The World Bank Report No: ISR3058 Implementation Status & Results Kyrgyz Republic Public Disclosure Copy Capacity Building for Economic Management Grant (P108525) Operation Name: Capacity Building for Economic Management Grant Project Stage: Implementation Seq.No: 4 Status: ARCHIVED Last Modified Date: 09-Jun-2011 (P108525) Country: Kyrgyz Republic Approval FY: 2009 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Technical Assistance Loan Implementing Agency(ies): Ministry of Economic Regulation Key Dates Board Approval Date 01-Jul-2008 Original Closing Date 31-Dec-2012 Planned Mid Term Review Date Last Archived ISR Date 31-Dec-2010 Effectiveness Date 18-Dec-2008 Revised Closing Date 31-Dec-2012 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to assist the Recipient in establishing and institutionalizing an efficient and effective framework for formulating and implementing sustainable economic policies as well as in enhancing the capacity of public institutions responsible for the development and implementation of such policies to formulate and carry out the policies. [Objective as reflected in the Financing Agreement, which in substance is not different from the PAD but wordings are different. The most important project objectives are: a) contribute to government-wide coherent macro-economic policy development and decision making through establishing strong inter-ministerial coordination and interface; b) support process of economic policy development and implementation through enabling public institutions (and particularly the MEDT, through capacity building and restructuring) to formulate sound and analytically informed policy measure and proposals; and c) support reform of employment practices and wages in the civil service by building the capacity in a special task force in this area. [ These other main objectives are from the PAD but are not reflected in the legal agreement except item b. although broadly in line in substance ] Has the Project Development Objective been changed since Board Approval of the Project? Yes No Public Disclosure Copy Component(s) Component Name Component Cost 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 Page 1 of 6 The World Bank Report No: ISR3058 Previous Rating Current Rating Moderately Unsatisfactory Moderately Satisfactory Public Disclosure Copy Progress towards achievement of PDO Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating Implementation Status Overview Two rounds of disruption in government stalled implementation of the project. First, a major restructuring in the structure of government in October 2009 which resulted in creating a "Central Agency on Development, Investment, and Innovation" (CADII) to be responsible for all policy decisions, donors coordination, and all external assistance, and replacing the Ministry of Economic Development and Trade (MEDT) by a new Ministry of Economic Regulation (MER) with a new set of priorities and objectives, impacting shifts in roles and responsibilities of government agencies involved in implementation of various components and sub-components of the project. Next was the April 2010 political turmoil which led to a change in government, abolishing CADII, and dismantling of parliament, and later the social tensions that broke out in the southern regions of the country in June which disrupted functioning of the government and implementation of many projects including the CBEM. The management and implementation of the project which had moved from MEDT to CADII in October 2009 was shifted back to MER- which has been reassigned its previous priorities and objectives - following changes to the Constitution and reorganization of government in 2010. In recent months, project implementation has accelerated across all three project components, albeit unevenly. However, due to significant initial delays it is still behind the plans. Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Enhanced inter-ministerial coordination and Text Value No existing coordination in High level coordination capacity to ensure a coherent economic policy policy making across central committee operational, holds decision-making process. Governement. -date reflects regular meetings with relevant Board date agenda for major economic policy decisions. Date 15-Jul-2008 08-Jun-2011 31-Dec-2012 Comments Decree adopted establishing Macroeconomic Policy Public Disclosure Copy Coordination Council and a technical support group to theCouncil has been formallyestablished. Page 2 of 6 The World Bank Report No: ISR3058 Public institutions (and particularly the MEDT, Text Value MEDT has old dysfunctional MER reorganized consistent through capacity building and restructuring) are structure and low analytical with new structure. Public Disclosure Copy enabled to formulate sound and analytically capacity. informed policy measure and proposals. Date 15-Jul-2008 08-Jun-2011 31-Dec-2012 Comments Functional review prepared for reorganization of MER. Policy Development Unit established and capacity of Macroeconomic and FiscalUnit has been stregthened Capacity for carrying out a reform of wages Text Value No existing capacity to carry Salary task force presents and employment in the civil service, together out a pay reform options for wage and with options developed employment reform Date 15-Jul-2008 08-Jun-2011 31-Mar-2011 Comments Salary Task Force established and staffing process has been partially completed. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Presidential Decree/govt Regulation which (a) Text Value No coordination in economic The Decree Establishing Coordination procedures clearly defines roles & responsibilities in policy Macroeconomic Coordination formalized in decree or economic policy design, implementation & Council was adopted by the regulation. Agreement evaluation at central level (b) establishes an Government. reached on composition and effective coordination agenda of coordination committee Date 15-Jul-2008 08-Jun-2011 30-Jun-2011 Public Disclosure Copy Comments Regular meetings of coordination group taking Text Value No coordination in economic Coordination committee place, with appropriate agenda and relatively policy meeting regularly with few major economic policy decisions being substantive appropriate taken outside the mechanism. agenda. Date 15-Jul-2008 08-Jun-2011 31-Dec-2012 Comments The Council has just been established, too early to judge regularity of its meetings and scope of its decisions. Page 3 of 6 The World Bank Report No: ISR3058 Indicator Name Core Unit of Measure Baseline Current End Target Publication of macroeconomic and fiscal Text Value Not currently published by Government started Publication of more detailed Public Disclosure Copy forecasts with evidence that these forecasts Govt. publishing macroeconomic forecasts at least twice during provide the basis for budget and economic and fiscal forecasts, which are the year,and evidence that policy discussions. used in budget discussions. forecasts form the basis of budget planning. Date 15-Jul-2008 08-Jun-2011 31-Dec-2012 Comments New structure of MEDT corresponds to that Text Value Dysfunctional current MER reorganized consistent proposed in the SDP structure with new structure Date 15-Jul-2008 14-Dec-2010 31-Dec-2012 Comments Functional review of MER was completed, but the restructuring process has not started yet. Satisfactory implementation (according to Text Value No specific survey to measure Surveys indicate progress in private sector surveys) of significant measures reforms proposed by the 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 14-Dec-2010 31-Dec-2012 Comments High quality policy papers are produced and Text Value No policy papers At least six policy papers subsequently translated into policy decisions. developed, of which three are judged to be of high quality and at least one forms the basis of a significant policy decision Date 15-Jul-2008 14-Dec-2010 31-Dec-2012 Public Disclosure Copy Comments Pay and grading reform group established Text Value No existing taskforce The Salary Task Force was Salary task force established established. and basic data collected Date 15-Jul-2008 08-Jun-2011 31-Jul-2010 Comments Staffing of the Salary Task Force is around 70% complete. Options paper for pay reform is produced Text Value No current options for pay Salary task force presents reform options for wage and employment reform Page 4 of 6 The World Bank Report No: ISR3058 Date 15-Jul-2008 14-Dec-2010 31-Dec-2010 Comments Public Disclosure Copy Data on Financial Performance (as of 03-Jun-2011) Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P108525 IDA-H3880 Effective 01-Jul-2008 22-Sep-2008 18-Dec-2008 31-Dec-2012 Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P108525 IDA-H3880 Effective XDR 1.90 1.90 0.00 0.31 1.59 16.00 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation Several important decisions have been made following the appointment of interim and then the post-October elections Government in 2010. First, the Project Steering Committee (PSC) - the project oversight body with representation from other government agencies involved in the project--that had previously been disbanded has been reappointed and re- assigned the roles and responsibilities of leading and managing the project components. Second, more power was given to the heads of individual components within the PSC to independently make decisions specifically related to implementation of the project component over which they preside. Third, a new budget allocation and procurement plan was developed in November 2010. Finally, a local Project Manager with the mandate to facilitate project implementation was hired in 2011. These decisions have had a positive effect on project implementation. Page 5 of 6 The World Bank Report No: ISR3058 Restructuring History There has been no restructuring to date. Public Disclosure Copy Related Projects There are no related projects. Public Disclosure Copy Page 6 of 6