an input to the stated objective. There was no baseline and target for this indicator, which was added at PLR. 19. On balance, Objective 6 was Partially Achieved in view of the unclear value of one indicator and that the new package of health services was not achieved. 20. Overall, Focus Area I was Moderately Satisfactory. Of the six objectives, two objectives were achieved, two were mostly achieved, and two were partially achieved. Main achievements were improved debt management, strengthened strategic planning and prioritization, improved governance and organizational functioning, and strategy formulation; but limited progress on health service delivery, and revenue and expenditure administration. Focus Area II: Smart and Sustainable Growth. This focus area had six objectives. 21. Objective 7: Creating an improved business environment and a competitive economy. This objective, with two indicators, was supported primarily by several reimbursable advisory services (RAS), including for the development of the capacity of the central public administration to carry out impact studies (FY16), and for real estate system modernization (FY13). (i) Improved performance in Doing Business indicators that meet the current ECA averages in paying taxes. Achieved. Between 2014 and 2018 the number of payments for paying taxes decreased from 39 (per the 2014 Doing Business Report) to 14 (per the 2018 Doing Business Report) and below the ECA average of 16.5 payments. (ii) Updated framework for integrated cadaster system. Partially Achieved. The government has adopted an ordinance on cadaster and real estate registration to accelerate implementation. However, the CLR reports that the current legal framework is overly complex, and that a new draft comprehensive law has not yet been approved. 22. The two chosen indicators do not sufficiently support the broad and ambitiously formulated objective. There is also an issue of attribution. It is unclear how the RAS supporting this objective (impact studies and real estate modernization) could have contributed to the achievement of the first indicator. Overall, Objective 7 was Partially Achieved. 23. Objective 8: Improved performance of the Romanian Competition Council (RCC) for promoting and enforcing market competition. The RCC was also addressed under Objective 5. This objective and related two indicators were added at PLR. The objective was primarily supported by a RAS for assistance to the competition council (FY12). • An updated Competition Law is adopted. Achieved. The updated Competition law was adopted in 2015, well before the PLR when this indicator was added. • A new merger regulation adopted. Achieved. A new merger regulation was adopted in September 2014, allowing for fast-track procedures that have reduced the time needed to complete a merger. • The CLR reports that the RCC RAS helped enact a revised legal and regulatory framework covering unfair competition, state aid and competition law and a new merger regulation. • Additional information provided by the region suggests that RCC has taken actions to promote and enhance market competition. According to the RAS Completion Report For Official Use Only CLR Review 8 Independent Evaluation Group Transforming Romania’s Competition Architecture to Make Markets Work, the RCC has implemented several RAS recommendations including eliminating the 40 percent threshold for the presumption of dominance, limiting parties’ right to challenge access to file, and creating the Independent Procedural Officer role specialized in the disposition of access to file. However, the RAS completion report notes that the RCC has an unfinished agenda that would require further implementation of the RAS recommendations and competition reforms. 24. Both these output indicators laid a foundation for improved performance of the RCC, but neither indicator sought to measure or assess the performance of the RCC in promoting and enforcing market competition. On balance, this Objective 8 was Mostly Achieved. 25. Objective 9: Strengthening the effectiveness of skills and education programs for labor market inclusion. This objective, with two indicators, was primarily supported by a RAS for strategic framework for increasing tertiary education attainment (FY14), a RAS for raising early school leaving (FY14), and by the FY15 Romania Secondary Education Project. (i) Increasing the share of 30-34 year-olds who have completed a higher education degree from the 2012 baseline of 21.8 percent. Achieved. As of 2017, this percentage had increased to 26.3 percent. (ii) Reducing early school leaving (share of 18 to 24 year-olds who have at most lower secondary education and are no longer in education or training). Not Achieved. This percentage increased somewhat (from 17.4 percent to 18.1 percent) whereas it was targeted to decline. (iii) The RAS for Preparing a Strategic Framework for Increasing Tertiary Education Attainment, Quality and Efficiency RAS ( FY14) supported the preparation of the 2015-2020 National strategy for Tertiary education - adopted on July 28, 2015 (Government decision 561/2015) and (ii) the Assistance to the Ministry of National Education for Reducing Early School Leaving RAS (FY14) supported the 2015-2020 National Strategy for reducing the early school leaving – adopted on June 19, 2015 (Government decision 439/2015). (iv) The CLR notes that attribution of these results is an issue since there was no subsequent WBG interventions supporting these indicators. The FY15 Education Project which supports the retention rate does not yet report progress on these indicators due to implementation delays. 26. Neither of the two indicators directly measure the effectiveness of skills and education markets or their relationship to labor market inclusion. There is also an attribution issue. On balance, Objective 9 was Partially Achieved, 27. Objective 10: Making it easier for business to enter and exit the market. This objective was supported primarily by the FY06 Judicial Reform Project of FY06 and the FY15 Second Fiscal Effectiveness and Growth DPL. This objective had four indicators: (i) Adopting a new insolvency code in line with the ROSC (Report on the Observation of Standards and Codes) principles. Achieved. The Insolvency Code was adopted in 2014 following the ROSC principles. (ii) Reducing the time taken to resolve insolvencies from 3.3 to 2.7 years. Not Achieved. The time needed to resolve insolvencies did not change between 2014 and 2018, per the 2018 Doing Business report. (iii) Supporting Romanian financial institutions in the disposal of their non-performing portfolio, with at least 3000 NPLs (non-performing loans) to be resolved by 2020 from a baseline of 0 as of 2015. Achieved. The CLR reports that IFC has co-invested in five NPL portfolios and that about 16,500 NPLs have been resolved from the IFC-supported projects. (iv) Amendments to the capital markets law approved. Achieved. As part of the prior actions for the second Effectiveness and Growth DPL, Parliament adopted amendments to the For Official Use Only CLR Review 9 Independent Evaluation Group capital markets law (in 2015) to modernize the regulatory landscape and enhance the governance and accountability of the Financial Supervisory Authority. 28. On balance, Objective 10 was Mostly Achieved. 29. Objective 11: Environment and climate action in line with EU requirements. This objective and three related indicators were added at PLR. The objective was supported primarily by the FY08 Integrated Nutrient Pollution Control Project and its Additional Financing (FY16), and by RAS, including for climate change and low carbon green growth (FY14), and for a Danube Delta integrated sustainable development strategy (FY14). (i) Climate change strategy updated and adopted. Achieved. The national strategy and the national action plan on climate change were approved in 2016. (ii) Danube Delta sustainable development strategy updated and adopted. Achieved. This integrated strategy was approved in 2016. (iii) Favorable assessment of the EU on meeting the EU Nitrates Directive requirements across the country. Mostly Achieved. The EU reports that since 2013 Romania has implemented the nitrates directive through revised legislation that has brought significant improvements. The draft Commission report has not yet been disclosed, although a country report states that progress has been made. 30. Overall, Objective 11 was Mostly Achieved. 31. Objective 12: Improved energy efficiency. This objective and its two indicators were added at PLR. The objective was supported by the FY17 Second Fiscal Effectiveness and Growth DPL and by RAS for regional development fee based service (FY13) and for regional development (FY13). (i) Tool for rapid assessment of city energy for growth poles in place. Achieved. The existence of the Tool for Rapid Assessment of City Energy (TRACE) and its use for the development of integrated urban development tools in seven growth poles was reported in a 2015 report. (ii) Orders issued by ANRE (National Energy Regulatory Authority) to fully liberalize the non- residential gas and electricity market. Achieved. The non-residential gas market was liberalized in 2015 and the full liberalization of the household market for electricity and gas was completed in January 2018. (iii) Additional information provided by the region shows a continued modest reduction in in energy intensity from 2013 to 2016, which suggests improvements in energy efficiency. 32. While the two indicators can reasonably be expected to contribute to improved energy efficiency, they do not provide any direct measurements of changes in energy efficiency. The additional information suggests modest improvement in energy efficiency. On balance this Objective was Partially Achieved. 33. Under Focus Area II, three objectives were mostly achieved and three partially achieved. Overall, Focus Area II was Moderately Satisfactory. There was good progress in aligning with EU requirements on environment and climate action, improving business entry and exit, and improving RCC performance in promoting and enforcing market competition (although this is still work in progress). However, there was limited progress on strengthening skills and education programs, creating an improved business environment and improving energy efficiency. There were shortcomings in providing appropriate indicators for measuring achievement of the stated objectives. Focus Area III: Social Inclusion. 34. This focus area had two objectives: (i) Support an ambitious and successful government program to tackle social inclusion and poverty reduction of the population including the Roma, and (ii) A more streamlined, better targeted and more cost-efficient social protection system. For Official Use Only CLR Review 10 Independent Evaluation Group 35. Objective 13: Support an ambitious and successful government program to tackle social inclusion and poverty reduction of the population including the Roma. This objective had four indicators, of which the last three were added at PLR. This objective was supported by RAS for study on diagnostics and policy advice for Roma integration (FY13), for supporting the Implementation of Romania's human development operational program (FY17), for integration strategies for poor areas and disadvantaged communities (FY13), and for the deinstitutionalization of children (FY16). (i) An updated national Roma strategy adopted and implemented. Achieved. The national strategy was updated by a 2015 government decision. The CLR reports that several programs under this strategy are planned or under implementation, with support through a separate RAS. (ii) National strategy on social inclusion and poverty reduction is adopted and implemented. Achieved. The national strategy was adopted in 2015 and the government passed in February 2016 a comprehensive anti-poverty package with 47 measures to combat poverty. Implementation is ongoing according to the CLR. (iii) Mapping of urban marginalized communities inform the preparation of priorities and Operational Programs for 2014-20. Achieved A detailed implementation framework for the Community Led Local Development (CLLD) approach with a typology of urban marginalized communities and their characteristics was prepared with RAS support. This framework informed the preparation of priorities and operational program for the 2014-2020 period. (iv) Draft operational plan for closing residential centers and proposing alternatives to institutional care for children. Achieved. As reported in the CLR, an operational plan and methodology for closing residential centers was developed through a RAS and approved by the National Authority for the Protection of Child Rights and Adoption in 2017. 36. On balance, Objective 13 was Achieved. 37. Objective 14: A more streamlined, better targeted and more cost-efficient social protection system. This objective, with two indicators, was supported primarily by the FY11 Social Assistance System Modernization project. (i) Government consolidates three means-tested programs and reduces disincentives for work by changing the benefit formula to avoid penalizing work by 2018. Not Achieved. The latest ISR reports that legislation to consolidate programs for low-income households was not in place, as of November 2017. (ii) Increasing the coverage of means-tested programs to 70 percent of the poorest 20 percent of households by end FY18. Not Achieved. Parliament adopted the 2016 Anti- Poverty Program which unifies the three means-tested programs, but the government has decided to postpone the implementation to 2019. 38. . None of the indicators were achieved. Objective 14 was Not Achieved 39. Under Focus Area III, one objective was mostly achieved and one not achieved. Overall, Focus Area III was Moderately Unsatisfactory. Several process steps were completed and under implementation in support of the government’s program to tackle poverty and social exclusion while measures for a more streamlined, better targeted and more cost efficient social protection system were not achieved. Overall Assessment and Rating 40. On balance, IEG rates the overall development outcome as Moderately Satisfactory. Of the 14 objectives, three were rated Achieved, five Mostly Achieved, five Partially Achieved and one Not Achieved. Focus Area I was Moderately Satisfactory. Good progress was made in improving debt management, strengthening strategic planning, improving governance and organizational functioning, and strategy formulation; but there was limited progress on health service delivery and For Official Use Only CLR Review 11 Independent Evaluation Group revenue and expenditure administration. Focus Area II was Moderately Satisfactory. There was good progress in aligning with EU requirements on environment and climate action, improving business entry and exit, and improving RCC performance in promoting and enforcing market competition (although this is still work in progress). However, there was limited progress on strengthening skills and education programs, creating an improved business environment and in improving energy efficiency. Focus Area III was Moderately Unsatisfactory. Several process steps were completed and under implementation in support of the government’s program to tackle poverty and social exclusion while measures for a more streamlined, better targeted and more cost efficient social protection system were not achieved. Objectives CLR Rating IEG Rating Focus Area I: Creating a 21st Century Government Moderately Satisfactory Objective 1: Revenue and expenditure administration Partially Achieved Partially Achieved improved. Objective 2: Strengthened debt management. Achieved Achieved Objective 3: Improved strategic planning, prioritization and Mostly Achieved Mostly Achieved evidence-based policy-making. Objective 4: Enhanced strategy formulation, Achieved operationalization and monitoring and evaluation in Achieved preparation for the 2014-2020 period and beyond. Objective 5: Improved governance, organizational Mostly Achieved Mostly Achieved functioning and efficiency of public enterprises and SOEs. Objective 6: Improved health service delivery. Partially Achieved Partially Achieved Focus Area II: Smart and Sustainable Growth Moderately Satisfactory Objective 7: Creating an improved business environment Partially Achieved Partially Achieved and a competitive economy. Objective 8: Improved performance of the RCC for Achieved Mostly Achieved promoting and enforcing market competition. Objective 9: Strengthening the effectiveness of skills and Partially Achieved Partially Achieved education programs for labor market inclusion. Objective 10: Making it easier for business to enter and Mostly Achieved Mostly Achieved exit the market. Objective 11: Enhanced environment and climate action in Mostly Achieved Mostly Achieved line with EU requirements. Objective 12: Improved energy efficiency. Achieved Partially Achieved Focus Area III: Social Inclusion. Moderately Unsatisfactory Objective 13: Support an ambitious and successful government program to tackle social inclusion and poverty Achieved Achieved. reduction of the population including Roma. Objective 14: A more streamlined, better targeted and Not Achieved Not Achieved more cost-efficient social protection system. 6. WBG Performance Lending and Investments 41. At the beginning of the CPS period, the outstanding lending volume was $3.6 billion for eight lending operations, comprising seven Investment Project Financing (IPF) including an Additional Financing and one DPF (a deferred drawdown option - DDO). For trust funds, the outstanding volume was $7.6 million for three operations (and one was subsequently added during the CPS For Official Use Only CLR Review 12 Independent Evaluation Group period for less than half a million). During the CPS period, the Bank approved six lending operations for $2.3 billion, comprising of two DPFs (First and Second Fiscal Effectiveness and Growth) for $1.7 billion, and four IPFs for a total of $0.6 billion. The actual new lending amount was about 42 percent of the $5.5 billion projected in the CPS, and thus also much less than the $4.9 billion projected in the PLR. A total of five planned lending operations have been either dropped or postponed until after the end of the CPS period, including two planned DPFs. 42. Overall, closed and active portfolio of Romania has showed variable performance. During the review period, four projects were closed and validated by IEG. Three were rated Moderately Satisfactory and one Moderately Unsatisfactory, and all four with risk to development outcome rated Moderate or lower. The average outcome rating (moderately satisfactory or higher) for Romania by number of operations was a bit lower than for ECA (75 percent versus 80.6 percent) and almost identical to the average Bank-wide performance, while the average risk to development outcome (moderate or lower) was 100 percent for Romania versus 50 percent for ECA and 42.5 percent Bank- wide. 43. The disbursement ratio has been variable but mostly low – an average of 8.2 percent since 2014, much lower than for ECA and Bank-wide average (both around 20 percent). By amount, an average of 45.6 percent of Romania’s portfolio has been rated at risk over the CPS period – with a rising trend – considerably higher than for ECA (16 percent) and the world (22.4 percent). The latest ISR ratings for the ongoing portfolio also show a mixed picture: two are rated satisfactory and four are rated moderately satisfactory for development outcome, while two are rated moderately unsatisfactory and one unsatisfactory. Some IPFs also take a long time to complete in Romania, with one project (nutrient pollution control) from as far back as FY08 that is currently expected to close in FY22. 44. IEG uses net commitment 1 to measure IFC’s engagement as it describes accurately IFC’s contribution. IFC’s core business of long-term financing of loans and equity investments amounted to US$612.9 million during FY14-18. During the same period, total average short-term commitment under the IFC Global Trade Finance Program (GTFP) was US$269.4 million. 2 Financial Markets represented the largest sector in terms of net commitment with US$360.5 million or 66.3 percent of IFC’s long-term financing. MIGA did not underwrite any guarantee during the review period. 45. During the review period, IEG validated three Expanded Project Supervision Reports (XPSRs) of IFC investment projects by producing Evaluation Notes (EvNotes). IEG assigned development outcome ratings of Mostly Unsuccessful for one project and Mostly Successful for two projects. In one case, while an IFC project failed to achieve the intended demonstration effect as the growth of loans in the agriculture sector was less than projected, IFC was able to support the SME loan growth of another client bank. Analytic and Advisory Activities and Services 46. During the CPS period, the Bank has provided a total of 68 pieces of advisory services and analytical work (ASAs). Four items of economic and sector work have been delivered, including a public expenditure review and a thematic note on the decentralization process. The remaining ASAs were in the form of Technical Assistance (or a total of 64), of which 46 (or 71 percent) were reimbursable advisory services (RAS). As explained in the CLR, RAS have grown substantially against original expectations to become the cornerstone of the Bank’s engagement in the country. They covered a broad range of activities based on demand from the government and most of the objectives in the PLR program have been supported by RAS, largely funded by the EU to help speed up disbursements to the country under EU programs, and to help accelerate Romania’s structural reforms and thus its convergence with the EU. 1 Net commitment is calculated by adjusting IFC’s original commitment with conversion(s), sale(s), cancellation(s), and transfer(s). 2 IFC began reporting average outstanding short-term commitments (not total commitments) in FY15 and no longer aggregates short-term commitments with long-term commitments. For Official Use Only CLR Review 13 Independent Evaluation Group 47. During the review period, IFC had a small advisory service (AS) operation and approved one small AS project and the major AS operation to support PPP at the municipality level with $2.5 million of IFC funds. This AS project for PPP was terminated before full implementation. IEG did not validate any Project Completion Reports (PCRs) of AS project during the review period. Results Framework 48. The CLR has pointed out that the development objectives and associated results indicators did not adequately reflect the expected impact of the WBG program. IEG concurs fully with those observations. Overall, the results framework – especially after it has been revised at the PLR – did not serve the program well and had significant shortcomings. At the PLR, the number of objectives increased, from seven to 14 and the indicators, from 16 to 43. Overall, there were too many objectives and indicators for a program that had evolved from a lending based program to a program underpinned largely by RAS (which supported partly or fully ten of the 14 objectives). The modifications in indicators tended towards more process indicators, as was to be expected from the move to the RAS, but these indicators could have been supplemented by evidence of impact at the CLR stage. Some objectives were formulated broadly while the indicators were quite specific, which weakened the link between objective and indicator. Some indicators were very narrow to measure a broad objective – for example, Objective 7 (improved business environment) used just one indicator (number of payments) from the Doing Business tax exercise. Some process indicators were also weakly linked to the objectives and raised some issues of attribution especially in cases when the predominant WBG interventions were through several RAS activities (for example, Objective 8). The CLR flagged the question of uncertain WBG attribution for some indicators, but this question could have been considered more widely at the PLR stage for a program depending substantially on RAS, since it will normally be difficult to attribute results for actions from interventions primarily through studies or technical assistance. There was also an issue of using the same indicators for several objectives (Objective 1 and 6), and some indicators were without baselines and/or targets. IFC indicators were in the form of number of investments with unclear links to the objectives. Finally, several objectives and indicators introduced in the November 2016 PLR seem to have been mostly or fully achieved by the time of their introduction. It is not clear that the inclusion of such ”prior” items can have much value for monitoring purposes. Partnerships and Development Partner Coordination 49. Close collaboration with European development partners and, in particular with the EU, has been essential for the Bank’s work in the country. The CLR mentions in this regard close work with the EC (European Commission), ECB (European Central Bank) and IMF throughout design and implementation of the DPLs, and with EBRD, EIB and also some UN organizations. Safeguards and Fiduciary Issues 50. Four operations were closed and validated by IEG during the CPS period, of which three (health, social protection and agriculture sectors, triggered the environment and social safeguard policies. The CLR mentions resettlement in the context of citizen engagement but it does not elaborate on safeguards compliance. The ICRs and ICRRs reported proper application of the safeguards policies and instruments’ requirements in all projects, and underlined that only minor issues with negligible negative impacts were expected from all interventions. The ICRs further explained that all impacts were properly mitigated and the constant advice and guidance from WB specialists yielded satisfactory compliance with the applicable policies. The Inspection Panel registered no request for investigation during the CPS implementation period. 51. INT substantiated three cases of sanctionable practices during the period FY2014-FY2017: one in the agriculture sector and two in the health sector and that have resulted in sanctions and referrals. Ownership and Flexibility 52. The CPS, PLR and CLR all showed that the government had strong interest in the WBG program, and that the Bank demonstrated considerable flexibility in moving to a stronger RAS For Official Use Only CLR Review 14 Independent Evaluation Group program based on the government’s priorities. The shifting government priorities – affected by changing governments - were focused on making use of available EU funds (with strong Bank support through RAS), while the Bank had probably overestimated at the inception of the CPS the government’s project preparation and management capacity (affecting IPFs) as well as the ability to sustain a strong reform process (affecting DPFs). WBG Internal Cooperation 53. The CPS was formally a joint document of the Bank and IFC. However, as presented in the CPS document the two entities would work in parallel, with IFC focusing on the growth and job creation agenda, and with few if any areas of identified collaboration between the two. There were also no specific IFC items in the original CPS results matrix, although the matrix made general reference to IFC investments. This changed to some extent at the PLR that included several indicators in the form of IFC operations, but neither in the CPS nor the PLR were there any significant indications of cross-institutional WBG collaboration. In effect, the Bank and IFC in Romania worked independently of each other, with no significant areas of attempted synergy. Risk Identification and Mitigation 54. The CPS and the PLR rated as moderate the risks to the WBG’s program for Romania. The risks identified focused primarily on political instability (which materialized), macroeconomic risks (which largely did not materialize) and institutional capacity (which did become an implementation issue causing delays in project implementation). However, it subsequently became apparent that the program had underestimated the risks to its planned lending from changes in government and administrative weaknesses. It had also underestimated the relative weight on government priorities from the EU program and the desire to be able to make full use of the available EU funds. As a result, even the PLR, which noted the rapidly increasing importance of the RAS, did not adjust sufficiently the expected lending program (where major cancellations and postponements took place following the PLR). The results framework was also not modified sufficiently to adapt to the limitations in terms of development effectiveness and attribution from a program highly dependent on RAS. Overall Assessment and Rating 55. On balance, IEG rates the WBG performance as Good. Design 56. The CPS addressed important development challenges in Romania in the areas of improving government effectiveness, growth and job creation, and social inclusion. The original program design was based on a “selective approach” that would use in a flexible manner the full range of WBG instruments including financing, advisory services and analytics (ASA), reimbursable advisory services, and IFC operations, and with a positive synergy between advisory services and other WBG instruments. This design was ambitious but appeared appropriate at the time. Implementation 57. As a result of the government priorities the RAS program expanded considerably, while lending slowed down and ended up at only about 42 percent of the original expectation. The PLR also came late in the CPS period – only eight months before the end of the original period – which provided less of an opportunity to use the PLR proactively to modify the work program for the rest of the period, even with the one-year extension. The PLR also did not adjust the lending program sufficiently in light of this evolving experience, and the program as implemented was thus significantly different from what had been envisaged in the CPF and in the PLR. The results framework – especially after it has been revised at the PLR – did not serve the program well and had significant shortcomings. At the PLR, the number of objectives increased from seven to 14 and the indicators from 16 to 43. There were too many objectives, with weakened links between some objectives and indicators, and with uncertain WBG attribution for some indicators. Finally, several For Official Use Only CLR Review 15 Independent Evaluation Group objectives and indicators introduced in the November 2016 PLR seem to have been mostly or fully achieved by the time of their introduction. 7. Assessment of CLR Completion Report 58. The CLR is well organized and covers some important aspects. There is however little systematic discussion of the IFC program, and the conclusion that IFC’s engagement was strategic to add value in the mix of WBG instruments could have been justified. The CLR is right in its critical comments of the PLR results framework, but it could have gone deeper in reporting and assessing the results of the RAS, and it does not really discuss the limitations of relying on RAS for the Bank to achieve results as sought in the results framework, or how to measure IFC’s contributions ex post. Additional information and evidence provided by the team after the draft CLRR was shared with the region could have been incorporated in the final CLR. 8. Findings and Lessons 59. IEG concurs with some of the CLR lessons which are summarized as follows: (i) The WBG can continue to serve as a stable, neutral convener and knowledge broker in Romania to help identify development solutions and provide support for their implementation. (ii) Careful deliberation is needed for the right selection of WBG instruments to achieve development objectives. (iii) Continual attention should be paid to implementation support under the new CPF. (iv) In the next CPF cycle it will be critical to undertake the PLR in a timely manner to assess implementation and implement the recommendations. 60. IEG adds the following lesson: • In countries with large RAS program, it is critical to be more careful and realistic in designing the results framework to ensure strong linkages between RAS, CPS objectives, and results and ensuring appropriate monitoring and reporting of results. In the case of Romania, the results framework as drastically revised in the PLR suffered from several cases of weak linkages between the stated objectives and their related indicators. Annexes CLR Review 17 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Romania Annex Table 3: Analytical and Advisory Work for Romania, FY14-FY18 Annex Table 4: Grants and Trust Funds Active in Romania, FY14-18 Annex Table 5: IEG Project Ratings for Romania, FY14-18 Annex Table 6: IEG Project Ratings for Romania and Comparators, FY14-18 Annex Table 7: Portfolio Status for Romania and Comparators, FY14-18 Annex Table 8: Disbursement Ratio for Romania, FY14-18 Annex Table 9: Net Disbursement and Charges for Romania, FY14-17 Annex Table 10: Economic and Social Indicators for Romania, FY14-16* Annex Table 11: List of IFC Investments in Romania Annex Table 12: List of IFC Advisory Services in Romania Annex Table 13: IFC net commitment activity in Romania, FY14 - FY18 Annex Table 14: List of MIGA Projects Active in Romania, 2014-2018 Annexes CLR Review 19 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Romania CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government 1. CPS Objective: Revenue and expenditure administration improved Indicator 1: Revenue The Revenue Administration Modernization The four indicators were Management System is Project (RAMP) (P130202, FY13) added at PLR. procured supported this indicator as the project Before the PLR, the aimed at developing and implementing an original indicator was: Baseline: (2013): no procured Integrated Revenue Management System (i) Increasing tax system (IRMS) (see the Project Appraisal revenues by 3% of GDP Target: (2018): system is Document, PAD). However, as reported in within 5 years. (The 2013 procured the latest ISR: U (February 2018), the baseline was 28 percent project has stalled since completing the first of GDP). stage of the IRMS procurement (October 2017) and, since, no further initiatives have Various Reimbursable moved forward. Consequently, the system Advisory Services (RAS) has not been procured. contributed to CPS Not Achieved. objective 1: - The Better Solutions for Interpretations, Clarifications, and Rulings on Fiscal Issues RAS (P144566, FY13, Comparative Study and Solutions document) Major - The Capacity Outcome Strengthening for Tax Measures Policy Formulation RAS (P144557, FY13, Final Report) - The Assistance to the Ministry of Agriculture and Rural Development for developing an integrated Financial Management System RAS P143676, FY13, Overall Summary Report); Indicator 2: Framework for The First (P148957, FY14) Effectiveness Indicator reformulated at introducing results informed and Growth Development Policy Lending PLR stage from: budgeting (DPL) supported this indicator as one of the (ii) Introducing results prior actions was related to the amendment, informed budgeting, and Baseline: (2013): no framework by the Parliament, of Public Finance Law piloting it in two Target: (2018): framework in 500/2002 through Law 270/2013. This prior ministries. place action was completed and, based on these amendments, the Ministry of Public Finance Additional RAS (MOPF) has issued a detailed action plan for supported this indicator: preparing and executing results‐informed - The RAS Planning and budgets (RIB). Budgeting Capacity (P156889, FY16) Annexes CLR Review 20 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government The Program Document for the First DPL - Support to the reports that the Ministry of Health and the Establishment of the Ministry of National Education have been Strategy Unit selected as pilots to apply the RIB (P154787, FY16) methodology in their 2015 budgets. Only a - Public Investment June 2014 ISR: S was available for the Management First DPL; it reported that work was (P146782, FY17) underway to draft the methodologies for the new processes. Management ICR: MS of the Strengthening Financial Accountability Small Grant (P152568, FY15) reports that a pilot related to (RIB) was developed in two ministries and that methodological guidance and recommendations for RIB was provided. The target related to the share of total budget allocation informed by the performance (30%) was not achieved as of June 2016 and the ICR noted that it was unclear whether ministries will use the RIB methodology. Finally, as reported in the Public Finance Review (P159659, FY16) the government planned to introduce RIB in 2017. However, no recent WBG project document reports progress in relation to RIB. Additional information shared by the country team indicates that the basis for RIB was introduced in 2016 and that recommendations from the aforementioned WBG DPL and advisory services for improving the correlation between the strategic objectives and budget planning were integrated into strategic documents such as in the National Strategy for consolidating public administration 2014-20 – SCAP. These recommendations are now being implemented and institutional strategic plans for 13 ministries are available online (see the Government General Secretariat’s link). The Country Team also reported that the Government drafted the framework for introducing RIB at the end of 2017; it was revised in March 2018 and it is now following the clearances process in the Ministry of Finance before being published for public consultation Partially Achieved Annexes CLR Review 21 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government Indicator 3: Centralized The Second (P149776, FY17) The latest ISR: MU procurement introduced for Effectiveness and Growth DPL supported (December 2017) of the health medicine this indicator with one of the prior actions Health Sector Reform related to the extension of the use of project (P145174, FY14) Baseline (2014): no centralized centralized procurement in health. The did not report progress procurement Program Document reported that the on the indicator related Target (2017): centralized procurement of centrally procured to the share of total procurement antibiotics and oncology drugs started after spending on distinct the Ministry of Health (MOH) had approved specific medical devices a centralized procurement plan for 2016 for national hospital that included 31 antibiotics and 12 widely contracted through used oncology drugs. centralized procurement. Achieved Indicator 4: IFC investments in The Timisoara Municipality project (31884, No specific baseline/ sub-nationals FY14, loan of USD 34.3 million), supported target were reported for the rehabilitation of transport and social this Indicator in the PLR. infrastructure in the municipality. Likewise, the Botosani Municipality project (33606, FY14, USD 7.7 million loan) supported the rehabilitation of heating systems and the construction of a new cogeneration plant and heat boilers (see IFC presentation). The project was accompanied by an Advisory Service (AS) (project 600286, FY14, AS Completion Report). Achieved 2. CPS Objective: Strengthened debt management Indicator 1: Debt management The Second (P149776, FY17) Objective and related strategy adopted and updated Effectiveness and Growth DPL supports indicator added at PLR. yearly in line with best the strengthening of fiscal management practice and MOPF reforms in debt management The RAS to the Ministry practices. The Program Document reports of Public Finance for Baseline: (2013): no strategy that, under the First DPL, the MOPF Strengthening Debt Target: (2018): strategy adopted approved the Debt Management Strategy Management (P133720, and updated yearly 2014-2016. The latest ISR: MS (October FY14) specified the key 2017) also reports that significant progress steps to improve liability has been made in debt management. management (final The Debt Management Strategy 2017-2019 report) and the AAA was published in 2017 as a continuation of Developing Government the 2016-2018 Debt Management Strategy Yield Curve and it is in line with international practices (P152800,FY15) from the WB-IMF Guidelines for debt supported the strategy design. The strategies are updated development of the yearly since 2015. national capital markets In addition, as reported in the Program to increase the efficiency Document of the Second DPL, a fully of government debt electronic auction system became management (final functional in March 2014; its interface with report). the debt management systems allows the Annexes CLR Review 22 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government MOPF to obtain real time access to primaryAccording to IMF Article IV for Romania, public market data. An electronic trading platform for public debt secondary market debt in the country was operations was also implemented. relatively low (39.1% of Achieved the GDP in 2016) – 37.6% according to EuroStat for the same year, the 5th lowest among the 28 EU member countries. 3. CPS Objective: Improved strategic planning, prioritization and evidence based policymaking Indicator 1: Development and The RAS Planning and Budgeting Capacity Objective and related use of a central dashboard in (P156889, FY16) supports the indicators added at PLR. the Chancellery of the Prime strengthening of the Institutional Strategic Minister for monitoring high- Plans (ISP) of the MOPF and line The CLR reported that level Institutional Strategic ministries; monitoring of ISP updates and the Dashboard is used in Plans (ISP) priorities of implementation with an Information and 13 ministries, which selected ministries Technology (IT) tool and the development could not be verified by of a central dashboard for high level ISP of IEG. Baseline: (2013): no central the selected ministries. dashboard No WBG progress report was available to Target: (2018): central verify current results. However, a March dashboard developed and used 2017 presentation from the General Secretariat of the Government attests of the creation of an ISP Dashboard for monitoring. Achieved Indicator 2: Simplified The RAS Development of the Capacity of framework for more effective the Central Public Administration to Carry implementation of regulatory Out Impact Studies (P156807, FY16, analysis Report) and the RAS Strengthening the Regulatory Impact Assessment Framework Baseline: (2013): old framework (RIA) in Romania (P150017, FY16) Target: (2018): simplified supported the preparation of a diagnostic framework and recommendations presented to the Government in August 2014 and pilot projects (Results of the WB RAS Program in Romania 2012-2015 report and WBG Presentation). As reported in the CLR, the Prime Minister decision 297/2016 presents updated guidance on RIA. Achieved Indicator 3: 100% of public The RAS Harmonizing EU and state budget As reported in the CLR, investment projects selected funded projects (P147062, FY16, Final Ministerial Order based on improved evaluation Synthesis) informed the redesign of the 947/2015 updated the and selection criteria under National Local Development Program guidance on the PNDL (from 0 to 4000 projects (PNDL) which now has a multi-annual implementation of the amounting EUR90M) implementation timeline and budgeting, PNDL and introduced with allocation by counties based on needs selection criteria. Annexes CLR Review 23 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government Baseline: (2013): 0 projects and prioritization and criteria for the types Target: (2018): 4,000 projects of investment, in line with EU best practice (Results of the WB RAS Program in Romania 2012-2015 report). The Ministry of Regional Development and Public Administration (MDRAP) reported on its website, in February 2018, that 6,800 priority investments projects were funded across Romania. As of May 2018, the MDRAP reported an updated list of interventions and that the PNDL would support 9,500 priority interventions. Achieved Indicator 4: More effective Various municipalities were supported by inter-municipal investment the WBG in investment planning, as planning and project selection reported in the Results of the WB RAS criteria applied in at least Program in Romania 2012-2015 report: three cities - The ASA Assistance to Alba Iulia (P151596, FY14) led to the development Baseline: (2013): no criteria of a Project Prioritization 2014-2020 applied report. Through WBG support, the Target: (2018): criteria applied in municipality is using new analytical at least three cities approaches for inter-municipal planning with nearby cities and criteria for project selection and prioritization. - The RAS Danube Delta Strategy and Constanta Integrated Territorial Investment (ITI) 2014-2016 (P146633 and sub-tasks P147561 and P145417, FY14) supported the development of a methodological framework for the implementation of sustainable urban development activities. The Municipality now uses prioritization guides for metropolitan investment needs. - The Updating the Integrated Development Plan and Improving the Institutional Framework for the Ploiesti Growth Pole RAS (P153331, FY15) supported the preparation of the Integrated Urban Development Strategy for Ploiesti Growth Pole 2014-2020. The Municipality (that includes 13 neighboring localities) now uses prioritization guides for metropolitan investment needs. - Finally, the Brasov Growth Pole has used the Integrated Urban Development Strategy for Ploiesti Growth Pole 2014-2020 as a model and uses prioritization guides for Annexes CLR Review 24 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government metropolitan investment needs. The Brasov Urban Development RAS (P166263, FY16) has been supporting Brasov and its metropolitan area strengthen administrative capacity and assist with the implementation of urban development or regeneration programs. Based on the verified information, four cities in Romania now apply new municipal No baseline or target investment planning and project selection were reported for this criteria. indicator. Achieved Indicator 5: Digital maps drive The Implementation Support for the investments for increased National Strategy on Digital Agenda in access to broadband Romania RAS (P152542, FY14, see Final Report) supported the development of a tool to map village typology and enabled the Ministry of Information Society (MIS) to design tailored solutions for broadband supply (of the WB RAS Program in Romania 2012-2015 report). However, the CLR reports that no funding has been available to use maps and implement solutions. Partially Achieved 4. CPS Objective: Enhanced strategy formulation, operationalization and monitoring and evaluation in preparation for the 2014-20 period and beyond Indicator 1: Five strategies As reported in the Results of the WB RAS Objective and related adopted and contribute to Program in Romania 2012-2015 report, indicators added at PLR. Government’s meeting EU ex- Romania adopted five strategies that ante conditionalities for contribute to the Government meeting EU The strategies were accessing EU funds under the ex-ante conditionality for accessing EU supported by the 2014-20 period funds under the 2014-2020 period: following WBG - The 2015-2020 National Strategy for operations: Baseline: (2013): 0 strategies reducing the early school leaving – - The 2015-2020 Target: (2018): 5 strategies adopted on June 19, 2015 National Strategy for adopted - The 2015-2020 National strategy for reducing the early enhancing lifelong learning - adopted on school leaving was June 3, 2015 (Government decision supported by the 418/2015) WBG Assistance to - The 2015-2020 National strategy for the Ministry of Tertiary education - adopted on July 28, National Education for 2015 (Government decision 561/2015) Reducing Early - The 2015-2020 National strategy for School Leaving RAS promoting social inclusion and poverty (P145841, FY14) reduction - adopted on May 27, 2015 - The 2015-2020 (Government decision 383/2015) National strategy for - The 2015-2020 National strategy for enhancing lifelong Annexes CLR Review 25 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government promoting active aging - adopted on July learning was 15, 2015 (Government decision supported by the 566/2015) Technical Assistance for Preparing a The Final EU Report on the implementation Strategic Framework of the provisions in relation to the ex-ante for Lifelong Leaning conditionalites during the programming RAS (P146632, phase of the European structural and FY14) Investment (ESI) funds reports on the - The 2015-2020 implementation of ex-ante conditionalities National strategy for for early school leaving (page 73); for Tertiary education higher education (page 75); for poverty was supported by the reduction (page 65) and for lifelong learning Preparing a Strategic (page 77). The EU report does not report Framework for on the implementation of ex-ante Increasing Tertiary conditionalities for active ageing. Education Attainment, . On January 16, 2017 the Ministry of Quality and Efficiency European Funds published a note with the RAS (P146187, status of ex-ante conditionalities, FY14) confirming the fulfillment of the ex-ante - The 2015-2020 conditionalities, including 5 of them which National strategy for are related to the adopted strategies and to promoting social which the Bank provided inputs: early inclusion and poverty school leaving, lifelong learning, tertiary reduction was education, active aging, social inclusion supported by the and poverty reduction Provision of Inputs for Achieved the Preparation of a Draft National Indicator 2: M&E framework The Implementation Support for the Strategy and Action updated for the strategy on National Strategy on Digital Agenda in Plan on Social digital agenda Romania RAS (P152542, FY14, Final Inclusion and Poverty Report) has supported Real-Time Reduction RAS Baseline: (2013): M&E Monitoring and Evaluation (M&E) of the (P147269, FY14) framework not updated National Digital Agenda for Romania 2020 - The 2015-2020 Target: (2018): M&E framework through the development of a National strategy for updated comprehensive M&E system and training to promoting active support implementation. The MIS has aging was supported implemented the recommendations for the by the Strategy for the M&E framework. The EC assessed as Elderly and Active fulfilled the related ex-ante conditionality Ageing RAS (see EU Report on the implementation of (P147650, FY14) ex-ante conditionalites). Achieved 5. CPS Objective: Improved governance, organizational functioning and efficiency of public institutions and SOEs Indicator 1: MoPF Human The Human Resource Strategy for the Objective and related Resources Management Ministry of Public Finance RAS (P144505, indicators added at PLR strategy adopted and in FY14) has supported improvement of stage. implementation Human Resource Management (HRM) instruments and mechanisms through Baseline: (2013): no strategy trainings and the preparation of an Annexes CLR Review 26 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government Target: (2018): strategy adopted institutional analysis, of a strategy and and in implementation action plan (WBG report). The medium term HR strategy was approved by the MOPF (order 564/2014) as reported in the Results of the WB RAS Program in Romania 2012-2015 report. However, the CLR reports that the implementation of the HRM strategy has been challenged by the latest unitary pay law and that changes to the legal framework by the National Agency of Civil Servants (NACS) are needed. Partially Achieved Indicator 2: Performance The Establishment of a Performance appraisal system adopted and Appraisal System for Government Officials applied to Government Managing EU Funds RAS (P147746, FY14) officials managing EU funds supported the Ministry of European Funds (MoEF) developing a new appraisal system Baseline: (2013): no system (adopted in August 2015). The MoEF has Target: (2018): system adopted used the new system to assess the impact and applied on the performance of about 1,0000 civil servants involved in the management of EU funds (Results of the WB RAS Program in Romania 2012-2015 WB report). Achieved Indicator 3 : Improved The Administrative Capacity of the Ministry As reported in the CLR, delegation of authority of Education and Research (MoESR) RAS the Bank’s capacity in the MoESR piloted (P143659, FY13) supported development recommendations were and new of a study on the organizational cultural in adopted in the updated Regulations for Organization the MoESR and the preparation of ROF ROFs approved in May and Functioning (ROFs) and job descriptions within the MoESR. 2016 (see Minister Order adopted Pilots were designed on the delegation of 3748/2016). authority in the MoESR and the ROF were formally promoted as management tools and adopted in September 2015 (Results of the WB RAS Program in Romania 2012- 2015 WB report). Achieved Indicator 4: RCC revised and The RAS Assistance to the Competition A new merger regulation adopted business architecture Council (P131824, FY12) supported a was also adopted in to increase operational review of the legal and regulatory September 2014, Effectiveness framework governing market competition, allowing for fast-track and the strengthening of the activities in the procedures. field of competition, including the clarification of the Romanian Competition Council (RCC) role to increase effectiveness of competition policies. RAS recommendations informed a new competition law adopted in 2015 which Annexes CLR Review 27 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government helped eliminating overlapping mandates between the RCC and other agencies and allow the RCC to use resources more efficiently and enhance its administrative capacity (through automation of the merger process) (Results of the WB RAS Program in Romania 2012-2015 WB report). Achieved Indicator 5: Increase in court The Judicial Reform Project (P090309, No baseline or target hearings in courts FY06) supported this indicator. According were provided for this rehabilitated and increase in to the Management ICR: MS, there has indicator. number of council rooms been a 77% increase in the total number of since 2014 court hearings in the 5 courts rehabilitated under the project, between 2008 and 2016. IEG ICRR: MS also reports that the target of 15 court buildings improved was exceeded as 12 were renovated and four new ones were built, between 2010 and 2017. Achieved Indicator 6: Law adopted on A new Law on Corporate Governance of The RAS Support to the SOEs corporate governance SOE was approved in May 2016 (Law Establishment of a (to approve the Emergency 11/2016), which was a prior action of the Delivery Unit (P147482, Government Ordinance Second DPL, which first Pillar focused on FY14, Final Report) 109/2011) in line with OECD support to State-Owned Enterprises (SOE) permitted to improve the principles reform (see Program Document of project transparency of SOE in P149776, FY17). The new law upgrades the energy sector, by Baseline: (2013): law drafted Government Ordinance 109/2011 and establishing a High Target: (2018): law adopted introduces sanctions provisions. The norms Powered Commission on of the law were approved in September SOE performance, 2016 and published in October 2016. chaired by the Prime Achieved Minister (Results of the WB RAS Program in Romania 2012-2015 WB report). 6. CPS Objective: Improved health service delivery Indicator 1: Reducing the ratio The Health reform project (P145174, FY14) Before the PLR, the of public acute beds per 1,000 supports this indicator. The latest ISR: MU original CPS objective inhabitants from 5.5 to 4.8 (December 2017) reports that the ratio of was: “Rationalizing the public acute beds reduced from 5.5 beds/ hospital Baseline: (2013): 5.5 beds/1,000 1,000 to 4.5 beds/1,000 inhabitants network and enhancing Target: (2018): 4.8 beds/1,000 between 2013 and October 2017. primary health care Achieved services’’ and at PLR the following indicator was Indicator 2: Introducing a new The Health reform project (P145174, FY14) taken out: basic package of health care supports the implementation of short and Percentage of eligible services with additional roles medium term interventions of the 2014- women aged 25-60 with and payment incentives for 2020 National Health Strategy such as the at least one test of primary care professionals strengthening of primary health care cervical cancer in the last Annexes CLR Review 28 Independent Evaluation Group CPS FY14-FY17: Focus Area I: Creating a 21st Century Actual Results IEG Comments Government services at the community level by three years. (Current introducing a new basic package of health baseline 10 services with new clinical guidelines and percent). additional roles and payment incentives for primary care professionals (PAD). However, the latest ISR: MU (December 2017) does not present an indicator related to Indicator 2. The CLR reports that no new basic package or additional roles and payment incentives for primary care professionals will be introduced during the CPS period. Not Achieved Indicator 3: Centralized The Second (P149776, FY17) The latest ISR: MU procurement introduced for Effectiveness and Growth DPL includes (December 2017) of the health medicine prior actions related to the extension of the Health Sector Reform use of centralized procurement in health. project (P145174, FY14) Baseline: (2014): no centralized The Program Document reported that the did not report progress procurement procurement of centrally procured on the indicator related Target: (2018): centralized antibiotics and oncology drugs started after to the share of total procurement the Ministry of Health (MOH) had approved spending on distinct a centralized procurement plan for 2016 specific medical devices that included 31 antibiotics and 12 widely for national hospital used oncology drugs. Average unit price for contracted through centrally procured drugs and devices has centralized procurement. decreased from Ron 22.2 (baseline 2015) Indicator 3 is already to average unit price of Ron 20.0 (2017). reported under CPS Achieved Objective 1. Indicator 4: IFC’s health sector The IFC Medlife SA project (29638, FY10) No baseline and target investments permitted the commitment of a USD 15.9 were reported for this million investment in Medlife, a leading Indicator, added at PLR. Romanian healthcare provider, to increase the supply of high quality hospital services in Romania. IFC also supported Medlife becoming the first healthcare company to be successfully listed on the Bucharest Stock Exchange in December 2016 (see IFC presentation and Case Study). Achieved Annexes CLR Review 29 Independent Evaluation Group CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Smart and Sustainable Growth 7. CPS Objective: Creating an improved business environment and a competitive economy Indicator 1: Improved The RAS Development of the Capacity of The following indicator performance in Doing Business the Central Public Administration to Carry was taken out at PLR: indicators that meets the Out Impact Studies (P156807, FY16, (ii) construction permits current ECA averages in paying Report) and the RAS Strengthening the (time reduced from 287 taxes Regulatory Impact Assessment Framework days to 200 days) (RIA) in Romania (P150017, FY16) Baseline: (2014): 36 payments supported the preparation of a diagnostic Although the CLR Target: (2018): 29 payments and recommendations presented to the reports that the WBG Government in August 2014 and the contribution to the results development of pilot projects (Results of is unclear, the latest ISR: the WB RAS Program in Romania 2012- U (February 2018) of the 2015 report and a WBG Presentation). As Revenue Administration reported in the CLR, the Prime Minister Modernization Project decision 297/2016 presents updated (P130202, FY13) which guidance on RIA. aims at reducing the In addition, as reported in the Program burden of tax payers to Document of the Second DPL, the comply, indicates that Parliament has adopted amendments to electronic filling rate by the capital markets law (Law 268/2015) to large and medium size modernize the regulatory landscape. firms increased from However, the CLR reports that the new RIA 95% to 96.60% between has been piloted but not widely 2012 and 2017; that the Major implemented. time required to comply Outcome with tax procedures Measures Between 2014 and 2018 the number of decreased from 180 to payments for paying taxes decreased from 163 hours between 2013 39 (see 2014 Doing Business Report) to 14 and 2017 and that (see 2018 Doing Business Report) which is taxpayers’ satisfaction below ECA average of 16.5 payments (see with the Tax the 2018 Doing Business regional report). Administration quality of Achieved taxpayers services increased from 54% to 56% between 2013 and 2017. Indicator 2: Updated framework Through RAS Real Estate System Indicator added at PLR. for integrated cadaster system Modernization RAS (P145716, FY13) the WB supported the National Agency for The recently approved Baseline: (2015): law of 1996 Cadastre and Land Registration (ANCPI) to RAS Status Review of applicable strengthen its capacity to improve its policy, the National Program for Target: (2018): adoption of the regulatory and institutional framework. It Cadastre and Land Book new Cadaster law to set also supported the production of a draft of a (P166140, FY18) aims al framework for the integrated National Strategy for Systematic and reviewing the status of approach Sporadic First Registration and the draft the National Program for legislation for the Integrated Cadastre and Cadastre and Land Land Book System, aligned with EU good Book, and practice (Results of the WB RAS Program recommending priority in Romania 2012-2015 WB report). actions for accelerating Through the Real Estate Registration and the National Program Services RAS (P158399, FY16, Output and the related EU Report), the WBG is supporting the ANCPI financed Rural Land Annexes CLR Review 30 Independent Evaluation Group CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Smart and Sustainable Growth planning capacity for investment programs Registration Program, to and real estate registration by systematic meet their target of registration system. completing the systematic first As reported in the CLR, the Government registration of immovable adopted the Emergency Ordinance properties by 2023. 35/2016 amending Law 7/1996 on cadaster According to the CLR, and real estate registration to accelerate the new law on Cadaster the implementation of the National Program should consolidate and for Cadaster and Land Book that should be implemented during 2015-2023. However, harmonize disparate the CLR reports that current legal provisions, strengthen ANCPI’s independence framework is overly complex, and that the Government has prepared a and governance comprehensive Law on Cadaster and Real structure, and simplify registration rules to Estate Registration which has not yet been approved. support a national Partially Achieved program for systematic land registration. 8. CPS Objective: Improved performance of the RCC for promoting and enforcing market competition Indicator 1: An updated The RAS Assistance to the Competition Objective and related Competition Law is adopted Council (P131824, FY12) supported a indicators added at PLR. review of legal and regulatory framework governing market competition. RAS Changes in the recommendations informed a new Competition Law include Competition Law adopted in 2015 which eliminating the 40% helped eliminating overlapping mandates threshold for the between the RCC and other agencies presumption of (Results of the WB RAS Program in dominance; limiting the Romania 2012-2015 WB report). parties’ right to challenge Achieved access to file and confidentiality before the Indicator 2: A new merger Following RAS P131824 recommendations, Courts; and creating the regulation adopted a new merger regulation was adopted in Independent Procedural September 2014, allowing for fast-track Officer role specialized in procedures, which led to a 23% decrease the disposition of access in the time to complete a merger between to file, confidentiality and 2013 and 2014 (Results of the WB RAS other procedural matters Program in Romania 2012-2015 WB report separate from the and the RAS Completion enforcement team within Report Transforming Romania’s the RCC. Competition Architecture to Make Markets Work). As reported in RCC’s Achieved Annual Report the Competition Council was able to speed up the finalization of an increased number of investigations for breaking the Competition Law (17 in 2014, 21 in Annexes CLR Review 31 Independent Evaluation Group CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Smart and Sustainable Growth 2015 and 25 in 2016 completed investigations). RCC was also able to cope with an increased number of approvals, opinions and views issued. 9. CPS Objective: Strengthening the effectiveness of skills and education programs for labor market inclusion Indicator 1: Increasing the share The Preparing a Strategic Framework for The following indicator of 30-34 year-olds who have Increasing Tertiary Education Attainment, was taken out at PLR completed a higher education Quality and Efficiency RAS (P146187, stage: degree from the 2012 baseline FY14) supported the preparation of the (iii) Increasing the share of 21.8% 2015-2020 National strategy for Tertiary of education - adopted on July 28, 2015 adults (aged 25-64) Baseline: (2012): 21.8% (Government decision 561/2015). participating in lifelong Target: (2018): > 21.8% According to Eurostat data, 26.3% of the learning from the 2012 30-34 year olds had completed a higher baseline of 1.4 percent education degree as of 2017. The WBG also supported However, as reported in the CLR, WBG the Romanian Agency attribution of this result is uncertain, given for Quality Assurance in that the WBG did not have interventions Higher Education to that would directly affect the evolution of enhance attainment to this share – the Romania Secondary and quality and efficiency Education Investment Project (P148585, of the Romanian’s higher FY15) aims at supporting an increase in education system average retention rate in the first year of through the RAS tertiary education and a revision to the Assistance on Informing education student loan scheme. However, Project as per the latest ISR: S (December 2017), Evaluation,P157508, due to delays, the project does not yet FY17. report progress on these two indicators. Achieved Indicator 2: Reducing early The 2015-2020 National Strategy for As reported in the CLR, school leaving (share of 18 to reducing the early school leaving – adopted WBG attribution of this 24 years old who have at on June 19, 2015 (Government decision result is uncertain, given most lower secondary 439/2015) was supported by the that the WBG did not education and are no longer in Assistance to the Ministry of National have interventions that education or training) from Education for Reducing Early School would directly affect the 2012 baseline of 17.4% Leaving RAS (P145841, FY14). evolution of this share – According to Eurostat data, the share of 18- project P148585 aims at Baseline: (2012): 17.4% 24 year olds who have at most lower supporting a decrease in Target: (2018): < 17.4% secondary education and are no longer in the average dropout rate education or training increased to 18.1% as in the final grade in of 2017. project-supported high Not Achieved school and an increase in average graduation rate in project-supported high schools. However, as per the latest ISR: S Annexes CLR Review 32 Independent Evaluation Group CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Smart and Sustainable Growth (December 2017), the project does not yet report progress on these two indicators. 10. CPS Objective: Making it easier for business to entry and exit the market Indicator 1: Adopting a new The Judicial Reform Project (P090309, insolvency code in line with the FY06) supported activities related to ROSC principles insolvency legislation. According to the Management ICR: MS the project supported the strengthening of the Romanian insolvency framework and related mechanisms through, among others, the elaboration of the first National Insolvency Code in 2014 (law 85/2014), in line with European Reports on the Observance of Standards and Codes (ROSC) Standards, and adopted in 2014 (through decree 473/2014). Achieved Indicator 2: Reducing the time The Judicial Reform Project (P090309, taken to resolve insolvencies FY06) supported the introduction of the from 3.3 to 2.75 years National Insolvency Law and that led to a reduction in the number of insolvency Baseline: (2014): 3.3 years cases, through the introduction of a Target (2018): 2.75 years minimum threshold. However, according to Doing Business data, the time needed to resolve insolvencies did not change from 3.3 years between 2014 (see 2014 Doing Business Report) and 2018 (see 2018 Doing Business Report). Not Achieved Indicator 3: Supporting As reported in the CLR, IFC has co- Indicator added at PLR. Romanian financial institutions invested alongside major international Target date is beyond in the disposal of their non- investors in five NPL portfolios sold by the CPS period. performing portfolio (at least three of the leading banking groups in 3000NPLs from the acquired Romania. portfolio to be resolved by IEG confirmed from the review of IFC 2020, from a baseline of 0 as of documents that at least about 8,500 NPLs 2015) have been resolved from IFC supported projects. Baseline: (2015): 0 Achieved Target (2020): > 3,000 NPLS resolved Indicator 4: Amendments to the The Second (P149776, FY17) Indicator added at PLR. capital markets law approved Effectiveness and Growth DPL supports improvements in the functioning of capital The active Capital Baseline: (2014) No amendments markets through adoption of the new markets and ASF rapid Target (2018): Amendments capital markets framework. The Program assessment ASA approved Document reports that, as part of the prior (P160346, FY16) aims to actions, the Parliament has adopted improve the supervisory Annexes CLR Review 33 Independent Evaluation Group CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Smart and Sustainable Growth amendments to the capital markets law in capacity of the ASF and 2015 (Law 268/2015) to modernize the assist it in ensuring that regulatory landscape and enhance the regulations in key areas governance and accountability of the are in line with EU Financial Supervisory Authority (ASF) and Directives. to encourage the development of the non- banking sector. Achieved 11. CPS Objective: Environment and climate action in line with EU requirements Indicator 1: Climate change The Climate Change and Low Carbon Objective and indicators strategy updated and adopted Green Growth RAS (P145943, FY14) added at PLR. supported the government to develop a Baseline: (2014) No strategy comprehensive National Climate Change Target (2018): Strategy adopted and Low Carbon Green Growth Strategy for 2016-2030 and the National Action Plan on Climate Change for 2016-2020 (Government Decision 739/2016). Achieved Indicator 2: Danube Delta The RAS Danube Delta Integrated sustainable development Sustainable Development Strategy strategy updated and adopted (P145417, FY14) supported the development of the Danube Delta Baseline: (2014) No strategy Integrated Development Strategy , Target (2018): Strategy adopted approved by Government Decision 602/2016. Achieved Indicator 3: Favorable The Integrated Nutrient Pollution Control The ISR: MS also reports assessment of the EU on Project – INPCP (P093775, FY08, IEG that 311.23 tons of meeting the EU Nitrates ICRR: MS) and its additional financing nutrient load reduction Directive requirements across support Romania in implementing the was achieved under the the country requirements of the 1991 EU Nitrates project (target is 600 Directive. tons) and that about IEG ICRR: MS indicates that the required 53.8% of the targeted reports from the Government of Romania project areas show a on implementation of the Nitrate Directive 10% reduction in nitrates for the 2004-2007 and 2008-2011 discharge to water implementation periods were submitted on bodies (target is 70%) of time and accepted by the EU Commission's targeted project areas), Environment Directorate as of September as of October 2017. 2015 The ISR also reports that As reported in the EU Environmental the target related to Implementation Review Country Report for improved inter- Romania, since 2013 the country has governmental implemented the nitrates directive through coordination and revised legislation that has brought capacity to assess, significant improvements. monitor and report on Mostly Achieved progress with implementation of the EU Annexes CLR Review 34 Independent Evaluation Group CPS FY14-FY17: Focus Area II: Actual Results IEG Comments Smart and Sustainable Growth Nitrates Directive has been achieved. 12. CPS Objective: Improved energy efficiency Indicator 1: Tool for rapid The Regional Development Fee Based Objective and related assessment of city energy for Service (P132399, FY13) and the Regional indicators added at PLR. growth poles in place Development RAS (P143014, FY13) supported the strengthening of the TRACE was developed Baseline: (2014) No tool effectiveness of the growth poles policy in by the WB Energy Sector Target (2018): Tool in place the country (see Final Report) and the use Management Assistance of the Tool for Rapid Assessment of City Program (ESMAP) in Energy (TRACE) studies that served as 2010 as a means to basis for the development of integrated help city planners target urban development tools in 7 growth poles and prioritize energy (Results of the WB RAS Program in efficiency interventions Romania 2012-2015 WB report). (see WB information). Additional information from the Country Team indicates that the 7 growth poles have developed Integrated Urban Development Strategies (ISD) that include energy efficiency programs being financed by EU funds, own budget resources and other funds. Achieved Indicator 2: Orders issued by The Second (P149776, FY17) Eurostat reports (see ANRE to fully liberalize the non- Effectiveness and Growth DPL, supports document) that between residential gas and electricity improvement in the functioning of the 2005 and 2015 the market Energy sector. The Program Document biggest reductions in reports that, as a prior action of the DPL, energy intensity were Baseline: (2014) No orders issues the National Energy Regulatory Authority recorded in (…) Romania Target (2018): Orders issued by (ANRE) has issued the order to liberalize (-36.5%) (Additional ANRE the non-residential gas market in 2015 and information from the that prices for electricity and gas are now country team reports that determined by market participants. As efficiency gains are reported in the CLR, full liberalization of reflected in the indicator household market was completed in for energy intensity, January 2018. defined by Eurostat as Achieved measuring the energy consumption of an economy and its energy efficiency through the ratio between gross inland consumption of energy and gross domestic product (GDP). Annexes CLR Review 35 Independent Evaluation Group CPS FY14-FY17: Focus Area III: Actual Results IEG Comments Social Inclusion 13. CPS Objective: Support an ambitious and successful government program to tackle social inclusion and poverty reduction of the population including the Roma Indicator 1: An updated national The RAS Study on Diagnostics and Policy As reported in the CLR, Roma strategy adopted and Advice for Roma Integration (P145035, between FY15 and implemented FY13) provided inputs for the National FY17, the Roma Filter Strategy for the Inclusion of the Romanian has been applied to the citizens belonging to Roma minority 2012- WBG Romania country 2020 (see EC document), which was portfolio, such as in the updated by the government by Government INPCP (P093775, FY08), Decision 18/2015 (Results of the WB RAS as reported in IEG ICRR: Program in Romania 2012-2015 report). MS, and the Justice Services Improvement As reported in the CLR, several programs Project (P160751, FY17, supporting Roma communities are planned see Project Appraisal or under implementation under Priority Document). Axes 3-6 of the Human Capital Operational Another WBG RAS on Program (see European Commission Roma was the RAS information). Support to the Roma The RAS Supporting the Implementation of Education Fund for the Romania's Human Development Implementation of the Operational Program 2014-2020 (P162775, “Ready Set Go” Project FY17) supports the Government in the in Romania (P154011, implementation process (see WBG FY15, see Project presentation). Presentation) Major Achieved Outcome Indicators 2, 3 and 4 Measures Indicator 2: National strategy on The Provision of Inputs for the Preparation were added at PLR. social inclusion and poverty of a Draft National Strategy and Action Plan reduction is adopted and on Social Inclusion and Poverty Reduction At PLR the following two implemented RAS (P147269, FY14) supported the indicators were taken preparation of the 2015-2020 National out: Baseline: (2014): no strategy strategy for promoting social inclusion and (ii) An increase in the Target: (2018): strategy adopted poverty reduction - adopted on May 27, percentage of Roma 2015 (Government decision 383/2015). As children enrolled in pre- reported in the CLR the Government primary education subsequently passed, in February 2016, a (currently 30%). comprehensive anti-poverty package with This indicator will also 47 measures to combat poverty through track the percentage of 2020 (see WBG press release). Additional Roma girls in preschool information of October 2016 published on (currently 34%) the national government indicated that the (iii) Successfully package was being implemented. mobilizing Achieved EU resources and instruments Indicator 3: Mapping of urban The Elaboration of Integration Strategies (including by supporting marginalized communities for Poor Areas and Disadvantaged the implementation of the inform the preparation of Communities RAS (P143090, FY13) Community Led Local priorities and Operational supported the development of a detailed Development (CLLD) Programs for 2014-20 implementation framework for the instrument for Roma Community Led Local Development (CLLD) inclusion. Baseline: (2014): no strategy approach that included a typology of urban Target: (2018): strategy adopted marginalized communities and their Annexes CLR Review 36 Independent Evaluation Group CPS FY14-FY17: Focus Area III: Actual Results IEG Comments Social Inclusion characteristics and mechanisms to identify the geographical location of different sub- types of the most marginalized urban communities. As a result, the Regional Operational Program for the 2014-2020 programming period includes a dedicated CLLD Priority Axis (Results of the WB RAS Program in Romania 2012-2015 report). Achieved Indicator 4: Draft operational The RAS Deinstitutionalization of Children plan for closing residential (P156981, FY16) supports the centers and proposing development of a diagnostic of the centers alternatives to institutional care for children deprived of parental care and of for children the needs of their beneficiaries to prioritize the closure of these centers (see Project Presentation). As reported in the CLR, an operational plan and methodology for closing residential centers was developed through a RAS and was approved by the National Authority for the Protection of Child Rights and Adoption (NAPCRA) in 2017 (see UNICEF information). Achieved 14. CPS Objective: A more streamlined, better targeted and more cost-efficient social protection system Indicator 1: Government The latest ISR: MU (December 2017) of the consolidates three means- Social Assistance System Modernization tested programs and reduces Project reports that the legislation to disincentives for work by consolidate program for low-income changing the benefit formula to households with improved targeting formula avoid penalizing work by 2018 and increased average benefits was not in place, as of November 2017. Not Achieved Indicator 2: Increasing the The ISR of project P121673 reports that the Baseline not reported. coverage of means-tested Parliament adopted in 2016 the Anti- programs to 70 percent of the Poverty Program (VMI) law which unifies poorest 20 percent of the three-existing means-tested programs. households by end FY2018 However, in November 2017, the Government decided to postpone the implementation of VMI to April 2019. Not Achieved Annexes CLR Review 37 Independent Evaluation Group Annex Table 2: Planned and Actual Lending for Romania, FY14-FY18 Approved Proposed Approval Closing Proposed Proposed Project ID Project name IBRD FY FY FY Amount Amount Amount Project Planned Under CPS/PLR 2014-2018 CPS PLR P145174 Health Sector Reform 2014 2014 2021 340 340 339 First Fiscal Effectiveness and Growth P148957 2014 2014 2016 1,020 1,020 1,035 DPL1.1 P148585 Romania Secondary Education Project 2015 2015 2023 270 243 243 Social Inclusion 2015 135 - 2nd Fiscal Effectiveness and Growth P149776 2015 2017 2018 950 565 558 DPL DPL 2.1 2016 950 950 Energy IPF 2016 250 250 P160751 Justice Services Improvement Project 2016 2017 2018 200 68 70 P155594 Integrated Nutrient Pollution Mgmt AF 2016 2016 54 52 DPL 2.2 2017 950 950 IPF TBC 2017 450 450 Total Planned 5,515 4,890 2,297 Unplanned Projects during the CPS and PLR Period Total Unplanned - Approval Closing Approved On-going Projects during the CPS and PLR Period FY FY Amount INT. NUTRIENT POLLUTION P093775 2008 2022 92 CONTROL P130202 RAMP 2013 2021 561 P121673 SOC ASST SYST MOD-Results 2011 2018 1,333 P090309 JUDICIAL REFORM 2006 2017 381 P130051 DPO - DDO 2012 2015 710 P100638 CESAR 2008 2015 423 P093096 SOC INCL PROG (CRL) 2006 2014 68 P078971 HEALTH SEC REF 2 (APL #2) (CRL) 2005 2014 65 Total On-going 3,632 Source: Romania CPS and PLR, WB Business Intelligence Table 2b.1, 2a.4 and 2a.7 as of 4/23/18 *LIR: Latest internal rating. MU: Moderately Unsatisfactory. MS: Moderately Satisfactory. S: Satisfactory. HS: Highly Satisfactory. Annexes CLR Review 38 Independent Evaluation Group Annex Table 3: Analytical and Advisory Work for Romania, FY14-FY18 Proj ID Economic and Sector Work RAS Fiscal year Output Type P159659 Progammatic Public Finance Review No FY17 Public Expenditure Review (PER) P151109 Romania Decentralization Process No FY16 Sector or Thematic Study/Note P130426 Romania - ICR ROSC No FY15 Insolvency Assessment (ROSC) P133519 Europe 2020 Romania No FY14 Sector or Thematic Study/Note Proj ID Technical Assistance RAS Fiscal year Output Type P157075 Romania-Road Safety Capacity Review No FY18 Technical Assistance P164578 Resource Mapping - Interactive Platform No FY18 Technical Assistance P154011 Capacity Enhancement of REF Romania Yes FY17 Technical Assistance P158399 Real Estate Registration and Services No FY17 Technical Assistance P159178 Regional Pilot: ECA-Romania urban regen No FY17 Technical Assistance P159383 Mining Sector Policy No FY17 Technical Assistance P130510 FBS RO Public Private Partnership Yes FY16 Technical Assistance P143659 RAS - Develop Admin Capacity of MoNE Yes FY16 Technical Assistance P145417 RAS Danube Delta Dev Str (Comp1) Yes FY16 Technical Assistance P145716 RAS Real Estate System Modernization Yes FY16 Technical Assistance P145841 RAS - Reducing Early School Leaving Yes FY16 Technical Assistance P146187 RAS Framework Incr Tertiary Education Yes FY16 Technical Assistance RAS Component A+B Romania Climate P146697 Yes FY16 Technical Assistance Change P146782 RAS Public Investment Management Yes FY16 Technical Assistance P146802 RAS Comp C1+C2 Romania Climate Change Yes FY16 Technical Assistance RAS Component C3 Romania Climate P146803 Yes FY16 Technical Assistance Change P146821 RAS Component D Romania Climate Change Yes FY16 Technical Assistance P147269 RAS RO Social Inclusion & Poverty Reduct Yes FY16 Technical Assistance P147482 RAS Establishment of a Delivery Unit Yes FY16 Technical Assistance P147561 RAS Danube Delta (Comp 4) Yes FY16 Technical Assistance P147650 RAS Active Ageing Yes FY16 Technical Assistance RAS RO Performance Management - EU P147746 Yes FY16 Technical Assistance Funds P150017 RAS Strengthening Regulatory Impact Asse Yes FY16 Technical Assistance P150144 RAS EU and State Projects Coordination Yes FY16 Technical Assistance P150145 RAS Prioritization of MRDPA Investments Yes FY16 Technical Assistance P150146 RAS Improving quality of MRDPA inv Yes FY16 Technical Assistance P150147 RAS Housing and Social Infrastructure Yes FY16 Technical Assistance P150499 Impact of Rural Land Registration No FY16 Technical Assistance P152542 Digital Romania Strategy Support Yes FY16 Technical Assistance P153331 Ploiesti Growth Pole Yes FY16 Technical Assistance P153436 Support for the Capacity Dvp ADI ITI DD Yes FY16 Technical Assistance P154400 Improving heating sector regulation No FY16 Technical Assistance P154609 Implementation of EU Water Directives No FY16 Technical Assistance Annexes CLR Review 39 Independent Evaluation Group P159257 Dissemination SocInclusion RAS Outputs No FY16 Technical Assistance P130508 FBS Romania Transport Strategic Planning Yes FY15 Technical Assistance P131824 RAS-MAP-Competition Council Yes FY15 Technical Assistance P143674 Strategic planning ARD administration Yes FY15 Technical Assistance P143676 Integrated financial management system Yes FY15 Technical Assistance P144557 RAS Tax Policy Formulation Yes FY15 Technical Assistance P144566 RAS Interpretations on tax issues Yes FY15 Technical Assistance P146632 Romania: RAS - TA for Preparing a SFLLL Yes FY15 Technical Assistance P147587 Mining Sector Support No FY15 Technical Assistance P151965 RO Financial Sector TA No FY15 Technical Assistance P152800 Romania - Developing Govt Yield Curve No FY15 Technical Assistance P154014 Banking Sector - Romania No FY15 Technical Assistance P154237 National Reform TA No FY15 Technical Assistance P154402 Priorities in the agri-rural space No FY15 Technical Assistance P155786 Romania: Competitiveness No FY15 Technical Assistance P129957 FBS - Romania Judicial Functional Review Yes FY14 Technical Assistance P131858 FBS-21-FY12 West Region Competitiveness Yes FY14 Technical Assistance P132399 FBS Romania Growth Poles Yes FY14 Technical Assistance P133582 FBS: Administrative Capacity Development Yes FY14 Technical Assistance P133720 Romania Strengthening Public Debt Mgmt Yes FY14 Technical Assistance P133830 FBS Risk Based Systems Enhancement Yes FY14 Technical Assistance P143087 FBS Romania Spatial and Urban Strategy Yes FY14 Technical Assistance P143088 FBS Romania MA-IB Collaboration Yes FY14 Technical Assistance P143089 FBS Romania Project Selection Models Yes FY14 Technical Assistance P143090 Integration of urban marginalised groups Yes FY14 Technical Assistance P143673 Agri-food sector strategy formulation Yes FY14 Technical Assistance P143675 Internal management system Yes FY14 Technical Assistance P144505 HR Strategy for MOF Yes FY14 Technical Assistance P145035 Romania Roma diagnostics Yes FY14 Technical Assistance P147023 Policy Note on Health Care Provision No FY14 Technical Assistance P148243 StAR - Romania Engagement No FY14 Technical Assistance Source: WB Business Intelligence 4/23/18 Note: ASA delivered during review period RAS - Reimbursable Advisory Services Annexes CLR Review 40 Independent Evaluation Group Annex Table 4: Grants and Trust Funds Active in Romania, FY14-18 Approval Closing Approved Project ID Project name TF ID FY FY Amount P152568 Romania Strengthening Financial Accountability TF 18442 2016 2017 488,100 Improved Policy Making and Institutional P128150 TF 10417 2012 2018 1,715,000 Framework for People with Disability P124601 Monitoring and Evaluations for Policymaking TF 98645 2012 2015 434,000 GEF Romania Integrated Nutrient Pollution P099528 TF 58040 2008 2017 5,500,000 Control Project Total 8,137,100 Source: Client Connection as of 4/23/18 ** IEG Validates RETF that are 5M and above Annex Table 5: IEG Project Ratings for Romania, FY14-18 Total IEG Risk to Exit FY Proj ID Project name Evaluated IEG Outcome DO ($M) MODERATELY NEGLIGIBLE 2014 P078971 HEALTH SEC REF 2 (APL #2) (CRL) 89.6 SATISFACTORY TO LOW MODERATELY 2014 P093096 SOC INCL PROG (CRL) 49.6 MODERATE SATISFACTORY MODERATELY 2015 P100638 CESAR 24.0 MODERATE UNSATISFACTORY MODERATELY 2015 P130051 DPO - DDO 1,370.2 MODERATE SATISFACTORY Total 1,533.4 Source: BI Key IEG Ratings as of 4/23/18 Annex Table 6: IEG Project Ratings for Romania and Comparators, FY14-18 RDO % RDO % Total Total Outcome Outcome Moderate or Moderate or Region Evaluated Evaluated % Sat ($) % Sat (No) Lower Lower ($M) (No) Sat ($) Sat (No) Romania 1,533.3 4 98.4 75.0 100.0 100.0 ECA 14,477.5 124 93.8 80.6 59.1 50.0 World 77,258.0 851 85.8 74.9 51.5 42.5 Source: WB BI as of 4/23/18 Annexes CLR Review 41 Independent Evaluation Group Annex Table 7: Portfolio Status for Romania and Comparators, FY14-18 Fiscal year 2014 2015 2016 2017 2018 Ave FY14-18 Romania # Proj 9 9 8 8 5 8 # Proj At Risk 6 3 4 4 4 % Proj At Risk - 66.7 37.5 50.0 80.0 54.5 Net Comm Amt 3,738.9 2,624.7 1,642.3 2,039.2 858.9 2,181 Comm At Risk 1,340.8 1,050.9 1,050.4 615.8 1,014 % Commit at Risk 51.1 64.0 51.5 71.7 46.5 ECA # Proj 280 290 279 292 280 284 # Proj At Risk 37 36 47 37 52 42 % Proj At Risk 13.2 12.4 16.8 12.7 18.6 14.7 Net Comm Amt 26,927.9 26,544.5 27,637.3 25,808.5 25,058.3 26,395 Comm At Risk 2,635.4 3,533.8 4,350.5 5,466.2 5,159.0 4,229 % Commit at Risk 9.8 13.3 15.7 21.2 20.6 16.0 World # Proj 2,048 2,022 1,975 2,071 2,055 2,034 # Proj At Risk 412 444 422 449 470 439 % Proj At Risk 20.1 22.0 21.4 21.7 22.9 21.6 Net Comm Amt 192,610.1 201,045.2 220,331.5 224,420.1 230,268.4 213,735 Comm At Risk 40,933.5 45,987.7 44,244.9 52,549.1 55,334.1 47,810 % Commit at Risk 21.3 22.9 20.1 23.4 24.0 22.4 Source: WB BI as of 4/23/18 Annex Table 8: Disbursement Ratio for Romania, FY14-18 Fiscal Year 2014 2015 2016 2017 2018 Overall Result Romania Disbursement Ratio 16.8 3.4 2.7 3.9 16.6 8.2 Inv Disb in FY 120.7 29.6 29.4 41.7 164.5 385.9 Inv Tot Undisb 718.8 864.7 1,077.4 1,071.0 993.6 4,725.6 Begin FY ECA Disbursement Ratio 22.8 23.5 17.5 20.7 17.5 20.2 Inv Disb in FY 2,612.0 2,664.4 2,275.6 2,857.1 2,342.1 12,751.2 Inv Tot Undisb Begin FY 11,467.5 11,342.1 13,028.9 13,776.0 13,400.4 63,014.9 World Disbursement Ratio 20.8 21.8 19.5 20.5 14.9 19.4 Inv Disb in FY 20,757.7 21,853.7 21,152.9 22,126.4 16,622.6 102,513.3 Inv Tot Undisb Begin FY 99,854.3 100,344.9 108,600.3 108,147.9 111,316.1 528,263.4 * Calculated as IBRD/IDA Disbursements in FY / Opening Undisbursed Amount at FY. Restricted to Lending Instrument Type = Investment. Source: BI disbursement ratio table as of 4/23/18 Annexes CLR Review 42 Independent Evaluation Group Annex Table 9: Net Disbursement and Charges for Romania, FY14-17 Period Disb. Amt. Repay Amt. Net Amt. Charges Fees Net Transfer FY14 1,493,241,584.8 326,859,964.7 1,166,381,620.1 43,074,515.1 6,288,209.0 1,117,018,896.0 FY15 879,330,804.4 310,897,086.1 568,433,718.3 64,855,575.5 3,782,826.9 499,795,316.0 FY16 27,399,875.0 290,887,863.7 (263,487,988.7) 75,938,597.7 1,129,462.1 (340,556,048.5) FY17 41,298,437.2 264,761,249.9 (223,462,812.7) 73,706,563.3 721,416.7 (297,890,792.8) Report 2,441,270,701.4 1,193,406,164.3 1,247,864,537.1 257,575,251.6 11,921,914.7 978,367,370.8 Total World Bank Client Connection 4/23/18 *FY18 not yet closed Annex Table 10: Economic and Social Indicators for Romania, FY14-16* Romania ECA World Series Name 2014 2015 2016 Average 2014-2016 Growth and Inflation GDP growth (annual %) 3.1 4.0 4.6 3.9 1.9 2.7 GDP per capita growth (annual %) 3.5 4.5 5.2 4.4 1.4 1.5 GNI per capita, PPP (current international $) 20,350.0 21,060.0 22,370.0 21,260.0 30,449.5 15,696.9 GNI per capita, Atlas method (current US$) 9,600.0 9,530.0 9,480.0 9,536.7 24,520.5 10,610.8 Inflation, consumer prices (annual %) 1.1 (0.6) (1.5) (0.4) 0.4 1.9 Composition of GDP (%) Agriculture, value added (% of GDP) 5.3 4.8 4.3 4.8 2.2 4.1 Industry, value added (% of GDP) 35.6 34.1 32.4 34.0 25.7 28.3 Services, etc., value added (% of GDP) 59.0 61.2 63.3 61.2 72.1 67.7 Gross fixed capital formation (% of GDP) 24.3 24.7 22.7 23.9 20.2 23.4 Gross domestic savings (% of GDP) 24.3 24.5 24.1 24.3 23.9 24.8 External Accounts Exports of goods and services (% of GDP) 41.2 41.0 41.4 41.2 41.7 29.4 Imports of goods and services (% of GDP) 41.6 41.6 42.3 41.9 38.4 28.7 Current account balance (% of GDP) (0.7) (1.2) (2.1) -1.3 External debt stocks (% of GNI) 56.8 55.6 52.9 Total debt service (% of GNI) 12.5 13.6 10.3 Total reserves in months of imports 5.8 5.7 5.5 5.7 7.3 13.3 Fiscal Accounts /** General government revenue (% of GDP) 32.0 32.8 29.0 31.2 General government total expenditure (% of 33.9 34.2 31.4 33.2 GDP) General government net lending/borrowing (% (1.9) (1.5) (2.4) -1.9 of GDP) General government gross debt (% of GDP) 40.5 39.3 39.1 39.6 Health Life expectancy at birth, total (years) 75.0 75.0 75.0 75.0 77.2 71.9 Immunization, DPT (% of children ages 12-23 94.0 89.0 89.0 90.7 93.1 85.4 months) Annexes CLR Review 43 Independent Evaluation Group Romania ECA World Series Name 2014 2015 2016 Average 2014-2016 People using safely managed sanitation 55.3 57.1 .. 56.2 67.2 38.9 services (% of population) People using safely managed drinking water 87.8 87.8 .. 87.8 90.7 71.2 services (% of population) Mortality rate, infant (per 1,000 live births) 8.1 7.8 7.7 7.9 8.8 31.4 Education School enrollment, preprimary (% gross) 89.8 89.7 87.0 88.8 74.1 48.4 School enrollment, primary (% gross) .. 90.4 89.4 90 102.3 103.4 School enrollment, secondary (% gross) 92.7 90.9 88.9 90.9 105.5 76.3 School enrollment, tertiary (% gross) 47.5 46.8 48.0 47.5 66.3 36.1 Population Population, total (Millions) 19.9 19.8 19.7 19.8 907.4 7,357.5 Population growth (annual %) (0) (0) (1) (0) 0 1 Urban population (% of total) 54.4 54.6 54.7 54.6 70.9 53.8 Rural population growth (annual %) -0.7 -0.8 -1.0 -0.9 -0.1 0.2 Poverty Poverty headcount ratio at $1.90 a day (2011 .. .. - PPP) (% of pop) Poverty headcount ratio at national poverty 25.4 25.3 .. 25.4 lines (% of pop) Rural poverty headcount ratio at national .. .. .. poverty lines (% of rural pop) Urban poverty headcount ratio at national .. .. .. poverty lines (% of urban pop) GINI index (World Bank estimate) .. .. 28.3 28.3 Source: WB Development Data Platform as of 5/21/18 * Data only available up to FY16 ** International Monetary Fund, World Economic Outlook Database, April 2018 Annexes CLR Review 44 Independent Evaluation Group Annex Table 11: List of IFC Investments in Romania Investments Committed in FY14-FY18 Project Cmt Project Project Original Original Original Loan Equity Net Net Net Greenfield Primary Sector Name ID FY Status Size Loan Equity CMT Cancel Cancel Loan Equity Comm Code 40788 2018 Active Finance & Insurance 8,285 8,719 - 8,719 - - 8,719 - 8,719 G Construction and Real 41142 2018 Active 61,093 61,093 - 61,093 - - 61,093 - 61,093 G Estate 36783 2018 Active Finance & Insurance 37,528 38,736 - 38,736 - - 38,736 - 38,736 E Construction and Real 38149 2018 Active 55,710 58,153 - 58,153 - - 58,153 - 58,153 G Estate 40713 2018 Active Finance & Insurance 29,590 29,590 - 29,590 - - 29,590 - 29,590 G 37926 2017 Active Health Care 11,112 11,142 - 11,142 - - 11,142 - 11,142 E 38079 2017 Active Finance & Insurance 2,300 2,300 - 2,300 - - 2,300 - 2,300 E 38414 2017 Active Finance & Insurance 53,760 54,690 - 54,690 - - 54,690 - 54,690 G 39197 2017 Active Finance & Insurance 16,884 16,884 - 16,884 - - 16,884 - 16,884 E 39287 2017 Active Finance & Insurance 5,875 6,016 - 6,016 - - 6,016 - 6,016 G 35030 2016 Active Finance & Insurance 22,778 23,593 - 23,593 2,088 - 21,505 - 21,505 G 37071 2016 Active Finance & Insurance 165,902 63,447 - 63,447 8,189 - 55,258 - 55,258 G 37394 2016 Closed Finance & Insurance 1,100 1,100 - 1,100 1,100 - - - - E Professional, Scientific 37422 2016 Active 1,681 - 1,681 1,681 - - 1,681 1,681 1,681 E and Technical Services Professional, Scientific 38387 2016 Active 5,120 - 5,120 5,120 - - 5,120 5,120 5,120 E and Technical Services 34577 2015 Active Finance & Insurance 9,232 8,816 - 8,816 - - 8,816 - 8,816 E 34605 2015 Active Finance & Insurance 48,295 47,777 - 47,777 - - 47,777 - 47,777 G 34984 2015 Active Food & Beverages 60,000 60,000 - 60,000 - - 60,000 - 60,000 G 35682 2015 Closed Public Administration 28,190 28,190 - 28,190 25,291 - 2,899 - 2,899 G 36728 2015 Active Finance & Insurance 5,000 5,000 - 5,000 - - 5,000 - 5,000 E 31884 2014 Active Public Administration 46,706 34,319 - 34,319 - - 34,319 - 34,319 E Professional, Scientific 32630 2014 Active 20,414 10,372 6,829 17,201 - - 17,201 6,829 17,201 G and Technical Services 33606 2014 Active Public Administration 60,000 7,568 - 7,568 - - 7,568 - 7,568 G 33830 2014 Active Finance & Insurance 30,973 31,078 - 31,078 3,108 - 27,970 - 27,970 G Annexes CLR Review 45 Independent Evaluation Group Project Cmt Project Project Original Original Original Loan Equity Net Net Net Greenfield Primary Sector Name ID FY Status Size Loan Equity CMT Cancel Cancel Loan Equity Comm Code 34298 2014 Active Finance & Insurance 10,000 - - - - - - - - E 34657 2014 Active Finance & Insurance 15,000 6,079 - 6,079 - - 6,079 - 6,079 E 35118 2014 Active Finance & Insurance 25,000 4,846 - 4,846 - - 4,846 - 4,846 E 35119 2014 Active Finance & Insurance 10,000 - - - - - - - - E Sub-Total 778,150 549,695 13,630 563,325 39,776 - 523,549 13,630 523,549 Investments Committed pre-FY13 but active during FY14-18 Project CMT Project Project Original Original Original Loan Equity Net Net Net Greenfield Primary Sector Name ID FY Status Size Loan Equity CMT Cancel Cancel Loan Equity Comm Code 31613 2013 Active Finance & Insurance 24,564 25,637 - 25,637 - - 25,637 - 25,637 G 32914 2013 Active Finance & Insurance 15,000 9,052 - 9,052 - - 9,052 - 9,052 E 33733 2013 Active Finance & Insurance 74,976 74,936 - 74,936 - - 74,936 - 74,936 G 30802 2012 Active Finance & Insurance 10,000 13,279 - 13,279 - - 13,279 - 13,279 E 30869 2012 Active Electric Power 54,701 38,970 - 38,970 - - 38,970 - 38,970 E Transportation and 31024 2012 Active 16,000 - 16,000 16,000 - 1,545 16,000 14,455 14,455 E Warehousing 31466 2012 Active Wholesale and Retail Trade 66,565 66,565 - 66,565 - - 66,565 - 66,565 E 29716 2011 Active Finance & Insurance 1,378 - 1,378 1,378 - - 1,378 1,378 1,378 E 30868 2011 Active Electric Power 182,368 60,757 - 60,757 - - 60,757 - 60,757 E 31101 2011 Active Finance & Insurance 7,500 375 - 375 - - 375 - 375 E 28118 2010 Active Finance & Insurance 60,000 647,813 - 647,813 - - 647,813 - 647,813 E 29355 2010 Active Wholesale and Retail Trade 103,721 52,612 - 52,612 - - 52,612 - 52,612 E 29638 2010 Active Health Care 25,766 12,411 - 12,411 - - 12,411 - 12,411 E 26504 2009 Active Finance & Insurance 283,167 43,764 - 43,764 - - 43,764 - 43,764 G 25069 2007 Active Health Care 28,303 6,348 5,000 11,348 - - 11,348 5,000 11,348 G 24027 2005 Active Finance & Insurance 45,713 45,074 - 45,074 - - 45,074 - 45,074 G Sub-Total 999,722 1,097,592 22,378 1,119,970 - 1,545 1,119,970 20,833 1,118,425 TOTAL 1,777,872 1,647,286 36,008 1,683,294 39,776 1,545 1,643,518 34,464 1,641,974 Source: IFC-MIS Extract as of 4/30/18 Annexes CLR Review 46 Independent Evaluation Group Annex Table 12: List of IFC Advisory Services in Romania Advisory Services Approved in FY14-18 Impl Impl Primary Project Project Total Project Name Start End Business ID Status Funds, US$ FY FY Line 599599 Bucharest District Heating PPP 2014 2016 TERMINATED CAS 2,500,000 600286 Botosani District Heating Advisory Services 2014 2014 CLOSED CAS 21,818 Sub-Total 2,521,818 Advisory Services Approved pre-FY14 but active during FY14-18 Impl Impl Primary Project Project Total Project Name Start End Business ID Status Funds, US$ FY FY Line Sub-Total - TOTAL 2,521,818 Source: IFC AS Portal Data as of 4/15/18 Annex Table 13: IFC net commitment activity in Romania, FY14 - FY18 2014 2015 2016 2017 2018 Total 67,627,555 60,142,147 1,100,000 2,300,000 21,190,000 152,359,702 - - - 56,633,500 1,230,444 57,863,944 Financial Markets 227,091 (5,555,415) - - - (5,328,324) - - 81,795,262 (2,147,014) 13,880 79,662,128 - 8,804,250 - 23,191,285 46,652,369 78,647,904 Agribusiness & Forestry - 60,000,000 - - - 60,000,000 Tourism, Retail, Construction & Real (1,777,937) - - - 119,272,901 117,494,964 Estates (TRP) Health, Education, Life - - - 10,970,775 82,250 11,053,025 Sciences (1,496,979) - - - - (1,496,979) Infrastructure 42,544,688 21,812,813 (25,018,764) - - 39,338,736 Telecom, Media, and 17,038,046 (433,170) 6,699,708 3,416 9,243 23,317,243 Technology Total IFC Long Term 124,162,464 144,770,625 64,576,205 90,951,962 188,451,086 612,912,342 Financing Short Term Trade 85,903,164 89,124,632 80,616,823 13,196,912 570,152 269,411,682 Finance Guarantee (TF) Source: IFC MIS as of 6/5/18 Note: IFC began reporting average outstanding short-term commitments (not total commitments) in FY15 and no longer aggregates short-term commitments with long-term commitments. IEG uses net commitment number for IFC's long-term investment. For trade finance guarantees under GTFP, average commitment numbers have been used. Annexes CLR Review 47 Independent Evaluation Group Annex Table 14: List of MIGA Projects Active in Romania, 2014-2018 Max Project ID Contract Enterprise FY Sector Investor Gross Status Issuance Financial 5969 HVB Bank Romania S.A. 2005 Active Austria 35 Services Total 35 Source: MIGA 4-17-18