Criteria for Supplemental Support

To determine eligibility for the Supplemental Support, the Bank applies a series of criteria at two levels:

• First- level criteria
  Application of the first-level criteria consists in determining whether a potentially eligible country meets the key conditions laid down for consolidation of peace and security, and whether any damage to the economy results from conflict or a crisis environment.  These conditions are:
  Commitment to consolidate peace and security
  
  • Signing of an agreement for global peace, crisis emergence or reconciliation recognized by the international community
  • Existence of a functional or transition government acceptable to stakeholders and the international community
    Unfulfilled Social and Economic needs
  • Adverse economic effects of conflict, characterized by Gross Domestic Product contraction by 10% or more since 1990
  • Very low level of human development, characterized by classification of the country in the last quintile of the United Nations Human Development Index.

• Second-level criteria
  Countries meeting these first criteria are assessed at the second level. This stage seeks to determine their degree of commitment to continuing implementation of adequate programs for macroeconomic consolidation and structural reforms. This second level also assesses determination to increase transparency and responsibility in the management of debt and financial resources.
  At this stage, the Bank evaluates the macroeconomic and structural reforms implemented, to determine whether they contribute to:
  
  • Strengthening the country’s growth prospects and debt management  
  • Boosting the country’s commitment to continued implementation of appropriate policies and practices relating to public finance management
  • Restoring an environment conducive to entrepreneurship and private sector development, and
  • Increasing transparency and empowerment of institutions responsible for public resource management.

Criteria for Arrears Settlement
The countries eligible for Arrears Clearance are those with chronic debt arrears to the Bank. These countries are required to meet the two levels of Additional Support criteria and also:

• Furnish evidence of their respect of the Bank Group’s status of preferred creditor. To that end, they should fully honor all further maturities for debt outstanding, or at least honor them to the same debt service level as for other international finance institutions, and
• Be eligible for debt relief under the Highly Indebted Poor Countries (HIPC) Initiative, without however having attained the decision point for that Initiative.

Criteria for Targeted Support
To be eligible for Targeted Support, countries must show the following characteristics:

• Marked socio-economic deterioration
• Conflict or prolonged crisis
• Emergence from conflict or a transition phase
• Gradual socio-economic recovery.