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Ph: k syy

The majority o countries in emerging Europe and Central Asia have recov-

ered rom the 200809 global economic crisis, but growth remains slower

than beore the crisis in most o the region. Estimated growth o 5.5 per-

cent in 2011 is projected to slow to 3.4 percent in 2012, largely a result othe sovereign debt problems in the Euro Area, which are reducing cross-

border nancial capital ows, trade, and workers remittances.

Wrd Bak Assisac

World Bank support to the region reached $6.6 billion in scal 2012.

Lending was targeted to support a regional strategy based on three pillars:

deepening reorms or improved competitiveness; supporting social

sector reorms or inclusive growth; and helping countries take action to

improve energy efciency and address climate change or sustainable

growth.

Despite the need or adjustments, the resilience o Europes economic

growth model and its strong record o economic and social convergence

are the highlights o a 2012 regional agship report, Golden Growth:Restoring the Lustre of the European Economic Model. The report underscores

the strong eatures o the European model, which has driven growth and

convergence or the past ve decades, notably nancial and trade integra-

tion as well as social inclusion, and equally highlights reorms needed to

restore competitiveness.

Icrasig Cmpiivss

Inrastructure and the need or skilled workers are the key bottlenecks to

private-sector growth in the region, according to the 2010 Busines

Environment and Enterprise Perormance Survey, which polled more than10,000 rms in 29 countries in the region. Increasing competitiveness and

improving productivity require improvements to governance and the in

vestment climate, stable and eective nancial intermediation, upgraded

labor-orce skills, better energy and transport inrastructure, and more e

cient public spending.

Through operations in the region in scal 2012, the Bank helped stabi

lize the nancial sector in Montenegro and FYR Macedonia and increase

access to nance or small- and medium-size enterprises in Armenia

Bosnia and Herzegovina, Moldova, and Turkey. Bank operations improved

critical transport inrastructure in Kazakhstan, the Kyrgyz Republic, Ukraine

and the South Caucasus; provided advisory support or modernization e

orts in the public administration in Romania; and contributed to reorm

eorts by Armenia, Kosovo, Poland, and the Russian Federation to improvethe business environment and spur innovation.

Spprig Scia Scr Rfrms

Countries that already had good saety nets in place beore the 2009

crisis were best able to protect those in need during the crisis, which hit

the region hard. To prepare countries to weather new turmoil linked to

the Euro Area crisis, promote employment, and deal with the aging o the

europe And centrAl AsiA

FI URE 2.5

EUROPE AND CENTRAL ASIA

IBRD AND IDA LENDING BY SECTOR | FISCAL 2012SHARE OF TOTAL OF $6.6 BILLION

Transportation 19%

Information andCommunications < 1%

Public Administration,Law, and Justice 23% Finance7%

Education1%

Energy and Mining24%

Water, Sanitation, andFlood Protection 2% 1% Agriculture, Fishing, and Forestry

Health and Other Social Services18%Industry and Trade 3%

Economic ManagementUrban Development 3% 9%

FIGURE 2.6

EUROPE AND CENTRAL ASIA

IBRD AND IDA LENDING BY THEME | FISCAL 2012SHARE OF TOTAL OF $6.6 BILLION

Social Protection andRisk Management 5%

Trade and Integration 18%

Social Development,Gender, and Inclusion 1%

Rule of Law < 1%

Rural Development 2%

Public Sector Governance 14% Human Development13%

Financial and PrivateSector Development26%

Environmental and NaturalResources Management8%

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Ky Parrships

The Bank partnered with the International Monetary Fund (IMF), European

Union (EU) institutions, and European international nancial institutions

to advance the Vienna 2 Initiative, which aims to improve banking sys-tems and coordination in EU and non-EU countries. The Bank has a

close partnership with the EU, the largest trust und donor to the ECA re

gion. The Bank is working with the EU to improve the capacity o ECAs

EU-member clients to absorb EU unds, and supports EU candidate coun

tries reorm eorts. The Bank also has a close partnership with Russia

which is now the second-largest trust und donor in the region, to suppor

education, public nance management, project preparation capacity, o

cial statistics, and global public goods in the region and beyond. (See

hp://wr.r/c.)

population, the Bank is working with countries to improve their socialsaety nets.

In Romania, the Bank is working to make a comprehensive social assis-

tance program more equitable and efcient. In Tajikistan, it is supporting

the governments eorts to develop ways to identiy the poor, so that it

can more eectively channel support to them in times o need. Bank lend-

ing is protecting spending on social assistance and health care in several

countries across the region, including Poland and Romania. It is support-

ing improvements to social saety nets and insurance in Albania and

Armenia, and it is unding health care enhancements in Moldova. In Russia,

the Bank is working with the Republic o Yakutia to modernize its early

childhood network, including the latest design and technology or eec-

tive and cost-efcient construction o early childhood centers.

Miigaig ad Adapig Cima Chag

ECA has some o the highest energy intensity countries in the world as a

result o articially low energy prices and limited investment in inrastruc-

ture over the past 25 years. To help the countries meet this massive chal-

lenge, the Bank is supporting investments to improve sustainability and

adaptability across the region. Bank operations are backing policy reorms

to provide incentives or efcient energy use in Poland, Serbia, and Turkey,

and are nancing investments in energy efciency and renewable energy

projects in Poland, Turkey, Ukraine, and Uzbekistan. The Bank is supporting

carbon nance operations in the Czech Republic, Poland, and Romania. In

addition, it is investing in improvements in the capacity to orecast climate

change in Moldova, Russia, and Central Asia; disaster mitigation and cli-

mate risk management in Moldova; ood management in Poland; and ur-

ban development and water and sanitation services in multiple countries.

Bulgaria

Croatia

Georgia

Kazakhstan

Kyrgyz Republic

Kosovo

Albania

Armenia

Azerbaijan

Belarus

Bosnia andHerzegovina

Poland

Romania

RussianFederation

Serbia

Tajikistan

Turkey

Turkmenistan

Ukraine

Uzbekistan

Latvia

Former YugoslavRepublic oMacedonia

Moldova

Montenegro

CountRies eligible foR WoRld bank boRRoWing

euRoPe and CentRal asia Regional snaPsHot

Total population 0.4 billion

Population growth 0.5%

Lie expectancy at birth 71 years

Inant mortality per 1,000 live births 19

Female youth literacy 99%

Number o people living with HIV/AIDS 1.5 million

2011 GNI per capita $7,610

GDP per capita index (2000 = 100) 162n: Lie expectancy at birth, inant mortality rate per 1,000 live births, and emale youthliteracy are or 2010; other indicators are or 2011 rom the World Development Indicatorsdatabase. HIV/AIDS data are rom the 2012 UNAIDS report, Together We Will End AIDS.

total fisCal 2012 total fisCal 2012

New commitments Disbursements

IBRD $6,233 million IBRD $5,654 million

IDA $362 million IDA $482 million

Portolio o projects under implementation as o June 30, 2012: $23.0 billion

euRoPe AnD CentRAl ASIA ReSultS HIGHlIGHtS

Pensioners in azrj now receive their payments in ull

and on time as a result o the Pension and Social Assistance

Project. The project increased the number o people contributing

to the social security system by 40 percent between 2003 and

2011 to 1.87 million people. (See hp://.wr.r/

Qn0lf5XP50.)

Three development policy operations strengthened the safety

nets in gr. Between 2009 and 2011, the loans expanded

coverage under the targeted medical insurance system rom

750,000 to 900,000 people and increased the number o people

receiving social assistance rom 370,000 to 440,000. (See hp://.wr.r/oHli96VRf0.)

Seventy-three million regional energy consumers have beneted

rom the introduction o wholesale markets or electricity in

the shr erp ery Cmmy and try,

through the Europe and Central Asia Regional Energy APL

Program. The program also nanced the construction or rehabili-

tation o 42 substations, 218 kilometers o transmission lines, and

165 kilometers o ber-optic cable. (See hp://.wr

.r/YfMHWQJYo0.)