UMBRELLA FACILITY FOR POVERTY AND EQUITY FY23 ANNUAL REPORT Copyright © 2023 International Bank for Reconstruction and Development /THE WORLD BANK Washington, DC 20433 Telephone: +1-202-473-1000 www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions: The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; email: pubrights@worldbank.org. This report was designed by Fluyt Design. 2 Table of contents 1 Acknowledgments 04 2 Abbreviations and Acronyms 05 3 Foreword 06 4 About UFPE 07 5 Results at a Glance 10 6 Global Public Goods 11 7 Data for Policy Action 16 Making Policies and Programs Work for 8 the Poor and Vulnerable 20 9 UFPE Operational Impact 28 10 Financials 34 11 The Way Forward 37 12 Annexes 39 3 1. Acknowledgments The FY23 Annual Report for the Umbrella Facility for Poverty and Equity (UFPE) was prepared by the Secretariat, led by Jessica Adler, Program Manager, under the guidance of Luis Felipe López-Calva, Global Director of the Poverty and Equity Global Practice. The task teams implementing UFPE-financed activities are also acknowledged for their tremendous dedication and collaboration. The UFPE Secretariat extends its gratitude to the following development partners for their contributions and collaborations: Germany Ireland Sweden Deutsche Gesellschaft für Department of Foreign Affairs Swedish International Internationale Zusammenarbeit (Irish Aid) Development Cooperation (GIZ) Agency (Sida) United Kingdom Bill and Melinda Gates William and Flora Hewlett Foreign, Commonwealth and Foundation Foundation Development Office (FCDO) *Ireland initiated partnership with UFPE during FY23, but agreements were completed in early FY24. 4 2. Abbreviations and Acronyms CEQ Commitment to Equity DPO Development Policy Operations EGED Effective Governance for Economic Development FY Fiscal Year GDP Gross Domestic Product HFPS High-frequency Phone Survey(s) LEAP Livelihood Empowerment Against Poverty TSA Targeted Social Assistance UFPE Umbrella Facility for Poverty and Equity VAT Value Added Tax All dollar amounts are US dollars unless otherwise indicated. 5 3. Foreword The world today faces formidable and complex challenges, chief among them an existential climate crisis, a fledgling pandemic recovery, high indebtedness, food insecurity, fragility, and conflict. The world’s poorest are the most vulnerable to the impacts of these profound forces and changes. After decades of sustained global poverty reduction, the period 2020-2022 represents three years of lost progress, the result of several overlapping crises and shocks. Low-income countries, which saw poverty increase during this period, have yet to recover. Around 700 million people today live on less than $2.15 per day, the international extreme poverty line. In addition, inequality around the world remains unacceptably high, and the widening gulf between the world’s richest and poorest threatens to entrench poverty for generations to come. No single organization, institution, or government can solve these challenges alone. Multilateralism and partnerships are critical. To this end, the Umbrella Facility for Poverty and Equity (UFPE) is an important convening and coordinating platform for development partners and governments alike. It is only by working together that we can make progress toward a more equitable and just world. The UFPE is a critical platform and resource for generating global knowledge that translates into better country policies aimed at improving the lives of the poor. Results from the past two years of UFPE implementation reflect strong ongoing demand from our clients and partners – they are looking to us to help build a solid base of evidence on what works to sustainably reduce poverty and inequality through investments in data, analysis, and development effectiveness. This work is central to helping achieve the World Bank’s vision of a world free from poverty on a livable planet. I deeply appreciate the contributions and collaboration of our UFPE partners to date and look forward to continuing to collaborate as we strive for even greater success in the future. Luis Felipe López-Calva Global Director, Poverty and Equity Global Practice Equitable Growth, Finance, and Institutions (EFI) World Bank Group 6 4. About UFPE Vision The UFPE is the first global trust fund to support the cross-cutting poverty and equity agenda. The objective is to inform and support the design, implementation, and monitoring and evaluation of policies and programs to reduce poverty and promote equity. 7 By June 30, 2023, the UPFE portfolio included seven grants supporting activities in more than 20 countries as well as the production of global knowledge and cross-country learning. 8 Strategic Focus Areas A multi-donor trust fund, the UFPE adds value to the World Bank trust fund landscape by strengthening global coordination and partnerships on the poverty and equity agenda. It provides key financing to ensure the poverty and equity lens remains at the forefront of World Bank engagements. The UFPE promotes innovation and supports the scaling of proven solutions, including through the production of policy-relevant global public goods. The trust fund also facilitates knowledge sharing and learning of UFPE-generated insights to help solve pressing development challenges in client countries. The UPFE strategy aims to build the evidence base for policies and programs that promote poverty reduction and equity through investments in data and analysis. It also invests in tools and approaches that enhance the operational effectiveness of policies and programs to maximize poverty and equity impacts of the work carried out by the World Bank and our client countries. Figure 1. UFPE Strategic Focus Areas This annual report highlights selected results and achievements from the second year of UFPE implementation in the areas of global public goods, data and analytics for policy action, and operational impacts. 9 5. UFPE Results and Achievements At-a-Glance 10 6. Global Public Goods Global public goods help inject fresh thinking, challenge conventional wisdom, and chart new courses in the policy and practice of international development. The UFPE produces and disseminates foundational and policy-relevant research, data, and analytics to fill gaps in global public knowledge. Highlights for fiscal year 2023 (FY23) include the completion of the COVID-19 Household Monitoring Dashboard project and innovations in fiscal incidence analysis for gender equality. 11 Reflecting on COVID-19 Household Welfare Monitoring In June 2023, the 18th and final edition of the COVID-19 Household Monitoring Dashboard was released. For more than three years, with support from the UFPE, the dashboard has shared harmonized high-frequency phone survey (HFPS) data to provide a near-real-time picture of a rapidly evolving crisis. With data from 423 survey rounds across close to 90 countries, the dashboard was one of the largest sources of household data in developing countries throughout the COVID-19 pandemic. The dashboard will remain online as a valuable source of data for researchers and policy makers. Photo source: World Bank Blog Harmonized HFPS data from the dashboard informed policies designed to reduce hardships during the pandemic and influenced World Bank lending and operations. It was also widely used to track the impact of the pandemic in a variety of topics, including its effects on labor markets and employment (Brunckhorst et al. 2023; Hatayama et al. 2022; Khamis et al. 2021), barriers to medical care (Swindle and Newhouse 2021; Ballon et al. 2021), education disruptions (Dang et al. 2021; Muñoz-Najar et al. 2021), intergenerational mobility (Azevedo et al. 2023), inequality (Narayan et al. 2022), and poverty (Mahler et al. 2022). Although the COVID-19 public health emergency has officially ended, households across the globe have yet to fully recover from the disruptions to lives and livelihood. Hard evidence to understand the medium- and long- term impacts of the pandemic on welfare is essential to the design of policies that speed up recovery and help us prepare for future crises. The COVID-19 Household Monitoring Dashboard provides this evidence, making it an invaluable tool for policy makers and researchers alike. 12 Spotlight: Phone surveys became a necessary means to monitor household welfare during the COVID-19 pandemic. The large-scale adoption Lessons Learned of national phone surveys also highlighted important strengths from Working associated with remote household data collection that hold even with a Large, when in-person surveys are feasible. The potential advantages of Harmonized using phone surveys, related to lower implementation barriers and the ability to collect data rapidly at more frequent intervals, were well Global Database known, but the pandemic created conditions to prove the concept at a national scale in many different contexts. Several lessons have also been learned from working with a large, harmonized global database. First, while phone surveys have the advantage of being relatively inexpensive and quick to roll out, they require reliable sampling frames and the pros and cons among the different options in terms of representativeness, implementation and post-survey adjustments need to be well understood. Second, country customization may need to be carefully balanced against standardization in instances where cross-country comparisons are important. Harmonized data collection can be useful to tell a cross-country narrative, which can be imperative during times such as a global crisis. Ex post harmonization can be very resource-intensive; more standardized data collection would mean less time spent on preparing the data for analysis, allowing for timely results that can inform the crisis response. In addition, some relatively small details in the customization came at a high cost: For example, the selection of different reference periods for food security rendered the otherwise identical question noncomparable (as these are, in principle, treated as different variables in the global database). Finally, baseline metrics are critical for crisis monitoring because without them interpretation of contemporaneous outcomes can be limited. This is particularly important for outcomes such as employment and food security. In practice, this means more frequent data collection in low- and middle-income countries, which would also facilitate regular welfare monitoring in data-deprived countries. 13 CEQ Methodology and Applications: Changes, Challenges, and Innovations If policymakers are committed to ending poverty and improving the lives of their poorest citizens, they need to explore ways to redesign taxation and transfers so that the poor— especially the extremely poor—do not end up paying more than their fair share without reaping the benefits. The relevance of these decisions has become especially evident as many countries have had to act in response to COVID-19 and, more recently, to other challenges, including high food and energy prices. Many of these countries were already in a weak fiscal position before the crises hit. The analysis of how fiscal policy can contribute to reducing poverty and inequality is broadly known as fiscal incidence analysis. A common form of this type of analysis is known as Commitment to Equity (CEQ), an approach developed by the CEQ Institute at Tulane University, a longtime partner of the World Bank. With UFPE support, the World Bank provides analytical and advisory services, including capacity building, to policy makers who are eager to understand the distributional effects of potential fiscal policy reforms using the CEQ and other tools. At the global level, the UPFE helps the World Bank raise awareness on the potential impacts of fiscal policy on poverty and inequality, develop and scale innovative methods for fiscal incidence analysis, and provide capacity building and training to practitioners and clients. One such innovation includes integrating a gender lens into the CEQ analysis to understand how fiscal policies differentially impact men and women based on their household roles, which allows a deeper understanding of economic gender inequalities. In FY23, the UFPE launched funding to implement and expand on this methodological innovation in different country contexts. Results of the ongoing analysis will be reflected in future progress reports. 14 Public revenue and expenditure policies, or taxes and transfers, Spotlight: shape individuals’ behaviors, consumption, savings and investment Gender and patterns, participation in labor markets, and access to social safety Fiscal Policy nets and other publicly provided goods and services. Poor and vulnerable women, men, and children make decisions about how much to work outside the home for pay or inside the home without pay, about how much to save and spend, about what to buy, and about which services are essential for which household members. These decisions are often made under severe financial, social, and cultural constraints, which fiscal policies can either ameliorate or exacerbate. The World Bank has developed a new methodology to better understand gender equity impacts of fiscal policy. The application of a gendered perspective in fiscal incidence analysis, using the CEQ approach, has been applied in two pilot countries, Armenia and Jordan. The methodology adds richness to the standard analysis of fiscal policy’s impact on poverty and inequality by highlighting which male-type or female-type households within the welfare distribution gain or lose from fiscal policy. Because it adds information on sex, age, and employment status of individual household members, the CEQ methodology also reveals the extent to which fiscal policy supports household members in their individual roles and activities. Recently, the Poverty and Equity Global Practice of the World Bank partnered with the CEQ Institute at Tulane University to host a two-day workshop on the changes, challenges, and innovations of the CEQ methodology and applications. The workshop brought together about 50 practitioners to take stock of the changes to the methodology, present methodological innovations, and new data, and discuss recurring challenges. Recordings of the open sessions are available as part of the learning catalogue of the Poverty and Equity GP and a synthesis of the key discussions and decisions will be made available as a public document in the form of conference proceedings. The insights will help improve the valuable tools and approaches for policy makers and researchers working to promote equity and reduce poverty. 15 7. Data for Policy Action The availability of timely, relevant, and good-quality data is critical for effective and efficient decision-making, resource allocation, and service delivery. Data are crucial for knowing where a country stands in terms of social and human development and for assessing the challenges ahead. Data are also needed to understand which policies work, and which do not work for pro- poor and equitable economic growth and addressing social deprivations. Across countries, comparable data are also needed to monitor progress toward the eradication of extreme poverty and, more broadly, the achievement of the Sustainable Development Goals. The UPFE supports countries to transform data into decisions that improve the lives and livelihoods of poor and marginalized people and safeguard the planet. Highlights for FY23 include leveraging real-time data in Georgia for policy action and strengthening data systems for regional development in the Kyrgyz Republic. 16 Tackling Uncertainty with Real-Time Data in Georgia Georgia has emerged from the COVID-19 crisis, but the pace of recovery has not been even across space and sociodemographic groups. In addition, the Russian Federation’s invasion of Ukraine and sanctions on Russia have put additional strain on economies around the world, including Georgia. The profound impacts of the crises underscore the urgency of timely data and real-time analyses for countries to mitigate the effects of a shock and quickly and effectively lay the groundwork for future resilience. To help the government of Georgia build resilience to these crises and shocks, the UFPE supported collaboration between the World Bank and government partners to continue the collection of high frequency phone surveys (HFPS) to monitor the evolution of the crises and its real-time impacts on households. Data, results, and survey instruments for all eight rounds of the surveys are available at the online public platform. Despite rapid recovery in macroeconomic indicators, Georgian Spotlight: 1 households are still struggling. Twenty-seven percent of Key Findings households report earning lower incomes than before the from the Latest COVID-19 pandemic. HFPS in Georgia Inflation is disproportionately impacting poor and vulnerable 2 households. Poor households, those in rural areas, and ethnic minorities report higher impacts of rising prices. These households are often consuming less food to cope with inflation. Employment is recovering, but many people experienced 3 disruptions of employment during the pandemic, with a higher share of disruption among the informal workers. Twenty-eight percent of the adults who were working before the pandemic were unemployed at some point during the pandemic. The pandemic has hit the informal sector particularly hard. Indication of longer-term impact on human capital accumulation. 4 Data show that 21 percent of households with children report missing school. Children from less well-off homes and ethnic minorities are more likely to miss school. Lower-income and vulnerable Georgians are least optimistic 5 about their expectations and self-perceived well-being. People from poorer households, rural areas, those without tertiary education, and the elderly have more pessimistic views about their current economic well-being. 17 These insights provided the World Bank and the government of Georgia with real- time information about the poverty and inequality effects of these recent shocks on Georgian society, helped shape policy responses, and provided timely data on the effectiveness of policies in mitigating the impact of the shocks on households. The findings also informed the recent Georgia Systematic Country Diagnostic Update. Regional Development in the Kyrgyz Republic Regional development has been a top development priority in the Kyrgyz Republic over the last several years. The country has a system of local self-governments that operate at the village, town, and district levels, with the main aim of providing services and implementing programs for local development. However, these governments have faced various challenges, including lack of an adequate methodology for local socioeconomic development planning. Challenges include reliance on qualitative data, institutional capacity constraints, and inadequate planning and coordination mechanisms. The UFPE-supported Effective Governance for Economic Development (EGED) program in Central Asia provided technical assistance to improve the effectiveness of regional development and planning policies and to improve transparency in inter-budgetary decisions. EGED aims to improve policy performance in key areas by generating better data and evidence and embedding it into policy reform, planning, and project implementation. At each step, the program encourages greater transparency and disclosure in the policy-generation process to catalyze broader participation, accountability, and popular legitimacy of the activities covered. 18 “ Central Asian countries have set ambitious goals to generate sustained and inclusive economic growth and improve the opportunities and living standards of their people. Strengthening governance and promoting the consistent use of good evidence in policy making is key to achieving these goals. Kathy Leach The British Ambassador to Kazakhstan Photo source: Sanarip Aymak Training Series in the Kyrgyz Republic. The technical assistance provided to the government under EGED aims to incorporate better data into regional development policies and budgeting by integrating an advanced data collection system (Sanarip Aymak) with new methodologies for designing local socioeconomic programs and inter-budgetary processes. Trust fund resources provided training for more than 500 officials to use the Sanarip Aymak for socioeconomic program planning and budgeting using a standard methodology that incorporates best practices. Draft methodologies prepared and endorsed by the Ministry of Economy and Commerce were successfully piloted in two districts and four local self-governments. EGED also supported the integration of regional development priorities into the implementation of two World Bank operations. The new methodology described above was used in the implementation of the Additional Financing for Third Village Investment Project (P174316) to provide inclusive community participation. The EGED also supported regional development priorities financed by the Tax Administration and Statistical System Modernization Project (P163711), including the creation of a regional dashboard to monitor and evaluate regional development and improvements in municipal-level data quality and access, particularly access to municipal- level data for the National Statistical Committee. 19 8. Making Policies and Programs Work for the Poor and Vulnerable Understanding who the poor and vulnerable are, where they live and work, and how they are affected by markets, institutions, risks, and government action is critical for designing policies and programs that tackle the root causes of poverty and inequality in a sustainable way. The UFPE supports analytics that help develop sound policies that can help the poorest in every country and focus investments in areas that are critical to improving lives. Highlights for FY23 include an innovative analytical approach for understanding the poverty and inequality impacts of air pollution, understanding works to narrow gender gaps in Sub-Saharan Africa, and using analytical insights to improve economic and social inclusion through labor market reforms. 20 Poverty and Distributional Effects of Air Pollution in Tbilisi In Tbilisi, the capital of Georgia, air pollution levels exceed international standards, significantly surpassing other cities in the region. With UFPE support, the World Bank conducted an innovative study that provides new evidence that air pollution adversely affects the health, labor productivity, and economic outcomes of the city’s residents. The air pollution study in Tbilisi, Georgia, collected real-time air pollution Spotlight: data from 40 outdoor monitors strategically placed throughout the city and Leveraging leveraged data from the official air pollution monitors and satellite imagery Innovative Data analysis. This comprehensive data collection enabled the assessment of Sources and outdoor air pollution’s sources and impacts. The study also explored indoor air pollution sources and impacts thanks to the distribution of 145 indoor Methods air pollution monitors to randomly selected households in Tbilisi. To analyze the collected data, innovative and rigorous methodologies were employed, such as instrumental variable estimation to estimate the causal impacts of air pollution on health and real estate values and a randomized controlled trial to test the impact of information on adaptation and exposure. The experiment tested households on the benefits and effectiveness of receiving one, two, or three interventions—a leaflet with information on air pollution, daily text messages with outdoor air pollution levels, and an indoor air pollution monitor. 21 The research demonstrates that the impact of air pollution is not evenly distributed, with poorer and less-educated households more exposed to air pollution and having lower adaptive capacity. As such, the findings emphasize the importance of considering socioeconomic impacts when designing pollution reduction policies. The study also shows that better knowledge of the effects of air pollution and access to monitoring devices as well as protective measures are likely to help households in Tbilisi take adaptive actions in the short term. In the medium term, decreasing emissions from transportation and regulating industrial emissions should be considered a priority. This UFPE grant contributed new analytical tools and an improved understanding of how climate change adaptation and mitigation policies impact poverty and inequality, with policy recommendations that can pave the way toward cleaner air and improved well-being for Tbilisi’s residents. And lessons learned here could prove useful for cities across the region and beyond. What Works to Narrow Gender Gaps and Empower Women in Sub-Saharan Africa? Despite growing awareness of the scale and adverse outcomes of gender gaps in economic opportunities, progress to address them in practice has been limited to date. With UFPE support, the World Bank’s Poverty and Equity Global Practice partnered with the Africa Gender Innovation Lab to produce the report What Works to Narrow Gender Gaps and Empower Women in Sub-Saharan Africa? Intending to bridge the gap between knowledge generation and policy and operational design, the report includes eight evidence briefs that summarize in a concise, user-friendly way what works to address gender gaps in a range of outcomes related to endowments, economic opportunities, and women’s agency in Sub- Saharan Africa. The briefs are based on a review of more than 150 studies analyzing the effectiveness of interventions across 26 countries in the region, identifying effective and promising interventions to narrow gender gaps. 22 Key findings on selected topics: Supporting Girls in Achieving Better Education Outcomes Despite recent gains in closing gender gaps, children in Sub-Saharan Africa are still much more Context likely to be out of school than children elsewhere in the world, and gender gaps, though smaller, still persist. The success in education indicators for girls correlates positively with the income level of their respective country and negatively with its level of poverty. Education is a pathway toward women’s employment, empowerment, and improved health, and Why it it brings tangible benefits for their children. Equal access to quality education has a pivotal role in matters countries’ social and economic growth. • Cash transfers, whether conditional or unconditional, show to be effective in increasing school What enrollment and attendance of girls. works • Increasing access to free schooling, either through elimination of school fees or provision of scholarships, translates into higher enrollment/attendance rates for girls at the primary and secondary levels. • In-kind aid can reduce school dropout rates and absenteeism, while food-for-education schemes can increase girls’ school enrollment rates. Interventions that aim to make schools safer and more girl-friendly have the potential to reduce school absenteeism. 23 Helping Women in Sub-Saharan Africa Access Quality Jobs Despite high levels of female labor force participation in Sub-Saharan Africa, most female Context employment in Africa is vulnerable employment. Thus, most Sub-Saharan African women face adverse work conditions, usually as family workers (often in agriculture) or in small low-productivity businesses. Beyond increasing women’s economic empowerment and decision-making power, gender equality Why it in employment is also an important driver of inclusive economic growth and poverty reduction. matters Furthermore, higher women’s income is associated with improvements in household dietary diversity, children’s nutritional status, and children’s education. • Multicomponent programs that combine skills training with job placement support or What internships/apprenticeships show to be effective at enhancing employment opportunities for works women and increases their earnings. • Investing in young women’s education can lead them to higher-skilled employment and better wages. • Improving access to affordable early childcare is likely to increase poor urban women’s participation in paid work. 24 Supporting Women Farmers to Maintain and Grow Their Businesses Employment in agriculture in Sub-Saharan Africa, although decreasing over the last 30 years, is Context still much higher than anywhere else in the world for both women and men. Productivity in agriculture in the region is low in general, and research focusing on selected countries shows that it is particularly low in female-managed farms. Drivers of gender gaps in agricultural productivity include disparities in access to inputs and assets such as labor, technology, improved seeds, extension services, credit, and land. Giving women farmers the same access as men to productive resources and services could Why it significantly increase agricultural output, boost economic growth, increase food security, and matters alleviate poverty in developing countries. Land tenure security increases women’s ability to make decisions—with positive spillovers to household welfare. • Land regularization and contract farming interventions, especially if coupled with information What focusing on gender equality, strengthen women’s land rights. works • Facilitating knowledge exchange among farmers and providing participatory learning approaches have the potential to improve crop productivity and/or agricultural income of female farmers. • Providing cash or in-kind transfers to female farmers is likely to improve female farmers’ ownership of animals and agricultural assets. Likewise, providing voucher assistance to buy agricultural inputs can increase crop productivity of female farmers. 25 Supporting Women Farmers to Maintain and Grow Their Businesses In Sub-Saharan Africa, about 81 percent of female workers and 70 percent of male workers are Context self-employed. The importance of self-employment in Sub-Saharan Africa is connected with the scarcity of wage employment and the lack of better opportunities—particularly for women, who often have lower levels of formal education and may be seen as a second option in hiring. Women tend to bear most of the responsibility for domestic work, including childcare, so small- scale home-based businesses provide one of the few ways women can generate income for their households. Female entrepreneurship is associated with an increase in women’s decision-making, autonomy, Why it and financial independence, and contributes to improved family welfare through women’s matters investments in households and children’s needs. • Women with access to financial products to support their businesses are likely to have higher What incomes. works • Incentives to increase business formalization, such as reducing the registration costs and offering complementary services, can have a significant impact on rates of formalization. • Psychology-based training, such as personal initiative training, and one-to-one mentorships seem to have the potential to improve microentrepreneur profits. 26 Overhauling Uzbekistan’s Labor Regulations to Increase Economic and Social Inclusion Globally, women earn about 80 percent of what men earn on average. But the gap is larger in Central Asia. In Uzbekistan, working women earn about 61 percent of what men earn. Where women are empowered, they can contribute their full potential—leading to a more diverse and dynamic workforce. In Uzbekistan, a pattern of low pay and low employment rates among women directly reduces the size of the country’s economy and increases the number of people living in poverty. It is estimated that equalizing the average wage among men and women who are already working would alone pull more than 700,000 people out of poverty. However, restrictive gender norms and expectations combined with outdated labor laws have discouraged women’s full participation in the labor market. Research using the UFPE-financed World Bank’s Listening to the Citizens of Uzbekistan monthly surveys revealed that restrictive gender social norms drive unequal economic outcomes between men and women. Additional barriers, like discrimination, also harm employment prospects for women. Through lower incomes and less economic activity, these patterns contribute to higher poverty rates and slower economic growth. Removing legal barriers to equality is a critical first step to addressing this. Uzbekistan’s labor code, adopted in 1995, retained onerous Soviet-era burdens and obligations on employers that incentivized noncompliance and illegal hiring practices. Technical assistance provided under the UFPE-supported EGED program aimed to improve the design of a new labor code, which was a central prior action in the Accelerating Uzbekistan’s Transition Development Policy Operation Project (P176353). In April 2023, Uzbekistan became the first country in Central Asia to mandate equal pay between men and women for work of equal value. The regulations, which reflect an improved alignment with internal conventions and best practices, also modernize hiring, firing, and labor management practices, and codify increased rights for workers, including regular and parental leave provisions, while considering the interest of employers. In addition, the new labor code supports programs to improve the labor market opportunities of persons with disabilities. While legal reform alone will not reverse social norms that perpetuate gender imbalances in work and pay, it is a necessary and important step in the right direction. 27 9. UFPE Operational Impact Knowledge that is produced as a result of good data and strong analytics is one of the World Bank’s most valuable assets. Knowledge is vital to ensure high-quality development projects and, ultimately, to deliver development impact. UFPE evidence informs and strengthens the design and implementation of World Bank operations to maximize their effectiveness on reducing poverty and promoting shared prosperity. Highlights for FY23 include operations to improve the productive capacity of the poor, strengthen social protection systems, and promote equitable fiscal policies. 28 Barriers Facing Angolan Girls and Young Women Despite the recognized instrumental value of gender equality in accelerating economic growth and shared prosperity, Angolan women and girls continue to be disadvantaged in life across multiple dimensions of well- being when compared with men and boys in the country. The UFPE supported qualitative research that found young women in Angola have limited options to continue their education, delay family formation, and access better-quality jobs. On the other hand, even when such options are available, limited women’s agency and sense of control prevent them from making informed decisions and exercising their voice. Structural barriers—such as poverty, lack of financial and social capital, gender norms, and high prevalence of community- and gender-based violence—further limit young women’s access to opportunities and their ability to undertake them. Figure 2. Structural Issues Affecting Gender Outcomes in Angola Source: World Bank, Navigating Education, Motherhood, and Informal Labor: The Experiences of Young Women in Luanda, 2023. 29 This evidence helped informed policy actions jointly developed with representatives from multiple sector ministries of the government of Angola to address these barriers. The research findings were discussed at length with the government and resulted in the formulation of five actions proposed for inclusion in the new National Development Plan: (1) supporting pregnant adolescent girls and young mothers to benefit from a maternity leave from school and return at no financial costs; (2) providing sexual education in all schools through collaborations with local health clinic staff; (3) creating mechanisms to ensure more female teachers are hired for public schools, with a focus on secondary schools; (4) producing a charter of rights and regulations for informal women traders; and (5) enhancing sensitization and communication efforts on gender equality and the importance of fathers’ involvement. The research and recommendations are also being used across the World Bank country program in Angola. It informed the recent Country Economic Memorandum and Public Expenditure Review and influenced several operations. Findings were used to inform the design and implementation strategies of the Accelerating Economic Diversification and Job Creation Project (P178035) and the Girls Empowerment and Learning for All Project (P168699). The work also contributed to multiple policy actions supported by the Angola First Green, Resilient, Inclusive Growth and Diversification Development Policy Financing Project (P179512), including support for prioritizing women-led households in the context of expanding the reach, duration, and benefit level of poverty- targeted cash transfers, and providing free public transportation for public school students to improve access to education. Addressing the gender inequalities faced by young women in Angola in their education, professional, and family trajectories requires a multisectoral and multilevel effort. The UFPE-supported program leveraged analysis and evidence to bring visibility to gender gaps and policy failures, and successfully advised stakeholders on how gender gaps can be addressed through operations and policy reform. 30 Modernizing the Social Protection System in Tajikistan Tajikistan’s social protection system‚ the Targeted Social Assistance (TSA) program—expanded in several phases before finally reaching full national coverage in 2021. But despite this large increase in the covered population (due both to the success of the national rollout and increasing need following the COVID-19 pandemic), benefit sizes remained at low levels, and as a result the total budget allocated to social assistance remained modest, at just 0.13 percent of GDP—the lowest in the region. The program had several limitations. The benefit amounts were too low to significantly reduce poverty. The amount was not adjusted between 2010 and 2019, falling by 44 percent in real value before a revision was made in 2019. The 2009 vintage targeting formula was increasingly imprecise. Equal benefit amounts per household disadvantaged large beneficiary families with greater needs. Thus, various estimates showed that the program had limited impact on poverty. The UFPE-supported EGED program in Central Asia provided crucial technical assistance that drove the reform and modernization of the TSA. Technical assistance provided by EGED led to the adoption of two reforms to modernize the program to better contribute to poverty reduction and mitigate the impact of shocks. First, a government decree was issued to increase the budget allocated to TSA benefits in three phases, rising more than 30 percent above inflation per year. The decree also established increased generosity per beneficiary, and benefit differentiation, which provided additional benefits to poor families based on the number of children in a family unit, and indexed benefits to inflation. Second, per a joint order from the Ministry of Health and Social Protection, Ministry of Finance, and the national statistics agency the TSA adopted a new and improved targeting formula developed with EGED support. “ I am glad that the World Bank can support this reform program through the new development policy operation, the first one in ten years between the government of Tajikistan and the World Bank. These reforms aim to support Tajikistan’s efforts to create an environment for better and more productive jobs domestically and raising the living standards of the population, as spelled out in the National Development Strategy up to 2030. Ozan Sevimli World Bank Country Manager for Tajikistan 31 The EGED program worked closely with other members of the World Bank country team in Tajikistan to ensure the technical analysis and policy dialogue was embedded into and amplified by the operational portfolio. For example, in FY23 this work influenced the design of two complementary operations—Social Protection Modernization and Economic Inclusion Project (P178878) and the Resilient and Sustainable Tajikistan Development Policy Operation (P177930)—which support the government of Tajikistan in protecting poor and vulnerable households from shocks, promoting economic inclusion, and improving social protection systems, including, among other things, strengthening the National Registry for Social Protection. The monthly Listening 2 Tajikistan surveys, also supported by the UFPE through the EGED program, were a critical input for analysis that shaped these operations and reforms. Boosting Social Protection in Ghana Ghana’s economy is facing challenges because of macroeconomic imbalances and external shocks. The country experienced a deep macroeconomic crisis in 2022, with a sharp decline in economic growth, high inflation, rising debt levels, and a depreciating exchange rate. However, projections for the future are optimistic, with plans to restore fiscal sustainability, support financial sector stability and private sector development, improve energy sector financial discipline, and strengthen social and climate resilience. The World Bank is supporting these efforts through the First Resilient Recovery Development Policy Financing Project (P180718). 32 The project includes efforts to mitigate the social impact of macroeconomic adjustment on the most vulnerable and build stronger foundations for economic and environmental resilience. The UFPE financed the development of a microsimulation tool that was used to inform the design of the expansion of the Livelihood Empowerment Against Poverty (LEAP) cash transfer program to lift an estimated 184,000 people out of poverty. Specifically, the LEAP program reform will expand coverage to 700,000 households and increase benefits fivefold (to bring benefit levels in line with international good practices). This reform is a key pillar in the project’s policy matrix and will help mitigate the significant poverty impacts of increased electricity tariffs over the past year. Mobilizing Equitable Tax Revenues in Senegal High tax expenditures are a major constraint for the mobilization of tax resources in Senegal, which is currently well below the regional target of 20 percent of GDP. The differentiated tax treatment of specific sectors, activities, and regions is widespread, increasing complexity and reducing the fairness, efficiency, and effectiveness of the tax system. Because of the limited tax base on income tax, value added tax (VAT) remains the most important source of income, accounting for about 40 percent of total government revenues and contributing around 8 percent of GDP in revenue. The Senegal Second Equitable and Resilient Recovery Development Policy Financing (P175293) operation supports tax expenditure rationalization through an improved targeting of VAT exemptions while preserving consumption of the poorest households, with the objective of further improving the efficiency of tax expenditures. The UFPE helped finance the development of a microsimulation tool that facilitated policy dialogue around the VAT reform and informed the design of the elimination of VAT exemptions. These reforms are expected to support the growth recovery in the short term and permanently improve the efficiency of VAT collection in an equitable way in the medium term. 33 10. Financials By the end of FY23 (June 30, 2023), the UFPE had signed contributions of more than $12.3 million from five donors. 34 The UFPE welcomed more than $1.6 Figure 3. UFPE Contributions in FY23 by Donor (US$) million in new contributions during FY23, provided by a new donor, the William and Flora Hewlett Foundation, $329,000 and two existing donors, Germany United Kingdom and the United Kingdom (figure 3). (FCDO)- Additional During the year, the UFPE allocated more than $3 million to support the facility’s two main focus areas: (1) $1,000,000 $308,000 data for poverty and equity-informed William and Flora Hewett Germany (GIZ) policy and (2) analysis for poverty and Foundation - New Additional equity-informed policy. Resources were deployed to global and country teams to support World Bank–executed activities. Exciting new opportunities for financing in FY23 included extending strengthening emphasis on gender, specifically strengthening evidence-based policy making for gender equity in the areas of fiscal policy and economic opportunities and agency. The overall financial summary is shown in table 1. UFPE disbursements reached $3.9 million, which is 55 percent of total available funds. Table 1. UFPE Financial Summary as of June 30, 2023 Development Partner Amount (US$) A. Total donor-signed countributions 12,313,684 B. Actual funds received from donors 7,008,382 C. Investment income 139,043 D. Total funds available (B+C) 7,147,425 E. Disbursements 3,926,124 F. Undisbursed Commitments 2,424,214 G. Available fund balance at trustee and disbursing account level D-(E+F) 797,087 Table 2 itemizes contribution details by donor. As shown, all UFPE funding is preferenced for thematic and/or geographic priorities. 35 Table 2. Total UFPE Contributions and Assigned Preferencing Unpaid Preferenced Contribution Contribution Preferenced Donor contribution contribution (US$) paid in (US$) programs (US$) (Y/N) COVID-19 High Bill and Melinda Gates Frequency 500,000 500,000 - Yes Foundation Monitoring and Analysis Germany - Deutsche Fiscal Incidence Gesellschaft Fur Internationale 778,119 778,120 - Yes Analysis Zusammenarbeit (GIZ) Effective United Kingdom - Foreign, Governance Commonwealth and 9,155,574 3,850,271 5,305,303 Yes for Economic Development Office Development in Central Asia Evidence-Based Swedish International Policy and Development Cooperation 879,991 879,999 - Yes Program Reforms Agency (Sida) in Georgia Evidence-Based William and Flora Hewlett 1,000,000 1,000,000 - Yes Policymaking for Foundation Gender Equity Total 12,313,684 7,008,382 5,305,303 36 11. The Way Forward In two short years, the UFPE has successfully demonstrated value in bringing the poverty and equity lens to the forefront of development research, operations, and policy. 37 As illustrated in this report, the UFPE global public goods are timely and relevant, bringing knowledge to operational and policy engagements for impact. This is complemented by dedicated country programs producing and using the latest evidence and analysis to help governments improve the lives of the poor and vulnerable. The world is now in a time of transformation. The international community has called on the World Bank to urgently rise to meet the evolving and extraordinary challenges. In response, the World Bank is transforming itself to become bigger and better to deliver development impact more effectively and efficiently for people and the planet. The vision of the UFPE remains central to the evolution of the World Bank during this moment of transformation. Together with our partners, the UFPE will continue its efforts at the country, regional, and global levels to inspire, inform, facilitate, and support the fight against poverty in all its dimensions. 38 12. Annexes 39 Appendix 1. Grant Details Grant Disbursements Grant Approval Closing Grant name Objective amount (as of June 30, number date date (US$) 2023) (US$) 1. To expand coverage and access to high frequency data 2. to increase frequency and depth COVID-19 High of analysis to inform policy making Frequency and advocacy TF0B7242 28/10/21 31/03/23 418,000 408,176 Monitoring Data 3. To strengthen the understanding and Analysis of National Statistical Organizations of cutting-edge methodologies and tools to encourage uptake. To support analysis of the distributional impact of fiscal policies and Fiscal Incidence TF0B7242 incorporate recommendations into 15/11/21 31/12/23 634,000 411,270 Analysis policy dialogue and policy actions, and support capacity building. To provide advisory support to the government of Georgia in line Georgia with the recently issued 10-year Evidence- Government Strategy, Economy Based Policies TF0B7986 2030, aiming at the inclusive growth 20/02/22 30/04/26 697,000 616,184 and Programs and sustainable development, with for Poverty and sound macroeconomic environment Equity accompanied by structural and economic reforms. Effective Governance To improve the performance of TF0B8240 for Economic economic policies to generate inclusive 11/04/22 30/06/26 2,784,066 1,839,816 Development in economic growth in Central Asia. Central Asia Gender- To support the design and Informed Fiscal TF0B8240 implementation of fiscal policies in an 30/01/23 31/12/23 390,000 11,254 Incidence inclusive way to reduce gender gaps. Analysis Strengthening To strengthen the evidence base on Evidence- gender gaps and promote reforms in Based policy design and implement ation to TF0C0623 28/02/23 31/12/23 390,000 107,880 Policymaking narrow them in selected developing for Gender countries, with a focus on Sub- Equity Saharan Africa. UFPE Program To support the management and Management TF0C0623 administration of the Umbrella 24/11/21 29/02/28 418,000 112,025 and Facility for Poverty and Equity. Administration 40 Appendix 2. Results Framework To inform and support the design, implementation, and monitoring and evaluation of Development Objective policies and programs to reduce poverty and promote equity. Results FY22- Results area Indicators FY23 Pillar 1: Data for Poverty and Equity-Informed Policy Number of data gaps filled/reduced in core data for evidence- Improvement in the production based policy making (including disaggregation by sex and 2 of core economic, social disability, other). and sustainability statistics Number of knowledge products, tools and methods for effective (investing in data for policy) production of statistical and non-statistical data for policymaking 4 developed, applied or taken to scale Number of countries with improved systems for data use for Strengthened systems for data planning, and monitoring and evaluating policies and programs 3 use, planning, and monitoring and evaluating of policies and Number of countries where technical assistance and capacity programs building for modernization of national statistical systems 3 implemented Number of solutions, effective and/or innovative approaches for welfare measurement or monitoring developed, applied or taken 6 Data innovations for improved to scale welfare measurement and monitoring Number of harmonized databases and tools to facilitate cross- country monitoring and analysis, including selected Sustainable 1 Development Goals Pillar 2: Improved Evidence Base for Poverty and Equity-Informed Policies Number of studies strengthening the evidence base through 42 Improved understanding of policy-relevant poverty and equity diagnostics the drivers and constraints to poverty reduction, inclusive Number solutions, effective or innovative tools (frameworks, growth and equity methodologies, etc.), models and methods for poverty and equity 16 analysis developed, applied or taken to scale Number of World Bank projects with explicit poverty or equity- related goals or results (that are attributable to the operation and 15 informed by UFPE activities) Number of policies/policy dialogue informed by poverty and 8 Distributional analysis for equity analysis (not captured by World Bank lending support) poverty and equity-informed policies Number of prior actions/policy actions in DPO operations 25 informed by poverty and equity analysis Number of countries where policymakers, government officials or 5 practitioners trained to perform distributional analysis 41 Pillar 3: Operational Effectiveness Behaviorally informed Number of policies or programs, and policy dialogue informed by solutions to development 1 behavioral science challenges Cross-Cutting Global Public Goods Number of global public goods delivered to support knowledge Global public goods 1 sharing and learning 42 For more information, The World Bank Group is one of the largest please contact: sources of funding and knowledge for developing countries; a unique global partnership of five institutions dedicated to The UFPE Program Management Team | ending extreme poverty, increasing shared Poverty and Equity Global Practice prosperity, and promoting sustainable development. With 189 member countries and more than 120 offices worldwide, ufpe@worldbank.org WBG works with public and private sector partners, investing in groundbreaking projects and using data, research, and www.worldbank.org/ufpe technology to develop solutions to the most urgent global challenges. The World Bank For additional information, visit 1818 H Street, NW www.worldbank.org Washington, D.C., 20433