Belarus - Strengthening Public Investment and Public Private Partnerships : Assessment Report

Faced with a prolonged economic downturn and resulting fiscal constraints, the Government of Belarus is looking to increase the efficiency of public funds spent on public investment. As the total envelope on public capital spending is likely to stagnate or even decrease further in the coming years, it becomes important to increase the output for each ruble spent on infrastructure and other public investment. Several international studies point to a significant payoff from improving Public Investment Management (PIM) – the institutions, systems, and processes guidingdecisions on how to prepare and implement public investment projects. The InternationalMonetary Fund (IMF) estimates – based on a survey of the efficiency of PIM systems in a range of countries having gone through PIM assessments – suggest that an average country obtains 30 percent less output in terms of physical infrastructure for a given expenditure than the most efficient countries. Up to two-thirds of this efficiency gap could be clawed back through improved PIM institutions (IMF, 2015). At the same time, alternative modalities have developed for procuring andimplementing public investment projects through the involvement of private partners. Such Public Private Partnerships (PPPs) can in some cases increase the efficiency of project implementation and likelihood of achieving project outcomes, although attention must be devoted to properly identifying and managing significant fiscal and other project-related risks. Against this background, the Government of the Republic of Belarus (GoB) has requested the World Bank to provide technical assistance to strengthen PIM and PPPs. As a first step, this report assesses the current systems and procedures for public investment against good international practice using a diagnostic methodology developed by the World Bank and tested in a large number of countries worldwide. The analysis identifies gaps in the current system, and options for improvement are provided as a basis for further discussion and prioritization by the GoB.