World Bank Releases Lebanon Strategy Document, A First

5 August 2010

By Toby McIntosh

The World Bank Aug. 4 issued the first documents under its new “simultaneous disclosure” policy, including a proposed Country Partnership Strategy for Lebanon.

Under the new disclosure policy, the public gets a look at certain key proposals at the same time they are sent to the Exective Board.

However, it took a month before the first documents were released under the policy, which went into effect July 1, while the Bank worked out bugs in its administration.

The first documents were disseminated at 7 p.m. Washington time to those signed up for the e-mail alert system on the Bank website, where they also appear. The three documents are:

Peru – Fourth Programmatic Fiscal Management and Competitiveness Development Policy Loan — Board Meeting Date: Aug. 26, 2010

Brazil – Rio de Janeiro Renovating and Strengthening Public Management (PRÓ-GESTÃO) Technical Assistance Project — Board Meeting Date: Aug. 26, 2010

Lebanon – Country partnership strategy for the period FY11-FY14 — Board Meeting Date: Aug. 31, 2010

Under the new policy certain documents are to be disclosed when they are sent to the Board, usually several weeks before the Board meeting. Disclosable are:

Country Assistance Strategies, Project Appraisal Documents, and Program documents may be made publicly available before the Board has considered them provided that the client has given its written consent (e.g. during negotiations) to such early disclosure.

Operational policy papers and sector strategy papers may be simultaneously disclosed if they have had public consultations and Executive Directors (EDs) have already reviewed a draft version of the paper (e.g. during consideration by a Board Committee). If EDs have not previously reviewed the paper, it may still be made available before Board discussion if the Board approves such early disclosure.

Governments may veto the advance release of these documents. In recent weeks, procedures have been put place to obtain government’s sign-off, according to Bank officials.

There is no disclosure of when a government has vetoed release, except to examine the Board Calendar and see if eligible documents were disclosed.

Lebanon CPS Unveiled

Early access to proposed Country Partnership Strategies has been of interest to Bank observers because of they describe the Bank’s future lending priorities for borrowing governments.

The Lebanon CPS, dated July 28, has been under development for about a year, with extensive consultations in Lebanon.  No “draft” CPS was disclosed, however, so this is the first public exposure of the document, which is 80 pages long.  

In the case of Lebanon, there was a Country Assistance Strategy in 2005, but in 2007 the World Bank developed an “interim strategy” to deal with the changes facing Lebanon as a result of the Israeli invasion in 2006, and the domestic political deadlock that the country experienced since the end of 2006.

The CPS states that for a variety of reasons, particularly the internal political crisis, progress implementing the interim strategy “has been slow.”  A detailed evaluation accompanies the CPS, with statements including: “The general quality of the projects that remained open during the ISN period was good, however, some projects continued to suffer from procurement, disbursement and effectiveness delays.”

The Bank’s portfolio for Lebanon currently consists of eight active Bank projects for a total net commitment of $269.8 million, of which $138.4 million has been disbursed to-date.

Assessing the current projects, the CPS summarizes,While all projects are expected to achieve their development objectives, the sustainability of the outcomes will continue to depend on the implementation of sector reforms and sufficient expenditure on maintenance.”

Looking ahead, the CPS forecasts: “During the CPS period (FY11-14), the indicative lending envelope will range between US$375 and US$550 million assuming reasonable pacing and distribution over the four-year CPS period.”

Assessments Sometimes Frank

The CPS assesses Lebanon’s needs, summarizes the government’s goals and plans and describes the Bank’s priorities.

At times the assessments are slightly critical, for example:  “The annual budgeting process is marred by variability and uncertainty, and both transparency and monitoring functions are in need of strengthening.”  The CPS also says progress has been made, and describes ways to make improvements, for example, by establishing new internal and external audit controls.

Frank comments also appears in other sections, such as in the one on education, where it states in part; “… financing of the education sector is highly fragmented and inefficient, and leads to inequities. Government budget statistics do not allow resource allocation to be analyzed by level of education, region, learning outcomes, or socioeconomic groups of beneficiaries.”

While the Bank generally refrains from pointing fingers, some suggestions emerge. For example:

With one million Lebanese living on no more than US$4/day, and 300,000 living on US$2.4/day or less, and with the evidence of widening regional disparities, the GoL [Government of Lebanon] needs to consider a larger and more effective role for social safety nets.

The CPS covers many other specific areas, and is usually supportive of the government’s plans. The document also describes the Bank’s aims and intentions in each area.

For example, the Bank says it “aims to support” the government’s action plan for development of the electricity sector, where it says progress to date has been “delayed.” The CPS lays out a variety of Bank actions such as:

Through ongoing technical assistance and policy dialogue, the Bank will help advance reforms in the management of the sector while preparing an investment loan to rehabilitate the transmission and distribution systems to ensure that investment in additional generation capacity is well used.

At times the Bank’s comments are general but prescriptive, noting, for example, “Each area of the above program will pay particular attention to the gender characteristics of the Lebanese domestic labor market, for the purpose of enhancing gender inclusion and social protection.”

The CPS does not specifically discuss alternative policy options or areas of disagreement with the government.  In a section describing the consultations, the Bank hints at unspecified disagreements when it notes, “Political parties and public officials show a reasonable level of agreement on the reform priorities outlined in the GoL’s priority Action Plan, but they differ over the implementation options. Their differences are clearly shaped by political interests.”

The CPS goes on to describe the interests of various sectors who were involved in consultations.

Lebanon’s private sector sees the need to improve the business environment to encourage investment and job creation and curb brain drain. Some key complaints of the private sector include the country’s inadequate infrastructure and the weak enforcement of laws, especially commercial laws, which undermines investor confidence. More support for SMEs [small and medium enterprises] is needed as away to reduce the migration of skills.

“The civil society organizations,” the CPS continues, “display a clear lack of confidence in the state and its institutions under the existing consensual power-sharing formula. They voiced strong support for a Bank role in facilitating agreement on some of the less controversial reforms, such as in the electricity and water sectors, and cautioned against an ambitious strategy that would be undermined by the prevailing political economy.”

The Bank also is sometimes candid when it evaluates the risks to the strategy. For example, it states:

There is therefore a significant risk that narrow sectarian interests will continue to overshadow national-level interests and obstruct again the implementation of the newly adopted economic reform program.

In the same section, the Bank’s stated interest in providing “analytical and advisory activities” for Lebanon comes through, when it describes planned research on structural reforms:

During the implementation of the CPS, the Bank will seek to deepen dialogue around feasible governance arrangements that are compatible with Lebanon’s political economy. The Country Management Unit has commissioned a country governance and anti-corruption analysis to identify governance-related risks, as well as entry points to mitigate these risks against the background of Lebanon’s complex political environment. Increasingly, it has been recognized that reform practices that might seem ideal technically may not be feasible in Lebanon’s historical and institutional setting.

SD Procedures Developed, Undisclosed

Although the Bank thus far has declined to release “attachments” to its Access to Information Staff Handbook that describe its procedures relative to simultaneous disclosure, sources inside and outside the Bank have indicated that a process has been established.

When a Country Partnership Agreement for Albania was scheduled for Board consideration in mid-July, after the effective date of the policy, the Bank did not released the draft document, saying first that had been sent to the Board in late June when the policy did not apply.  A few days before the meeting, Bank officials consulted Albania about its release, but determined that permission could not be obtained in the time frame before the meeting.

Under procedures now established, Bank units working with countries on matters where SD applies, are instructed to submit a consent form from the government.  The Bank’s General Counsel recently underscored their responsibilities in a letter, a Bank official said.  Also, governments have been asked to give their negotiating teams authority to approve or disapprove the release of documents.

It is feasible under Bank policy for parts of a document to be deleted before it is disclosed, although apparently unclear if the fact of abridgement must be mentioned.

The Bank’s Corporate Secretary is also charged with following up on adherence to simultaneous disclosure.

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ABOUT IFTI WATCH

In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
Contact: freeinfo@gwu.edu or
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