The World Bank: Moving Closer to Russia’s Regions
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Transcript of The World Bank: Moving Closer to Russia’s Regions
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Republic of TatarstanThe City of Kazan
Michal Rutkowski The World Bank Country Director
The Russian Federation
The World Bank: Moving Closer to Russia’s Regions
04/22/2023 1
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Presentation Outline
1. Russia’s Development Challenges
2. The World Bank Group in Russia
3. 2012-2016: The New Country Partnership Strategy for Russia (CPS)
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1. Russia’s Development Challenges• Russia’s Economic Outlook• Constraints to Growth and Diversification• Challenges for Skills and Social Services• Governance Challenges
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Russia’s Economic Outlook and Policy Challenges
* Conditions in global financial markets have improved during the first quarter of 2012 after several months of heightened uncertainty. But global recovery remains fragile.
* Russia’s economy is expected to grow in the range of 3.5-4 percent in 2012, depending on oil prices and the rate of recovery in global demand.
* The balance of payments position is expected to deteriorate in 2012, while capital flows are likely to remain volatile, reflecting remaining global uncertainties.
* Aggregate unemployment is expected to remain under 7 percent but as the economic activity returns to pre-crisis level, further reduction in unemployment and poverty will be slow.
* Russia may also face fiscal pressure, if the prices for its main commodity exports decline due to a slowdown in global demand.
* To reduce fiscal vulnerability, Russia needs to exercise fiscal restraint and to rebuild fiscal buffers while oil prices are still high.
* Russia needs to establish a new growth model that addresses two critical challenges: increasing the competitiveness of the economy; and coping with demographic change.
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Constraints to Growth and Diversification
Dependency on fossil fuel production and export – a dominant concern
Low level of technology and knowledge
Huge variations among regions
Weak business environment
Weaknesses in the financial system
Infrastructure constraints
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Challenges for Skills and Social Services
Vulnerability to poverty remains a concern
Low fertility, high adult mortality and morbidity rates
Skill mismatches in the labor market
Inequality and social exclusion
Regional disparities in development and living standards
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Governance Challenges
Excessive and often ineffective regulation
Corruption seen as an obstacle for growth
The judiciary viewed as weak
Disparity among the regions
Low efficiency of public services
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The Word Bank Principles of Engagement with Russia
>> Global Knowledge and Innovation
>> Focus on Results
>> Flexibility and Selectivity
>> Timeliness/ Fast Response
>> Coordinated WBG Support
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2012-2016 CPS Engagement Areas
Increasing Growth and
Diversification
Management of public finances
Investment climate/innovation
Financial sector development
Sustainable development and
effective protection of the environment
Expanding Human
Potential
Education, health, and social protection
Skills for economic development
Socially inclusive development
Deepening Russia’s
Global Role
Global public goods
Russia as a donor
Improving Governance
and Transparency
Public administration,
procurement, and financial
management
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2012-2016 CPS Choice of Instruments
- AAA – ESW, TA
- Reimbursable TA, Fee-Based Services
- Investment Lending – SIL, FIL, TA
- Results-Based Lending (if approved)
- Sub-national lending (direct or through intermediary)
- Guarantees
- “Virtual” Lending (project services without lending)
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2012-2016 CPS Levels of Engagement
Global
Regional
Federal
Sub-national
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Regional Focus: Overview
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1. Russia’s Regions: Diversity of Challenges
2. The World Bank Group: Activities and Instruments
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Russia’s Regions: Diversity of Challenges
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Regional Human Development Indicators
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Russia’s Regions: Diversity of Challenges
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Some regions are experiencing very high unemployment rates
with attendant social risks
Tatarstan Republic
Astrakhan oblast
Kaliningrad oblast
Republic North Osetia-Alania
Kurgan oblast
Altai Republic
Kabardino-Balkaria Republic
Tyva Republic
Ingush Republic
0 5 10 15 20 25 30 35 40 45 50
Unemployment in Tatarstan Republic is below Russian average
Unemployment, %, average for November - January 2012
Source: Rosstat.
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Enhanced Focus on Sub-national Level
Lending instruments to reach regions • IFC Sub-national Financing (no sovereign
guarantee)• IBRD Financial Intermediary Loans (FILs)• IBRD Direct Lending (with sovereign guarantee)• (conditions apply, e.g. fiscal situation)
TA support for less advanced regions• Possible federal government/IBRD fund to finance
analytical/advisory work in poor regions
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The World Bank Group: Activities and Instruments
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Lending Products for Regions • IBRD Flexible Loans
― Require federal intermediary or sovereign guarantee― Long maturities up to 30 years― Competitive and flexible pricing in USD
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The World Bank Group: Activities and Instruments
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Providing Finance and Advice
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The World Bank Group: Activities and Instruments
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Knowledge Products for Regions
• Analytical and Advisory Activities (AAA)e.g. Studies on
- Doing Business in Russia 2009 - Monocities - Regional Development and
Growth Agglomeration- Social Expenditures
•Reimbursable Technical Assistance (RTA)- More than 20 RTAs completed- Current RTAs in regions:
Education (Kazan, Yakutia)Health (Kirov)Urban Transport (Moscow, St. Petersburg)Investment Climate (Moscow)Doing Business (30 regions)
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www.worldbank.org/russia
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