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					  Rapid Response and Fragile States –
            New Reforms

New Policy Framework (OP 8.0)

Accelerated and Streamlined
 Procedures (BP 8.0)
          Why Change Policy?

“There is a growing demand for reform in how the Bank
does business, particularly fiduciary, and how to build
country capacity and use it more effectively. Better,
cheaper, faster—and the purpose of this forum is to
exchange, debate, and move forward on how to reform and
refine our requirements.” Jeff Gutman March 24, 2008




                                                      2
         Why change policy? (cont’d)

 Increasing number of emergency operations
   – 74 emergency operations in FY ’89-‘00
   – 94 emergency operations in FY ’01-’06
 Inappropriate response time
   – PCD to Effectiveness over 9 months
   – First disbursement later
   – 34% of emergency operations were flagged for slow
     disbursements (FY ’01-’06)
   – Time needed to grant waivers


                                                         3
           New Policy Framework:
   increased demand for Bank engagement

 Definition refocuses from cause to impact; includes
  imminent emergencies

 Clarified objectives include support for preservation of
  human, social and institutional capital and peace-
  building4

 Clarify Bank support for comprehensive and
  integrated multi-donor recovery programs (that may
  include relief, security and peace-building)
           New Policy Framework (cont’d)

 Bank’s involvement still limited to its areas of competence (PFM,
  reintegration of combatants)

 Support start-up implementation in weak capacity countries (PPF
  increased to $5 mill, limited bank execution, alternative arrangements
  for NGOs and UN agencies, pre-qualified procurement agents and
  contractors)

 Allow speed by shifting controls and risk mitigation measures from
  ex ante to ex-post

 Intensify supervision effort and ex-post measures as needed to
  address risks



                                                                           5
                 Risks and Risks
 “In particular, the revised policy and accompanying
  guidelines would clarify that the risks associated with the
  need for much greater speed early in an emergency
  operation should be balanced by more careful and
  intensified supervision later in the operations, including
  additional post-reviews, audits and other measures, and
  application of appropriate remedies. In addition, when the
  situation has stabilized, it is appropriate to gradually
  transition toward regular Bank processes and safeguards,
  as needed, to mitigate and address risks.” (para. 32 Board
  Paper



                                                                6
         Risks and Risks (cont’d)
 OP 8.00, paragraph 7
  – “The Bank recognizes both the inherent risks involved in
    working in emergency situations, including the risks and
    lost opportunities associated with a delayed response,
    and the critical importance of speed, flexibility, and
    simplicity to an effective rapid response. As a result,
    emergency operations:
       (b) involve a different balance between ex-ante and
        ex-post controls and risk mitigation measures
        compared to regular operations, including on issues
        of fraud and corruption, requiring intensified
        supervision support to address such risks . . . . “

                                                           7
               Sample Minutes

 The meeting agreed that this operation
  would need an intense supervision effort . . .
  The Country Director. . . agreed to provide a
  higher level of Bank budget for supervision,
  and the team will provide [the CD] with a
  breakdown of the estimated costs of the
  proposed supervision for [CD] approval.


                                               8
           Greater Financing Flexibility
 PPF
     Amount increased from $2 to $5 million
     Can cover urgent start-up activities, not just preparation
     For grant only countries: provided on grant terms and may be Bank
      executed
 Retroactive Financing
     Limit increased from 20% to 40% of loan amount
 Expenditure eligibility and cost sharing
     OP 6.00 rules apply to all rapid response operations, even in countries
      without CFPs
     100% financing is assumed, unless CD determines otherwise
 Allows temporary increase in cost-sharing limits in all projects in the
  portfolio
     At borrower request
     Approved by CD
             Financing Flexibility (cont’d)

 Positive List of Goods (not just imports)
     Goods required for the recovery effort
     Local goods procured using national emergency procedures

 Fast Disbursing Contingent Loan to Address Future Emergencies
     Prepared under OP/BP 10.00 rules
     Includes OP 8.00 features (including positive list)
     Governed by OP 8.00 once triggered
    Accelerated and Streamlined Project
                Processing
 Concept-Negotiations:
    single one-stop review meeting which consolidates all clearances
    reduced turn-around times
    delegating higher authority to task teams and regional designated
     staff
 Negotiations-Effectiveness:
    proactive assistances to borrowers in satisfying Bank’s legal
     obligations
    minimize conditions of effectiveness
    facilitate cash-flow by establishing appropriate arrangements before
     effectiveness
 High risk review processes do not apply (RVP-chaired decision
  meeting provides comparable oversight)
Accelerated and Streamlined Procedures:
            Internal Reviews

 Concept/Ad Hoc      PR
Committee Review
                     FM      Single Decision
                             Review Meeting
                               Authorizing
 Decision Meeting    LOA      Negotiations


                     LEG       Record of all
                                Clearances
 Clearance of Neg.
     Package         SG
        Simplified Operating Procedures
 Apply simplified procurement procedures and assist Borrower
  during early stages of implementation:
       Single-source/direct contract
       Shopping
       Extending existing contracts
       Pre-qualification
       Accelerated bid times and no bid bonds
 Ensure sustained flow of funds (flexible designated account
  procedures, payment methods and shorter turn-around time on
  replenishments)
 Apply corporate-wide reduced turnaround standards for all
  reviews/clearances including for no objection letters for procurement,
  HR contracting
 Define/agree upfront strategy for safeguard issues (allow
  sequential approach that ensures adoption of timely measures)
              Institutional Back-up
Regional Rapid Response
 Committee covered by CD, RVP or Operations Director
 Designated regional emergency legal and fiduciary
   staff
 One stop decision-meeting chaired by RVP
Networks/Sectors
 Callable roster
 Documented lessons learned
Corporate Rapid Response
 MD-chaired meetings
 Mobilize action across institution and provide guidance
   on issues with potential corporate reputational risk
 Guidance and actions list, with follow-up
                Resources


 OPCS Home page (Rapid Response)
 Search “Rapid Response”
  – These pages provide links to procedures and
    guidance, as well as templates.
  – There is a “contact us” box for emailing the
    Rapid Response Core team

                                                   15
  Emerging Implementation Issues
 Achieving greater speed from onset of emergency to Board, still delays with
  signing and effectiveness

 Sticking with one-stop review (issues include – readiness, design, RRC
  role/composition)

 Making a case for and getting higher supervision budgets approved

 Uncertainty about implementation in new areas, such as positive list of goods,
  contractor pre-qualification

 Concerns about evaluations/reviews that use old bench-marks and methods

 Lack of consistent practices concerning callable capacity/institutional support




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