The World Bank Report No: ISR14235 Implementation Status & Results Kyrgyz Republic Capacity Building for Economic Management Grant (P108525) Public Disclosure Copy Operation Name: Capacity Building for Economic Management Grant Project Stage: Implementation Seq.No: 9 Status: ARCHIVED Archive Date: 26-Apr-2014 (P108525) Country: Kyrgyz Republic Approval FY: 2009 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Technical Assistance Loan Implementing Agency(ies): Key Dates Board Approval Date 01-Jul-2008 Original Closing Date 31-Dec-2012 Planned Mid Term Review Date Last Archived ISR Date 08-Oct-2013 Effectiveness Date 18-Dec-2008 Revised Closing Date 30-Jun-2014 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to assist the Recipient in establishing and institutionalizing an efficient and effective framework for formulating and implementing sustainable economic policies as well as in enhancing the capacity of public institutions responsible for the development and implementation of such policies to formulate and carry out the policies. [Objective as reflected in the Financing Agreement, which in substance is not different from the PAD but wordings are different. The most important project objectives are: a) contribute to government-wide coherent macro-economic policy development and decision making through establishing strong inter-ministerial coordination and interface; b) support process of economic policy development and implementation through enabling public institutions (and particularly the MEDT, through capacity building and restructuring) to formulate sound and analytically informed policy measure and proposals; and c) support reform of employment practices and wages in the civil service by building the capacity in a special task force in this area. [ These other main objectives are from the PAD but are not reflected in the legal agreement except item b. although broadly in line in substance ] Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Public Disclosure Copy Institutional and Technical Framework for Macro-Economic Policy 0.50 Strengthening the Capacity to Formulate and Implement Economic Policy 1.64 Building Capacity for Civil Service Reform 0.34 Project Management and Implementation Support 0.33 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Page 1 of 7 The World Bank Report No: ISR14235 Previous Rating Current Rating Overall Risk Rating Substantial Substantial Public Disclosure Copy Implementation Status Overview Overall, the project assessment remains moderately satisfactory. The project activities have been implemented as planned. The government has now established clear institutional arrangements for coordinating and developing macroeconomic projections/scenarios. The Ministry of Economy has strengthened its capacity to develop and implement economic policy measures and proposals, conduct regulatory impact analysis, and monitor and evaluate implementation of the anti-corruption program. The State Personnel Service has been carrying out pay and grading reform measures in the civil service. Component 1 At a technical level, the economic policy coordination mechanism has been satisfactory. The technical expert group, which includes representatives from the Ministry of Economy, the Ministry of Finance, the PM’s office, the Central Bank, the Statistics Committee, and the Social Fund, supports the Coordination Council on Macroeconomic and Investment Policies (CCMIP). The work of the technical group has satisfactorily ensured good coordination between the key government bodies at the technical level. As a result, the key government bodies are able to produce agreed macroeconomic projections and scenarios more effectively and faster than it was before the start of the projection. At a decision making level, the CCMIP appears to play a limited role in economic policy coordination largely because the government uses other established arrangements for it. The meetings of the CCMIP were not regular. In 2013, the CCMIP only met three times, to consider the mid-term macroeconomic forecasts, the mid-term budget framework and the partnership strategies of the World Bank and the Asian Development Bank. However, the government maintains adequate coordination through regular government meetings and other meetings chaired by the Prime-Minister or Deputy Prime-Minister responsible for economic issues. The Government institutionalized a mechanism for producing macroeconomic projections and scenarios. With its resolution No557 dated October 9, 2013, the Government approved the financial programming model (a macroeconomic consistency framework) and a manual for using it. The financial programming model has now become the main tool for key government bodies to produce agreed macroeconomic projections and scenarios. Component 2 The current structure of the Ministry of Economy (MoE) enables it to adequately address the tasks assigned to the Ministry. The current structure was adopted in August 2013 reflecting new functions added to the Ministry and recommendations from functional review analysis conducted by a CBEM project consultant and USAID consultants. The Ministry now has assigned staff to work on policy development, macroeconomic analysis and projections and anti-corruption policy. The ministry has also strengthened its strategic planning function. Analytical capacity of the policy development group has increased. The policy development group, with support from the CBEM consultants, developed analytical documents on economic policy, governance, strategic planning and monitoring and evaluation system. The MoE continues to strengthen its role in implementing and coordinating the government's anti-corruption action plan. The MoE has developed and approved: Public Disclosure Copy i) a methodology on anti-corruption monitoring and evaluation system; ii) a manual on monitoring and evaluation of the implementation of the government's anti-corruption action plan (Order of the Minister of Economy, number 80, date d April 16, 2013); and iii) a methodology to help individual ministries and government agencies develop and implement their own anti-corruption programs (Order of the Minister of Economy, number 89, dated May 6, 2013). The MoE has made good progress in developing tools to produce and maintain a macroeconomic framework. With the support from the CBEM consultants, the MoE is now able to maintain: i) the RMSM-X model; ii) a simplified financial programing model; and iii) an inflation model. Page 2 of 7 The World Bank Report No: ISR14235 In addition, CBEM consultants have developed a methodology for economic forecasting at the regional level. The MoE’s capacity for tax policy development and public investment management remains weak. CBEM consultants have developed a tax and non-tax revenues forecasting model, Public Disclosure Copy conceptual proposals on strengthening revenue policy, and recommendations on improving public investment management. However, the MoE's capacity remains weak. This is partly due to lack of efforts to reach strong results in these areas. The MoE's senior management needs to put more efforts to strengthen the ministry's capacity before the closure of the project. The MoE has enhanced its capacity in regulatory impact analysis (RIA). A CBEM consultant, in cooperation with the MoE staff, prepared a new RIA methodology, which is expected to be approved by a government resolution. In addition, the CBEM consultant prepared a manual to assess the quality of RIA. Component 3 Outcomes under this component have been achieved. The Wage Reform Strategy for civil and municipal servants covering 2013-2020 and an action plan for its implementation have been approved by the Government (Resolution number 383 dated June 28, 2013). The Government has also adopted standards for job descriptions and qualifying requirements in the civil service, and regulation for assessing performance of civil servants. In addition, the President approved a new civil and municipal services registry (Order number 145 dated June 26, 2013). These documents incorporate proposals and comments from ministries and government agencies collected during presentations and round tables conducted by the state personnel service in May and June 2013. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Enhanced inter-ministerial coordination and Text Value Poor coordination The CCMIP held no meetings High level coordination capacity to ensure a coherent economic policy in the second half of 2013 and committee operational, holds decision-making process. in the first two months of regular meetings with relevant 2014. agenda for major economic policy decisions. Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments It is uncertain when the next Public Disclosure Copy CCMIP would meet. The government resigned after the break-up of the ruling coalition on Mar 18, 2014. Public institutions (and particularly the MEDT, Text Value MEDT has old dysfunctional The new structure of the MoE MER reorganized consistent through capacity building and restructuring) are structure and low analytical adopted in August 2013 is with new structure. enabled to formulate sound and analytically capacity. adequate to the tasks informed policy measure and proposals. assigned to the MoE. Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Page 3 of 7 The World Bank Report No: ISR14235 Comments The MoE's capacity to develop policy measures improved. Public Disclosure Copy Capacity for carrying out a reform of wages Text Value No existing capacity to carry The government is Salary task force presents and employment in the civil service, together out a pay reform implementing the action plan. options for wage and with options developed employment reform Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments Outcome is achieved. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Presidential Decree/govt Regulation which (a) Text Value No coordination in economic Coordination procedures Coordination procedures clearly defines roles & responsibilities in policy formalized in the government formalized in decree or economic policy design, implementation & regulation. Agreement regulation. Agreement evaluation at central level (b) establishes an reached on composition and reached on composition and effective coordination agenda of coordination agenda of coordination committee. committee Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments Done. Regular meetings of coordination group taking Text Value N/a The CCMIP held no meetings Coordination committee place, with appropriate agenda and relatively in the second half of 2013 and meeting regularly with few major economic policy decisions being in the first two months of substantive appropriate taken outside the mechanism. 2014. agenda. Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments It is uncertain when the next CCMIP would meet. The government resigned after the break-up of the ruling coalition on Mar 18, 2014. Publication of macroeconomic and fiscal Text Value Not currently published by The government publishes Publication of more detailed forecasts with evidence that these forecasts Govt. the Mid-term Socia-economic forecasts at least twice during Public Disclosure Copy provide the basis for budget and economic Development Prognosis, the the year,and evidence that policy discussions. Mid-term Budget Framework forecasts form the basis of and annual budget laws. budget planning. Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments Is being implemented. New structure of MEDT corresponds to that Text Value Dysfunctional current The new structure of the MoE MEAMP reorganized proposed in the SDP structure adopted in August 2013 is consistent with new structure adequate to address the tasks assigned to the MoE. Page 4 of 7 The World Bank Report No: ISR14235 Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments Satisfactory implementation (according to Text Value No specific survey to measure The survey has not been Surveys indicate progress in Public Disclosure Copy private sector surveys) of significant measures reforms proposed by the done yet. other areas of business to improve the business environment proposed investment council. environment and increase by the investment council. satisfaction with the performance of IC and MEDT. Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments Reforms to improve the business environment would probably reflect well on the results of a survey when undertaken. High quality policy papers are produced and Text Value No policy papers The anti-corruption research At least six policy papers subsequently translated into policy decisions. is being conducted. The three developed, of which three are studies under component 1 judged to be of high quality have been launched. and at least one forms the basis of a significant policy decision Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments An analysis of the corruption in the state property management is planned under component 2. Pay and grading reform group established Text Value No existing taskforce The group was established Salary task force established and it finalized the civil and basic data collected service wage strategy and prepared an action plan to implement the strategy. Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments Done. The salary working Public Disclosure Copy group has finished its work. Options paper for pay reform is produced Text Value No current options for pay The government approved the Salary task force presents reform wage reform strategy for civil options for wage and and municipal servants for employment reform 2013-2020 and an action plan to implement this strategy. Date 15-Jul-2008 25-Mar-2014 30-Jun-2014 Comments Done. Data on Financial Performance (as of 25-Mar-2014) Page 5 of 7 The World Bank Report No: ISR14235 Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P108525 IDA-H3880 Effective 01-Jul-2008 22-Sep-2008 18-Dec-2008 31-Dec-2012 30-Jun-2014 Public Disclosure Copy Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P108525 IDA-H3880 Effective XDR 1.90 1.90 0.00 1.56 0.34 82.00 Disbursement Graph Key Decisions Regarding Implementation The macroeconomic policy coordination in the government has improved at a technical level. The Government’s capacity to use technical tools to maintain a consistent Public Disclosure Copy macroeconomic framework has increased. The Ministry of Economy has enhanced its capacity to: i) develop macroeconomic projections/scenarios; ii) prepare analytical documents related to economic policy, governance, strategic planning and monitoring and evaluation system; and iii) monitor and evaluate the implementation of strategic programs and plans. The State Personnel Service (SPS) has developed a program for improving the wage system for civil and municipal servants during 2013-2020, and an action plan to implement the program. The action plan is being implemented. Restructuring History Page 6 of 7 The World Bank Report No: ISR14235 Level two Approved on 14-Nov-2011, Level two Approved on 28-Dec-2012, Level two Approved on 05-Mar-2013, Level 2 CD Decision on 07-Nov-2013 Related Projects Public Disclosure Copy There are no related projects. Public Disclosure Copy Page 7 of 7