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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 81361-AR INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL FINANCE CORPORATION MULTILATERAL INVESTMENT GUARANTEE AGENCY COUNTRY PARTNERSHIP STRATEGY Public Disclosure Authorized FOR THE ARGENTINE REPUBLIC FOR THE PERIOD FY15-18 August 7, 2014 Public Disclosure Authorized Argentina, Paraguay and Uruguay Country Management Unit Latin America and Caribbean Region International Finance Corporation Latin America and Caribbean Department Multilateral Investment Guarantee Agency This document has a restricted distribution and may be used by recipients only in the performance of Public Disclosure Authorized their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (As of July 29, 2014) 8.19 Peso = US$ 1 FISCAL YEAR (FY) January 1–December 31 IBRD IFC MIGA Vice Jorge Familiar Vice Jean-Philippe Vice Michel President: President: Prosper President: Wormser Director: Jesko S. Director: Irene Arias Director: Ravi Vish Hentschel Manager: Salem Rohana Task Team Zafer Task Team Frank Sader Task Team Dan Biller Leaders: Mustafaoglu Leaders: Luciana Leader: Sabine Hader Marchesini ABBREVIATIONS AND ACRONYMS AAA Analytical and Advisory Activities ACUMAR Autoridad de Cuenca Matanza-Riachuelo (Matanza-Riachuelo River Basin Authority) AFIP Administración Federal de Ingresos Públicos (Federal Tax Administration) ANSES Administración Nacional de Seguridad Social (National Social Security Administration) APL Adaptable Program Loan ARBA Agencia de Recaudación de la Provincia de Buenos Aires (Tax collection agency of the Province of Buenos Aires) AUH Asignacion universal por Hijo (Universal Allocation per Child) AySA Agua y Saneamientos Argentinos S.A.(Water and Sanitation Agency Argentina) BCRA Banco Central de la República Argentina (Central Bank of the Republic of Argentina) CAF Corporación Andina de Fomento (Development Bank of Latin America) CCIs Chronic Conditions and Injuries CEDLAS Centro de Estudios Distributivos, Laborales y Sociales (Center for Distributional, Labor and Social Studies) CFAA Country Financial Accountability Assessments CNEA Comisión Nacional de Energía Atómica (National Atomic Energy Commission) COFEMA Consejo Federal del Medio Ambiente (Federal Environment Council) CPI Consumer Price Index CPS Country Partnership Strategy CR Completion Report CREMA Performance-based Road Rehabilitation and Maintenance Contracts DLI Disbursement-Linked Indicator DRM Disaster Risk Management FDI Foreign Direct Investment FM Financial Management FON.DE.AR Fondo para el Desarollo Economico Argentino (Economic Development Fund Argentina) FONAPyME Fondo National de Desarrollo para la Micro, Pequena y Mediana Empresas (National Development Fund for Micro, Small and Medium- Size Enterprises) FSAP Financial Sector Assessment Program FY Fiscal Year GAAP Governance and Accountability Action Plan GDP Gross Domestic Product GEF Global Environment Facility HPMP Hydro chlorofluorocarbons (HCFCs) Phase-out Management Plan IBRD International Bank for Reconstruction and Development ICSID International Centre for Settlement of Investment Disputes IDB Inter-American Development Bank IEG Independent Evaluation Group IFC International Finance Corporation IFS International Financial Statistics IMF International Monetary Fund IMR Infant Mortality Rate INDEC Instituto Nacional de Estadística y Censos (National Statistics and Census Institute) IPCC Intergovernmental Panel on Climate Change LAC Latin America and the Caribbean Region MECON Ministerio de Economía y Finanzas Públicas (Ministry of Economy and Public Finances) MERCOSUR Mercado Común del Sur (Southern Common Market) MIGA Multilateral Investment Guarantee Agency MP Montreal Protocol M-R River Basin Matanza-Riachuelo River Basin M&E Monitoring and Evaluation NCD Non-communicable Disease NLTA Non-lending Technical Assistance OECD Organization for Economic Co-operation and Development PEFA Public Expenditure and Financial Accountability (Assessment) PISA Program for International Student Assessment PRAMU Argentina Mining Decontamination Project PROMER Argentina Rural Education Improvement Project PROG.R.ES.AR Programa de Respaldo a Estudiantes de Argentina (Support Program for Argentine Students) PROSAP Provincial Agricultural Development Project RAAP Rapid Assessment Action Plan RAICES Red de Argentinos Investigadores y Científicos en el Exterior (Argentine Network of Researchers and Scientists Abroad) RAS Reimbursable Advisory Services SEDLAC Socio-Economic Database for Latin America and the Caribbean SINTyS Social and Fiscal National Identification System SME Small and Medium Enterprise TTL Task Team Leader UMCs Upper-Middle-Income Countries UNFCCC United Nations Framework Convention on Climate Change US United States WBG World Bank Group WDI World Development Indicators WEO World Economic Outlook WHO World Health Organization YPF Yacimientos Petrolíferos Fiscales (National Oil Company) ACKNOWLEDGMENTS The World Bank Group greatly appreciates the collaboration of the Argentine authorities in the preparation of this Country Partnership Strategy. The preparation of the document involved discussions with government representatives from various sectors at the central and provincial levels, as well as with civil society, private sector, academia and development partners. The strategy is the result of a team effort that drew on knowledge, experience, and guidance from individuals across the World Bank Group. We thank them for their contributions. TABLE OF CONTENTS INTRODUCTION ........................................................................................................................................ 1 I. COUNTRY DIAGNOSIS ................................................................................................................ 1 A. Poverty, Inclusion, and Shared Prosperity ........................................................................................ 1 B. Economic Developments and Outlook ............................................................................................. 7 C. Country Development Challenges for Sustained Poverty Reduction and Shared Prosperity ......... 21 II. GOVERNMENT VISION ............................................................................................................. 26 III. WORLD BANK GROUP ENGAGEMENT ................................................................................. 28 A. Lessons Learned from the FY10-14 WBG Engagement and Stakeholder Feedback ..................... 28 B. Proposed World Bank Group Partnership Strategy ........................................................................ 31 C. Portfolio and Implementing the FY15-18 Country Partnership Strategy ....................................... 44 IV. MANAGING RISKS ..................................................................................................................... 45 Annex 1. Results Framework—Argentina Country Partnership Strategy FY15-18 ................................... 48 Annex 2. Argentina CPS FY10-12 Completion Report .............................................................................. 53 Annex 3. Monitoring and Evaluation (M&E) of the CPS FY14-18 Results Framework ........................... 94 Annex 4. Main Economic Indicators, 2004-2013 ....................................................................................... 99 Annex 5. Balance of Payments, 2008-2013 .............................................................................................. 101 Annex 6. Fiscal Accounts ......................................................................................................................... 102 Annex 7. Evolution of Social Spending in Argentina ............................................................................... 104 Annex 8. Growth Employment and FDI: Argentina and Comparator Countries ...................................... 108 Annex 9. Labor Productivity and Wages .................................................................................................. 110 Annex 10. Social Indicators ...................................................................................................................... 111 Annex 11. Status of Gender Issues in Argentina ...................................................................................... 112 Annex 12: Consultations with Stakeholders ............................................................................................. 115 Annex 13. Argentina at a Glance .............................................................................................................. 117 Annex 14. Argentina Operations Portfolio (IBRD and Grants) ................................................................ 120 Annex 15. Argentina Trust Fund Portfolio ............................................................................................... 121 Annex 16. IFC Committed and Disbursed Outstanding Investment Portfolio ......................................... 122 Annex 17. Map of Argentina .................................................................................................................... 123 Table 1. Economic Indicators ..................................................................................................................... 20 Table 2. Argentina CPS: WBG Results Areas and Core CPS Results, FY15-18 ....................................... 35 Table 3. IBRD
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