A high rate of economic growth in Belarus – an average of about 8% annually from 2001 to 2011 – has helped reduce poverty almost seven-fold. A favorable external environment supported the economic growth in Belarus.
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Oil price shock and slowdown in Russia impacting region’s growth outlookWASHINGTON, April 17, 2015 - In the Emerging Europe and Central Asia (ECA) region, lower oil prices and the economic slowdo... Show More +wn in Russia are weighing heavily on many economies in Eurasia, while countries in the Eurozone are benefiting from lower oil prices and a modest economic recovery. Overall, economic growth in ECA will be almost non-existent in 2015, down from 1.8 percent last year, the World Bank said during the 2015 World Bank/IMF Spring Meetings.This drop in growth largely comes from a major slowdown in Russia, which is caused by lower oil prices and a sharp economic downturn. Not counting Russia, the rest of the region is expected to grow by 2.8 percent in 2015.“Emerging Europe and Central Asia is expected to be the slowest growing region worldwide, with almost no growth forecast for 2015,” said Laura Tuck, Vice-President for the World Bank’s Emerging Europe and Central Asia region. “These low growth prospects are driven in large part by those countries in the eastern part of the region that are highly dependent on oil exports, or on trade and remittances from oil exporting countries, which are experiencing a slowdown. This is compounded by ongoing geopolitical tensions due to the conflict in Ukraine. Poor households are hit either directly because they receive fewer remittances, or indirectly because of the macroeconomic consequences, including higher import prices, the disappearance of jobs in construction and other non-tradable sectors, and potentially lower government transfers because of induced fiscal pressures. As a result, poverty rates are expected to rise.”Tuck added that, “On the other hand, Central and South Eastern Europe and the Western Balkans – those countries that have close ties to the Eurozone – are benefitting from an increased pickup in net exports. The Eurozone is experiencing a nascent but modest recovery, with an expansionary monetary policy and declining oil prices, which is boosting consumer and business confidence.Impacts of Falling Oil Prices and Geopolitical tensionsGDP growth in Russia was just 0.6 percent in 2014, compared to 3.5 percent in 2012 and 1.3 percent in 2013.Looking ahead, the baseline scenario calls for a sharp recession in Russia, with a projected contraction of 3.8 percent in 2015 and 0.3 percent in 2016. This forecast is based on expectations of an ongoing slump in oil prices (oil prices remaining in the US$50-60 range) and no immediate resolution of geopolitical tensions.The flexibility introduced into the exchange rate regime (the ruble has depreciated nearly 40 percent over the last year) has allowed the country to avoid a balance of payments crisis and has facilitated rebalancing of demand and production away from imports and toward domestic products and exports.Countries in the South Caucasus, Eastern Europe, and Central Asia have been hard hit by the downturn in Russia and the oil price shock, directly and indirectly due to lower oil revenues, or a decline in remittances, and trade. Growth rates in 2015 are expected to be half those seen in 2014 in the South Caucasus and Central Asia, while Eastern Europe, which includes Ukraine, is expected to fall further into recession. Benefiting from the Eurozone linkEU-Central and South Eastern Europe (EU-CSEE) countries are expected to see growth remain roughly the same in 2015 as in 2014 – about 2.7 percent – which is a significant improvement from the previous two years when growth was very modest (0.5 percent in 2012 and 1.2 percent in 2013), but it still remains far below potential. Unemployment rates remain stubbornly above 10 percent in many EU-CSEE countries and consumption growth is sluggish.Economic growth in the Western Balkans is expected to be a modest 1.2 percent in 2015, up from 0.7 percent in 2014 as a pick-up in net exports is expected to offset slowing investment and consumption. The Western Balkans still remain heavily burdened by the lack of new credit, and non-performing loans are the highest in the ECA region (above 16 percent). In Turkey, growth slowed to 2.9 percent in 2014, but is expected to increase modestly to 3 percent in 2015.Overall, these countries close to the Eurozone are seeing a pick-up in consumer and business confidence with reduced fears of deflation with quantitative monetary policy easing, a fall in oil prices, initial signs of a pick-up in industrial production, and, at least to date, limited spillover from the financial turbulence in Greece and uncertainty over Ukraine. Going forwardGiven the weaker buying power of many households in the region, poverty rates are expected to rise in several countries. This is a reversal of the downward trend toward lower poverty rates across the region. Poor households in oil-exporting countries and remittances-receiving countries are hit by higher import prices due to devaluations, the disappearance of jobs in construction and other non-tradable sectors, and because of fiscal pressures. This highlights the need for a quick adjustment to the new economic reality. Only if countries seize new opportunities in tradable sectors, can the deterioration of poverty rates be stopped.Exchange rate adjustments, along with prudent monetary policy to keep domestic inflation under control, will help countries regain competitiveness in global markets in the Eastern part of the region. For the EU-CSEE part of the region, projected low oil prices and monetary policy easing in the Eurozone should continue to help to mitigate the impact of low capital inflows and remaining uncertainty, including that arising from high debt levels, vulnerabilities in the banking sectors, geopolitical tensions, and Greece’s current financial turbulence.“The bottom line is that countries are performing the rebalancing act to the ‘new normal’ in which they have to seize new opportunities to expand export sectors,” said Hans Timmer, Chief Economist in the World Bank’s Europe and Central Asia region. “This is very much true for oil-exporting countries, but also for countries in the western part of the region that have experienced depreciations and low capital inflows. Ongoing reforms to improve the business climate are key to permit expansion in these sectors. Moreover, steady financial sector and macro management is critical, particularly in dollarized economies. Postponement of the adjustments needed for the rebalancing can be very costly and may backfire.” Show Less -
ContextRapid urbanization, industrialization and motorization have intensified pollution, especially in developing countries. Vehicle exhaust, untreated wastewater, nitrogen fertilizer runoff, dirty f... Show More +uel burning, industrial emissions and toxic waste including e-waste cause debilitating and fatal illnesses, destroy ecosystems and create harmful living conditions.Pollution is not a uniquely urban challenge; in rural areas, indoor cook-stoves, undrinkable water and contaminated soil are toxic and stunt economic growth. Poor people, who can’t afford to protect themselves from the negative impacts of pollution, end up suffering the most.In 2012, an estimated 9 million people died from air, water and land pollution, according to the Global Alliance on Health and Pollution. According to the World Health Organization, 7 million people died from air pollution alone. Environmental factors, especially air pollution, cause 24 percent of global disease and 13 percent of preventable deaths every year.While the challenge of pollution is a global one, the impacts are overwhelmingly felt in developing countries. About 95 percent of adults and children impacted by pollution-related illnesses live in low and middle-income countries.It is critical to address pollution because of its unacceptable toll on health and human capital, as well as associated GDP losses. Pollution management offers no-regrets options to boost economic development and competitiveness (through for example, improved transport, job creation, better energy efficiency, sustainable urban and rural development), mitigate related climate change (for example black carbon contributes to both air pollution and global warming), and address the vital demands of millions of people for healthier and more productive lives.StrategyThe World Bank Group works with developing countries and development partners to reduce pollution, implement proper waste management, improve water and air quality and promote clean development for healthier lives and better economic opportunity.Between 2009 and 2014, World Bank commitments (IBRD/IDA) to pollution management and environmental health totaled well above US$5 billion. In 2014, the World Bank established a Pollution Management and Environmental Health (PMEH) program that builds upon experiences in urban and rural pollution reduction from around the world to promote more systematic and effective responses to deadly and costly pollution.The World Bank also partners with the Climate and Clean Air Coalition and the Global Alliance on Health and Pollution to achieve greater global action to clean up pollution.The Bank provides technical assistance, financing and knowledge products that cover:legacy pollution cleanup and land rehabilitation;management of different forms of waste including solid waste, industrial/e-waste, and wastewater;improving air quality through the reduction of indoor/outdoor air pollution, short lived climate pollutants and GHG emissions;improving water quality, both in freshwater and in oceans;promoting environmental sustainability in economic sectors;helping countries improve environmental governance, regulation and enforcement.ResultsAir pollutionIn Santiago, Chile, the Sustainable Transport and Air Quality program supported a long-term shift to more efficient and less polluting forms of urban transportation.In Bangladesh, the Bank is working to tackle pollution from the country’s two biggest polluters: brickfields and transport. To date, 11 stations have been installed in eight cities to monitor air pollutants and generate real time air quality data.Clean Air and Healthy Lungs, a report released in 2015, examines lessons learned from past projects to enhance the World Bank’s air quality management work in the future.More results:Curbing Air Pollution in UlaanbaatarCleaner Cookstoves for a Healthier IndonesiaCutting Short-Lived Climate PollutantsLand PollutionIn Africa, a $25 million program has removed over 3,000 tons of obsolete and dangerous pesticides from close to 900 contaminated sites in Ethiopia, Mali, Tanzania, Tunisia and South Africa.In Belarus, the Bank worked with the Ministry of Natural Resources and Environmental Protection to develop its capacity to treat and dispose of hazardous waste. The Bank supported a massive cleanup operation at the Slonim burial site, which excavated and disposed of up to 1750 tons of toxic obsolete pesticides.More results:Argentina Solid Waste ManagementCleaning up Uranium in ArgentinaKosovo Energy Sector Cleanup and Land ReclamationRidding Moldova of Toxic ChemicalsSolid Waste Management in IndonesiaWater pollutionIn China, the Bank supported the government to establish the integrated management of water resources and the environment in the Hai Basin. Between 2004 and 2011, the project reduced wastewater discharge, cleaned over 6 million m3 of polluted sediment from the Dagu Canal, and improved living conditions for millions of people. Also in China, the Bank helped improve water and wastewater services for residents in Ningbo by financing investments in a water intake tower and tunnel, water treatment plant, water transmission pipes, sewers and pumping stations, greatly reducing pollution loads discharged into Hangzhou Bay.More results:Kazakhstan Nura River Cleanup ProjectControlling pollution in Croatia’s Coastal WatersWastewater treatment and landfills ease pollution in China’s Yangtze River Show Less -
IBRD Loan: US $40.71 million equivalent Terms: Maturity = 15 years, Grace = 5 yearsGEF Grant: US $2.74 million equivalentProject ID: P147760Project Description: The objective of the project is to... Show More + enhance silvicultural management and reforestation and afforestation, increase the use of felling residues and improve the public good contribution from forests in targeted forest areas.For more information, please visit here: http://www.worldbank.org/projects/P147760?lang=en Show Less -
WASHINGTON, March 27, 2015 - The Board of Executive Directors of the World Bank today approved a US$40.71 million loan to the Republic of Belarus for a new Forestry Development Project designed to enh... Show More +ance silvicultural management, reforestation and afforestation, increase the use of felling residues, and increase the overall contribution of forests to sustainable development. The project is also financed by a grant from the Global Environment Facility in the amount of US$2.74 million.“We are building on our prior engagement which helped to outline a long-term strategic vision for forestry sector development in Belarus and has brought tangible results through institutional and policy development,” said Mr. Young Chul Kim, World Bank Country Manager for Belarus. “The new forestry development project will help to modernize several aspects of forestry sector operations, and protect and enhance the quality of the forest resources. For instance, it will provide direct support to 25,000 employees of 88 forest enterprises by generating better jobs in the rural forested areas that require skilled and semi-skilled workers. The enhanced efficiency in forest enterprises is expected to bring benefits to the wood processing and wood energy sectors further downstream.”Belarus is one of the most forested countries in Europe and Central Asia with forest area accounting for nearly 40 percent of the territory and contributes about 2 percent of the GDP. The Government recognizes the importance of institutional change, investment, new technologies and capacity building in the forestry sector, as well as the need to respond in a sustainable manner to a growing demand for wood products from both the wood processing and wood energy enterprises.“By 2020, four million hectares of forests outside the protected areas will be managed in a manner friendlier to biodiversity,” noted Mr. Andrew Mitchell, World Bank Project Team Leader. “Investments in goods and machinery will support further development and intensification of silviculture, including the purchase of 74 modern forest harvesters, needed for younger-aged thinning operations, and 52 forwarders. Six new heavy-duty chippers will help to utilize wood waste and woody biomass from felling and logging operations, which currently are simply left in the forest to rot, wasting the calorific value therein and creating a fire hazard.”The project will also facilitate modernization of forest nurseries to produce container-grown seedlings of improved quality, installation of video and communications equipment for monitoring, surveillance and detection of fires, introduction of fire-fighting equipment to help extinguish the fires once started, as well as the development of a web-based interface to allow sharing of information, including geo-information. It is estimated that the measures on prevention, improved detection and more timely and effective response to forest fires is expected to reduce future losses by 30 percent.This is the second World Bank supported forestry sector project in Belarus. The earlier Forestry Development Project implemented from 1994 to 2002 was actually the first World Bank investment operation in Belarus. It helped to promote economically and environmentally sound practices in the forestry sector, and to move to an open market pricing for wood and liberalization of trade in wood and wood products. New concepts and approaches to forest resource management and technology, such as forest certification and improved forest fire management, were introduced.The new project also builds on the World Bank Forest Sector Policy Note which provided strategic advice on defining sector goals and opportunities in conjunction with the development of the National Forest Strategic Plan for 2015–2030 and the experience and knowledge gained from the European Neighborhood and Partnership Instrument East Countries Forest Law Enforcement and Governance (FLEG) Program (2008 – 2012, 2012-2017) which is being implemented by the World Bank.Since the Republic of Belarus joined the World Bank in 1992, lending commitments to the country have totaled US$1.43 billion. In addition, grant financing totaling US$28 million has been provided to various programs, including those with civil society organizations. With the approval of this project, the current investment lending portfolio includes seven operations totaling US$938 million. Show Less -
The creation of forests on contaminated soil has tangible benefits. Fallen leaves and needles create a kind of a barrier that limits the dissemination of radioactive dust. Over the past 13 years, this... Show More + technique has been used in the Vetka Forestry Enterprise to create 10,800 hectares of forest, which is equivalent to a third of the area of the city of Minsk. Show Less -
Among other activities, the FLEG Program helps the participating countries develop forest policy and plans in the seven countries, including Belarus, Moldova and Ukraine. As part of the project, joint... Show More + detailed plans for reforming sustainable forest sectors have been developed with the help of local and international experts, NGOs, academia, the private sector and governments.In Belarus, for instance, the program provided the analytical background for the new National Forestry Sector Strategic Plan until the year 2030.In all three countries, in addition to the FLEG program, the World Bank has funded forest policy studies with the aim of supporting the governments reshape forest sector processes and attract investment for sustainable forest management. These studies look at the forest sector and compare it with the experiences of other countries. As a rule, they identify some key issues for forest policy reform and, in some cases, help prioritize areas for further collaboration with the World Bank.These studies identified the need for investment in education for a qualified workforce; development of forestry infrastructure; use of modern harvesting and wood-processing technologies; and improvement of legal frameworks, so that this important natural resource can be managed more sustainably.Qualified workforceBelarus, where forests represent nearly 40 percent of the territory, managed to boost preventive activities against illegal logging and the associated forest-product sales and corruption. Recognizing that forests are among its most precious natural resources, Belarus increased forested areas from 35 percent of the country’s territory in 1994 to over 39 percent in 2013. During this period, the World Bank was also engaged in providing support for the formulation of policies and strategic planning underpinning the development of the country’s afforestation capacity. The first Forestry Development Project was completed in 2002, with the help of the World Bank, and some 514,000 hectares of new forest were created from 2002-2014. Show Less -