Development Policy Loan (formerly PAL 3)

closed

This First Development Policy Loan (DPL-1) will support priority reforms in the social and economic spheres of the program of the Government of Ukraine - "Action Plan for Meeting the People". The project design focuses on the institutional and policy changes necessary to implement the reforms, within the context of Ukraine's European Union (EU) integration efforts, and, is a valuable tool in the process of implementing the Ukraine-EU Action Plan. The DPL program, supported by the project, seeks to integrate government, and donor activities under three broad themes to improve public governance: a) investment climate, b) public administration and public finance management, and, c) social inclusion. It builds on a number of accomplishments supported under the Second Programmatic Adjustment Loan (PAL-2), being concluded in parallel with this loan. However, there are political and economic risks, which the DPL's design will seek to mitigate. Engagement will improve the Bank's capacity to help the authorities make appropriate policy decisions. Furthermore, the content of the program creates the basis for sustained, and diversified growth over the medium term. More broadly-based and socially inclusive growth should help dampen the political costs of reform, while reducing social and regional imbalances.