Country Partnership Strategy Progress Review World Bank Moldova April 2011

Country Partnership Processes Country Partnership Strategy outlines the Bank Group’s program of engagement Usually a four year cycle – the current Moldova CPS runs from CPS Progress Report is a mid-course review & correction if necessary. Is the strategy still relevant, what progress made, are changes necessary?

Moldova Country Partnership Strategy FY09- FY12 Three pillars – Economic competitiveness and sustainable growth – Human development and public services – Public Sector Management and Governance Flexibility in lending program – Allowed focus on response to crisis in 2010 (Development Policy Operation to support ESRP) – Additional Finance to support vulnerable households (e.g. MSIF, social assistance) Emphasis on partnerships – Working with others to coordinate support for reform, coherent financing and to promote greater aid effectiveness

Progress Strong results have been delivered across all three pillars e.g. – Renovation of 65 kindergartens and improved teaching standards and materials (EFA/FTI) – RISP assisted creation of 1700 new businesses – Basis for improved public financial management (CPAR Trust Fund) IFC complements the Bank with $74m investment over the CPS Partnerships have been effective: eg Roads sector, CPAR, MSIF

Changes in the environment Elections have given a mandate for change Reform minded government Economy beginning to recover Opportunity now to expand the basis of the economy and make structural reforms necessary for Moldova’s future growth

Changes in the Bank’s Partnership Strategy Pillars still valid Adjustment in lending program to support government reforms – particularly education More focus in the program with less fragmentation as smaller projects exit Extending for a year to FY13 to set the basis for a more focused and strategic CPS beginning FY14

Proposed IDA lending program* CPS Progress Report Lending Program, (US$ million) FY 11 Actual Disaster and Climate Risk Management Strengthening the Effectiveness of the Social Safety Net Results Based Financing Governance e-Transformation TOTAL FY11 $10 $37 $20 $67 FY12 Forecast Competitiveness Development Policy Operation 1 Health Services and Social Assistance Additional Financing Agricultural Competitiveness TOTAL FY12 $20 $11 $15 $46 FY13 Forecast Competitiveness Development Policy Operation 2 Education RBL Public Financial Management 2 TOTAL FY13 $20 $30 $20 $70 FY14 Forecast (Indicative)** Competitiveness Development Policy Operation 3 Energy Efficiency TOTAL FY14 $20 $40 * IDA16 allocations are indicative only; IDA16 covers the period FY12-FY14 ** FY14 is in the next CPS period

Next Steps IDA allocations will allow confirmation of lending program – expected by June CPS Progress Report being finalised based on internal and external consultations Progress Report will go to WB Board June 2011