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29 March 2016, 12:01

WB to allocate $10m loan to Belarus for public financial management modernization project

MINSK, 29 March (BelTA) – The World Bank will allocate a $10 million loan to Belarus for the public financial management modernization project, BelTA learned from the WB Office in Belarus.

“The Board of Executive Directors of the World Bank approved a $10 million loan to the Republic of Belarus for a new Public Financial Management Modernization Project,” specialists informed.

The project is aimed to improve policy alignment of the budget, consolidate cash balances, improve budget transparency and lay foundations for implementation of an Integrated Financial Management Information System (FMIS).

The project design is based on profound analytical work. The Public Expenditure and Financial Accountability (PEFA) Assessment carried out by the World Bank in 2014 argued that Belarus' Public Financial Management (PFM) system managed to deliver fiscal discipline in recent years but still had notable weaknesses.

“The government's public financial management reform strategy prepared by the Finance Ministry in 2015 relies on the evaluation of public spending and financial accountability and involves an ambitious reform program in the areas of medium-term budgeting, program budgeting, treasury, debt management, and public sector accounting,” the World Bank said.

“The World Bank helped the government to outline key structural reforms to improve competitiveness, long-term economic growth, and shared prosperity in Belarus. Budget planning and execution is a key foundation for public sector reforms to improve service delivery and efficient use of public resources,” WB Country Manager for Belarus Yang Chul Kim was quoted as saying. According to Mr. Young Chul Kim, “the Belarusian government recognizes that changes are needed in the way it manages public finances and we are ready to assist the authorities in this endeavor.”

The project relies on a phased approach to public financial management modernization. It supports institutional reforms, improving the legislative and organizational framework for the public financial management system, redesigning core business processes and investing in capacity development.

“As a result of implementation of the project, the private sector and households will benefit from improvements in transparency and more efficient management of public resources, which will ultimately lead to improvements in the level and the quality of public services,” the WB Office quoted Oleksii Balabushko, Senior Public Finance Specialist, World Bank Project Team Leader, as saying.

Since the Republic of Belarus joined the World Bank in 1992, lending commitments to the country have totaled $1.58 billion. In addition, grant financing totaling $28 million has been provided to various programs. The active investment lending portfolio financed by the World Bank includes nine operations totaling $998 million.

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