24150
Revised
OFFICIAL USE ONLY
SecM2002-0228/1
WvORLD BANK         .                                         IIFC/SecM2002-0033/1
z   NAs                                              May 1, 2002
FROM: Vice President and Secretary
EXECUTIVE DIRECTORS' MEETING - April 25, 2002
Chairman's Concluding Remarks
Latvia - Joint IBRD/IFC Country Assistance Strategy
Final Text
Attached is a copy of the final text of the Chairman's Concluding Remarks on the
discussion of the joint IBRD/IFC Country Assistance Strategy for Latvia at the meeting of
the Executive Directors held on April 25, 2002, which was circulated on April 26, 2002
(SecM2002-0228[IFC/SecM2002-0033]).
The final text takes account of comments received from Messrs. Crawford and Jonck
as follow:
Paragraph 2, wording in sentences 8 and 9
Paragraph 3, wording in sentence 2
Addition of Paragraph 5
Distribution:
Executive Directors and Alternates
President
Bank Group Senior Management
Vice Presidents, Bank, IFC and MIGA
Directors and Department Heads, Bank, IFC and MIGA
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents
may not otherwise be disclosed without World Bank Group authorization



LATVIA: COUNTRY ASSISTANCE STRATEGY
CHAIRMAN'S CONCLUDING REMARKS
Meeting of Executive Directors
April 25, 2002
The Executive Directors welcomed the discussion of the joint IBRD/1FC Country Assistance
Strategy (CAS) for Latvia.
Directors welcomed the substantial progress Latvia has made in the accession negotiations
process. Directors also noted that Latvia has reached an advanced stage toward building the institutions
needed for a market economy. Directors commended the Government for its successful macroeconomic
management and recognized Latvia's impressive economic growth in recent years. Directors were,
however, concerned about Latvia's high current account deficit. They, therefore, stressed the importance
of additional public sector savings. Directors also noted that unemployment and regional disparities in
unemployment rates don't seem to be improving. In this context, they particularly emphasized the need to
take steps beyond maintaining macro stability by implementing vigorously the remaining structural
agenda. Areas of special importance include improved public expenditure management and completion
of privatization. Continuation of education and health reform, agriculture sector reform, balanced
regional development, rationalization of local governments and labor market reform was also
encouraged.
Directors welcomed the alignment of the CAS with the EU accession program and the Government
National Development Plan. They noted that the CAS was designed to take into account Latvia' s request
to the Bank Group to assist in key areas not explicitly covered by the acquis communautaire, thus
complementing the support of other donors, especially the EU. Directors broadly supported the proposed
strategic direction of IBRD/IIFC programs. Directors also broadly agreed with the proposed assistance
scenario, given Latvia's stage of transition although several Directors stressed the importance of greater
focus on the priorities in this regard. Reference was made to the importance of measurement indicators to
assess development progress and impact, and of incorporating lessons learned into the design of the next
phase of the PSAL program.
Directors were also supportive of IFC's plans and overall focus particularly on promoting growth
and job creation.
Directors also welcomed the suggestion to organize a separate discussion, in an appropriate
format, of the paper distributed to Directors on October 10, 2001, entitled Framework for Bank Group
Support to European Union (EU) Accession Candidate Countries of Central and Eastern Europe.
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