Contacts: In Washington – Merrell Tuck tel. 202-473-9516, mtuckprimdahl@worldbank.org In Chisinau – Slavian Gutu tel. 37322-233565, sgutu@worldbank.org Program envisages support of up to $137 million for next four years WASHINGTON, December 14, 2004 – The World Bank’s Board of Executive Directors today discussed a new Country Assistance Strategy (CAS) for Moldova. The CAS is a document that details the Bank’s work plan to assist client countries in achieving their development goals. It describes the Bank’s planned operations in the country – lending, analytical work, and technical assistance. The new CAS for Moldova covers the period 2005-2008 and envisages a lending program of between $90 million and $137 million. Priorities of the new CAS include promoting conditions for sustaining growth and employment creation; improving access to social capital, services and community infrastructure; and improving public sector governance and combating corruption.. “The goal of the Country Assistance Strategy is to support the country’s efforts to promote sustainable economic growth and reduce its high level of poverty,” says Paul Bermingham, the World Bank’s Country Director for Ukraine, Belarus and Moldova. “This is why improving access to social services and community infrastructure, as well as improving the business environment and public sector governanceare key to this Strategy, as is contributing to job creation and better lives for poor people.” After declining by more than 60 percent since independence, the Moldovan economy has rebounded, with growth averaging 6.7 percent over the past three years. While impressive, Moldova’s growth performance remains largely consumption-led, driven mainly by remittances from abroad. With a per capita GDP of only US$542 and a poverty headcount of 48 percent, Moldova is the poorest country in Europe. The Government considers poverty reduction, and in particular achieving the Millennium Development Goals, its major challenge and has undertaken extensive consultations in developing its medium-term (2004-2006) Economic Growth and Poverty Reduction Strategy (EGPRSP), with the major focus on sustainable economic growth, human development and social protection. The new CAS reflects the current country context, the EGPRSP framework, and the country’s European Union aspirations. The CAS focuses on the following three pillars: · Promoting Conditions for Economic Stability, Growth, and Employment Creation. The CAS will target actions to reduce the cost of doing business, to improve corporate governance, broaden financial intermediation, and improve the maintenance of basic infrastructure to facilitate investment and economic activity. In addition, the CAS will support the development of the rural economy, where most of the poor live, and will place emphasis on removing internal barriers that limit the export capacity of the country. · Improving Access to Social Services, Capital and Community Infrastructure, and Minimizing Environmental Risks. The CAS will support actions to strengthen human, social, and physical capital. It will target social assistance to better reach the poor and facilitating their access to quality health, education and social protection services. Bank assistance will seek to address the deterioration in critical infrastructure, such as housing, public utilities, and transportation. The Bank will also assist the government in mitigating significant health risks derived from ground water pollution. Lastly, assistance will be provided to address the serious risks posed to rural communities from weather-related events. - Improving Public Sector Governance and Combating Corruption. The Bank will place emphasis on improving transparency and accountability in the management of public funds, expenditure programming and evaluation practices. It will support greater involvement of civil society in exercising accountability over public action and the delivery of public services, focusing attention in particular on community-driven development and stronger local government ownership and leadership.
The CAS has been designed with adequate flexibility to respond to changing events. Progress in implementing the benchmarks outlined in the EGPRSP, including a solid and sustained track record of reforms supporting private sector development and public sector governance, would trigger additional funds under the new CAS. If such progress occurs, the Bank would be in a position to resume support of structural reforms, possibly through development policy lending (i.e., budget support). The CAS includes a results-based program matrix to monitor progress achieved during the CAS period. Over the four-year CAS period (2005-2008), the lending envelope will be between US$90 million and US$137 million under IDA terms. The CAS was prepared in partnership with the Government of Moldova and in consultation with business community, civil society/NGOs and donors. For more information on the World Bank’s work in Moldova, visit: www.worldbank.org/md |
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