Bulgaria | World Bank

Bulgaria - Municipal Infrastructure Development Project

The objectives of the Municipal Infrastructure Development Project for Bulgaria are to: (a) improve the reliability and quality of water provision to the communities in selected settlements in the project area; and (b) assist municipalities to improve investment-planning capacity. There are three components to the project: (1) project implementation support to carry out activities under component three of the project and consultant services associated with project implementation. These will include preparation of feasibility studies, updates of design and environmental management plans, preparation of bidding documents, construction supervision and other consulting assignments needed for project support, including audit, development and implementation of the communication plan to help ensure people are aware of the status of project-related land issues, training of Project Implementation Unit (PIU) and Ministry of Regional Development and Public Works (MRDPW) staff; (2) preparation of forty eight (48) regional master plans for water supply and sewerage systems (ViK systems), including forty (40) master plans for urban settlements, within the six (6) economic development regions, as described in the operational manual, in order to support the Borrower, through MRDPW, to: (i) identify investment needs for rehabilitation of water supply networks and construction of sewerage networks and wastewater treatment plants; and (ii) meet the applicable European Union (EU) water and wastewater directives commitments. The master plans will also include corporate development plans and any other related documents and activities promoting improved service delivery and greater efficiency; and (3) completion and rehabilitation of water supply dams will include completion of Luda Yana, Neikovtsi, and Plovdivtsi dams and rehabilitation of the Studena dam that is currently operational and supplies water to the town of Pernik. This component will also support the completion of water treatment plants preparation work included in the dam investments.

Bulgaria - Social Inclusion Project : procurement plan

Status of projects in execution (SOPE) - FY09 : Europe and Central Asia region - Bulgaria

The Status of Projects in Execution (SOPE) report for FY09 provides information on all International Bank and Rural Development (IBRD)/International Development Association (IDA) projects that were active on June 30, 2009. The report is intended to bridge the gap in information available to the public between the project appraisal document, disclosed after the Bank approves a project, and the implementation completion report, disclosed after the project closes. In addition to the project progress description, the FY09 SOPE report contains project level comparisons of disbursement estimates and actual disbursements, and a table showing the loan/credit/grant amount and disbursements to date for all active projects.

Bulgaria - Living conditions before and after EU accession

This report provides estimates of the level poverty and changes in living conditions between 2003 and 2007 in the new European Union (EU) member state Bulgaria. This report fills key gaps in the understanding of the state of welfare in Bulgaria and its future trends. It provides an assessment of changes in living standards since 2003, a period of sustained robust growth and intensive reform efforts leading to successful EU accession, and the current profile of the poor. The report quantifies the level of deprivation and the gains in poverty reduction and overall welfare improvements in different segments of Bulgaria's population. The study aims to support policy discourse on poverty reduction and strengthening of social protection by providing a robust assessment of living conditions among various individual, household, geographic, and socioeconomic groups and of the actual and likely future effectiveness of current poverty reduction policies. The report is organized as follows. Section two examines welfare trends between 2003 and 2007, decomposes changes in poverty, and links poverty outcomes to growth. In section three, the poverty profile is presented based on the results of the 2007 Multitopic Household Survey (MTHS) data. Correlates and determinants of consumption expenditures are presented in section four. Annex A provides a detailed account of the concept of poverty and the methodology used for measuring poverty in this report. Annex B presents supplementary data.

Bulgaria - Registration and Cadastre Project

Ratings for the Registration and Cadastre Project for Bulgaria were as follows: outcomes were satisfactory, the risk to development outcome was moderate, the Bank performance was moderately satisfactory, and the Borrower performance was moderately unsatisfactory. Some lessons learned included: it is valuable for the Bank to be involved in registration and cadastre projects for the leverage the Bank brings in dealing with contractors. It will have been almost impossible for the project to have been completed so effectively without the Bank intervening on behalf of the country to deal with the Income Tax (IT) consultant. The projects may still get done, but at a much slower pace and with a low-quality output. Frequency of supervision should vary with the needs of a project over time. Although it may require some managerial risk, Bank units should explicitly consider both increasing supervision frequency when troubles arise, and until they are resolved, and diminishing it when no such case presents itself. The question to ask of a portfolio should thus be: why are so many projects supervised a conventional twice per year, rather than more or less often, based on need? Declaration of unsatisfactory status of projects is indeed the first step to radically remedying the situation. The explicit recognition of a serious situation prepares the way, for remedial steps, including a marked increase in the planned frequency of supervision. This step should be taken more often, i.e., perhaps sooner in the cycle of poor performance.

Bulgaria - Environmental Remediation Pilot Project; and Environmental and Privatization Support Adjustment Loan Project

Ratings for the Environmental Remediation Pilot Project for Bulgaria are as follows: outcome was satisfactory; risk to the development outcome was negligible/low; Bank performance was satisfactory; and Borrower performance was also satisfactory. Ratings for the Environmental and Privatization Support Adjustment Loan (EPSAL) Project for Bulgaria are as follows: outcome was satisfactory; risk to the development outcome was moderate; Bank performance was satisfactory; and Borrower performance was moderately satisfactory. Lessons learned from the projects included: a development policy loan supporting privatization with environmental remediation should include strong measures by the Government to monitor and reward compliance (or punish non-compliance) to ensure that remediation and compliance plans are completed on schedule. In the EPSAL, even though all of the policy conditions were met and the remediation plan's (RPs) were signed, the achievements in terms of implementation of the plans, along with their environmental results, were mixed. Even in well-prepared environmental impact assessments (EIAs), it is difficult to include sufficient detail in the technical specifications of remediation investments. Modifications in design and re-negotiations during implementation should be anticipated, and possibly reflected in a longer project implementation period and higher than normal contingency funds. Even when the state assumes responsibility for remediating past environmental damages of state-owned enterprises (SOEs), setting a cap on the state's liability creates risk for potential investors and delays during re-negotiations. The possibility of letting the state assume more of the risk for additional remediation costs should be considered.

Bulgaria - Wetlands Restoration and Pollution Reduction Project

Ratings for the Wetlands Restoration and Pollution Reduction Project for Bulgaria were as follows: outcomes were satisfactory, the risk to development outcome was low or negligible, the Bank performance was satisfactory, and the Borrower performance was also satisfactory. Some lessons learned included: participatory approaches to wetland restoration design were critical for project success, which hinged on changing people's perceptions of wetlands, and gaining the full support for restoration among authorities and stakeholders. Protected area (PA) local consultative councils and public awareness campaigns effectively supported stakeholder involvement. The established panel of experts was instrumental in providing independent assessments that balanced the best interests of local stakeholders and Government. Skepticism about wetland restoration among stakeholders transformed into strong support through their early involvement in planning and decision making processes. Linking small grants and farmer transition support programs to the broader objective of wetlands restoration was highly beneficial to local communities to ensure: (i) commitment to common goals; engagement with the main restoration activity; and (ii) raising public awareness of environmental and conservation issues. If well targeted and managed, the community-level grant programs financing local initiatives on the ground can be effective to engage diverse local stakeholders (communities, farmers, etc.) with the main project activity and to foster stronger public commitment to the project objectives. The project region had lost over 80 percent of its floodplains and wetlands and restoring these is a significant environmental achievement. This project focused on wetlands potential to reduce nutrient loads; however, the wider environmental benefits, especially for conservation of biodiversity and reproduction of bio-resources such as fish and birds, have produced additional benefits.

Bulgaria - Municipal Infrastructure Development Project

Environmental impact assessment for Plovdivtsi dam

The objective of the Municipal Infrastructure Development Project for Bulgaria is to improve the provision of water and wastewater supply by building various dams. Building of the dams will lead to an inevitable change of the thermal-physic properties of the bearing stratum and thence, of the microclimate. That change, however, affects only the dam area, and as a result may have a beneficial eject on the unaffected flora and fauna. The main pollution source of the dams is mines, especially during heavy rain, for which reason the design contains special measures for their diversion from the reservoir and beyond the water catchments area of the reservoir. Some other environmental concerns and mitigation measure are the following: 1) restrict land disturbance within the construction time limits; 2) use mobile water sprinkling systems for dust suppression, on the temporary roads across settlements and at the construction sites; 3) construct a water meter station in the dam lake tail for metering of water inflow; 4) sanitize the reservoir bed; 5) erect stationary chemical toilets during the construction and operation phases; and 6) ensure release of ecological discharge from an appropriate level of the lake (not exceeding 10 m).

Environmental impact assessment for Neykovtsi dam

Environmental impact assessment for Luda Yana dam

Bulgaria - Health Sector Reform Project

Ratings for the Health Sector Reform Project (HSRP) for Bulgaria were as follows: outcomes were moderately satisfactory, the risk to development outcome was moderate, Bank performance was moderately satisfactory, and Borrower performance was also moderately satisfactory. Some lessons learned included: monitoring and evaluation (M&E) frameworks should be well developed at the time of project effectiveness. Several aspects of the HSRP M&E framework lacked a clear link to project activities, and it was made in the absence of good baseline data. Surveys undertaken during project effectiveness were not consistent, making it difficult to compare data over time. A simple insistence on using the same core questionnaire in each survey from start to finish will be a big step forward. Although Bank-financed projects can not always be coordinated with election cycles, starting an ambitious health reform project less than one year before an election is fraught with risk. To the extent possible, reform projects should be mindful of electoral considerations. There are valuable synergies between investment operations and Development Policy Loans (DPLs) that should be exploited wherever feasible. Investment projects can open policy dialogue and build trust as a precursor to policy-based lending, as well as finance Technical Assistance (TA) that can inform DPL activities once they are operational. DPLs can help shape the policy environment to maximize the return to a traditional project's investments.

Bulgaria - Third Social Sectors Institutional Reform Development Policy Loan Program

This program document describes the third and final phase of three Social Sectors Institutional Reform Development Policy Loans (SIR DPL 3) Program in Bulgaria. The DPL series support the adoption and implementation of structural reform policies to: (i) increase employment and lay the foundations for long-term productivity growth by providing incentives for job creation and labor force participation as well as by improving quality of education; and (ii) promote fiscal sustainability through efficiency gains in the social sectors. Bulgaria's economic growth is forecast to decline substantially in 2009 and 2010 compared to 2008, and the Government is focusing on a dual strategy of: (i) maintaining a prudent fiscal stance to ensure the continued cushion of a sizable fiscal surplus; and (ii) continued structural reforms to increase competitiveness and raise productivity so as to emerge stronger from the economic downturn. The SIR DPL 3 contributes to address both short-term and medium-term aspects of the expected economic slowdown by supporting: (i) short-term measures to address the potential adverse employment effect from the economic downturn; (ii) the government's continued reforms to improve, in the short- and medium-term, the efficiency of resource use in health and education; and (iii) measures to raise employment and productivity growth over the medium-term through structural reforms to improve employment activation policies, raise quality of primary and secondary education and to reduce the regulatory burden for the enterprise sector.

Land acquisition policy framework

The development objective of the Municipal Infrastructure Development Project for Bulgaria is to improve the provision of water and wastewater supply. This objective will be met through rehabilitating the water network and supporting institutional improvements in RWCs; and rehabilitating and completing construction of dams to ensure adequate water supply. The above objective is fully in line with Bulgaria's National Strategy on Environment (2005 - 2014) which has an objective to provide good quality and sufficient quantity of water for various purposes and is consistent with the provisions described in the Bank OP 4.12 on Involuntary Resettlement. The resettlement plan offers the following considerations : the bulk of the land required for the main dam wall, dam lakes and corresponding submerged area, ancillary structures and adjacent infrastructure has previously been acquired by the Government of Bulgaria in the years 1986, 1989 and 2000. The additional land acquisition supported under this Project is expected to be relatively minor and will cover construction of ancillary structures including a water purification plant at Luda Yana dam. In the vicinity of Plovdivtzi dam there will be some land acquisition needed (up to 3 1 000 m2); consultation arrangements during the design and preparation process will be transparent and inclusive to ensure that all persons affected by involuntary land acquisition are consulted on the mitigation measures; compensation for lost assets shall be provided before land and other assets are taken into possession; it is not expected that there will be any residential or other structures that will need to be acquired for the project site, however, in the event that there are structures (barns, kiosks, small commercial buildings etc.,) that will need to be demolished "depreciation" will not be used while calculating the compensation payable for affected structures, and affected people will be able to replace their structures with the compensated amount; also, informal users of land without title or lease who use the land for temporary or seasonal purposes such as grazing will be entitled to rehabilitation assistance or some form of support to enable affected persons, who have lost their source of livelihood, to restore their income levels to pre-project levels.

The performance of Bulgarian food markets during reform

Food policy often depends on markets and markets depend on institutions. But how good do institutions have to be before reforms can be launched? Relying on well timed surveys of agricultural prices and a joint study by the Government of Bulgaria and the World Bank on agricultural market institutions, this paper presents evidence that performance in food markets improved following significant policy reforms in Bulgaria, although public institutions remained weak. This suggests that even though strong institutions are preferred to weak ones, it can be costly and impractical to delay policy reforms until work on strengthening institutions is finished. Still, measured performance varied by place and by commodity, suggesting that markets developed at different tempos and that the distribution of benefits from improved markets was uneven. This points to the need to address the costs of adjustment as policies change. The paper introduces a new approach to measure market performance based on composite-error techniques.

Bulgaria - Third Strategic Investment Review Development Policy Loan Project

What drives firm productivity growth ?

This paper presents new evidence on the causal links between changes in the business environment and firm productivity growth. It contributes to the literature in three important aspects. First, it constructs a unique database merging information from two large firm-level databases. The samples of both databases are merged on four criteria-country, sub-national location, firm size, and year-producing a panel of 22,004 firms in eight economies of Eastern Europe and the former Soviet Union: Bulgaria, Croatia, Czech Republic, Estonia,, Poland, Romania, Serbia, and Ukraine. Second, the paper addresses shortcomings of earlier studies, namely reverse causation, multicollinearity, and unreliable productivity estimates. Firm productivity growth is estimated drawing on corporate financial data from manufacturing firms included in the AMADEUS database. Changes in the business environment are estimated from the World Bank Enterprise Surveys conducted in 2002 and 2005. Multicollinearity problems in the full model regression are mitigated by constructing a set of six aggregate indicators of the business environment (using principal component analysis). The paper finds that, over the period 2001 to 2004, an increase of one standard deviation in infrastructure quality, financial development, governance, labor market flexibility, labor quality, and market competition raises the total factor productivity of the average firm by 9.8, 7.8, 3.2, 3.4, 5.8, and 3 percent, respectively. Lastly, the paper decomposes firm productivity growth and ranks the relative impact of changes in these six aspects of the business environment by country, by firm size, and by industry.

Bulgaria - Third Strategic Investment Review Development Policy Loan Project

Doing business 2010 : Bulgaria - comparing regulation in 183 economies

Doing Business 2010 is the seventh in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. This paper presents the summary Doing Business indicators for Bulgaria. The paper includes the following headings: introduction and aggregate rankings, starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, closing a business, and Doing Business 2010 reform.

World Bank Financing Improves Access to and Reliability of Water in Bulgaria

2009-11-25T09:43:45.000Z

WASHINGTON, November 24, 2009 – The Municipal Infrastructure Development Project in Bulgaria, approved today by the World Bank’s Board of Directors, will assist local governments across the country in investment-planning for the water sector, and improving the reliability and quality of water provision in four municipalities. The Project amounts to €81 million and will finance the:

Preparation of 48 regional Master Plans for Water Supply and Sewerage systems (ViK systems), including 40 Master Plans for urban settlements, within six regions; and
Completion of construction of three dams that was interrupted about 20 years ago along with the rehabilitation of a fourth dam that is currently operational.

Upon project completion, more than 141,000 Bulgarians in four municipalities will have a secure and reliable supply of quality water. Water shortages in some parts of Bulgaria have become critical over the last 15 years due to increased incidence of dry years − extreme drought was recorded in 2000 and 2007. As a result, the delivery of water has been unreliable and a conservation plan has been put in place with many days of water rationing and restrictions.

“The citizens of municipalities of Rudozem, Madan, Tryavna, and Panagyuriste in Bulgaria are all looking forward to seeing a significant improvement in the water supply to their communities,” said Gabriel Ionita, World Bank Senior Agriculture Specialist and Task Team Leader of the project. “The lack of a steady source of quality drinking water as well as water for agricultural use is seen by many as one of the main issues affecting their well-being. The municipal authorities are themselves very concerned about this issue and have been pressing for the prompt resolution of the problem. The completion of the three dams was disrupted for about twenty years. The World Bank’s funding for finalizing the construction provides an opportunity for further economic development, including tourism growth.”

As a full-fledged EU member state, Bulgaria has aligned its legislation with the EU Directives on Environment. Following EU norms, the rehabilitation and construction of water supply and sewerage networks aims to improve service delivery and reduce health risks. The component of the Project envisioning the preparation of Master Plans for Water Supply and Sewerage systems in the country will help identify the needs in each utility and provide recommendations for meeting technical requirements of EU directives. The Master Plans are expected also to lead to investments (funded by EU and other sources) that will help Bulgaria to fully implement the EU directives in the water and wastewater sector and facilitate the country’s economic and social integration with the EU.

This project the last operation within the framework of the Country Partnership Strategy for Bulgaria (2006-09), which was adopted in 2006 and was geared to support Bulgaria’s EU accession and absorption of EU funds.

“The World Bank and the Government of Bulgaria are currently working closely to identify the Bank’s future support to Bulgaria's key development priorities with the goal of accelerating growth and improving living standards,” said Florian Fichtl, World Bank Country Manager for Bulgaria. “As a committed partner, the World Bank will continue bringing the best of international and European knowledge to support the country in its path to becoming a strong EU member state.”

The project approved today is financed from a loan with a 19-year maturity, including a 7-year grace period.

World Bank Financing Improves Access to and Reliability of Water in Bulgaria

2009-11-24T23:54:23.000Z

Contacts:

In Sofia: Ivelina Taushanova (+3592) 9697 239

itaushanova@worldbank.org

In Washington: Michael Jones (1-202) 473-2588

mjones2@worldbank.org

· Preparation of 48 regional Master Plans for Water Supply and Sewerage systems (ViK systems), including 40 Master Plans for urban settlements, within six regions; and

· Completion of construction of three dams that was interrupted about 20 years ago along with the rehabilitation of a fourth dam that is currently operational.

“The citizens of municipalities of Rudozem, Madan, Tryavna, and Panagyuriste in Bulgaria are all looking forward to seeing a significant improvement in the water supply to their communities,” said Gabriel Ionita, World Bank Senior Agriculture Specialist and Task Team Leader of the project. “The lack of a steady source of quality drinking water as well as water for agricultural use is seen by many as one of the main issues affecting their well-being. The municipal authorities are themselves very concerned about this issue and have been pressing for the prompt resolution of the problem. The completion of the three dams was disrupted for about twenty years. The World Bank’s funding for finalizing the construction provides an opportunity for further economic development, including tourism growth.”

“The World Bank and the Government of Bulgaria are currently working closely to identify the Bank’s future support to Bulgaria's key development priorities with the goal of accelerating growth and improving living standards,” said Florian Fichtl, World Bank Country Manager for Bulgaria. “As a committed partner, the World Bank will continue bringing the best of international and European knowledge to support the country in its path to becoming a strong EU member state.”

The project approved today is financed from a loan with a 19-year maturity, including a 7-year grace period.

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For more information on the World Bank’s program in Bulgaria, please visit the Project portal in:

www.worldbank.bg

Bulgaria: Municipal Infrastructure Development Project

2009-11-24T23:19:09.000Z

WASHINGTON, November 24, 2009 - The World Bank’s Board of Executive Directors today approved the following project:

IBRD Loan: €81 million

Terms: Maturity = 19 years; Grace Period = 7 years

Project ID: P099895

Project Description: The Municipal Infrastructure Development Project for Bulgaria aims to: (a) improve the reliability and quality of water provision to the communities in selected settlements in the project area; and (b) assist municipalities to improve investment-planning capacity. There are three components to the project: (1) project implementation support to carry out activities under component three of the project and consultant services associated with project implementation; (2) preparation of 48 regional master plans for water supply and sewerage systems (ViK systems), including 40 master plans for urban settlements, within the six economic development regions; and (3) completion and rehabilitation of water supply dams will include completion of Luda Yana, Neikovtsi, and Plovdivtsi dams and rehabilitation of the Studena dam.

Media Contact

Michael Jones

(202) 473-2588

mjones2@worldbank.org

For more project information, please visit: http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P099895

For more information, please visit the Projects website.

Poor road safety conditions threaten economic and social well-being of Europe and Central Asia countries

2009-11-24T13:57:10.000Z

WASHINGTON, November 24, 2009 – Unsafe road traffic conditions in the countries of Europe and Central Asia (ECA)* have tremendous adverse implications for their economic and social well-being, says a World Bank report released today. Treating road safety victims is imposing an increasingly unbearable burden on these countries’ health and social services. Road traffic injuries are a major cause of death and disability, affecting young and working-age groups of society in particular, and ECA countries need to act now to prevent injuries and save lives, suggest World Bank experts.

The report Confronting “Death on Wheels”: Making Roads Safe in Europe and Central Asia, released after the first Global Ministerial Conference on Road Safety, reviews the size, characteristics, and causes of the road safety problem in ECA countries. The report will help bring into action the agreements reached during the conference held in Moscow on November 19-20, 2009 under the main theme Time for Action. The report finds that the magnitude of the road safety problem in countries of the Commonwealth of Independent States (CIS), Eastern and Central Europe, the Baltics, and the Balkans is much higher than in Western Europe, even though their car fleet is smaller and the number of kilometers they travel by car is lower. The report provides compelling evidence on the economic and social consequences of the silent epidemic and suggests a range of policies and strategies and to confront and prevent “death on wheels”.

“Road traffic injuries are already among the top 10 causes of death and disability in ECA and the trend is worsening,” – said Abdo Yazbeck, World Bank Health Sector Manager for the Europe and Central Asia. “Human impact of traffic crashes is enormous. Families are being driven into poverty because of the death of their breadwinner or the mounting costs of medical care and rehabilitation for accident victims. But the growing magnitude of the problem is also bringing a national dimension to it, contributing to the demographic crisis and imposing additional burdens on country economies which lose billions of dollars every year as a result of traffic injuries and fatalities”.

In ECA, the highest estimated annual costs to governments are in the large economies that also have sizeable populations: Russia (US$ 34 billion per year), Turkey (US$ 14 billion), Poland (US$ 10 billion), and Ukraine (US$ 5 billion). A combination of weak road safety management capacity, deteriorated roads, unsafe vehicles, poor driver behavior, and patchy enforcement of road safety laws, alongside exponential growth in the number of vehicles, are the key factors contributing to road traffic injuries and fatalities multiplying at a rapid pace.

“Road safety is routinely a key component of World Bank transport projects but more can be done,” – said Henry Kerali, World Bank Transport Sector Manager for the Europe and Central Asia. “The Bank stands ready to support countries’ programs to improve road safety - including road safety reviews, strengthening capacity of national road safety authorities, improving safety features of road infrastructure, tightening enforcement, implementing public campaigns for safer driving, and strengthening emergency medical services”.

According to the report, an effective country road safety strategy requires a systematic multisectoral approach with a politically strong and technically competent lead agency to coordinate contributions by the many government departments across which road safety responsibilities tend to be diffused: transport, interior, police, health, and education, among others. The goal should be to prevent the occurrence of injury, minimize the severity of injury when traffic injuries occur, and prevent lasting disability in the aftermath.

The report concludes that growing urbanization, accelerating growth in the number of vehicles, and patchy efforts to legislate and enforce road safety measures result in continued growth of road injuries and fatalities, and the time has arrived to support concerted efforts to make roads in ECA countries safer. Together with seven other development banks, on November 11, 2009, the World Bank issued a joint statement ahead of the Global Ministerial Conference on Road Safety, outlining a broad package of measures that each institution would implement to reduce an alarming rise in the number of road injuries fatalities and disability in low and middle income countries.

For more information, please visit: www.worldbank.org/eca/roadsafety

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* The ECA countries include Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, FYR Macedonia, Georgia, Hungary, Kazakhstan, Kosovo, the Kyrgyz Republic, Latvia, Lithuania, Moldova, Montenegro, Poland, Romania, the Russian Federation, Serbia, the Slovak Republic, Slovenia, Tajikistan, Turkey, Turkmenistan, Ukraine, and Uzbekistan.

Roma education to get crucial boost in funding

2009-11-12T20:18:19.000Z

Roma education to get crucial boost in funding

BRUSSELS, November 12, 2009―At an international donor conference hosted by the Open Society Institute, the World Bank and the European Economic and Social Coimmittee, donors swung their financial support behind education for the Roma, Europe ’s largest minority population. The €25.5 million in funding commitments announced by donors today is targeted for the Roma Education Fund (REF) and will provide the essential ingredients needed for children to succeed in school: scholarships, school meals, teacher training and academic support. The added financial support will also help governments develop stronger national policies for Roma inclusion.

“Roma want to contribute to society. They want to improve the lives of their children and give them a better life than they had. The most important factor that keeps so many Roma trapped in poverty is a lack of education; with increased political will and improved cooperation we can tackle this problem head-on,” said George Soros, chairman of the Open Society Institute and one of the founders of the Roma Education Fund.

The REF is a grant-making and policy analysis foundation established in 2005 that designs and supports programmes and projects to improve Roma education outcomes in Europe . With help from the Fund, last year alone over 30,000 students, from pre-school to university, showed improved test scores while more than 800 Roma students attended and graduated from university.
Roma continue to face discrimination and exclusion from opportunities available to most citizens. They often lack access to good quality education or other social services, holding low quality and low-paying jobs.

“The primary school completion rate among young Roma is similar to that prevailing in some countries in Sub-Saharan Africa. This strikes me as something that does not belong in the Europe of the 21 st century”, said the World Bank Managing Director Ngozi Okonjo-Iweala.

The amount committed today will enable the REF to continue closing the gap in educational outcomes between Roma and non-Roma children by supporting quality education for Roma, desegregation of education systems, and improvement of Roma’s social inclusion. “The REF has identified what works in Roma education. The time has come to move to large scale interventions,” said Costel Bercus, chair of the REF governing board.

www.romaeducationfund.hu
www.refdonorconference.org

Contacts:
Luis Montero
luis.montero@osf-eu.org
Alexander Rowland
arowland@worldbank.org

Bulgaria Is well positioned to sustain the modernization of its Revenue Administration

2009-11-12T13:15:00.000Z

Sofia, November 12, 2009 – In preparation for EU accession, Bulgaria initiated a major institutional overhaul of its revenue administration system, supported by the World Bank’s Revenue Administration Reform Project. The comprehensive reform program was centered on the integration of collection and enforcement functions of the old tax administration and the social security collection into a new agency, the National Revenue Agency (NRA) and putting in place a modern legal framework for the agency, the collection procedures, and the material tax laws. In addition, the collection of municipal taxes and fees was gradually divested to municipalities. Making the NRA operational meant the development of new policies, new work arrangements, procedures and technology, the integration of staff and resources of the two agencies into the NRA and implementing a true self-assessment culture based on respect for and collaboration with the taxpaying community.

Key results from the reform include improved voluntary compliance, increased revenue

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collection and reduced taxpayer compliance burden, and better efficiency of revenue collection.
Voluntary compliance has improved steadily—by 15 percentage points for VAT, by 13 percentage points for corporate income taxes, and by 7 percentage points for personal income taxes between 2002 and 2008
Tax and social contribution revenues increased by 4.6 percentage points of GDP between 2002 and 2008, the highest revenue gain among the New Member States
Compliance gains allowed the government to reduce tax rates to levels that are the lowest among the New Member States—firms allocate 31.4 percent of their profits on taxes and social contributions according to Doing Business 2010 report
Field offices were consolidated from 340 in 2002 to 29 currently, and further consolidation is planned
Revenue per revenue staff tripled in 2008 compared to 2002
Revenues are collected by 25% less staff in 2008 compared to 2002
Collection costs in Bulgaria at 0.8 percent of revenues are much lower than in the other New Member States
Efficiency of audits improved—less audits but more enforced revenue per audit

These achievements of the revenue administration reform in Bulgaria and the next stage of reforms in the NRA were discussed today during the closing workshop of the World Bank Revenue Administration Reform Project for Bulgaria. Government officials, including Deputy Minister of Finance Anna Mihailova, and the Executive Director of the National Revenue Agency, Krasimir Stefanov, World Bank team, representatives of taxpayers’ community, researchers, and NGOs took part in the discussion.

The Revenue Administration and Reform Project for Bulgaria, with original World Bank financing of €31.9 million (€21 million actually disbursed), started in 2003. Project development objectives were fully achieved—Bulgaria now has an efficient, EU-compliant, and sustainable revenue collection system that facilitates private sector development. A complementary objective of the project was the separation of central and municipal revenue collection, which was achieved in 2004.

Bulgaria has put in place an institutionally strong and capable revenue administration that continuously improves itself to face the challenges of collecting the revenue needed for the government to deliver its programs. The process of modernizing and seeking efficiency and effectiveness gains, in the NRA in particular and in the public sector in general, is endless. The workshop recognized that Bulgaria has made impressive progress in revenue collection, which has been internationally recognized. However, there are several areas which will benefit from further reforms like improving the physical infrastructure, including the office upgrading and consolidation in Sofia, as well as the development of some more sophisticated IT applications for the Revenue Management System that will all contribute to NRA’s efficiency and will strengthen the existing good governance systems.

According to Florian Fichtl, the World Bank’s representative in Bulgaria, these impressive results must be protected, preserved and furthered. “The World Bank as a committed partner to Bulgaria was privileged to help country setting up a modernized, efficient and in line with EU standards revenue administration. The success of the revenue administration reform in Bulgaria shows that enhancing the effectiveness and efficiency of public administration can be achieved if there is commitment and clear vision of reform outcomes. We stand ready to provide future support to Government efforts to modernize Bulgaria’s revenue administration and public administration as a wholе”, Fichtl said.

“Three years after the establishment of the National Revenue Agency we can say that due to the implementation of the Revenue Administration Reform Project the Agency has become an effective institution, responsible for the collection of state revenues from taxes and social contributions. We learned a lot of lessons during Project implementation but the key outcome for us was the creation of a team of professionals, which is especially important now when we face new challenges. One of the NRA future priorities is to guarantee the continuity and sustainability of objectives and outcomes of the Project", emphasized Krasimir Stefanov, the NRA Executive Director.

For more information, please contact
Ivelina Taushanova (+3592) 9697 239
E-mail: itaushanova@worldbank.org

Transition since Fall of Berlin Wall Shapes Today’s Crisis and Recovery

2009-11-03T17:05:11.000Z

Report on eve of 20th anniversary of the Berlin Wall's fall says structural reforms are now necessary to protect hard-won gains

WASHINGTON, November 3, 2009―The economic policy choices made by some countries of Europe and Central Asia (ECA)* during the transition from centrally planned to market economies contained the seeds of vulnerability when facing the global economic crisis, and are also likely to shape the recovery, says a new World Bank report issued on the eve of the 20th anniversary of the fall of the Berlin Wall.

The report, Turmoil at Twenty: Recession, Recovery, and Reform in Central and Eastern Europe and the former Soviet Union, says many countries in ECA are well integrated today into global markets. While this integration brought many benefits and drove the region’s spectacular growth in the decade since the Russia financial crisis of 1998, it also exposed ECA countries to three channels through which the crisis has hit the region hard: financial, market, and labor.

Excessively rapid catch-up towards Western European living standards by countries that had suffered deep or double transition recessions in the late 1990s, enabled by bank lending at a time of unusually high global liquidity, led to rapid growth, but also created serious macroeconomic imbalances when facing the 2008-09 global crisis. Short-term maturing debt reached extremely high values. But not all financially integrated countries in the region were equally vulnerable. Their experience suggests that tighter fiscal policies, without necessarily insulating countries from the crisis, could have played a stabilizing role, even though the imbalances did not generally originate in the public sector.

The report says that international collective action comprising generous official financing and coordination by Western European parent banks to maintain their exposures in Central and Eastern Europe has allowed maturing external debt to be rolled over, at least so far. Those parent banks were crucial in hardening budget constraints and attaining macroeconomic stability during the first decade of transition.

“The outlook for economic growth in emerging Europe and Central Asia is considerably weaker than that in the years before the crisis,” said Pradeep Mitra, one of the authors of the report and former World Bank Chief Economist of the Europe and Central Asia Region. “If parent banks reduce exposures in countries of the region due to recognition of losses in their home market, continuing collective action will be necessary to make this process gradual and less disruptive.”

According to the report, the weak outlook for growth highlights the urgency of proceeding with bank, corporate, and household debt restructuring. Government should set up enabling frameworks for debt restructuring, but resist using public resources since household debt is typically not concentrated among the poorer households.

The poorer countries of the former Soviet Union that are financially less integrated are experiencing the crisis primarily as a result of a downturn in exports and decline in workers’ remittances due to the recession in the Russian Federation. Thus, in Tajikistan, the poorest country of the region, it is estimated that a 30 percent decline in remittances would reduce the consumption of the bottom fifth of households by around 20 percent. While some countries have safety net programs that deliver a substantial proportion of benefits to poorer households, more resources are necessary to scale up these programs where they exist, and introduce targeted programs where they do not. Official financing for a number of years will be necessary to support desirable social spending until a durable recovery is in place.

The report recommends that with capital flows likely to be considerably lower than pre-crisis levels, and financial markets already differentiating across countries, policy makers need to address the most binding constraints to growth in order to improve their business environment and remain competitive.

“It is remarkable that business surveys show infrastructure and labor skills – formerly the main assets of transition countries – not only to be the tightest bottlenecks to the operation and growth of firms, but also more constraining than in non-transition economies at similar income levels. These sectors require urgent reforms,” said Mitra. “However, the surveys also show significant progress after two decades of transition in building institutions of the market economy. For example, tax administration and customs regulation which have traditionally ranked high among constraints to the operation and growth of firms are now seen as less constraining and indeed in line with non-transition economies at similar income levels.”

* The ECA countries include Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, FYR Macedonia, Georgia, Hungary, Kazakhstan, Kosovo, the Kyrgyz Republic, Latvia, Lithuania, Moldova, Montenegro, Poland, Romania, the Russian Federation, Serbia, the Slovak Republic, Slovenia, Tajikistan, Turkey, Turkmenistan, Ukraine, and Uzbekistan.

Contacts:
In Washington:
Elena Karaban 202-473-9277
Ekaraban@worldbank.org
Michael Jones 202-473-2588
Mjones2@worldbank.org

Bulgaria after crisis: What to expect from the “new normal”?

2009-11-03T15:27:53.000Z

What could be expected after the crisis and what means the “new normal”? According to the World Bank Vice President and Corporate Secretary Kristalina Georgieva the “new normal” means slower internal and external demand as well as limited access to financial resources in the next 2-3 years. She attended the annual meeting of Bulgarian business and the government which took place today in Sofia.

The event was opened by the Prime Minister Boyko Borissov and the World Bank Vice President was the keynote speaker. Bulgaria should focus on raising the competitiveness and productivity trough investment in human capital and infrastructure, Kristalina Georgieva emphasized. She said that the climate change and new green economy provide possibilities for Bulgaria’s future growth.

See Kristalina Georgieva’s presentation here (in Bulgarian)

The development challenge of climate change

2009-10-29T14:45:00.000Z

“Climate change as a development challenge” was the main subject of Jari Väyrynen’s presentation on the Green Innovation Forum, held on October 29, 2009 at the Hilton Hotel in Sofia, Bulgaria. Mr. Väyrynen, Operations Team Leader for the Carbon Finance Unit of the World Bank, was a key note speaker of the event, which gathered more than 120 private sector and civil society representatives.

The World Bank engagement in Carbon Finance Projects in Bulgaria was presented at the event. It was emphasized also that the climate change is fundamentally a development issue, not only an environmental one.

The main objective of Bulgaria Green Innovation Forum was to present green strategies and internationally acclaimed approaches for addressing environmental challenges to national businesses.

Read Jari Väyrynen’s presentation here

Eastern and Central Europe is on the path to recovery, but robust growth still some way off

2009-10-29T13:00:00.000Z

Sofia, October 29, 2009 —The EU’s newest member states in Eastern and Central Europe have begun the recovery one year after the breakout of the

The report was launched in Sofia with a discussion at the University of
National and World Economy

global financial crisis as the credit crunch has eased, but most countries undergo large contractions this year, and the recovery is likely to be feeble and uncertain, the World Bank said today as it launched its new EU10 Regular Economic Report.

Although the rebound of the global economy has started, the report cautions that the recovery in EU10* countries could be weak and growth is likely to be lower than in pre-crisis years. EU10 countries are projected to contract by around 4.2 percent in 2009, and to grow by around 1 percent in 2010 and 3.6 percent in 2011, down from 3.9 percent in 2008 and around 6 percent in 2007. Medium-term growth prospects look weak as the recovery is not yet private-demand driven and potential growth is lower than before the crisis.

According to the report, the EU10 countries fall into three groups with regards to their recent growth performance:
• Poland is in the first group as the only EU country whose economy has expanded throughout the last three quarters.
• Bulgaria, Romania and other Central Europe countries make the second group with year-on-year contraction of 5 to 10 percent of GDP.
• Third group comprises The Baltic countries, where the output contraction started in 2008, with declines of 15 to 20 percent of GDP.

Kaspar Richter in the niversity
of National and orld Economy

“The scale of the contraction is linked to a number of factors, including the degree of trade openness, the export composition, the exchange rate regime and the magnitude of macroeconomic imbalances.” said Kaspar Richter, Senior Economist in the World Bank’s Europe and Central Asia Region and lead author of the report.

Given these prospects, financially weaker governments in the region will need to protect poor people while strengthening institutions and infrastructure to attract investors. At the same time, they need to adjust their policy agenda to support exit strategies and prevent future crisis.

Unemployment rose in the EU10 countries from 6.1 percent in August 2008 to 8.1 percent in July 2009, or from about 2.9 million to 3.8 million people. At the same time, one million workers who had emigrated from the region to crisis-hit countries such as the UK, Ireland, and Spain after 2004 have returned home, adding to the pressure on job markets in Eastern and Central Europe. The economic crisis is affecting foremost workers with basic education level and limited work experience, most of whom are young. Unemployment rates for workers aged 15 to 24 increased more than twice as compared to the overall increase. As a result, almost one third of the economically active population below 24 years of age is unemployed in the Baltic countries, and around one quarter in Hungary and Slovakia.

“Employment has remained remarkably high in many EU10 countries, similar to key countries of the euro area, and opposite to the trends seen in the US. However, while employment tends to hold up better during downturns, it could take much longer to increase up during upturns.” said Richter “Governments’ active efforts to alleviate the impact of economic slowdown on the labor markets have to be combined with measures supporting employability and guiding people towards new jobs, empowering workers to take advantage of new opportunities when the economy recovers.”

According to the EU10 Regular Economic Report the main challenge for the EU10 countries now is to adjust the policy agenda; the economic policy should balance the support of recovery with exit strategies to contain risks of negative public debt dynamics and inflation. Structural policies, along the lines of the Lisbon agenda, are crucial to mitigate the loss in potential output growth due to weaker capital flows. Social policies are crucial to mitigate the loss in living standards for the poor.

“The recovery from the economic crisis depends foremost on restoring financial market confidence. To help close some external financing gaps created by the crisis and ease the burden of adjustment, the IMF, EC and World Bank have provided substantial support. As international investors take a closer look at the vulnerabilities of emerging economies, there is a large premium on strong domestic policies.” – said Richter, “Governments face the difficult challenge of reconciling three objectives: to protect priority programs for economic and social development so that growth prospects are enhanced and social cost of the economic crisis mitigated; to exit from anti-crisis policies and ensure fiscal consolidation once the recovery is under way to make room for a private sector led recovery; and to improve policies, regulations and coordination to prevent such crises in future.”
___________________

* The EU10 countries include: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia.

The EU10 Regular Economic Report is published three times a year. It monitors macroeconomic and reform developments in the EU10 countries, and provides in-depth analyses of key policy issues. To obtain an online copy of the new report, please visit http://www.worldbank.org/eca/eu10rer

A World Bank team contributed to the discussion on reforms in the new EU member states

2009-10-19T16:00:00.000Z

The year 2009 marks the 5th anniversary of the 5th enlargement of the EU, 20 years of the fall of the Berlin Wall and 1 year from the start of the global economic crisis. While the accession and Berlin Wall anniversaries provide basis for reflection and elicit important lessons, the global economic crisis effects inject a sense of urgency to look ahead.

The International conference “The New Reform Agenda of the New EU Member States”, held in Sofia on October 19, 2009 started a discussion on the similar experience the new EU member states have shared. A World Bank team contributed to the discussions at the conference which was organised by the European Policies Initiative of the Open Society Institute. The event was attended by opinion leaders, experts and decision makers from Bulgaria and several new EU member states. The deputy Prime minister and minister of Finance Simeon Djankov opened the event.

The discussions were focused on four key topics:
1. Regional Solutions to Regional Problems - “Financial Crisis in Central and Southern Europe: The World Bank’s Instruments and Policies” with main World bank speaker Orsalia Kalantzopoulos, Senior Advisor Financial and Private Sector Development, World Bank 2. Macro-economic issues - see World Bank’s key note presentation called “From Crisis to Recovery”
3. Investing in Human Capital – with main World Bank speaker Boryana Gotcheva, Senior Social Protection Specialist
4. Politics and governance in the crisis – with main World Bank speaker Florain Fichtl, Country manager for Bulgaria – see his presentation here

Global Crisis Hits Home in Emerging Europe and Central Asia

2009-10-03T07:40:09.000Z

Contacts:

Kristyn Schrader (90) 530-929-45-35

kschrader@worldbank.org

Tunya Celasin (90) 533-285-18-21

tcelasin@worldbank.org

ISTANBUL, October 3, 2009—The global economic crisis has reversed the impressive economic growth of recent years in Emerging Europe and Central Asia, hitting families hard with higher unemployment and lost wages. Financially weaker governments will need to protect poor people while strengthening institutions and infrastructure to attract investors, the World Bank said today at a press briefing at the World Bank/IMF Annual Meetings.

“The global financial and economic crisis has literally hit home in many parts of Emerging Europe and Central Asia,” said Philippe Le Houérou, World Bank Vice-President for Europe and Central Asia. “What started as a financial crisis has become a social and human crisis. The global crisis has come on the heels of the food and fuel crises, which had already weakened people in the region by reducing their purchasing power. Today, rising poverty and joblessness are pushing households into poverty and making things even harder for those already poor.”

For the past decade, many countries of Emerging Europe and Central Asia notched up impressive growth, moving them closer to the living standards of Western Europe and other advanced economies. But the crisis has hit them hardest and stopped that convergence. Growth has plummeted from a fast clip of 7.6 percent in 2007 to 4.7 percent in 2008, and is projected at negative 5.6 percent in 2009.

“For years now, Emerging Europe and Central Asia has roared along in high gear,” said Le Houérou. “But the global crisis and the drying up of external private financial flows are stalling the engine of growth, prompting many to downshift and some to even slip into reverse. The job now for the governments in the region is to speed up reforms. The role of the international community is to help countries get back in gear. For us at the World Bank, that means essentially focusing our support to governments in their efforts to clean up the banking sector so that banks can provide a lifeline for firms and businesses to grow and create jobs, improve the business climate to attract private capital flows, make public spending more efficient so that the benefits reach working families, and continue to finance key public investments in infrastructure.”

Unemployment and deficits on the rise

The global crisis has hit some countries worse than others but today there is a danger that the region faces a weak and jobless recovery. Some countries, such as Poland, have fared better than others. Still, the number of jobless in the region has jumped from 8.3 million in 2008 to 11.4 million in 2009. It has doubled in the Baltic countries, grown by 60 percent in Turkey, and by one-third in other countries in the region.

“Instead of the number of poor falling by 15 million in 2009, we now project poverty to increase by about 15 million,” said Indermit Gill, World Bank Chief Economist for the Europe and Central Asia Region. “There are already 145 million poor people in the region – or almost one-third of the total population. For them, the crisis has made an already tough existence even tougher. Much of the world is getting good economic news this autumn. But for workers and their families in Emerging Europe and Central Asia the news is not encouraging. To them, the talk of recovery may seem premature.”

In the face of the unprecedented crisis, governments in Emerging Europe and Central Asia will have many hard choices to make, given that government deficits will increase from 1.5 percent of GDP in 2008 to 5.5 percent in 2009, said Gill. This will put more pressure on governments to make spending more efficient.

“Social spending makes up more than half of government expenditures so governments will need to make education, health care and social security more efficient,” Gill said. “School systems need to be resized to fit shrinking enrollment numbers due to falling fertility. Health care has to be restructured because many countries now have the health problems of high-income countries with the fiscal resources of middle-income economies. And social security has to be restructured to recognize that many countries in the region have aged before they have become wealthy. Reforms will help make governments fiscally healthy, economies robust, and societies more fair. Every responsible policymaker should take a hard look at these reforms.”

Also, governments must continue to improve their business environment to attract investment. During the last decade, countries in Emerging Europe and Central Asia have made progress in improving the climate for doing business. The region has been the top performer in the World Bank’s Doing Business ratings for the last six years—led first by countries in central and southern Europe and more recently by those in the Caucasus and Central Asia. This year, five of the top ten reformers were from the region: Krygyz Republic, FYR Macedonia, Belarus, Tajikistan, and Moldova.

World Bank supporting reforms through lending and advice

While governments are in the lead, the World Bank is helping countries navigate their way through the crisis, Le Houérou said. For its part, the World Bank is providing budget support to countries to support promising reform efforts. During the past year, the World Bank has increased financial support to the region by 60 percent, from $8 billion last year to $12.5 billion this year with the aim of mitigating the impact of the crisis on the poor, stabilizing banks, and positioning countries for post-crisis recovery. In September 2009 alone, the Bank approved $2 billion in budget support to Hungary, Latvia, and Ukraine.

Along with funding, the Bank is offering analytical support and encouraging governments to expand selected social safety net programs. Currently, most countries in the region have good programs that could be expanded during the crisis, such as those in the Kyrgyz Republic, Albania and Georgia where benefits are most likely to reach the neediest people. At the same time, the Bank is advising governments on how to fix less efficient programs to ensure benefits are reaching the right target audiences. Although many countries in the region have excelled on improving the business environment, many countries have not improved social service delivery.

The World Bank’s client countries in Emerging Europe and Central Asia are currently using Bank funds for 53 projects spanning institutional reform, infrastructure and interventions to help the neediest. Also, through the World Bank’s private sector arm, the International Finance Corporation (IFC), the Bank has teamed up with the EBRD and EIB on a $31 billion fund to support the banking sector and to fund lending to businesses hit by the global economic crisis through equity and debt finance, credit lines, and political risk insurance. And the Bank’s political risk insurance arm, MIGA, has made up to $3 billion available for investments in the heavily hit economies of the region. Guarantees worth nearly half of a $1 billion were issued in support of shareholder loans made by parent banks to their subsidiaries in Ukraine and Russia.

For more information, please visit www.worldbank.org/eca

The World Bank's Team Presents Analyses on Bulgaria's Economic Recovery and Sustainable Growth

2009-09-16T12:28:29.000Z

SOFIA, September 16, 2009 — The World Bank team led by Florian Fichtl, Country Manager for Bulgaria, presented today an overview of the Bank’s latest analytical findings aimed at unleashing the country’s potential for sustainable recovery and accelerated convergence with EU living standards. The presentation was attended by the Deputy Prime Minister and Minister of Finance and Ministers and Deputy Ministers of Economy Energy and Tourism; Education, Youth and Science; Regional Development and Public Works; Agriculture and Food; Environment and Water; Transport, Information Technology and Communications; Labor and Social Policy; and Health.

“The World Bank stands ready to support Bulgaria”, Florian Fichtl, the Country Manager, said. He added: “The Government faces a unique opportunity to cut wasteful spending and improve accountability for results of all public offices. This is very important because there is a need for fiscal consolidation as revenues cannot be increased in the economic downturn. Supported by more solid, transparent, effective public finances and as the recession gives way to recovery, Bulgaria can continue to build the foundations for an economy centered on inclusive growth with productive jobs. As a committed partner, the World Bank brings up the best of international and European knowledge to support the country in its path becoming a strong EU member state”.

At today’s first discussion with the new Bulgarian Government, the World Bank team presented its analyses in:
• Policies to Mitigate Crisis and Support Recovery through fiscal consolidation particularly rationalizing public spending, cutting waste and increasing accountability for better public services, maintaining financial market confidence, and mitigating social costs;
• Policies to Accelerate Structural Change to enhance Bulgarian competitiveness and to improve public services by upgrading infrastructure, energy and mitigating climate change; and investing in people, knowledge and innovation.

The findings will be further discussed within the Government and it is expected for these discussions also set priorities for future World Bank’s support.

The World Bank’s support to Bulgaria is generally provided within the framework of the Country Partnership Strategy (CPS). The last CPS was adopted in 2006 and was designed to help the country to promote high economic growth and poverty reduction for the period 2006-2009. Bulgaria focused on improving health care, education, social protection and infrastructure. The Bank and the Government of Bulgaria are currently working closely to identify the Bank’s future support to Bulgaria's key development priorities with the goal of accelerating growth and improving living standards.

The World Bank will continue supporting Bulgaria

2009-09-14T12:14:11.000Z

Sofia, September 14, 2009 - Bulgaria will continue seeking the World Bank’s advice, expertise and close collaboration aiming at the effective continuation of revenue administration reforms, Simeon Djankon, Deputy Prime Minister and Minister of Finance said after his meeting with Theodore Ahlers, Director Strategy and Operations at the ECA Vice Presidency at the World Bank.

At today’s courtesy meeting, which was also attended by Florian Fichtl, Country Manager for Bulgaria and other World Bank officials, the parties discussed areas of possible future collaboration between the new Bulgarian government and the World Bank.

The forthcoming institutional reforms in health and education sectors were one of the discussed topics during the meeting.

Doing Business 2010: Bulgaria keeps track record of reforming business environment

2009-09-09T09:34:50.000Z

Washington, D.C., September 9, 2009 — Bulgaria eased business start-up by reducing the paid-in minimum capital requirement to about 21 percent of gross national income per capita and making the company registry more efficient. An integrated Web-based property register providing online access to the ownership and cadastre status of properties shortened the time required to register property. Due to these reforms Bulgaria keeps its track record of business friendly destination and was ranked on 44th place globally in the latest Doing Business 2010 report.

In a record year for regulatory reform worldwide, Eastern Europe and Central Asia led all regions in the pace of reforms. Doing Business 2010: Reforming through Difficult Times finds that 26 of 27 economies in the region reformed regulations to create more opportunity for domestic firms.

Globally, a record 131 of the 183 economies surveyed reformed business regulations between June 2008 and May 2009, according to the report, the seventh in a series of annual reports published by IFC and the World Bank.

The region was the most active worldwide in reforming insolvency regimes and easing access to credit. Six economies improved their insolvency regimes: Albania, Estonia, Lithuania, Poland, Russia, and Tajikistan. Seven reformed their credit information systems: Armenia, Azerbaijan, Latvia, the Former Yugoslav Republic of Macedonia, Serbia, Tajikistan, and Turkey. The Kyrgyz Republic and Poland strengthened the legal rights of borrowers and lenders.

“Governments in Europe and Central Asia continue implementing regulatory reforms as part of their long-term strategies, despite the many challenges of the past year,” said Neil Gregory, Advisor, Financial and Private Sector Development, World Bank Group. “They recognize that the quality of business regulation helps determine how easy it is to reorganize troubled firms, rebuild entrepreneurs’ confidence, and start new businesses.”

Reform activity among developing economies in the region is the strongest since 2004. The Kyrgyz Republic, the region’s leading reformer, moved up in the global rankings from 80 to 41 on ease of doing business, by implementing reforms in seven of the 10 areas measured by the report. Among other things, it expedited the issuance of construction permits and eased business start-up and property registration.

This year Rwanda was the top global reformer. There were 4 new reformers among the global top 10: Liberia, the United Arab Emirates, Tajikistan and Moldova. Others, aside from Rwanda, include Egypt, Belarus, the Former Yugoslav Republic of Macedonia, the Kyrgyz Republic, and Colombia.

“Reforms continue to move eastward across the region. Albania, Belarus, the Kyrgyz Republic, and FYR Macedonia implemented reforms in several areas for the third year in row,” said Svetlana Bagaudinova, an author of the report. “Inspired by their neighbors, Kazakhstan, Montenegro, and Tajikistan have also picked up the pace of reform,” she added.

Doing Business analyzes regulations that apply to an economy’s businesses during their life cycles, including start-up and operations, trading across borders, paying taxes, and closing a business. Doing Business does not measure all aspects of the business environment that matter to firms and investors. For example, it does not measure security, macroeconomic stability, corruption, skill level, or the strength of financial systems.

About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world.
For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org.

For more information about the Doing Business report series, please visit: www.doingbusiness.org
For more information on Doing Business 2010, please contact:
Nadine Ghannam +1 (202) 473-3011 Rebecca Ong +1 (202) 458-0434
E-mail: nsghannam@ifc.org E-mail: rong@worldbank.org
Contacts for region-specific queries on Doing Business 2010:
Central and Eastern Europe Central Asia Ilya Sverdlov +7 (495) 411-7555 Nezhdana Bukova +7 (985) 411-3986
E-mail: isverdlov@ifc.org E-mail: nbukova@ifc.org
Southern Europe
Slobodan Brkic +381 (11) 30-23-750 Kristyn Schrader +1 (202) 458-2736
E-mail: sbrkic@ifc.org E-mail: kschrader@worldbank.org

Bulgarian National Corporate Governance Commission established today

2009-09-03T13:55:25.000Z

Sofia, September 3, 2009 – A permanent body that will monitor and encourage good corporate governance practices in Bulgaria – the National Corporate Governance Commission, was established today. The commission will be an independent body under the patronage of the Bulgarian Stock Exchange and the Financial Supervision Commission. The new body aims at strengthening further the corporate governance in Bulgaria, addressing the challenges highlighted in the latest World Bank’s report on the Observance of Standards and Codes (ROSC) called “Bulgaria: Corporate Governance Assessment”, that was presented in December last year.

The objectives of the Commission will be to:
• develop and disseminate best practices;
• monitor the implementation of the National Corporate Governance Code by the companies;
• provide regulators with recommendations for the improvement of the corporate governance legal and regulatory framework.

Mr. Rumen Radev, Vice-Chairman of the Governing Board of the Bulgarian Industrial Capital Association and Member of the Governing Board of the EuropeanIssuers has been appointed as the first chairman of the Bulgarian Corporate Governance Commission. The Commission includes representatives from the Bulgarian Stock Exchange, Financial Supervision Commission, Center for Economic Development, Bulgarian Industrial Capital Association, Association of the Investor Relations Directors in Bulgaria, Bulgarian Association on Investors Relations, Investors Association, and academia including prof. Bistra Boeva. Prominent representatives from the private sector with proven reputation and expertise in corporate governance such as Manu Moravenov, CEO of Fair Play Properties and Stefan Petranov, CEO of Zlaten lev will contribute to the work of the Commission. Additional members are expected to be invited to join shortly.

“The global financial crisis and the economic down turn have highlighted more than ever the need to improve corporate governance and risk management” the World Bank country manager for Bulgaria Florian Fichtl said at the event.

Read the statements of Philip Armstrong, Head, IFC-Global Corporate Governance Forum, and Christian Strenger, Director DWS Investment, Member of the German CG Commission and Deputy-chairman of the Forum’s Private Sector Advisory Group

The project Revenue Administration Reform Project has changed to Closed

2009-07-02T04:00:00.000Z

The project Revenue Administration Reform Project has changed to Closed. To see more information, see the project information in the World Bank project database

The Revenue Administration Reform Project for Bulgaria objective is the implementation of a sustainable revenue collection system for Bulgaria through the establishment of an economically efficient public revenue collection system that facilitates private sector development and complies with requirements for European Union accession. There are six components to the project. 1) Policy Support. This component aims at ensuring that the National Revenue Agency (NRA) fully complies with the tax policy framework developed by the Ministry of Finance, and provides useful feedback on the administrative arrangements and requirements to implement the Tax Code. 2) Organization and Management Development. This component aims at developing the capacity of NRA in two major areas: Organizational Development, and Human Resources and Training. 3) Increasing Operational Efficiency. This component would support activities required to implement the core business processes of the National Revenue Agency. 4) Outreach and Participation. This component would develop and implement a Taxpayer, Insurer, and Contributor Charter of Rights. 5) Office Upgrading. This component would finance civil works to establish an adequate working environment for the NRA staff, taxpayers, and contributors. 6) Project Management. This component would finance a structure for implementing the project.

Governance Matters 2009: Release of Worldwide Governance Indicators 1996-2008

2009-06-29T10:00:00.000Z

WASHINGTON, June 29, 2009 — While this year’s update of the research dataset Worldwide Governance Indicators (WGI) 1996-2008 shows many countries making progress in governance and anti-corruption over the past decade, it also reveals that many countries around the world failed to make such improvements.

The eighth release of the WGI, one of the most comprehensive cross-country sets of governance indicators currently available, highlights the serious challenges that remain for rich and poor countries alike, and draws attention to the well-established link between better governance and improved development results.

“The good news is that some countries are recognizing and responding to governance challenges, and are showing strong improvements that reflect concerted efforts by political leaders, policymakers, civil society, and the private sector,” said Aart Kraay, co-author of the report and Lead Economist in the Development Research Group of the World Bank.

At the same time, other countries have stagnated, and worryingly, still others have regressed in key dimensions of governance. In fact, the updated WGI show that current governance standards have plenty of room for improvement in many industrialized countries and emerging economies.

“We should not presume that rich and powerful countries have the very best levels of governance and corruption control; the financial crisis reminds us that the quality of governance in G8 countries is not always exemplary”, said Daniel Kaufmann, co-author of the report and a Senior Fellow at the Brookings Institution.

The WGI is a research project initiated by Kaufmann and Kraay in the late 1990s, and is now coauthored with Massimo Mastruzzi of the World Bank Institute. The authors define governance as the traditions and institutions by which authority in a country is exercised. This includes how governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern economic and social interactions among them. The WGI measure six broad dimensions of governance, including:

• Voice and Accountability: the extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, association, and the press.
• Political Stability and Absence of Violence: the likelihood that the government will be destabilized by unconstitutional or violent means, including terrorism.
• Government Effectiveness: the quality of public services, the capacity of the civil service and its independence from political pressures; the quality of policy formulation
• Regulatory Quality: the ability of the government to provide sound policies and regulations that enable and promote private sector development
• Rule of Law: the extent to which agents have confidence in and abide by the rules of society, including the quality of property rights, the police, and the courts, as well as the risk of crime.
• Control of Corruption: the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as elite "capture" of the state

The indicators cover 212 countries and territories, drawing together hundreds of variables from 35 different data sources to capture the views of tens of thousands of survey respondents worldwide, as well as thousands of experts in the private, NGO, and public sectors.

“Challenging the naysayers, the Worldwide Governance Indicators show that governance and corruption can be robustly measured and the lessons drawn can in fact be put to subsequent use by reformist governments, the development community, civil society and the media” said John Githongo, formerly Permanent Secretary, Governance & Ethics, Office of the President of Kenya.

Better governance helps in the fight against poverty and improves living standards. Research by many scholars, including the WGI authors, shows that improved governance strengthens development, and not the other way around. When governance is improved by one standard deviation, infant mortality declines by two-thirds and incomes rise about three-fold in the long run. Such advances in governance are readily achievable, since these differences constitute just a fraction of the difference between the worst and best performers. For example, in the dimension of Rule of Law, one standard deviation is all that separates the very low ratings of Afghanistan or Zimbabwe, from the still-low ratings of countries such as Nigeria or Paraguay; or the moderate ratings of Turkey or Ghana from the stronger ratings of Portugal or Chile; or what separates these from some of the best performers such as Norway or New Zealand.

Measuring governance is difficult, and all measures of governance are necessarily imprecise. A unique feature of the WGI is its transparent recognition of this imprecision, in the form of explicitly reported margins of error for all country scores that need to be considered when comparing countries.

Where there is commitment to reform, improvements in governance can and do occur.
Over the past decade from 1998-2008, countries in all regions have shown substantial improvements in governance, even if at times starting from a very low level. Examples include Ghana, Niger, and Peru in Voice and Accountability; Algeria, Angola and Sierra Leone in Political Stability and Absence of Violence/Terrorism; China, Colombia, and Rwanda in Government Effectiveness; the Democratic Republic of Congo, Georgia and Libya in Regulatory Quality; Latvia, Liberia and Rwanda in Rule of Law; and Indonesia, Liberia and Serbia in Control of Corruption.

On average the quality of governance around the world has not improved much over the past decade, despite some of the individual country improvements noted above. Coinciding with countries that have done well, a similar number have experienced deteriorations in several governance dimensions, including Zimbabwe, Cote d’Ivoire, Belarus, Eritrea and Venezuela. In many other countries, no significant change in either direction is yet apparent in recent years.

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The full “Governance Matters VIII” research paper, a synthesis of the main findings, and the new WGI data update are available at: http://www.govindicators.org after expiration of the embargo.

The WGI are a research output of staff of the World Bank and Brookings Institution, and as such do not reflect the official views of the Brookings Institution, the World Bank, its Executive Directors, or the countries they represent. The WGI are not used by the World Bank Group to allocate resources.

The project SIR DPL3 has changed to Closed

2009-06-24T04:00:00.000Z

The project SIR DPL3 has changed to Closed. To see more information, see the project information in the World Bank project database

Europe and Central Asia Facing Significant Climate Change Threats, But Are In ‘Adaptation Deficit’

2009-06-02T14:25:40.000Z

Contacts:
In Brussels: Alexander Rowland +32-478-319939
Arowland@worldbank.org

In Washington: Kristyn Schrader +1-202-458-2736
Kschrader@worldbank.org

BONN, June 2, 2009—The World Bank today warned that the impact of climate change in the Europe and Central Asia Region* will be more significant than expected due to a lingering post-Soviet legacy of environmental mismanagement and the poor state of much of the Region’s infrastructure, leaving the countries poorly prepared to adapt.

“Europe and Central Asia suffers from an ‘adaptation deficit’ that is already challenged by recent climate variability,” said Marianne Fay, Director of the World Bank’s World Development Report 2010, and author of the new report ‘Adapting to Climate Change in Europe and Central Asia’, “which will only worsen with the consequences of projected trends in climate in the coming decades.”

Fay added that “While almost two decades have passed since the breakup of the Soviet Union and its partner countries in Central and Eastern Europe, the legacy of environmental mismanagement and oversized infrastructure in countries outside the European Union still remains a dangerous holdover from the past. It greatly worsens the countries’ vulnerability to even modest changes in the climate.”

Launched today during the UNFCCC Bonn Climate Change Talks and on the eve of ‘World Environment Day’ (June 5^th), the report says that, contrary to popular perception, the Region is significantly threatened by climate change and is already experiencing the consequences: increasing variability, warmer temperatures, changing hydrology, and more extremes – droughts, floods, heat waves, as well as windstorms and forest fires.

Average temperatures across ECA have already increased by 0.5ºC in the south to 1.6ºC in the north (Siberia) since the early 1900s and overall increases of 1.6 to 2.6ºC above are expected by the middle of the century, with the greater changes occurring in the more northern latitudes. The north is projected to see greater temperature changes in winter, with the number of frost days declining by 14 to 30 days over the next 20 to 40 years. Southern parts of the region are expected to see the greatest changes in the summer, with the number of hot days increasing by 22 to 37 days over the same period. This warming trend is significant: by mid-century, countries such as Poland or Hungary are expected to experience the same number of hot days (>30^oC) as today’s Spain or Sicily.

According to Fay, “Increases in temperature are affecting hydrology, with a rapid melting of the region’s glaciers and a decrease in winter snows. Many countries are already suffering from winter floods and summer droughts – with both Southeastern Europe and Central Asia at risk for severe water shortages. Summer heat waves are expected to claim more lives than will be saved by warmer winters.”

The report says that changes in sea level, another impact of climate change, will affect the Region’s four basins – the Baltic Sea, the East Adriatic and Mediterranean coast of Turkey, the Black Sea, and the Caspian – and the Russian Arctic Ocean. On the Baltic, Poland, with its heavily populated low-lying coast, is the most vulnerable. Along the Adriatic and the Mediterranean, storm surge and saltwater intrusion into aquifers threaten parts of the Croatian, Albanian, and Turkish coasts. Sea level rise in the Black Sea is already threatening numerous ports and towns along the Russian, Ukrainian, and Georgian coasts. In the Caspian Sea, increased surface evaporation is projected to decrease water levels by as much as 6 meters by the end of the 21st century, imperiling

fish stocks and affecting coastal infrastructure.

However, according to the report, legacy issues make the Region even more vulnerable. Under the Soviet system, economic growth was pursued in blatant disregard to natural conditions. When water was needed for irrigation, the rivers feeding the Aral Sea were diverted to the desert to produce rice, fruit, and cotton. Uzbekistan became one of the world’s largest exporters of cotton, but at the cost of destroying the Aral Sea in the process.

The historic poor environmental management across the Region has its consequences. Even countries and sectors that stand to benefit from climate change are currently poorly positioned to do so. According to Fay, “Much has been made of the fact that warmer climate and abundant precipitation in the northeastern part of Europe and Central Asia – Kazakhstan, Russia, and Ukraine – will open up a new agricultural frontier. However, any local potential benefit pales in comparison to the costs of the region’s relative inefficiency and low productivity. While world grain yields have been growing on average by about 1.5 percent per year, they have been falling or stagnant in these three countries.”

But over the next ten to twenty years, Europe and Central Asia’s resilience to climate shocks can be strengthened with improved infrastructure and environmental management systems, all of which will have positive consequences for sustainable development. Regardless of climate change, Europe and Central Asia will gain from improving its water resource management, tackling its environmental pollution problems, upgrading neglected infrastructure and housing, and strengthening disaster management. These steps will also greatly strengthen the Region’s ability to cope with the current climate.

Adapting to the changing climate will also require specific climate-related actions: investments in weather and water monitoring; the capacity to interpret and disseminate climate information; institutions to support adaptation efforts, whether by large firms or small farmers; and policies to foster incentives for informed, proactive responses to the challenges of climate change.

The Europe and Central Asian countries will need to develop strategies to reduce vulnerability to future changes. Jane Ebinger, World Bank Senior Energy Specialist, emphasized the need for stakeholder involvement in adaption. “Adaptation strategies will require steps to bring together policy makers, planners, asset owners, academics, and civil society to discuss and assess the risks a country may face from current weather and projected climate change, and identify possible adaptation measures, their costs and benefits. In addition, the experience of countries, regions, or cities currently developing and implementing adaptation plans offers valuable lessons and methodologies.”

*Europe and Central Asia Region economies: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Kosovo, Kyrgyzstan, Latvia, Lithuania FYR Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan,

For more information, please visit: www.worldbank.org/eca

###

ENVIRONMENTALLY SUSTAINABLE REFORMS ARE KEY FOR PRESERVING BULGARIA’S FORESTS

2009-05-22T10:29:55.000Z

In Sofia: Ivelina Taushanova, (3592) 9697 239
itaushanova@worldbank.org
In Washington: Michael Jones, (202) 473-2588
mjones2@worldbank.org

BELOGRADCHIK, MAY 22, 2009 - Bulgaria’s forest, covering 4,1 million ha, is considered as one of the country’s most important environmental assets. Further environmentally sustainable reforms are required to increase investment, transparency and accountability in the use of forestry resources, to improve forestry management and the protection of biodiversity, which together will ensure the future Bulgaria’s green treasure.

This was one of the conclusions arising from today’s discussion of the World Bank’s latestForest Policy Note for Bulgaria. The document was officially presented to Government high level officials, including Deputy Prime Minister Meglena Plugchieva, as well as EU Member States Ambassadors.

“Bulgaria’s forests are an extremely important asset as they provide multiple environmental and economic benefits, raw materials for the timber industry and significant employment in rural areas. There is a clear need to enhance the effectiveness of forest institutions in Bulgaria so that the sector can show its full potential for the benefit of all citizens”, Deputy Prime Minister Meglena Plugchieva said.

The World Bank team led by Andrew Mitchell, Senior Forestry Specialist in the Agriculture and Rural Development Sector in Europe and Central Asia region prepared the note at the request of the State Forest Agency. The document analyses the institutional reforms in the sector and their consequences, and outlines the challenges and risks for the successful implementation of reforms and identifies the opportunities for improving the performance of the sector.

The note acknowledges that the general principles behind the reforms which are underway in Bulgaria are sound. “The ideas that forestry units should and can be financially self-sufficient, that regulatory functions should be separated from day-to-day management operations, and that forestry units should be encouraged to improve their efficiency and service delivery orientation by adopting commercial business practices are not uncommon among European forestry agencies”, Andrew Mitchell pointed out. “Ireland, Austria, Finland, Latvia, and Estonia have all adopted similar practices, and are also able to provide management services for global public goods such as nature protection under contract to the state using this approach.”

There are however opportunities for building on the recent developments. There is a need for a clearer vision of the reform process developed through a participatory approach with all stakeholders. The operation of the timber market could be improved to enhance transparency and competition. Markets could be diversified and expanded by developing the certification of forestry and utilizing the opportunities offered by the growing carbon emissions market. There is scope for improving performance of the sector by investing in various public goods and services, in areas such as forest road rehabilitation, fire control, diversifying forest management objectives and outcomes, investing in IT management systems and capitalizing on Bulgaria’s natural habitats.

“The recommendations made in the note are a good basis for preparing the roadmap for the development of Bulgarian forests with specific aims, criteria and time schedule. This will allow us to improve the performance of the sector, finalize the initiated reforms and evaluate their effect. We are ready to discuss our future cooperation with the World Bank in this respect”, said the chairman of the State Forest Agency Stefan Jurukov.

According to the World Bank country manager for Bulgaria Florian Fichtl, Bulgaria is rich in beautiful forests and these assets need to be preserved and developed sustainably. In the context of the current global financial crisis, Bulgaria’s forests provide an opportunity for the country to trigger green investment and better use the opportunities on the international carbon market. ”Investing in Bulgaria’s forests is investing in Bulgaria’s future. This is why we are happy to support Bulgaria in this important sector”, Fichtlsaid.

POLICY RESPONSES ENCOURAGING, BUT HOUSEHOLDS IN EU10 COUNTRIES FEELING CRISIS IMPACTS

2009-05-21T11:29:38.000Z

SOFIA, May 21, 2009 —The World Bank today revealed that while the policy responses have been encouraging, the global economic and financial crisis is having a deepening impact on households in EU10* countries, and urged Governments to restructure their public finances to help mitigate the social costs of the crisis.

According to the new World Bank report, the EU10 Regular Economic Report, the unemployment rate is set to increase from 6.5 percent in 2008 to 10.4 percent in 2010, or from 3 million to 5 million people. This rising unemployment could derail any nascent recovery, as it could take years to reabsorb excess labor pools.

“The joblessness created by the economic crisis translates into lower household incomes, remittances, and consumer demand,” said Kaspar Richter, Senior Economist in the World Bank’s Europe and Central Asia Region. “Falling demand for industrial workforces and more return migration from the EU15 countries will strain labor markets and social safety nets. This then feeds back to the financial sector, including a rise in non-performing loans – becoming a vicious cycle. To break that cycle, Governments must protect priority spending that improves prospects for growth and target social assistance programs.”

According to the report, the EU10 countries are in recession, with economic activity projected to decline by 3 percent this year, and stagnate around zero percent next year. While the crisis has hit all countries in the region, its impact differs greatly across the EU10 countries. The variation is mostly related to two factors:

differences in the magnitude of macroeconomic imbalances at the beginning of the crisis, where countries with the largest imbalances are experiencing now the largest contractions; and
differences in the degree of market integration through trade, capital, and labor.

“Bulgaria has been already affected the contraction of global demand and capital flows with GDP declining by 3.5 percent year-on-year in the first quarter. Preserving prudent fiscal and incomes policy and accelerating structural reforms would be key for economic recovery and enhancing the competitiveness of Bulgarian firms,” said Florian Fichtl, World Bank Country Manager for Bulgaria.

The contraction in global spending on capital goods and durables has hurt manufacturing exports, such as automobiles and electronics. Industrial production has contracted by over 20 percent over the last year across the EU10 region. The fall in export demand affects EU10 countries through trade linkages, which in turn depend on trade openness, the performance of export markets, and the composition of export goods.

And after years of high profitability, the soundness of the financial sector is threatened by the economic recession. Gross capital inflows declined by two-thirds from the third quarter 2008 to the first quarter in 2009 in emerging EU10 countries.

These shocks have led to the sharp downturn and steep rise in unemployment because of the region’s deep trade, capital, and labor market integration with the EU and the world economy. Workers in countries with fixed currency regimes face a larger risk of lay-offs, as job losses are likely to increase sharply with the stark decline in output, especially in the Baltic countries. At the same time, currency depreciations have lowered the purchasing power of households’ incomes in countries with floating exchange rates vis-à-vis the euro or dollar, and increased debt service burdens for households with foreign exchange debt.

According to the report, the economic outlook remains uncertain. Some countries may experience a stabilization process that is more protracted than anticipated. Other countries that have weathered the crisis better due to sound economic fundamentals may still be at risk from a worsening external environment.

So far, though, policy responses have been encouraging. The unprecedented actions by governments, central banks, and multilateral agencies have prevented a financial meltdown and stabilized financial markets to some degree, eased concerns about cross-border banking, reduced the size of the output gap, and limited unemployment increases.

“Going from slump to stabilization in the EU10 countries hinges critically on the success of policies to maintain strong trade, capital, and labor linkages. This requires policy coordination of the EU10 countries with other EU countries and advanced economies along three dimensions – fiscal, financial, and social,” said Richter.

Since the EU10 countries have in general little room for fiscal stimulus spending, embedding fiscal policy within a framework of medium-term fiscal consolidation will reassure markets. Trade linkages to high-income countries can channel some of the benefits of fiscal stimulus spending in high-income countries to the EU10 region. Economic stability in the region, as in the rest of the world, depends most of all on restoring financial confidence. This requires close coordination among parent banks active in the same country. Restructuring public finances can help to mitigate the social cost of the crisis through social assistance programs and protection of priority spending that improves prospects for jobs and growth.

“The World Bank, in cooperation with the International Monetary Fund, the European Commission, and other multilateral partners, continues to stand ready to support the economic recovery from the crisis and the protection of vulnerable households through financial support and policy advice as needed,” said Florian Fichtl, World Bank Country Manager for Bulgaria.
___________________

* The EU10 countries include: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia.

The project SIR DPL3 has changed to Active

2009-05-19T04:00:00.000Z

The project SIR DPL3 has changed to Active. To see more information, see the project information in the World Bank project database

The project Social Sectors Institutional Reform Development Policy Loan (SIR DPL II) has changed to Closed

2009-04-09T04:00:00.000Z

The project Social Sectors Institutional Reform Development Policy Loan (SIR DPL II) has changed to Closed. To see more information, see the project information in the World Bank project database

This program document describes the second phase of three planned Social Sectors Institutional Reform (SIR) - Development Policy Loans (DPL II). The series has been designed to support the Government of Bulgaria (GOB) to meet some of the challenges associated with European Union (EU) accession in the case of DPL I and post-accession - DPL II and III. The DPL series is supporting the adoption and implementation of policies to (i) increase employment and lay the foundations for long-term productivity growth by providing incentives for job creation and improving quality of education; and (ii) promote fiscal sustainability through efficiency gains in social sectors. Many of the policies are well placed to improve access to and quality of social services in the medium term, a secondary objective of the program. The actions supported by the DPL series are expected to contribute in the medium term to increased speed of convergence with EU policies and standards, enhanced competitiveness through increased skills of the labor force and better investment climate, more efficient health, education, and social assistance systems, and a more equitable access to basic social services. The focus of this DPL series reflects the Government's social sectors and productivity agenda and its strategic use of multilateral organizations support to implement reforms and improve outcomes in sectors that remain outside the sphere of intervention of the EU.

The project Registration & Cadastre Project has changed to Closed

2009-03-02T05:00:00.000Z

The project Registration & Cadastre Project has changed to Closed. To see more information, see the project information in the World Bank project database

The objective of the Registration and Cadastre Project for Bulgaria is to improve the coverage, completeness, accuracy and responsiveness of the cadastre and real property registration systems and thus contribute to the development of secure tenure of real property and an efficient real property market. The Cadastre system development component will help the Cadastre Agency to design and implement a unified national cadastre system including office renovations, archives creation, equipment, and technical assistance. The property registration system development component will support capacity building in the district courts and the Ministry of Justice for the implementation of the new real property based registration system. Third component, cadastre and property registration operations, will support mass registration and the joint conversion of parcels in the operation of the new property-based registration and cadastre systems, plus the creation of an effective data link. The component will support the construction and measurement of control points as part of a Geodetic network. The project management and development of a policy and legal framework component will provide partial support for the project implementation unit, training activities, and technical assistance.

The project SIR DPL3 is now in the pipeline.

2009-02-03T05:00:00.000Z

The project SIR DPL3 is now in the pipeline. To see more information, see the project information in the World Bank project database

The project Bulgaria Regional Development has changed to Dropped

2008-12-19T05:00:00.000Z

The project Bulgaria Regional Development has changed to Dropped. To see more information, see the project information in the World Bank project database

The project Social Inclusion Project has changed to Active

2008-11-05T05:00:00.000Z

The project Social Inclusion Project has changed to Active. To see more information, see the project information in the World Bank project database

The objective for the Social Inclusion Project (SIP) for Bulgaria is to promote social inclusion through increasing the school readiness of children below the age of seven, targeting low-income and marginalized families (including children with a disability and other special needs). There are two components to the project. The first component is the integrated social and childcare services. This component consists of a menu of community subprojects including services and infrastructure investments from which the municipality can choose according to its needs. It covers provision of a set of integrated social and childcare services for parents and children from marginalized groups and children with a disability. Municipalities will subcontract third sector agencies with contracts involving performance targets and per capita based remuneration. All persons involved in delivery will be informed and equipped to refer parents to the services they need, whether available under this project or through established public channels. Finally, the second component is the capacity-building. This component supports the design and pilot launch of a national school readiness program, the SIP will also finance necessary capacity-building activities at the central and municipal level. European Social Fund (ESF) funding will be available finance the large part of local capacity-building activities, but SIP financing will be made available through this component to ensure quick start-up. This component also includes an allocation to support project auditing and construction works inspection for municipal sub-projects.

The project Social Sectors Institutional Reform Development Policy Loan (SIR DPL II) has changed to Active

2008-11-05T05:00:00.000Z

The project Social Sectors Institutional Reform Development Policy Loan (SIR DPL II) has changed to Active. To see more information, see the project information in the World Bank project database

The project Wetlands Restoration & Pollution Reduction GEF Project has changed to Closed

2008-10-26T04:00:00.000Z

The project Wetlands Restoration & Pollution Reduction GEF Project has changed to Closed. To see more information, see the project information in the World Bank project database

The development objective of the Wetlands Restoration and Pollution Reduction Project for Bulgaria is that local communities and local authorities in the Persian Nature Park and Kalimok/Brushlen Protected Site areas adopt sustainable natural respurces management practices. There are two amin project components. First, in the initial phase of this component, marshland will be recovered and restored in two already identified sites to demonstrate the use of wetlands as nutrient sinks. Additional sites are expected to be identified and restored later during project implementation. The GEF funds will finance consultancy services for the elaboration of detailed engineering designs, baseline surveys, and the supervision of construction and rehabilitation activities of small infrastructure which will regulate water flows. Grantsupport is being sought for consultant services pre-feasibility and feasibility studies, design of restoration activities, and needed civil works. The second component supports the next step towards sustainable resource managmeent and protection within the two protected sites by funding the preparation of protected areas management plans at the two sites. It moves on to then support the implementation of priority actions identified in these plans; strengthens monitoring programs for water quality, biodiversity, socioeconomic indicators, and health risks; builds a public awareness and education campaign; and strengthens land/water management institutions.

The project Health Sector Reform Project has changed to Closed

2008-07-06T04:00:00.000Z

The project Health Sector Reform Project has changed to Closed. To see more information, see the project information in the World Bank project database

The Health Sector Reform Project supports the Government of Bulgaria in implementing a fundamental reform of its health sector that is designed to improve access, especially for disadvantaged populations and those in remote areas, to quality health services and to ensure financial and operational sustainability,. Four of the seven projects components are financed by the World Bank. The first component facilitates the reform and sustainability of the primary and ambulatory care sector. It provides practice equipment for primary health care, funds physician office information systems, provides training in general practitioner (GP) practice management, funds an information campaign, finances a health reform investment program to provide low-interest loans to physicians, and funds a labor adjustment strategy. The second component helps implement reform of the hospital system, including funding hospital information systems, financing a health reform investment program, and funding a labor adjustment strategy to transition surplus hospital staff. The third component assists the National Health Insurance Fund (NHIF) to establish the technological infrastructure to operate the insurance system, including the hardware and software systems needed as well as the training and technical assistance required. The fourth component strengthens the management and institutional capacity of the health ministry, the NHIF, and the health system generally.

The project DISTRICT HEAT (PCF) is now in the pipeline.

2007-10-25T04:00:00.000Z

The project DISTRICT HEAT (PCF) is now in the pipeline. To see more information, see the project information in the World Bank project database

The project Lake Pomorie Conservation, Restoration and Sustainable Management Project is now in the pipeline.

2007-10-25T04:00:00.000Z

The project Lake Pomorie Conservation, Restoration and Sustainable Management Project is now in the pipeline. To see more information, see the project information in the World Bank project database

The project Programmatic Adjustment Loan (PAL) is now in the pipeline.

2007-10-25T04:00:00.000Z

The project Programmatic Adjustment Loan (PAL) is now in the pipeline. To see more information, see the project information in the World Bank project database

The Programmatic Adjustment Loan Project for Bulgaria is the first of three programmatic adjustment loans envisaged to Bulgaria, it supports the new government which came into power in mid-2001 two main development objectives: a) sustaining economic growth and b) reducing poverty, both key to complete Bulgaria's transformation to a market economy, and move closer towards European Union (EU) membership. The reform program of the current government builds on the gains of the past five years and makes a strategic shift in emphasis towards promoting growth and reducing poverty focusing on increasing investment and productivity, and building human capital. To implement economic growth and poverty reduction strategy the government is building its medium term reform program on: 1) sustaining structural reforms in the enterprise sector with emphasis on restructuring the energy, railway, telecommunications and water sectors; 2) establishing a market business environment; 3) deepening the financial sector, addressing the constraints to increase lending by the banking system and the development of financial markets; 4) improving public sector governance, by implementing an anti-corruption strategy, strengthening local governments, and reforming public administration and the judiciary; and 5) investing in human capital and strengthening social programs, focusing on health, education, pension reform and social assistance effectiveness.

The project Agriculture Sector Adjustment Loan 2 (ASAL 2) is now in the pipeline.

2007-10-25T04:00:00.000Z

The project Agriculture Sector Adjustment Loan 2 (ASAL 2) is now in the pipeline. To see more information, see the project information in the World Bank project database

The project BULGARIA AGRICULTURE SECTOR ADJUSTMENT LOAN is now in the pipeline.

2007-10-25T04:00:00.000Z

The project BULGARIA AGRICULTURE SECTOR ADJUSTMENT LOAN is now in the pipeline. To see more information, see the project information in the World Bank project database

The project Child Welfare Reform Project is now in the pipeline.

2007-10-25T04:00:00.000Z

The project Child Welfare Reform Project is now in the pipeline. To see more information, see the project information in the World Bank project database

The Child Welfare Reform Project protects children's rights in Bulgaria. There are four project components. The first provides for technical assistance and training for capacity building, management, standard setting for the state agency for child protection, and for the provision of social services at the local Child Protection Department. This component will also support monitoring and evaluation of all project activities, development and implementation of a management information system, and a public awareness campaign to support reform implementation. The second component will support the Bulgarian government in improving child welfare through identifying, financing, monitoring, and evaluating sub-projects targeted at preventing abandonment and institutionalization of children, leading to the de-institutionalization of children in residential care and an improved quality of residential care. It establishes instead alternative community-based services such as community support centers for family counseling, parental education, foster care services, staff training, counseling services for young offenders, and community development activities as well as temporary shelter for young, single mothers and their babies, and small group homes. The third component focuses on interventions aimed at preventing child abandonment in high-risk communities, like the Roma community. The last component identifies, finances, implements, and monitors sub-projects that target street children.

The project Energy Efficiency GEF Project is now in the pipeline.

2007-10-25T04:00:00.000Z

The project Energy Efficiency GEF Project is now in the pipeline. To see more information, see the project information in the World Bank project database

The Energy Efficiency Project for Bulgaria aims at supporting a large increase in Energy Efficiency (EE) investments in Bulgaria through development of self-sustaining, market-based financing mechanisms. The project has the following three components: Component 1) most commercial financiers in Bulgaria are reluctant to finance EE transactions due to their unfamiliarity with such projects and perceived weak client/project credit profiles. This facility will be used for credit enhancement purposes to share in the credit risk of EE finance transactions. Component 2) under this facility, sub-loans will be made on a commercial basis to creditworthy customers that will revolve with interest and principal payments into Bulgaria Energy Efficiency Fund (BEEF) for additional loans. Component 3) covers the following two broad areas: Capacity Building and Information Barrier Removal: to fund activities in initial project pipeline development and project evaluation, workshops and seminars for potential co-financiers and clients. Fund Administration: to finance set-up and running costs of the Fund during the first four years, including the salaries of Fund staff, when the Fund is not yet self-financing.

The project Environmental & Privatization Support Adjustment Loan is now in the pipeline.

2007-10-25T04:00:00.000Z

The project Environmental & Privatization Support Adjustment Loan is now in the pipeline. To see more information, see the project information in the World Bank project database

The project Financial Enterprise Structural Adjustment Loan (FESAL) is now in the pipeline.

2007-10-25T04:00:00.000Z

The project Financial Enterprise Structural Adjustment Loan (FESAL) is now in the pipeline. To see more information, see the project information in the World Bank project database