Implementation Status & Results Guatemala Second Fiscal and Institutional Development Policy (P114373)

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized losure Authorized Public Disclosure Authorized The World Bank Project Name: Implementation Status & Results Guatemala Second Fiscal and Institutional Development Policy (P114373) Second Fiscal and Institutional Development Policy Program Stage: Implementation Seq.No: 2 Status: ARCHIVED Last Modified : 14-Feb-2011 (P114373) Country: Guatemala Approval FY: 2010 Product Line: IBRD/IDA Region: LATIN AMERICA AND CARIBBEAN Lending Instrument: Development Policy Lending Implementing Agency(ies): Ministry of Public Finance Key s Board Approval 28-Jul-2009 Original Closing Planned Mid Term Review Last Archived ISR 25-Sep-2009 Effectiveness 17-Dec-2009 Revised Closing Actual Mid Term Review Program Development Objectives Program Development Objective (from Program Document) Program Development Objectives: # Maintain fiscal space for priority spending through tax policy and tax administration reforms. # Strengthen the effectiveness of the Mi Familia Progresa Conditional Cash Transfer Program through enhanced monitoring and evaluation of program design and outcomes. # Improve governance and transparency of public financial management and expenditures. # Improve access to finance and deepen financial markets through reforms to the financial legal framework and public debt management. Key outcomes expected by end 2010 under the operation include: (i) Enhancing macroeconomic stability, governance, and transparency # Fiscal reform measures mitigate the impact of the crisis so that Central Government tax collections do not fall below 10.4 percent of GDP in (Baseline:11.3 percent in 2008) # Results indicators have been developed for fifty percent of Central Government#s expenditures in order to introduce the results informed budget framework. (Baseline: 22 percent in 2008) (ii) Expanding opportunities for vulnerable groups through improved and transparent targeting of social programs # Co-responsibilities verified for 50 percent of the Conditional Cash Transfer Program beneficiaries, half of which are extreme poor, based on a framework for monitoring and evaluation. (Baseline: 0 in August 2008); (iii) Promoting sustainable growth and productivity for better jobs # Customs times for clearance and average release time of exported/imported goods has declined by 5 percent. (Baseline: Time to export 19 days, time to import 18 days in 2007). Has the Program Development Objective been changed since Board Approval of the Program? Yes No Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Moderately Satisfactory Page 1 of 9

2 Overall Implementation Progress (IP) Satisfactory Satisfactory Implementation Status Overview The Loan has been fully disbursed and closed. The team is in the process of preparing an Implementation Completion and Results Report. Results Results Indicators Central Government Fiscal Debt Ratio 1.70 Central Government Debt is 1.7% of GDP Not Achieved. The decline in economic growth hampered government revenues, while social spending was maintained to mitigate the impact of the crisis on the economy and the poor. Government Tax Collections Achieved. Despite the economic crisis and growth slowing, tax collections as a share of GDP were maintained. Central government tax collections do not fall below 10.4% of GDP Page 2 of 9

3 New Risk Manual Consolidated Supervision Custom Indicator Text 0 The new risk manual for consolidated supervision has been implemented and applied to 5 of the largest financial groups in the system that represent about 80 of financial assest fo the financial groups by assets. Achieved. According to the ICR for the Financial Sector TA loan and conversation with the Superintendency of Banks. Consolidated Supervision in at least half of financial groups by assets Regular Issuance by MoF Custom Indicator Text Only Irregular and Sporadic Issuance 31-Dec-2007 Regular issuance of debt is ongoing Achieved. MINFIN follows a regular calendar for its debt issuance which can be accessed here: php? option=com_content&view=article& id=16:bonos&catid=2: consultas&itemid=1%20%20% 20%2020 Ongoing regular issuance of debt by MoF Page 3 of 9

4 Increased Financing Volume Gernerated by garants mobiliarias Achieved. According the the Banking Superintendency, credits guarantied with movable capital increased by 10 percent between 2008 and 2010, in line with the credit growth during this period. With the available data, however, it is difficult to attribute this solely to the new movable capital law. It will be important to investigate how the new registry for movable capital is utilized Increase Public Information Offices Achieved. According to a report by Accion Ciudadana, 27 out of the 34 (80 percent) Executive Branch agencies had some type of Public Information Office (this includes the Ministries of Education, Health, Finance, Economy, and Defense among others). Central Government Agencies would also include the Legislative Branch and the Judicial Branch, but these were not evaluated by the Report. The Attorney General unofficially estimates that out of the 820 public entities of the three branches, 420 (51%) count with an access to public information unit. Page 4 of 9

5 Results Indicators for 50% of Central Governments Expenditures This result was more than achieved. The 2011 Budget actually began to use the results based indicators framework for three big ministries (Education., Health, and Interior) Page 5 of 9

6 Co-responsibilities verified for CCT beneficiars The MIFAPRO CCT program has verification of co-responsibilities completed for all beneficiary households on each payment day. Average level of compliance with co-responsibilities in education and health is about 92 percent. The program is changing the mechanism of verification of coresponsibilities to Teleform (provided by USAID) as a means to guarantee timely information and to reduce errors in transcription (from the beneficiary cards to the co-responsibility forms used by MIFAPRO local agents). The program has completed the baseline for an impact evaluation in the first quarter of 2010 with IDB assistance. The second round of data collection is expected to be financed under the World Bank Expanding Opportunities Project (if it is approved by the Congress before the deadline of 18 months after Bank approval#by May 19th, 2011) Increased Tax Declarations Submitted through the Internet Target has been exceeded Page 6 of 9

7 Customs Times for Clearance and Release of Exported/Imported Goods Custom Indicator Text 19 Days for Export 18 Days to Import 31-Dec-2007 Based on Doing Business Report Days for Export 17 Days for Import 18 Days to Export 17 Days to Import Target has been exceeded for Exports and just achieved for Imports. This is based on the 2011 Doing Business Report. Improve Oversight and Management with Audits and Financial and Execution Reports Custom Indicator Text Data on Financial Performance (as of 20-Jan-2011) Financial Agreement(s) Key s and 53 percent (monthly monitoring and external audits, respectively) 30-Nov-2010 All Trust Funds are now monitored monthly. Data is available on the web site of the MOF. In terms of external audits, 53 percent represents the share of active trust funds that are audited. The MOF identified 75 trust funds by January 2011 (58 operational, 10 out of date, and 7 in process of extinction and closing) of which 22 were audited in 2007, 29 in 2008, and 31 in 2009 by the Contraloria. There is not yet and audit report for percent Project Loan No. Status Approval Signing Effectiveness Closing P IBRD Closed 28-Jul Dec Dec-2009 Disbursements (in Millions) Page 7 of 9

8 Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P IBRD Closed USD Tranches Tranche 1 Description This is a single tranche operation and the prior actions have all been met. The loan is effective and has been fully disbursed. Amount (USD) Expected Release Actual Release Status 350,000, Oct Dec-2009 Pending Released Tranche Condition Description Status If If Delayed The Government has taken actions to maintain fiscal space for priority spending including implementation of: (a) a direct tax on business income to offset the decline in tax collections due to the expiration of the IETAAP in the year 2008; (b) mandatory use of the software application for income tax withholding to enhance income tax collection; and (c) cross-checks between value-added taxdeclarations and income tax submissions to reduce tax evasion. The Banking Superintendency has completed the supervision of at least three risk profiles (out of the following four: liquidity,credit, operational, and market) under its riskbased consolidated supervision manual, in Financial Groups controlling at least half of the total bank assets of the domestic financial system. The Central Bank has completed standardization of its debt instruments and the establishment of regular issuance to facilitate the market development of an interest rate yield curve, through the implementation of: (a) coordinated, weekly auctions of securities with the Ministry of Finance with broad participation of the financial sector, non-financial private sector and public sector; and(b) electronic issuance of 7-day securities. The Congress has approved legislation (Decreto , the Ley de Garantías Mobiliarias, and reforms under Decreto No )to provide firms, particularly micro, small and medium enterprises, with the possibility of using their movable assets as collateralwhile keeping possession of the assets. The Government has implemented the following mechanisms to enhance the control and transparency of the majority of public trustfunds: (a) monthly reporting of financial accounts to the MOF and its General Auditor's office; and (b) annual external audits of public trust funds. In order to facilitate public access to information and transparency: (a) an access to information and transparency law has been approved by Congress and is effective; and (b) the MOF has implemented the SAIP. Page 8 of 9

9 The Ministry of Finance: (a) has issued and is implementing Executive Decree for the internal reorganization of functions and responsibilities in the MOF to fully absorb, operate and upgrade the financial management and procurement framework systems SIAF and Guatecompras; and (b) has included provisions and technical indicators in its 2010 budget guidelines in order to start implementation of a results-informed budget system in central government entities. The Government: (a) is implementing a transparent monitoring and evaluation system in the municipalities benefiting from Mi Familia PROGRESA that allows for the verification of conditions for cash transfers being met by families in the program; and (b) has received an external evaluation of risks under Mi Familia PROGRESA, related to design, instruments, conditionality, information flows, beneficiaries# feedback and coordination with other institutions. SAT has implemented a customs management system (SAQB#E) on cargo management and on the release and clearance of imported/exported goods and merchandise in transit, in at least three major customs entry points, managing over 30 percent of the Borrower#s totalcustoms traffic. Key Decisions Regarding Implementation Overall, the actions supported by the loan look to be sustainable and much of the expected results at closing have been achieved. One area, however, that has not been achieved is the maintenance of the fiscal deficit below 2.8 percent of GDP (at end-2010 it reached 3.3 percent). This was primarily due to ongoing sluggishness of growth from the global economic crisis that directly and indirectly impacted the country through lower credit availability, demand for exports, and wage remittances. In addition, a series of natural disasters in 2010 also has had a strong negative impact on growth and necessitated reconstruction spending. Restructuring History There has been no restructuring to date. Related Operations P GT Fiscal and Institutional DPL, P Second Fiscal and Institutional Development Policy Page 9 of 9