Egypt: Positive Results from Knowledge Sharing and Modest Lending An IEG Country Assistance Evaluation 1999–2007 THE WORLD BANK GROUP WORKING FOR A WORLD FREE OF POVERTY The World Bank Group consists of five institutions—the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), the International Development Association (IDA), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for the Settlement of Investment Disputes (ICSID). Its mission is to fight poverty for lasting results and to help people help themselves and their envi- ronment by providing resources, sharing knowledge, building capacity, and forging partnerships in the public and private sectors. THE INDEPENDENT EVALUATION GROUP IMPROVING DEVELOPMENT RESULTS THROUGH EXCELLENCE IN EVALUATION The Independent Evaluation Group (IEG) is an independent, three-part unit within the World Bank Group. IEG-World Bank is charged with evaluating the activities of the IBRD (The World Bank) and IDA, IEG-IFC focuses on assessment of IFC’s work toward private sector development, and IEG-MIGA evaluates the contributions of MIGA guarantee projects and services. IEG reports directly to the Bank’s Board of Directors through the Director-General, Evaluation. The goals of evaluation are to learn from experience, to provide an objective basis for assessing the results of the Bank Group’s work, and to provide accountability in the achievement of its objectives. It also improves Bank Group work by identifying and disseminating the lessons learned from experience and by framing recommendations drawn from evaluation findings. Egypt: Positive Results from Knowledge Sharing and Modest Lending An IEG Country Assistance Evaluation 1999–2007 2009 The World Bank http://www.worldbank.org/ieg Washington, D.C. ©2009 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved 1 2 3 4 12 11 10 09 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other informa- tion shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. Cover: Top: Pyramids of Egypt. © Jose Fuste Raga/Corbis. Bottom: The Nile at Cairo. © Christophe Boisvieux/Corbis. ISBN-13: 978-0-8213-7958-5 e-ISBN-13: 978-0-8213-7959-2 DOI: 10.1596/978-0-8213-7958-5 Library of Congress Cataloging-in-Publication Data have been applied for. World Bank InfoShop Independent Evaluation Group E-mail: [email protected] Knowledge Programs and Evaluation Capacity Telephone: 202-458-5454 Development (IEGKE) Facsimile: 202-522-1500 E-mail: [email protected] Telephone: 202-458-4497 Facsimile: 202-522-3125 Printed on Recycled Paper Contents v Abbreviations vii Acknowledgments ix Foreword xi Preface xiii Egypt: Summary of Bank Program Outcome Ratings xv Executive Summary xxi Management Action Record xxiii Chairperson’s Summary: Committee on Development Effectiveness (CODE) 1 1 Introduction and Country Background 7 2 The Bank’s Strategy and Assistance Program 9 Overview of a Long Relationship 10 Bank Assistance Strategy 12 Overview of Lending 16 Analytical and Advisory Activities 17 Overview of Partnerships 19 3 Promoting Higher, More Sustainable Growth through Structural Reforms 21 Maintaining Macroeconomic Stability and Improving PSG 28 Trade Reform 30 Private Sector Development 32 Financial Sector Reform 35 Summary 37 4 Improving Water Resources Management, Infrastructure, and Environment 39 Water Resources Management, Agriculture, and Rural Development 44 Infrastructure 48 Environment 51 Summary 53 5 Human Development and Poverty Reduction 55 Gender 58 Education and Training 60 Health, Nutrition, and Population 62 Social Safety Nets and Subsidies 64 Poverty Reduction 66 Summary iii EGYPT – POSITIVE RESULTS FROM KNOWLEDGE SHARING AND MODEST LENDING 69 6 Conclusions, Lessons, and Recommendations 71 Overall Assessment 73 Institutional Development Impact 73 Risks to Development Outcomes 74 Main Findings and Lessons 75 Recommendations 77 Appendixes 79 A: Statistical Supplement 97 B: IFC’s Experience in Egypt, 1999–2007 111 C: People Interviewed 115 D: Guide to IEG’s Country Assistance Evaluation Methodology 119 E: Comments from the Government 121 Endnotes 125 Bibliography Boxes 6 1.1 IEG Country Assistance Evaluation (2000) 11 2.1 The Evaluation Framework 45 4.1 Egypt’s Independent Power Projects Figures 4 1.1 Egypt: GDP Growth Rates, 1990–2007 12 2.1 IDA/IBRD Commitments and Disbursements, Fiscal 1999–2007 14 2.2 Percent of Projects at Risk, Fiscal 1999–2007 15 2.3 Disbursement Ratios, Fiscal 1999–2007 Tables 5 1.1 Egypt: Social Indicators, 1996–2005/06 13 2.1 IDA/IBRD Commitments by Pillar and Sector Board 15 2.2 IEG Aggregate Ratings (by project exit year), Fiscal 1999–2007 22 3.1 Maintaining Macroeconomic Stability—Outcome Indicators 23 3.2 Egypt: Macroeconomic Indicators, 1999–2007 27 3.3 Budget Details (percentage of GDP) 29 3.4 Trade Reform Outcome Indicators 32 3.5 Private Sector Development Indicators 33 3.6 Egypt: Selected Banking Sector Indicators 35 3.7 Pillar 1: Summary Outcome Rating 40 4.1 Water and Rural Development Projects 41 4.2 Contributions of Water Management Projects, Fiscal 1999–2006 50 4.3 Environment Outcome Indicators 51 4.4 Pillar 2: Summary Outcome Rating 56 5.1 Gender Indicators 59 5.2 Education Indicators 61 5.3 Health, Nutrition, and Population Indicators 65 5.4 Poverty Indicators 67 5.5 Pillar 3: Summary Outcome Rating 72 6.1 Overall Outcome Ratings iv Abbreviations AAA Analytical and advisory assistance AfDB African Development Bank CAE Country Assistance Evaluation CAS Country Assistance Strategy DPL Development policy loan EEAA Egyptian Environmental Affairs Agency EPAP Egypt Pollution Abatement Project EU European Union FDI Foreign direct investment FSAP Financial Sector Assessment Program GDP Gross domestic product GNI Gross national income IBRD International Bank for Reconstruction and Development ICA Investment climate assessment IDA International Development Association IEG Independent Evaluation Group IFC International Finance Corporation IMF International Monetary Fund IPP Independent power producer kWh Kilowatt hours MW Megawatts NCW National Council of Women PCR/TAS Project completion report/technical advisory services (IFC) PEP-MENA Private Enterprise Partnership for the Middle East and North Africa PER Public Expenditure Review PFM Public financial management PPP Public-private partnerships PSG Public sector governance SFD Social Fund for Development SME Small and medium-size enterprise TA Technical assistance TSA Treasury Single Account UNDP United Nations Development Programme USAID United States Agency for International Development v Irrigation improvement project, financed by the World Bank. Photo courtesy of the Irrigation Improvement Sector. Acknowledgments This Country Assistance Evaluation was written Group–Country Evaluation and Regional by Ismail Arslan, with contributions by consult- Relations [IEGCR]). A review of International ants Ataman Aksoy, David Berk, Laurie Effron, Finance Corporation operations in the Arab James Fox, Joseph Goldberg, Omar Lyasse, and Republic of Egypt during this period was Victor Orozco. The peer reviewers were Susanne prepared by Cherian Samuel and Izlem Yenice Muller (Harvard University), John Nash (Latin (IEG–International Finance Corporation) and is American and the Caribbean Region Sustainable included in appendix B. William Hurlbut Development Department, World Bank), provided editorial assistance. Production and Marilou Uy (Africa Region Finance and Private logistical support was provided by Agnes Santos. Sector Development Department, World Bank), Heather Dittbrenner copy edited the study for and Steven Webb (Independent Evaluation publication. Director-General, Evaluation: Vinod Thomas Director, Independent Evaluation Group–World Bank: Cheryl W. Gray Senior Manager, Country Evaluation and Regional Relations Unit: Ali M. Khadr* Task Manager: Ismail Arslan * Ali M. Khadr, Senior Manager, IEGCR, recused himself from management oversight of this evaluation, owing to his past