WASHINGTON, December 14, 2006—The World Bank’s Board of Executive Directors today endorsed a new three-year Country Partnership Strategy (CPS) for Russia which marks a shift towards new ways of cooperation focused on knowledge sharing, increased technical advice and financing to the country’s regions, new fee-for-service arrangements for investment and policy advice, combined with continued strong levels of financing to the private sector and limited financing for assistance in managing priority public investments.
The CPS details the Bank Group’s work plan to assist client countries to achieve their development goals, and describes the Bank’s planned assistance program in the country—lending, analytical work, and technical assistance. Priorities of the new Russia CPS, which will cover World Bank Fiscal Years 2007-2009, include helping Russia sustain the impressive and rapid growth it has achieved in recent years; bettering management of the public sector and improving governance; ensuring that social and communal services are provided to the people of Russia; and helping Russia make the most of its newly emerging role as a development donor and global partner on the world stage. The CPS was developed in close partnership with the Russian government and integrates the future programs in Russia of three sister organizations within the World Bank Group – the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).
The CPS builds on Russia’s recent accomplishments yet recognizes that important development challenges remain. Russia has experienced five years of strong economic growth and poverty reduction. Furthermore, sharp increases in the prices of Russia’s main export commodities, particularly oil and gas, have filled the coffers of the federal government, and provided for the accumulation of over US$300 billion in monetary and fiscal reserves. Russia’s global role as G-8 member, emerging donor, and provider of world energy has expanded notably.
Accordingly, recent years have witnessed the beginning of a major transition in the nature of cooperation between the World Bank Group and the Russian government. The new CPS outlines a plan for completing this transition to a relationship that is based on new ways of cooperation.
“The new CPS for Russia reflects the strong partnership between the country and the World Bank, based on knowledge sharing, policy advice, and global initiatives,” said World Bank Country Director for Russia Kristalina Georgieva.
New borrowing by the federal government will be limited over the period of the new CPS, whereas the use of direct private sector financing, guarantees, and new fee-for-service arrangements for investment and policy advice are likely to grow. Additionally, an important aspect of the new CPS is the shift toward subnational lending without sovereign guarantees, noted Georgieva. “Increasingly, we will be working directly with Russia’s regions in the years ahead,” she said.
The CPS is organized around four central themes which help address Russia’s key remaining development challenges:
- Sustaining Rapid Growth, including active participation in economic policy debates, monitoring the investment climate, supporting public investment and PPPs for growth and diversification, working with regions to identify and overcome barriers to growth, supporting investments in priority areas at the regional level, and providing direct assistance to the private sector.
- Improving Public Sector Management and Performance, including remaining engaged in supporting programs for modernizing selected public sector institutions, and improving government administration, the judiciary, local self-government, and budgetary management at federal and sub-national levels.
- Improving the Delivery of Social and Communal Services. In addition to continued general cooperation with the federal government, the Bank will concentrate much of its support for improving social service delivery at the subnational level. Activities will include improving the health of the general population, modernization and improvement of the education system and vocational training, upgrade of targeted social assistance and improvement in the provision of housing and communal services, among other things.
- Enhancing Russia’s Global Role. The Bank will step up cooperation with the Russian government in support of its emergence as an international donor and active member of multilateral organizations. This will include assistance in establishment of an Official Development Assistance system for Russia as an emerging donor, and providing access to the Bank’s instruments for channeling Russian development assistance, including arranging an Africa debt-for-development swap and assisting in the establishment of a Malaria Booster Trust Fund and other development aid contributions.