OECS REGIONAL PARTNERSHIP STRATEGY FY15-19

Report
OECS
REGIONAL PARTNERSHIP
STRATEGY FY15-19
DRAFT FOR
DISCUSSION
1
OUTLINE
OECS Context
Lessons Learned
Prioritization Criteria
Proposed RPS FY15-19 Program
Issues for Discussion
2
OECS CONTEXT
OECS
REGIONAL
PARTNERSHIP
STRATEGY
FY15-19
3
OECS COUNTRIES FACE A NUMBER OF
COMMON CHALLENGES
Weak macro framework:
Insufficient growth
High debt
Limited fiscal space
Low competitiveness
and productivity
Dependence on a few
economic sectors
Unfavorable investment
climate
Public Sector
weaknesses
Weak financial resilience
Mismatches between
skills and job market
needs
Vulnerability to Natural
Disasters
Infrastructure gaps
High cost of energy
Fragile social resilience
Low connectivity
4
THE LAST DECADE WAS MARKED BY SUBDUED
GROWTH AND HIGH DEBT LEVELS
Slow growth
High debt
Slowest Growing Emerging Markets and Developing Countries
2003-2012
Av. 4.8
for 153 emerging
markets and
developing
countries
Av. 3.6
for 32 LAC
countries
3.0
2.5 2.5 2.5 2.6
140
103
The
debt-to-GDP ratio is high and above the emerging markets and
developing countries average in most Caribbean countries.
Guyana
Marshall Islands
Albania
Zimbabwe
Pakistan
India
Serbia
Brazil
Bhutan
St. Vincent and the Grenadines
Dominica
Barbados
The Gambia
São Tomé and Príncipe
Belize
Maldives
St. Lucia
Jordan
Hungary
Egypt
Mauritania
Seychelles
Antigua and Barbuda
Sudan
St. Kitts and Nevis
Cape Verde
Eritrea
St. Lucia
Gabon
Guinea
Yemen
Samoa
Source: IMF -WEO
Source: IMF –WEO
Debt Service to Total Revenue Ratios in 2011 for Countries in
the Caribbean with Debt Ratios above 90 percent of GDP
Percent of Revenue and Grants
Central African Republic
El Salvador
Grenada
Swaziland
Comoros
Kiribati
Côte d'Ivoire
Croatia
Antigua and Barbuda
Fiji
St. Kitts and Nevis
Eritrea
Marshall Islands
Hungary
Barbados
Haiti
Brunei Darussalam
Tonga
Palau
for 139
emerging
markets and
developing
countries
20
0.7
Tuvalu
Jamaica
The Bahamas
Av. 44.1
0
St. Vincent and the Grenadines
-3.0
Micronesia
Zimbabwe
-2.0
83 80 80 80 79 78 78 77 77
76 73 72 72 70
68 67 64
62 61 60 60 60
40
0.0
-2.0
89 89
60
0.2
-1.0
98
80
Jamaica
0.5 0.5
113
100
1.4 1.4 1.5
1.3 1.4
1.1 1.2 1.2 1.2
0.9 1.0
1.0
126
120
Grenada
1.8 1.8 1.9 1.9
1.7 1.7 1.8
2.0
2.3
2.1 2.2
Emerging Markets and Developing Countries with General Government Gross Debt above
60 percent of GDP in 2012
140
Lebanon
4.0
160 147
In percent
5.0
90
80
70
60
50
40
30
20
10
0
77
48
Av. 5
countries 38
22
St. Kitts and Nevis
26
14
Jamaica Barbados Grenada Grenada Antigua and Barbuda
5
Source: IMF, Peron, G.N. (2013)
THE INCIDENCE AND COSTS OF DISASTERS
HAVE INCREASED
Select Damages from
Disasters (% of GDP)
Evolution of Damages from
Disasters (US$ millions)
$4,000
Suriname
St. Vincent
St. Lucia
Dominica
$2,000
AB
Belize
Guyana
St. Kitts & Nevis
Grenada
Jamaica
DR
$0
1961 - 1971 - 1981 - 1991 - 2001 1970 1980 1990 2000 2010
Souce: EM-DAT
6
LOW GROWTH, DISASTERS, AND INSUFFICIENT
INCLUSIVENESS HAVE IMPACTED POVERTY
7
GIVEN THIS BACKGROUND, OECS COUNTRIES FACE A
NUMBER OF INTERRELATED DEVELOPMENT PRIORITIES
LAYING THE FOUNDATIONS FOR A RETURN
TO SUSTAINABLE INCLUSIVE GROWTH
Growth:
 Address key obstacles to growth, including in the investment
climate and infrastructure
 Facilitate private sector development and job creation
 Accelerate public sector modernization
Inclusiveness:
 Enhance shared prosperity, accelerate poverty reduction, address
gender issues, strengthen social protection, enhance
employability (esp. women, youth)
Sustainability:
 Build economic, financial, fiscal, environmental, and social
resilience
8
LESSONS LEARNED
OECS
REGIONAL
PARTNERSHIP
STRATEGY
FY15-19
9
OUR CURRENT PROGRAM
(OECS RPS 2010-14)
Key Pillars
What we have achieved
 Building resilience
 Enhancing
competitiveness and
stimulating growth over
the medium term
 Comprehensive Debt
Framework
 Caribbean Growth Forum
 Comprehensive framework
for Disaster Risk
Management
 Approach to improve skills
and build up ICT
competences
 Successful activities in
Energy, Public Sector,
Agriculture & Social Safety
Nets
10
LESSONS FROM THE OECS RPS 2010-14
LESSONS LEARNED
 Flexibility is required to respond
to evolving circumstances
 Alignment to national priorities
ensures stronger ownership
 A combination of regional and
national support enhances
results
 Coordination with other
development partners enhances
impact and efficiency
 Enhanced selectivity enables
sharper focus and greater impact
 Quality of project designs and
implementation flexibility are key
PROPOSED SOLUTIONS
GOING FORWARD
 CPS based on one focused overall
objective and a few key pillars and
interventions
 A steering committee will be
established with key development
partners and government
representati ve
 Support will be provided for
regional priorities, with
implemetati on at national level
(e. g., tourism)
 We will use of APLs for greater
flexibility
 We will bringing the entire World
Bank Group to the OECS
11
PRIORITIZATION CRITERIA
OECS
REGIONAL
PARTNERSHIP
STRATEGY
FY15-19
12
WE PROPOSE TO FOCUS OUR SUPPORT ON
SELECTIVE AREAS
 Which:
 Have a transformational impact on OECS economies
 Are aligned with regional and national priorities
 Will help us achieve, in the OECS, the WBG twin goals to
eradicate poverty and boost shared prosperity
 Coincide with areas where the WBG can bring value-
added or has a strong ongoing engagement
13
PROPOSED RPS FY15-19
PROGRAM
OECS
REGIONAL
PARTNERSHIP
STRATEGY
FY15-19
14
PROPOSED STRUCTURE OF THE
RPS FY15-19
PILLAR 1: REVITALIZING
SOURCES OF GROWTH
Focus Area 1
Facilitating private sector
development and job
creation
Focus Area 2
Enhancing the
effectiveness of the
public sector
Objective 2
Objective 1:
Removing key
constraints to
growth
Fostering
industries with
the highest
potential for
inclusive
sustainable
growth
PILLAR 2: STRENGTHENING
RESILIENCE
Focus Area
3
Managing
Disaster
Risks
Objective 5
Objective 3
Promoting a
more effective
Public Financial
Management
Objective 4
Improving
institutional
capacity
Increasing
capacity of OECS
governments to
manage natural
hazards or climate
change impacts
Focus Area 4
Increasing social
resilience
Objective 6
Objective 7
Building the OECS
human capital
and strengthening
the productivity
of its labor force
Strengthening the
efficiency and
responsiveness of
social protection
programs
Focus Area
5
Improving
financial
resilience
Objective 8
Promoting
economic, fiscal
and financial
resilience
15
FOCUS AREA 1: FACILITATING PRIVATE
SECTOR DEVELOPMENT & JOB CREATION
Objective 1: Removing key constraints to growth
 Improve the business environment and investment climate
 Strengthen the capacity of financial institutions to provide funding to
support growth of the economy
 Foster entrepreneurship and innovation
 Address critical infrastructure and connectivity gaps
Objective 2: Fostering industries with the highest potential for
inclusive sustainable growth




Tourism
Agriculture/Agribusiness
ICT/Creative industries
Logistics/Transport
16
FOCUS AREA 2: ENHANCING THE
EFFECTIVENESS OF THE PUBLIC SECTOR
Objective 3: Promoting a more effective Public Financial
Management





Improve public financial and fiscal management and administration
Increase quality of public service delivery
Improve customs administration
Enhance transparency of public information
Strengthen State-Owned Enterprise (SOE) management, when suitable
 Objective 4: Improving institutional capacity
 Strengthen institutional capacity of the public sector
 Build PPP capacity and a pipeline of bankable transactions
17
FOCUS AREA 3: MANAGING
DISASTER RISKS
Objective 5:
Increasing the
capacity of OECS
countries to
manage natural
hazards or
climate change
impacts
Pre-Disaster
Assess and quantify risks
Define and measure contingent liabilities
Reduce Disaster Risk
Assess Risk
Reduce contingent
liability
Reduce disaster
impact through
integrating risk
information in public
investments
Reduce economic
impact by
creating incentives
for
private sector
resilience
Assess Risks
Reduce Financial
Risk
Secure
Financing
Deploy and Monitor
Funding
Integrate
disaster risk in
fiscal risk and
public debt
management
Improve postdisaster budget
response
capacity
Clarify postdisaster
financial
assistance
Post-Disaster
Establish effective administrative systems
for post-disaster approval, transfer and
monitoring of funds
18
FOCUS AREA 4:
INCREASING SOCIAL RESILIENCE
Objective 6: Building the OECS human capital and strengthening
the productivity of its labor force
 Improve quality standards for education
 Upgrade skills for jobs
 Enhance capacity to plan, implement and monitor Non Communicable
Diseases (NCDs)
Objective 7: Strengthen the efficiency and responsiveness of
social protection programs
 Consolidate systems
 Strengthen efficiency
 Improve targeting and effectiveness
19
FOCUS AREA 5: IMPROVING FINANCIAL
RESILIENCE
Objective 8: Promoting economic, fiscal and
financial resilience
Enhance risk management
Reduce vulnerability to external shocks
Strengthen banking and non banking sector
Enhance fiscal and debt sustainability
20
PROPOSED LENDING PROGRAM
FY15
Regional DPL/APL Financial
Sector
DPL-II Grenada
FY16
DPL-III Grenada
FY17
Regional APL CGF
Reform Implementation
Regional APL Geothermal
Project
Regional APL Tourism Sector
Regional APL Agriculture
Competitiveness
Regional APL Social
Vulnerability Reduction
21
FINANCIAL ENVELOPE (ASSUMPTIONS)
IBRD envelope FY15-19 USD 120mln (up to USD
20mln per country)
IDA-17 envelope (FY15-17) not yet known;
estimated at around SDR 50 mln (roughly USD 75
mln)
 DOM:
 GRE:
 SLU:
 SVG:
SDR
SDR
SDR
SDR
11.3
11.6
14.8
12.6
mln
mln
mln
mln
(USD
(USD
(USD
(USD
17mln)
17.4 mln)
22.2 mln)
18.9 mln)
22
ISSUES FOR DISCUSSION
OECS
REGIONAL
PARTNERSHIP
STRATEGY
FY15-19
23
ISSUES FOR DISCUSSION
 Are we focusing on the right strategic priorities? Are there
critical areas missing? Can this program have a transformational
impact?
 Which area would the OECS need additional assistance? Which
areas suffers from knowledge gaps?
 Are there lessons to incorporate on the way we work? Are there
things we can do better?
24

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