Annex C Page 24 o f 46
60. With the cancellation of several planned Bank loans aimed at stimulating economic growth in rural areas, the one remaining Bank instrument with this objective was the Survey on Rural Development Needs. (See paras. 116, 123-124.) This had been envisioned as an Agriculture Sector Note when the CAS was prepared, but when the Rural Finance loan was replaced by a Rural Development loan, the scope o f the sector work was modified accordingly. The Survey served as a basis for Bulgaria’s “National Program for development o f Agriculture and the Rural Regions 2007-20 13,” a requirement for EU accession. Theme 2: Strengthening Public Administration and Anti-Corruption Initiatives 61. The primary CAS instruments aimed at strengthening Bulgaria’s public administration and anti-corruption initiatives were Pillar 4 o f the PAL program (Improving Public Sector Governance), the Revenue Administration Reform Loan, and the Trade and Transport Facilitation in South East Europe (TTFSE) loan. The Bank’s fiduciary AAA (the Country Financial Accountability Assessment and Country Procurement Assessment Report) were also intended to support these efforts. The Bank also provided technical assistance on to strengthen the Government’s capacity in debt management. (See Box 2.)
62. The objectives of Pillar 4 of the PAL program were wide-ranging, as public administration reform and anti-corruption efforts had not been previously tackled. By contrast, the structural reforms supported by Pillars 1-3 were building on those initiated under sector adjustment loans during the previous CAS period. Actions supported by the P A L program included Parliament’s approval o f amendments to the Civil Service Law, and the Government’s adoption o f a Public Administration Reform Strategy, launch o f fknctional reviews, introduction o f performance standards, improvement o f budget management systems, adoption o f a legal framework governing the accountability o f judges, and preparation and implementation o f an Anticorruption Strategy and Action Plan. Much o f the reform agenda for Pillar 4 was informed by studies funded by a PHRD grant, including a comparative analysis o f civil service pay and a proposal for a results-based compensation system. Box 2: Debt Management Technical Assistance Program and Use of IBRD Financial Products
In mid-2002 the Ministry of Finance requested technical assistance in public debt management from the Bank’s Treasury staff, to address Bulgaria’s high proportion of external debt coupled with currency and interest rate risk. A three-year Government Debt Management Strategy was approved by the Council o f Ministers in March 2003, and several months later Bulgaria signed a Master Derivatives Agreement“ (MDA) with the Bank. The MDA provided the contractual framework for a swap between the Bank and the Government to change the currency of Bulgaria’s net obligation on a VSL (Variable Spread Loan) o f $96 million, €?omUSD to EURO, in line with Bulgaria’s strategic objective to reduce its share o f USD-denominated debt. The swap took place in November 2003 and was the first IBRD currency swap under an MDA. In December 2003 the Bank’s Treasury staff entered into a fee-based technical assistance agreement with the Bulgarian authorities, with the fee paid by the Bulgarian National Bank (BNB) through the Bank’s Reserve Asset Management Program’s technical advisory program for international reserves management. The technical assistance has focused on public debt and cash management, with the objective o f strengthening the institutional capacity of the Bulgarian State Treasury, in particular its governance and decision-makingarrangements and the technical skills o f staff below the management level. During its technical assistance program with the Bank, Bulgaria has successfully implemented its debt management strategy and strengthened the organizational structure o f the Debt Management Office. Intensive staff training has taken place, both in Sofia and abroad, and the technical assistance program i s nearing completion,
“ Bulgaria was the second country to do so, after Tunisia.