The Bank's assistance program
translated into substantial financial transfers. Encouraged
by major shareholders, per capita lending by the Bank during
FY 1993-98 (b... Show More +
efore Moldova became eligible for International
Development Association -IDA credits), was more than twice
the average for other small countries. During 1993-96 the
Bank provided a third of Moldova's net official
receipts; during 1997-01, IDA provided a quarter, in spite
of growing amortization payments from prior loans. Given the
Bank's assistance program objectives-recovery of
self-sustaining growth, development of an efficient, private
sector-led market economy, and poverty alleviation - the
outcome of the Bank's assistance program to support
Moldova's 1992-02 development effort must be defined as
unsatisfactory. The country was neither able to comply with
its International Monetary Fund (IMF) Poverty Reduction and
Growth Facility (PRGF), nor some of the Bank's major
structural adjustment operations' conditions; both have
now lapsed. As a result of this track record, and some
recent fiscal laxity, and erratic privatization policies,
the sustainability of its recent economic recovery is
unlikely, while the institutional development impact has
been mixed: the banking system, and some other systems have
done well, but social institutions remain weak, and may be
unviable fiscally. This Country Assistance evaluation (CAE)
recommends: 1) Undertaking a Country Economic Memorandum or
a Development Policy Review to analyze key development
priorities, including governance issues, especially in the
energy and social sectors, and the factors constraining the
investment climate. 2) Avoid further adjustment lending
until a stronger Government commitment to reform is
evidenced. 3) Focus project interventions in the social
sectors, and take concrete steps in each lending operation
to guard against corruption, monitored by civil society. Show Less -
