Uruguay

Ratings for the Public Services Modernization Technical Assistance Project for Uruguay were as follows: outcomes were moderately satisfactory, the risk to development... Show More + outcome was moderate, the Bank performance was satisfactory, and the Borrower performance was moderately satisfactory. Some lessons learned included: projects involving broad based public reform should include inclusive and extensive consultations with stakeholders in the reform process to better explain objectives, design, approach, and benefits. A stakeholder and political analysis during project preparation should help to identify institutional change champions and those opposed to reform, therefore, assisting in the consultation strategies. Sector reform requires flexibility and the ability to not prematurely close any door. The project strategies for sector reform, namely regulatory frameworks and institutions, Private Sector Participation (PSP), yardstick competition, unbundling of sectors, and corporate governance of state owned utilities, reinforced each other and contributed to the transformation of public services. This allowed the Bank to continue to push for sector reform once PSP became off limits for some sectors. Given the likelihood of a shift in the political context during long-term reform projects, it is essential that the strategy to achieve a given objective remain flexible to ensure the project is relevant and palatable to successive administrations and for popular support. The Bank and Government of Uruguay (GoU) gained valuable experience with sector reform. It is essential that projects of this nature include an important knowledge base component, including dissemination of publications and tools to a wider public. The wide dissemination of the project and the creation of a specific knowledge base could have an impact in increasing local ownership and acknowledgement of reform at all levels. Show Less -

Ratings for the Social Program Development Policy Loan Project in Uruguay were as follows: outcomes were satisfactory, the risk to development outcome was low or negligible,... Show More + the Bank performance was satisfactory, and the borrower performance was satisfactory. Lessons learned were as follows: (1) In Middle-Income Countries with highly skilled government staff, it is critical to adopt a social participatory and consultative process in the preparation of the operations. Continuous dialogue with official counterparts and independent analysts simplified the team's work during preparation, as the main sectors and policies to be supported were clearly identified; (2) the institutional restrictions of a new administration must be taken into account when preparing an operation. The context in which policy reforms are designed and implemented at the time a new government takes office necessarily generates additional restrictions that must be taken in consideration when designing an operation; and (3) a one-tranche DPL can be an effective instrument for the Bank to provide continuity to reform efforts and lay the foundations for programmatic sector dialogue when a new administration takes office. Show Less -

Ratings for Uruguay - Power Transmission and Distribution Project were as follows: outcomes were moderately satisfactory, the risk to development outcome was low or... Show More + negligible, the Bank performance was moderately satisfactory, and the borrower performance was moderately satisfactory. Lessons learned from the project: an investment loan is not the appropriate vehicle to achieve or consolidate sector reform. Power sector reform should be based on a realistic assessment of the political economy and prospects for acceptance of this reform. Tariff adjustments reflecting costs of service ensured national power company (UTE's) financial viability. Difficulty of establishing efficiency incentives in the case of profit-making SOEs. Budget restrictions imposed by the Government on UTE hampered investment levels. Impact of UTE's procurement framework and procedures on project implementation. Show Less -

The Financial Sector Adjustment Loan Project's outcome is rated satisfactory. The lessons learned in this second adjustment operation confirm the lessons learned in... Show More + the Contractual Savings Structural Adjustment Loan Project. The lessons are as follows: 1) In preparing complex sector adjustment operations, the Bank should lead with its comparative advantage which is bringing to bear strong technical capacity and ample cross-country experience. The Borrower must be confident that its dialogue with the Bank will be of added value to its own efforts. 2) In designing a sector adjustment loan, political factors and the legislative needs of the client need to be understood and included in the dialogue with the client, particularly in an election year. 3) Rather than risk delays and failure in the achievement of the program's long term aims by locking the client into an overly ambitious and politically sensitive policy agenda, the Bank should choose to negotiate a medium-term reform strategy, and allocate its reform goals over a series of single-tranche adjustment operations - a lending vehicle designed specifically to protect the integrity of lengthy adjustment operations from significant political shifts in borrowing countries. Show Less -

The project's outcome was satisfactory. However, its cost-effectiveness in achieving project objectives was considered highly satisfactory. The key lessons learned are:... Show More + 1) Proper economic and sector work should be carried out on a regular basis. 2) It is important to have the closest possible participation of representatives of the different sub-sectors in identification and design. 3) Early discussions with, and full involvement of, key parts of the executive branch of the Government in project identification and preparation are important. 4)The Bank must take a firm stand on key issues, particularly at appraisal and negotiations, and the Government should do the same. 5) A project start-up seminar and the preparation of an Operational Manual would have helped to minimize some of the issues encountered in the early years of the project. 6) The project's design should include a project coordinating unit. 7) The project shows that good project design must be accompanied by a stable macro-economic and sector policy environment, and that policy intervention should be carefully tailored to relatively simple objectives. 8) It is right to open up the retailing of credit to the whole financial sector and to make investment resources available. 9) Timely strengthening of institutions and a good legal basis are important in institutional development. 10) It is important to define closely during appraisal the precise accounting system to record project expenditures. Show Less -