1. Asia-Europe Meeting (ASEM) Asian Financial Crisis Response Trust Fund Review
Overview of Progress 6/28/2006

2. Outline This presentation focuses on:
Progress in portfolio implementation
Impact of the Action Plan adopted at last year’s Review Meeting
Benefits from completed grants
Strategic coordination in the field
Country programs

3. Key Achievements
Positive impact of the Action Plan: current disbursement rate is 72% and is estimated to reach 80-85% by end-December when the program closes.
In-country steering committees have played proactive roles in grant monitoring and implementation

4. The portfolio today ASEM TF2 Portfolio by Country as of June 2006 (million US$)
The portfolio contains:
71 approved grants totaling $39.1 million
39 active grants ($24.4 million)
29 completed grants ($13.3 million)
3 grants have been cancelled, due to poor performance or shifts in the priorities of recipient countries

5. The portfolio today ASEM TF2 Portfolio by Sector as of June 2006 (million US$)
Sectoral proportions vary among countries
In total:
$20.3 million to financial projects
$18.8 million to social sector projects

6. Disbursements (as of June 15, 2006)
Disbursements are 72 percent of the total grant amount
Disbursement rates vary among countries
Disbursements are now $25.4 million, up from $12.8 million a year ago and $19.2 million in October 2005
Disbursement rates range from more than 70 percent in China and Thailand to 51 percent and below in Indonesia and the Philippines

7. Procurement (as of March 31, 2006)
Procurement is $30 million, or 77 percent, of the total grant amount
About $27 million, or 90 percent, is contracted to consultants from ASEM member countries

8. Action Plan: Main elements
Periodic portfolio reviews by in-country steering committees and World Bank
Recognize good performers
Scale back or cancel non-performing grants
Strengthen capacities of weak implementing agencies
Promote visibility of ASEM
The Plan was agreed in May 2005 and quickly took effect.

9. Positive impact on portfolio
Results:
much faster implementation
disbursements almost doubled in one year
stronger grant monitoring by in-country steering committees
regular portfolio reviews with the line agencies
training for implementing agencies in financial management and procurement

10. Disbursement Data (September 2004 – December 2006)

11. Topping up and scaling back
Based on recommendations by the ICSCs:
China
Four successful grants topped up
One grant cancelled
Indonesia
Two grants allowed to close as scheduled, with unused balances cancelled
Philippines
One grant restructured
Thailand and Vietnam
In each country, one successful grant topped up

12. ASEM TF2 has visible benefits
Most completed grants have achieved clear effects on policymaking and program design
In every country, several grants have played fundamental roles in key policy reforms
Outcomes of 17 grants completed since October 2005 Progress Report confirm positive contribution of ASEM TF2

13. ICSCs play active role
Over the past year all the in-country steering committees, except Indonesia’s, have played proactive roles in grant monitoring and implementation
All have stressed the positive contribution of ASEM TF2 to their countries’ ability to withstand crises and reduce poverty and vulnerability
Philippines: ICSC members helped the implementing agencies to identify possible sources of risk in delivering their expected outputs and helped them come up with measures to manage those risks; the risk mitigation measures have been incorporated in the action plans for individual grants.
Thailand: ICSC established a trouble-shooting team to help implementing agencies to solve problems faced by individual grant projects; the team is drawn from the World Bank, the Public Debt Management Office, and the Fiscal Policy Office.
Vietnam: ICSC meetings have provided a useful forum for grant-project managers to seek and obtain help on specific implementation problems.
Indonesia: Bank staff have been actively engaged with implementing agencies to speed up implementation and disbursement, and have met regularly with representatives of the Government and the EC to discuss problems and progress. Indonesia’s Central Planning Agency (which chairs the ICSC), the EC, and the World Bank plan to revive ICSC meetings to expedite disbursements and monitor implementation of the remaining portfolio

14. China program overview
14 grants totaling $7.7 million
5 grants completed (3 in financial/corporate sector; 2 in social sector)
Significant implementation progress in past 12 months
Proactive In-Country Steering Committee
Disbursements now 78 percent
Full disbursement expected by time of program closure

15. China recent completions
Support for restructuring and privatizing state enterprises, including new laws
Reforms in insolvency law
Analytical work to strengthen public health programs in rural poverty areas
TF for restructuring and privatization of state enterprises made a significant contribution to China’s Company Law of 2005 and to a draft ordinance on company ownership transformation. It also led to a decision to encourage all state-owned enterprises to establish boards of regulators to set salary levels and performance targets. The EC evaluation called this “a project that achieved a remarkable amount with a limited budget.”
TF supported reforms in China’s insolvency law. Advice resulting from this project prevented the draft law from being passed with a major fault, and also persuaded the authorities that a law on insolvency needed to be supported by changes in related laws, some of which are now being drafted.
TF supported analytical work to strengthen the public health program in rural poverty areas (the government is using the results to inform discussions of how best to deliver health services within the context of the regional development policy.

16. Indonesia program overview
17 grants totaling US$ 6.8 million
7 grants completed (3 in financial/corporate sector, 4 in social sector)
1 grant cancelled
Faster implementation progress in past 12 months;
GOI regularly reviews project progress
Disbursements now 51 percent, up from 26 percent a year ago
Good progress under the Action Plan:
World Bank devoted more resources to help implementing agencies speed implementation
Central Planning Agency (which chairs ICSC), plans to revive ICSC meetings to expedite remaining disbursement and implementation

17. Indonesia recent completions
To support community-based development:
Built capacity of Bappenas (Central Planning Agency) and influenced its community development policies and monitoring and evaluation arrangements
Provided underlying analysis for community-based investments in infrastructure
TF helped Bappenas to develop its capacity to analyze, program, and evaluate community development projects. The grant has already had tangible effects: Bappenas is using the analytical tools developed under the project; the work financed by the grant has contributed to the government’s decision to introduce a policy-based community development plan into Indonesia’s medium-term expenditure framework; and all Indonesia’s new community development projects incorporate a monitoring and evaluation mechanism similar to the one developed under the grant.
TF supported analytical work to support community-based investments in infrastructure; its implementation plans were curtailed by the tsunami but it has produced estimates on costs, rates of return, and macroeconomic impacts to guide the selection of community development programs. A fourth completed grant (TF052962) did not carry out all its planned activities, due to changes in the structure of the executing agency, but has provided valuable recommendations for strengthening the institutions that develop Indonesia’s housing policy.
TF sought to strengthen the institutional capacity of the Department of Community and Village Development. Not all its planned activities could be carried out, because the Department was frequently reorganized during the grant period.

18. Philippines program overview
9 projects totaling $5.2 million
3 grants completed, all in the financial/corporate sector
1 grant cancelled
Disbursements still below 50 percent, but
Speed of implementation much improved for most grants
Under the Action Plan, the proactive In-Country Steering Committee guided an intense effort to speed up implementation and disbursement.
Terms of reference have now been finalized for most components and procurement actions have been completed.

19. Philippines recent completions
Strengthened the banking and corporate sectors:
Improved the Central Bank’s IT, risk management, policymaking, and supervisory capacity
Provided training on corporate governance
Provided policy recommendations for enhancing productivity in industry
TF has helped the Central Bank to align the information technology and risk management policies of banks and financial institutions with international best practices, and to enhance its examiners’ capacity to supervise these institutions through training, on the job coaching and institutional reform. The grant has also enabled the Bank to issue new banking supervision guidelines and standards in these areas and to establish a technology supervision unit. The EC evaluation judged that this project had already had a high impact.
TF supported the country’s effort to improve corporate governance; a training program and accompanying manual on corporate governance have been developed and a series of workshops has been conducted for selected directors of major publicly listed companies, government-owned and controlled corporations, and government financial institutions.
TF supported the development of policy recommendations for strengthening the foundations of productivity growth at the firm level and to deepen the links between domestic economic activity and foreign trade and investment. The recommendations have been discussed at workshops and the World Bank country team will carry out follow-up discussions in the course of its broader policy dialogue with the government and other development partners.

20. Thailand program overview
11 grants totaling $7.2 million
6 grants completed (2 in corporate/governance sector and 4 in social sector/governance)
Proactive ICSC
Problems now resolved for four slow-disbursing projects listed in the Action Plan
Disbursements now 74 percent
Disbursements expected to be 98 percent by close of Trust Fund

21. Thailand recent completions
Helped government prepare for international negotiations on trade and financial liberalization of services
Strengthened social protection and poverty alleviation programs through:
empirical poverty studies
overhaul of national statistical system
stronger social service delivery
TF TF supported the continuation of work on empirical studies on poverty and building a database for monitoring poverty.
TF strengthened social protection by supporting statistical and analytical work for use in policy development. Among its outputs are a master plan for the production of statistics on labor and social welfare and a common sampling frame for establishment of surveys; the latter has encouraged the National Statistical Office to improve the country’s overall statistical system, and a new Statistical Act is in preparation.
TF helped the government implement, monitor, and evaluate its reform program to strengthen social services delivery; one of the results is the establishment of model community radio programs to enhance community awareness and feedback on the delivery of services at the local level.
TF has helped the government prepare its negotiating positions for talks on trade and the liberalization of financial services. The Ministry of Finance has now established a Committee on Financial Services Liberalization, chaired by the Director-General, Fiscal Policy Office, and the Ministry of Finance, to recommend short-term and long-term strategies for future trade negotiations. The EC evaluation judged this grant to have had a high impact.

22. Vietnam program overview
17 grants totaling $9.2 million
6 completed (2 in financial/corporate sector; 4 in social sectors)
ICSC closely monitors grant closing dates
Disbursements now 66 percent
Disbursements expected to reach 93 percent at close of Trust Fund

23. Vietnam recent completions
Grants have supported:
equitization of Mekong Housing Bank, a state-owned commercial bank
social safety net for workers displaced from state-owned enterprises
design and preparation of Vietnam’s social security law
TF has brought the Mekong Housing Bank, a state-owned commercial bank, to the point where it can seek a strategic partner as an equity investor. The equitization process is largely following the strategy and steps advised by the ASEM TF2 consultant, and shares of the Bank will be publicly auctioned in The EC evaluation judged this grant to have had a high impact.
TF supported operations, monitoring, and policy adjustments in Vietnam’s social safety net (SSN) for the thousands of workers displaced from state owned enterprises. The SSN fund has come to be regarded as an example of international best practice, and a tracer study of retrenched workers found that their living standards had been largely protected from the impact of retrenchment.
TF supported the design and preparation of Vietnam’s social security law. It provided analytical work, training, and discussions and seminars on the draft law and procedures for its implementation. The EC evaluation judged that the grant was instrumental in generating high commitment to the new law within both the Ministry of Labor and Social Affairs and the National Assembly.

24. A good outlook
Overall grant disbursement projected at percent at the end of the program (comparable to the disbursement rate of ASEM TF1)
Message should be conveyed to the In-country steering committees that they must to continue to play proactive roles in grant monitoring and implementation