Mongolia's prospects in the medium term look excellent from a growth perspective as well as a fiscal management perspective. Staying the course in the medium term means implementing the landmark Fiscal Stability Law (FSL) passed last year, and adopting a supportive integrated budget law this spring session of parliament. The economy grew 6.1 percent year-on-year (yoy) in 2010, following a contraction of 1.3 percent in 2009. The last quarter of 2010 ended with a broad-based recovery, supported by transportation, construction and wholesale and retail trade. The latest survey conducted in informal labor markets in March 2011 revealed no changes in the total number of casual workers compared to December. Mongolia has promising growth prospects. It has the opportunity now to exercise prudent fiscal and macroeconomic policies so it can steer clear of the mistakes made by other resource rich economies and achieve its potential.
Bank loans can become non-performing because of problems with the borrower s financial health, problems with the design or implementation of lender protection features, or both. In ascertaining how to deal with a problem loan, it is important to distinguish between a borrower s ability to pay and willingness to pay, Making this distinction is not always easy and requires effort. This manual was written as a guide for lending institution staff dealing with non-performing loans (NPLs) extended to corporations and small and medium enterprises (SMEs). It deals with both ad hoc and systemic financial distress and delves into how borrower problems may have arisen in the first place. It provides guidance to lending institutions staff responsible for handling individual problem loans and to senior managers responsible for organizing portfolio-wide asset resolution.
Prospects for the global economy have become less certain in the second half of 2011, with significant increase in downside risks. Developing countries in East Asia are growing faster than developed countries, but they too are facing challenges due to a combination of reasons including: slower expansion in demand in developed countries; the impact of global uncertainty on investor sentiments; natural disasters; and the withdrawal of stimulus policies. Vietnam's growth slowed in 2011 compared to 2010, though it is still expected to reach around 5.8 percent. The external sector has remained relatively stable. The current account deficit declined in 2011, as export performance outpaced imports and remittances grew robustly. Both import and export values saw a dramatic rise, mostly because of higher commodities prices. External debt remains sustainable, as the current account deficit was more than covered through medium-term capital inflows that are largely non debt-creating (foreign direct investments) or contracted on concessional terms (official development aid). Foreign direct investment inflows continued at a steady pace, although new commitments declined. International reserves increased in the first half of the year while the Vietnamese dong benefitted from a period of relative calm. In the last quarter of the year, however, exchange rate fluctuations increased due to volatility in gold prices, deepening uncertainties and the seasonal increase in demand for foreign currency as the year end approaches. In the longer run, Vietnam's ambition to maintain high growth into the next decade will require as bold a set of reforms as the one adopted with Doi Moi. The challenge is arguably more difficult than the previous one, and few countries in the world have accomplished it. Vietnam is endowed with a young and hard-working labor force. This is a vital asset to meet the country's ambitious goals, if the country manages to equip itself with relevant skills, and match it with necessary capital. It also needs a level-playing field to maximize its potential. As people become more educated and production becomes more sophisticated, demands for predictability, trust and a level playing field will grow. Transparency is a critical element in this. Concentration of economic power in a small number of large firms undermines efforts at creating a level playing field. Large firms and industries that circumvent rules to their advantage are promoting corruption, and undermining efficiency, which damages the country's potential. The governance challenges are complex, but Vietnam's medium term outlook will be much better if they are addressed sooner rather than later.
After a strong rebound in 2010, Philippine economic growth slowed by more than half to 3.6 percent in the first three quarters of 2011. Slower third quarter (Q3) growth of 3.2 percent was the result of significant contractions in exports and public investment. The contraction in exports largely reflected weaker demand in advanced economies while public investments continued to shrink in part because of measures to improve accountability of public spending. On the production side, industrial and agricultural activities were sluggish, leaving the services sector to buoy growth. To improve growth outcome in the remainder of the year, the government announced a PHP 72 billion (about 0.7 percent of GDP) disbursement acceleration plan to ensure that budgeted items are spent by year end. After a strong rebound in 2010, Philippine economic growth slowed by more than half to 3.6 percent in the first three quarters of 2011, bringing year to date growth below the government's revised target of 4.5 to 5.5 percent for 2011. Q3 growth of 3.2 percent was driven by private consumption and inventory build-up, which grew by 7.1 and 147.7 percent respectively. The country's slower expansion places it behind its neighbors with Indonesia, Vietnam, and Singapore growing above 6 percent, Malaysia at 5.8 percent, and Thailand, which was devastated by massive flooding in recent months, at 3.5 percent.
The World Bank initiated a review of HIV prevention among injection drug users in Thailand, with the objective of providing technical assistance to strengthen national capacity to develop state-of-the-art injecting drug use harm reduction interventions. Thailand has received international recognition for its successful interventions to reduce the transmission of HIV among female sex workers and military recruits. It is looked upon as a role model for HIV education and awareness campaigns that include the extensive promotion and wide acceptance of condoms as an HIV prevention strategy. Thailand has the most progressive and comprehensive antiretroviral program in the region with a reported coverage of over 80 percent of eligible individuals. In 2001, it embarked on a progressive universal health care program that provides free access to a wide array of health care diagnostics and therapeutics for the people of Thailand. With these impressive achievements, it is remarkable how poorly Thailand has responded to the HIV epidemic among injection drug users (IDUs). From available data, it appears that the HIV prevalence rates among IDUs have remained high and stagnant over the last decade. Failure to provide effective interventions to reduce HIV transmission among drug users has resulted in unnecessary suffering, and for many, HIV-related death. Continued inaction threatens to undermine successful HIV prevention efforts in the country through ongoing HIV transmission among injection drug users and their sexual partners. The current focus on enforcement and punishment, along with the reliance on compulsory drug treatment centers, has done little to control drug use in Thailand. The unintended consequence of this approach has been to push drug users into precarious and dangerous environments that have directly led to risky drug using patterns and persistently high rates of HIV transmission. Adopting a harm reduction approach to deal with injection drug use could have a major impact on reducing HIV transmission as well as engaging drug users into better health care and effective drug treatment. This will require strong leadership in key government Ministries and related agencies so that the central stakeholders can roll out harm reduction programs. Thailand has the potential to greatly reduce the transmission of HIV among injection drug users and become a regional leader in harm reduction.
The Philippines has made significant progress in empowering women and in advancing gender equality. The government's policy on gender equality and women's empowerment has prioritized women's economic empowerment, advancing human rights and enhancing gender-responsive local governance. All these priority concerns are integral components of poverty reduction programs in the Philippines. The Philippines has made significant progress in empowering women and in advancing gender equality. Since the government introduced a constitution in 1987 affirming the equality of women, it has pursued a number of initiatives to mainstream gender concerns in national policies and programs. A development plan for women was launched in 1987, followed by a plan for gender-responsive development, 1995-2025, coordinated by the National Commission on the Role of Filipino women. In 2004, the commission drafted a framework plan for women that identify three priority concerns to meet the objectives of gender equality and women's empowerment: economic empowerment of women, protection and fulfillment of women's human rights, and gender-responsive governance. Projects that support these priorities will facilitate more equitable development across the Philippines, including supporting the full participation of women in political processes and governance in the international and national local level, strengthening gender-sensitive and inclusive programs and mechanisms with civil society, and increasing women's access to economic resources such as capital, technology, information, markets, and training.
The Central Bank of Argentina (BCRA) and the Superintendence of Financial Entities (SEFyC) are to be commended on their thorough supervision, their implementation of risk-based supervision, and their thorough examination process. Since the 2001-2002 crises, financial sector indicators have improved significantly and the banking system weathered well the impact of the global financial crisis, with high capital levels, the introduction of a capital buffer, and low Non-Performing Loans (NPLs). This assessment of the state of compliance with the Basel Core Principles (BCPs) in Argentina has been undertaken as part of a World Bank Observance of Standards and Codes (ROSC) mission. The assessment was conducted from May 11 to 26, 2011. It reflects the banking supervision practices of the BCRA as of the end of April 2011. The assessment is based on the following sources: (i) a complete self-assessment prepared by the BCRA; (ii) detailed interviews with the BCRA staff; (iii) review of laws, regulations, and other documentation on the supervisory framework and on the structure and development of the Argentine banking sector; and (iv) meetings with individual banks, the banking associations, the Ministry of Economy and Public Finance (MECON), external auditors, and financial think tanks. This assessment is based solely on the laws, supervisory requirements, and practices that were in place at the time it was conducted.
Facility for Investment Climate Advisory Services (FIAS) ; Since investment climate reforms in developing countries started gaining traction in the 1990s, most efforts have focused on issues at the national level, achieving varying degrees of success for reasons that are relatively well understood. This handbook provides an overview of efforts and achievements in subnational investment climate reforms. It is organized as follows. Chapter 2 reviews a number of countries experiences with subnational reforms, noting both success stories and disappointments and pointing toward lessons learned. Chapter 3 sets out the basic principles of subnational revenue, including business taxation. Chapter 4 describes sound licensing practices for subnational governments, including establishing licensing fees. Chapter 5 provides recommendations for subnational reform projects where both the regulatory authority and taxation require attention, which is the most common situation. Finally, the Appendix offers nine case studies covering subnational reform efforts in the following countries: Canada (British Columbia), The Russian Federation, China, Kenya, Tanzania, Peru (Lima), The Balkans (Serbia and Bosnia and Herzegovina), Tajikistan, and Zambia.
Infrastructure has made a net contribution of around one percentage point to Nigeria's improved per capita growth performance in recent years, in spite of the fact that unreliable power supply held growth back. Raising the country's infrastructure endowment to that of the region's middle-income countries could boost annual growth by around four percentage points. Nigeria has made important strides toward improving much of its infrastructure. Compared to many African peers, Nigeria has relatively advanced power, road, rail, and information and communications technology (ICT) networks that cover extensive areas of the nation's territory. In recent years, Nigeria has conducted several important infrastructure sector reforms. The ports sector has been converted to a landlord model, and terminal concessions now attract private investment on a scale unprecedented for Africa. The power sector is undergoing a restructuring, paving the way for performance improvements; the sector is finally on a path toward raising tariffs to recover a larger share of costs. Bold liberalization measures in the ICT sector have resulted in widespread, low-cost mobile services, Africa's most vibrant fixed-line sector, and major private investments in the development of a national fiber-optic backbone. A burgeoning domestic air transport sector has emerged, with strong private carriers that have rapidly attained regional significance.
This semiannual report, a product of the Office of the Chief Economist for the Latin America and the Caribbean (LAC) region of the World Bank, examines the nature of the very good overall performance of the LAC region in the aftermath of the 2008-09 global financial crisis and presents a comparative analysis of the post-crisis recovery patterns in the region vis-a-vis other regions. The first part of this report provides an overview of recent economic developments, an in depth look at the drivers of the post-crisis performance in the region, analyzes the external and domestic risks that could drag down growth performance in LAC, and discusses policy response options. The second part of the report documents the adverse impact of the crisis on the Caribbean region as well as its slow recovery. It distinguishes the poorer performance of English speaking Caribbean nations vis-a-vis non-English speaking ones, and highlights the dependence of the region on countries in the epicenter of the crisis, especially the United States, and the limited fiscal space that disabled a counter-cyclical policy response. The report concludes by emphasizing that skillful cycle management is necessary although far from sufficient to be able to turn what has to date been a cyclical recovery into a higher rate of trend growth. Moreover, countries experiencing a formidable windfall from the high commodity prices are in a unique position to seize the opportunity by judiciously saving and investing out of the windfall, they could relax the structural speed limits that have so far kept economic activity from rising to a higher long-run growth path.
Russia has seen even higher oil windfall in the past few months, which translates into likely fiscal surpluses this year and next. The government should not miss the opportunity provided by a large oil windfall to substantially improve its long-term fiscal position, further reduce inflation, and, therefore, ensure a strong basis for durable stability and healthy growth in the future. Rising domestic demand and credit activity are increasingly supporting solid growth. Overall, labor market conditions improved recently while poverty was broadly flat during and after the crisis, but unemployment and poverty in many regions remain difficult. Further reductions in poverty will require greater policy focus and persistence in implementing more effective and targeted programs, especially in the poorest regions. Two new special-topic analyses focus on export diversification in Russia, and food and energy inflation in Europe and Central Asia region. In the first, results show that productivity is the key to exports and that lack of competition and entrepreneurial innovation are relevant obstacles to the emergence of new, potentially exportable products. In the second, it is shown that food and energy prices in Russia and other countries in Europe and Central Asia are contributing significantly to consumer price inflation, complicating anti-inflation policy and poverty reduction.
The objective of this study is to identify lessons for improving cookstoves in Bangladesh through an evaluation of existing programs, the international experience on improved stoves, and the lessons from successes in the sanitation sector. Bangladesh's new renewable energy policy endorses creating a better environment for renewable energy technologies and promoting market development for improved cookstoves (Government of Bangladesh 2009). This study supports this policy direction by examining possible strategies to move forward the development of markets for improved stoves in Bangladesh. The study consists of several components: a national review of household energy programs; an evaluation of national sanitation programs; and an examination of improved cookstove programs from around the world, including China, Guatemala, Haiti, Mongolia, Nepal, and Uganda. The study is based on published literature, consultations with organizations throughout Bangladesh, site visits, and structured discussions with beneficiaries and other stakeholders.
Indonesian financial sector comprises banks, multi-finance companies, capital market companies, insurance companies, and pension funds. The banking sector accounts for about 80 percent of the financial sector assets. It is dominated by 121 commercial banks, which account for about 98.6 percent of total banking assets (including 5 sharia banks accounting for 1.8 percent market share), with rural banks comprising the remainder of the banking system (about 1.4 percent market share). Bank Indonesia (BI), the central bank, is responsible for regulation and supervision of the banking system. The assessment of compliance with the Basel Core Principles for Effective Banking Supervision (BCP) was carried out within the framework of the Financial Sector Assessment Program (FSAP) between September 29 and October 16, 2009.
Vietnam has navigated the global crisis better than many other countries. GDP grew by 5.3 percent in 2009, accelerating to 6.9 percent in the last quarter of the year. At 5.8 percent, the figure for the first quarter of 2010 was less impressive, but claims that growth has slowed down are most probably unwarranted. Exports declined in 2009, for the first time since the beginning of economic reforms, but their decline was smaller than in other countries of the region. By now export growth is converging back to the 30 percent annual growth rate observed before the crisis. Inflation, which had reached 19.9 percent in 2008, was down to 6.5 percent in 2009. While there were some worrying signs of inflation acceleration in late 2009 and early 2010, by now the monthly increase of the Consumer Price Index (CPI) is again moderate. And as in previous years, there were no banking crises despite the continuation of macroeconomic turbulence. More generally, lack of clarity by markets forces the government to overshoot in its policy reactions. Because markets are not sure to understand what the government is up to, they need to see very strong action in order to be convinced that the right course of action has been taken. As a result, Vietnam has had to go through dramatic shifts in the policy stance as circumstances changed. The stabilization policies of 2008 effectively 'killed' the real estate bubble and brought inflation rates to zero in just a few months, but such speed took a toll on economic activity. The stimulus policies of 2009 were equally strong and determined, but they ended up putting too much pressure on international reserves. With more information disclosure and better communication, policy shifts could perhaps be less extreme. Combined with stronger macroeconomic management, it should be possible for Vietnam to gradually free itself from the 'stop-and-go' cycle that has characterized macroeconomic policies over the last three years.
The World Bank financed the Gujarat State Highway Project (GSHP) during 2001-07. The project development objective was to enhance the capacity of the Government of Gujarat (GOG) for effective and efficient planning and management of road infrastructure, while concurrently maximizing existing road infrastructure asset productivity through priority investments and increased maintenance funding. The project not only achieved its objective and targets successfully, but also was implemented with a significant cost reduction (about 23 percent). The GSHP resulted in a reduction in the backlog of major maintenance and an improved network to meet rapidly growing transport demand in the state. The project had the unique distinction of no contract disputes, a rarity among the highway development projects in India. The project also set best practices in developing and managing a very comprehensive asset management system, state of the art quality assurance framework and a very comprehensive training and capacity building program. The annual road sector allocation has grown from USD 30 million in 1995-1996 to an impressive USD 610 million in 2010-11, currently the second largest among all the Indian states. This study attempts to identify the key elements of the Gujarat road sector reforms and explores whether and, if so, how such reforms can be replicated across other Indian states and possibly even in other countries in the region.
