Country Partnership Strategy FY12-16 Consultations with Civil Society The World Bank Group June 2, 2011

From Previous CPS to New CPS Country Partnership Strategy (CPS) – a framework for cooperation endorsed by the Government of the Russian Federation and the World Bank Board of Executive Directors CPS FY07-11 – Key Pillars: Sustaining Rapid Growth Improving Public Sector Management and Performance Improving the Delivery of Social and Communal Services Enhancing Russia’s Regional and Global Roles CPS FY12-16 – To be agreed in consultation with federal and regional authorities

Purpose of Consultations with Regions CPS FY12-16 To identify successful approaches to socio-economic development at the regional level, which may not be currently recognized at the federal and international levels; To share new Bank’s approaches to partnership with Russia and new financial instruments; To learn where international knowledge or finance can strengthen regional programs or address new priorities; To get feedback on our performance.

Principles of Partnership - IBRD We support Russia’s: key economic and social development priorities contribution to global public goods By focusing on activities/areas: –with strong client demand –that need international knowledge or greater local capacity –that complement IFC or other development partners – where Russia also commits significant financial resources

Who are partners for IBRD in the new CPS? IBRD collaborates with: Federal authorities; Regions and cities; Development banks/financial institutions; Non-financial development institutions; Institutions that contribute to development of Russia’s economic potential or deliver social/economic services; Business Associations; Think-tanks and academia; Civil society organizations.

Principles of Partnership and Partners - IFC IFC’s role in Russia is to facilitate the growth and diversification of the private sector by: –Integrating advisory and investment services for a programmatic approach; –Focusing on frontier products, sectors & regions; –Addressing climate change and improving energy efficiency of the economy; –Investing in export-oriented growth sectors and value-added manufacturing; –Promoting private sector investment in infrastructure & social services, including at the municipal level; –Developing financial markets, particularly in the regions to reach SMEs and promote regional development; –Building long-term client relationships. IFC provides investment & advisory services to the private sector and to creditworthy municipalities. IFC collaborates with other IFIs, donors, federal authorities, regions & cities, and institutions which contribute to the growth and diversification of the private sector.

Possible Priority Areas CPS FY12-16 Increase Diversification for Growth –Innovation –Investment Climate –Infrastructure –Public Expenditure Effectiveness Expand Human Potential –Employment Opportunities –Health, Education and Skills –Social and Communal Services Deepen Russia’s Global Role –Economic and Financial Center –Energy Efficiency and Environmental Protection –Russia as Donor: Official Assistance to Development

Instruments for CPS FY12-16 AAA Investment lending (SIL, FIL, TA) Results-Based lending Guarantees Fee-based Services Subnational lending (direct or through intermediary e.g. VEB) New Modalities (project services without lending)

P4R (Program-for-Results): Why The Bank Is Doing This? Strengthening the link to results Better management of risks Overcoming inefficiencies in processes and controls Increasing responsiveness/flexibility in project preparation Improving implementation support Timeline: Concept Paper discussed with the World Bank Board of Executive Directors (February 22) We are now in the process of Global consultations (March to May) June 2011: Draft Policy Paper and Supporting Documents FY12 Q1: Final Paper to Board for approval 9

Why P4R? Responds to Changing Client Demand Clients want Bank support for government’s own programs and increased focus on results - a demand that can’t be fully responded to with existing lending instruments Supports Partnerships Many countries request support for their program(s) through medium-term partnerships with Bank and other development partners Builds on Success Stories and Lessons Learned Experience of operations with P4R-type features that are already approved demonstrated good track record and responsiveness to stakeholders needs Complements DPLs and Existing IL By adding P4R, the Bank has more options to respond better and faster to client demands 10

P4R: Key Features Finances specific sectoral or subsectoral expenditure programs Disburses upon achievement of results and performance indicators, not inputs Focuses on strengthening the institutional capacity essential to ensuring programs achieve their results and can be sustained Provides assurance funds are used appropriately and an adequate system is in place to protect affected people and the environment 11

Use of P4R P4R can be used by any country and any sector in support of a program(s) or sub-program (s) World Bank will appraise the program and assess if it is a good candidate for a P4R operation However, some activities are best supported by other instruments like Investment Lending. These include activities: a)With potentially significant, irreversible negative impacts on the environment and affected people b)Requiring high-value and/or complex procurement packages Examples of activities include: –New construction or expansion of large and complex infrastructure (large dams or power plants) –Mining or extractive industries; and supply and installation of complex industrial plants 12

CPS Consultations with Civil Society Thank you very much! 13