Download Report - Independent Evaluation Group - World Bank

30showed commitment to pursuing reforms and did so starting in 2003, although at a slowerpace than anticipated; public opinion has come to accept the reforms, particularly agreater role for the private sector, although there is a growing impatience to see concreteresults in terms of employment opportunities and reduction in inequality; and the privateoperators who have invested in the privatization program have now vested interests inmaintaining and strengthening the reforms. However, the remaining challenge for anygovernment is to deliver benefits rapidly and more widely, especially to the ruralpopulations.BANK PERFORMANCE6.28 Moderately Satisfactory. The agenda of SAC-II was well identified and its designappropriate. Indeed, by appraisal, the Bank had a good knowledge of the politicaluncertainties and of the economic challenges. It was particularly concerned about thelong implementing delays. However, despite the precautions taken (menu-basedtranches), there were weaknesses at entry, notably the overestimation of the commitmentto some reforms and of the institutional capacity to carry out several reformssimultaneously. In particular, the Bank underestimated the complexity inherent to theprivatization of large and powerful PEs, notably the multitude of legal issues involved.In that sense, the component was not ready for implementation. During supervision, theBank demonstrated realism and flexibility, viz., it reacted quickly and positively to thecyclones and the oil shock. Unfortunately, the dominance of the privatization agendaconsiderably reduced the attention given to other components. This was eventuallyreflected in two ways, the absence of any progress under some "additional measures" andthe “formal” fulfillment of tranche release conditions under others, notably in publicresource management (measures 5 and 6).6.29 After the crisis, the Bank played an important role in helping GOM select keyareas demanding urgent attention, but endorsed revisions in the third tranche conditionsthat were nothing more than a rubber stamp of actions taken. This was understandable inthe circumstances but meant little in terms of building a solid basis for future reform. Atthe time, the Bank was driven by the willingness to transfer funds rapidly to the newgovernment to mitigate the effects of the crisis. Finally, it failed to monitor adequatelyperformance under the Cyclone Supplemental Credit. Despite the many shortcomings onthe part of the Bank, its very presence and involvement were critical to the turnaround ineconomic policy after decades of mismanagement.BORROWER PERFORMANCE6.30 Moderately Unsatisfactory. The commitment to reforms was lukewarmthroughout and opposition to some of them was strong, in particular to the privatizationof the large PEs, symbols of autonomy. For historical reasons, the mentality is stronglynationalistic and isolationist – still an obstacle to attracting FDI. In areas less contentiousthan privatization, GOM did not have the will or the capacity to translate decisions intopermanent and workable mechanisms or to create institutions capable of applying andenforcing policies in a consistent and systematic manner. This was particularly the casein resource management. To a large extent, it was a passive actor, reacting to external