Argentina - Social Protection Project

Document of The World Bank Report No. 14832-AR STAFF APPRAISAL REPORT ARGENTINA SOCIAL PROTECTION PROJECT OCTOBER 27, 1995 Human Resources Operations Division Country Department I Latin America and the Caribbean Region CURRENCY EQUIVALENTS Currency Unit - Argentine Peso (A$) Official Rate: US$1 = A$1 FISCAL YEAR January 1 to December 31 ACRONYMS AGN Auditoría General de la Nación ASOMA Programa Apoyo Solidario a los Mayores CENOC Centro Nacional de Organizaciónes Comunitarios DEP Dirección de Evaluacion Presupuestaria DNPGS Dirección Nacional de Programación de Gasto Social EPAs Associative Productive Enterprises FNE Fondo Nacional de Empleo FOPAR Fondo Participativo de Inversion Social FONAVI Fondo Nacional de la Vivienda ICB International Competitive Bidding IDB Inter-American Development Bank IMF International Monetary Fund INDEC Instituto Nacional de Estadística y Censos INSSJP Instituto Nacional de Servicio Social para Jubilados y Pensionados INTA Instituto Nacional de Tecnologia Agricola MBA Metropolitan Buenos Aires MCE Ministry of Culture and Education MOE Ministry of Economy MOH Ministry of Health MTSS Ministry of Labor and Social Security NBI Necesidades Básicas Insatisfechas NCB National Competitive Bidding NGOs Non Governmental Organizations PAI Programa Ampliado de Immunización PAMI Programa de Atención Médica Integral/Integrated Program Medical Care PEP Programa de Empleo Privado PPAs Participatory Poverty Assessments PPF Project Preparation Facility PRENO Programa de Entrenamiento Ocupacional PROAS Programa de Asistencia Solidaria PRODESO Programa Participativo de Desarrollo Social PROEDIS Programa de Empleo de Interés Social PROMIN Programa Materno Infantil y Nutrición PRONAPAS Programa Nacional de Pasantiás PROSSE Mexico Program of Essential Social Services PSA Programa Social Agropecuario PSE Plan Social Educativo SAGyP Secretariat of Agriculture, Livestock and Fisheries SDS Secretaria de Desarrollo Social SIEMPRO Sistema de Información, Evaluación y Monitoreo de Programas Sociales SIFs Social Investment Funds SNCH Servicio Nacional de Chagas SOEs Statement of Expenditures TDP Technical Dissemination Plan UCAF Unidad de Coordinacion Administrativo Financiera UEC Unidad Ejecutora Central UEP Unidad Ejecutora Provincial UPS Unidad de Politica Social WHO World Health Organization ARGENTINA STAFF APPRAISAL REPORT SOCIAL PROTECTION PROJECT TABLE OF CONTENTS LOAN AND PROJECT SUMMARY i 1. SOCIAL ISSUES IN ARGENTINA 1 A. Economic Setting 1 B. The Mexico Crisis and its Impact on Argentina 2 C. Argentina's Poverty and Unemployment Situation 3 D. Social Budget Retrenchment and Program Issues 4 E. Government Social Policy and Strategy 8 2. ASSISTANCE STRATEGY 10 A. Rationale for Bank Involvement 10 B. The Role of Other Donors 10 C. Lessons Learned from Other Operations 11 3. THE PROJECT 12 A. Project Objectives 12 B. Project Description 13 4. INSTITUTIONAL ARRANGEMENTS FOR IMPLEMENTATION 26 5. PROJECT COSTS AND FINANCING PLAN 30 A. Project Costs 30 B. Recurrent Costs and Project Sustainability 31 C. Financing Plan 32 6. PROCUREMENT, DISBURSEMENTS, AND AUDITS 33 A. Procurement 33 B. Disbursements 37 C. Audits 41 7. MONITORING AND EVALUATION 41 8. BENEFITS AND RISKS 43 9. AGREEMENTS REACHED AND RECOMMENDATION 44 10. LIST OF ANNEXES A. Annex 1: Social Policy Letter and Public Social 48 Expenditure Tables B. Annex 2: Some Protected Social Programs 59 C. Annex 3. Matrix of Key Monitoring Indicators 65 D. Annex 4: FOPAR: Sample Monitoring Indicators 67 E. Annex 5: SIEMPRO Matrix of Key Activities 68 F. Annex 6: Features of SIEMPRO -INDEC Agreement 80 G. Annex 7: Technical Dissemination Plan (SIEMPRO) 81 H. Annex 8: SDS and SIEMPRO Organizational Charts 83 I. Annex 9: Project Cost And Financing Tables 86 This report is based on the findings of World Bank missions that visited Argentina in April and June 1995. The June appraisal team was composed ofMmeslMessrs. Robert Hecht (Principal Economist, Task Manager), Evangeline Javier (Senior Economist, Team Leader), William Experton (Senior Economist), Jose Moscoso (Procurement Coordinator), Brenda Enuton (Operations Analyst), Alan Berg (Senior Nutrition Advisor, PHN), Jorge Barrientos (Implementation Advisor, PHN), Paul Levy (Principal Economist, LA1CO), Haeduck Lee (LA3HR), Joseph Formoso (Disbursement Officer, LOAEL), and Patricio Fernandez (Consultant). Steve Schoenberger (LAINR), Julie van Domelen, and Leain-Hong Ding (A 1HR) also contributed to selected parts of this report. Report processing support was provided by Karla McEvoy and Sarah Menezes. Peer reviewers are David de Ferranti (PHN) and John Innes (LA2HR). Messrs. Gobind T. Nankani and Alain Colliou are Department Director and Division Chief respectively, for this operation. i ARGENTINA SOCIAL PROTECTION PROJECT Loan and Project Summary Borrower: The Argentine Republic Implementing Ministries of Economy, Education and Culture, Labor and Agency: Social Security, and Social Development Secretariat Beneficiaries: Social services protected under the project (basic education, vaccinations and disease control, nutrition, and employment) would benefit more than three million poor persons, primarily mothers and children. The pilot Participatory Social Investment Fund would benefit approximately 70,000 poor families in Northern Argentina. Poverty Category: Program of Targeted Interventions. Protected social services and the social fund are directed to the poor and vulnerable. Amount: US$152 million (including up to US$30.4 million of retroactive financing). Terms: Standard amortization term, grace period, and interest rate for fixed-rate US Dollar single currency loans expected to disburse within three years. Commitment Fee: 0.75% on undisbursed loan balances, beginning 60 days after signing, less any waiver. Financing Plan: See paragraphs 5.5 and 5.6, and Table 5.2 Net Present value: Not applicable Staff Appraisal Report: No. 14832-AR Project Code: AR-PA-35495  ARGENTINA SOCIAL PROTECTION PROJECT 1. SOCIAL ISSUES IN ARGENTINA A. Economic Setting' 1.1 Four years have passed since Argentina, emerging from the severe economic crisis of 1989-90, adopted the Convertibility Plan. This innovative plan restructured Argentina's economic landscape through reforms of the state and financial institutions, privatization, and liberalization of foreign and domestic credit. From extreme hyper- inflation, the country moved relatively quickly to a low annual inflation rate of 3.9 percent in 1994. Output and productivity increases have been remarkable for the last four years, with GDP growth averaging 7.7 percent annually. The initial consumption- led boom matured into a healthy pattern of investment and export-led growth. Privatization of state assets has been far-reaching, and much more successful than expected. As a result of the economic recovery, poverty levels declined significantly, although economic restructuring with a rigid labor market has resulted in increased unemployment, which reached about 13 percent of the labor force by late 1994. 1.2 With the dynamic evolution of the economy, shifting from consumption to export and investment-led growth, GDP in 1993 and 1994 grew by 6 and 7.1 percent respectively. Gross fixed investment reached 20 percent in 1994, associated with increased national and foreign savings. Exports, which were affected by declining international prices in 1992-93, rose by 20 percent in 1994, with manufactured goods exports exhibiting particular buoyancy, growing at an average of 27 percent in 1993-94. Better international prices for grains and improved economic conditions in Brazil contributed to the growth in exports. Imports of capital goods led the expansion, indicative of the acceleration in investment and the restructuring of the economy. Financing trade and current account deficits was not difficult, given Argentina's improved access to international financial markets during 1993 and 1994. During the first two months of 1995, exports rose by 35 percent, while imports remained approximately at the previous year's level. 1 See the Country Assistance Strategy dated April 10, 1995 for a more comprehensive assessment of Argentina's economic prospects. 2 B. The Mexico Crisis and Its Impact on Argentina 1.3 Despite these achievements, Argentina is now facing its first serious financial crisis since the implementation of the Convertibility Plan in 1991. The country has been particularly vulnerable to the events in Mexico, due to Argentina's relatively heavy reliance on foreign capital inflows (financing in 1994 an estimated current account deficit of 3.6 percent of GDP), the inflexibility of its exchange rate regime, and the need for a strong financial system under the Convertibility Plan. Higher international interest rates and the Mexico crisis have reduced capital inflows. From December 1994 through March 1995, the stock market declined by about 30 percent and banking deposits fell by about 15 percent. Consequently, economic activity has slowed considerably, with economic growth during 1995 expected to be flat. 1.4 In mid-March 1995, the Government reacted forcefully to mitigate the crisis. To reestablish a fiscal surplus, it cut expenditures on export subsidies, public sector wages, social security expenditures, and federally-funded social services, while raising the VAT rate and other taxes. The Government extended to March 31, 1996 its program with the International Monetary Fund, (IMF) and announced that tax adjustments would generate a fiscal surplus of 1.4 percent of GDP (including privatization proceeds) in 1995. The announced measures are estimated to yield US$6.3 billion, equivalent to 2 percent of GDP, in the remainder of 1995. At the same time, public expenditures were cut by 3.6 percent in comparison with the original budget approved in December 1994. This decline is expected to result in a contraction in public sector wages, investment, and non-wage recurrent spending for a large number of federal programs, including social services (see below). 1.5 The Government is reinvigorating the adjustment process by passing legislation capping social security pensions, liberalizing labor laws to small and medium enterprises, and taking measures to restructure the financial system by accelerating the privatization of provincial banks and the consolidation of private banks. To bolster its adjustment program, the Government has assembled a financial package of approximately US$11 billion from multilateral organizations (US$5.4 billion from IMF, the Bank and Inter-American Development Bank, IDB), the Japanese EXIM Bank (US$0.8 billion), bond sales (US$2.3 billion) and projected asset sales (US$2.4 billion). 1.6 The strong and rapid reaction of the Government to the crisis has reduced concerns about its future domestic action but the external environment remains uncertain. Although the initially strong negative reaction of financial markets to the Mexican crisis has now improved, there remains a reluctance to redirect significant flows towards emerging markets, particularly in Latin America. Even under an optimistic scenario, in which the principal countries affected by the crisis adopt 3 appropriate economic policy measures that reestablish credibility in the eyes of international investors in the next few months, access to international financial markets would be only slowly regained beginning in late 1995, and capital inflows would remain below those observed in previous years. C. Argentina's Poverty and Unemployment Situation 1.7 The general slowdown in economic activity, the rise in unemployment, and the recent reduction of public expenditures could have adverse effects on social conditions. A risk exists that the country's poverty situation, which has improved substantially since 1989, could deteriorate under these circumstances. 1.8 Argentina's poverty level2 declined significantly between 1990 and 1993. During that time, the share of the population living in poverty fell from about 35 percent to 20 percent. In Metropolitan Buenos Aires (MBA), where more than a third of the country's population lives, the 1993 poverty rate (the proportion of the population below an estimated poverty line) was 17.6 percent, or almost half its 1990 level. Not only did poverty in MBA greatly diminish in the 1990s, but the poor as a group did not experience as much extreme poverty as in the past. 1.9 Notwithstanding these improvements, poverty remains a reality for a sizable part of the population. Even though lack of reliable data on rural poverty continues to be a problem, some limited information based on case studies, qualitative assessments and surveys points to acute poverty in rural areas. The highest rates of poverty -- averaging 40 percent -- occur in the provinces in the Northeast and Northwest of the country. The rate of poverty decline in the early 1990s has been much swifter in MBA than in the remote provinces. While all provincial cities have experienced a fall in poverty between 1990 and 1992, the speed of decline has been slowest in the northern provinces. As a result, the share of the nation's poor living in the north has risen from 24 percent to 29 percent. 1.10 Rising unemployment has become a major concern in Argentina, in part because it exacerbates the country's poverty situation (in 1993, more than 25 percent of the unemployed population in MBA were living below the poverty line). Despite the impressive growth performance of the Argentine economy during 1990-94, the number of net jobs created was only around 350,000 or a 3.1 percent cumulative increase for the four-year period. Most of this growth took place in 1991-1992. In 1993 there was no employment growth, and in 1994 there was a net decrease of about 1.5 percent. Consequently, the unemployment rate reached a high of about 13 percent of the labor 2 Data on household income used to measure poverty are only available from Argentina's urban areas. However, since nearly 85 percent of the population lives in the cities, the numbers cited here are broadly representative of the country as a whole. See "Argentina's Poor: A Profile," dated June 27, 1995. 4 force in October 1994 and 18.6% in May 1995, up from an average rate of about 6 percent in earlier years. Structural constraints in the Argentine labor market (i.e., segmentation and excessive regulations) and the effects of economic restructuring largely explain these developments. 1.11 Current unemployment disproportionately affects the young (half of the unemployed are less than 25 years old) with incomplete secondary or primary education; less skilled workers (the unemployment rate for blue collar workers is nearly four times the rate for professionals); and heads of households between 45 and 65 years old. Unemployment rates are also about 25 percent higher for women than for men, with the largest difference prevailing for the 35-49 age group. By economic sector, unemployment is particularly high in construction and traditional manufacturing industries such as textiles and clothing. D. Social Budget Retrenchment and Program Issues 1.12 Public social expenditure3 under the Convertibility Plan has been growing in absolute and relative terms, reflecting the Government's commitment to invest in human capital and reduce poverty. Consolidated public social expenditure increased from 16.4 percent of GDP in the 1984-88 period to 17.3 percent during the first Menem Administration (1989-94), reaching US$51.4 billion or 18.4 percent in 1994 (Table 1.1). It is worth noting that this increase took place as the size of the overall public sector diminished from 33.2 percent of GDP during the previous administration to 29.9 percent in the 1989-94 period, on account of a major privatization effort. Consequently, overall social spending as a share of total public expenditure rose significantly from 49.5 percent in the 1984-88 period to 67.2 percent in 1994. 3 Public social spending includes expenditures of the national government, the provinces, and municipalities in the social sectors (culture and education, health, housing, nutrition, water and sanitation, social welfare, labor, sports, et.al.), and social insurance (social security, family allowances, health funds, and unemployment insurance). 5 Table 1.1 Argentina: Consolidated Pubic Sector Expenditures* 1910-88 194-n In$ 1990 1991 1992 1993 1904 1991-94 Total Expenditures( % of GDP) 32.5 33.1 35.6 29.7 29.3 28.7 28.6 27.4 28.5 State Administraion 5.5 5.0 5.0 4.7 5.3 5.5 5.8 5.3 5.5 Social Sectors and Human Resources 14.6 16.4 15.3 10.6 17.6 17.8 16.0 16.4 18.0 Pubie Enterprises and Infrastructure 7.6 7.2 0.4 4.4 3.3 2.9 3.2 2.0 2.6 Public Debt 4.8 4.4 9.0 4.1 3.1 2.6 1.8 1.8 2.2 Shares (% of Total Expenditures) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 State Administration 10.9 15.2 13.9 157 17.9 19.2 20.2 19.5 19.2 Social Sectors and Human Resources 44.6 49.0 43.0 55.8 60.1 01.9 63.0 67.2 83.0 Public Enterprises and Infrastructure 23.5 21.6 17.9 14.8 11.3 10.0 11.0 7.3 10.0 Public Debt 14.8 13.3 25.2 13,9 10.6 6.9 5.7 5.9 7.8 Source: "Argentina on Crecimlento 1995-99, Proyacclones Macroeconomicas", 8.P.E., Ministry of Economy. * Federal, Provincial and Municipal Governments. 1.13 Within the social areas, more than half of the 1994 budget (57.3 percent) was devoted to social insurance programs, including old age and disability pensions, health insurance, family allowances, and unemployment insurance.' This high proportion of spending for social insurance, mostly financed through earmarked payroll taxes, reflects Argentina's aging population profile, non-communicable disease epidemiology, and an increased pool of unemployed persons and the working poor requiring social assistance. Within social insurance, the largest proportional increases in spending have occurred in social security pensions (up from 34 percent of the total in 1984-88 to nearly 39 percent in 1994) and in health insurance for the elderly under the Instituto Nacional de Seguridad Social para Jubilados y Pensionados, or INSSJP (from 4 to 5.1 percent during the same period). The remainder of public social expenditures (42.7 percent of the total) consists of education and health (excluding insurance), housing and social welfare. 1.14 Taking into account all social expenditures, including social insurance, in 1994 the Federal Government accounted for 54 percent, provinces for 39.3 percent, and municipalities for 6.7 percent of public social spending.5 Responsibility for social spending has been shifting over time from the Federal Government to provincial and municipal governments. This trend towards fiscal decentralization was further accentuated in 1993, when the federal government transferred responsibility and budgets for secondary education and public hospitals to the provinces. As a result, in 1994, about 62.6 percent of public social expenditure excluding social security was executed by provinces and municipalities, even though part of those were still financed by the Federal Government (e.g., the housing program, FONAVI). At the same time, the Federal Government has maintained its responsibility for social insurance expenditures, with social security alone accounting for 57.4 percent of the Federal Government's social expenditure. 4 See Annex Table 1.1. SSee Annex Table 1.2. 6 1.15 In response to the recent economic crisis that was initially manifested in Mexico and spilled over to a number of emerging markets including Argentina, the Federal Government in December 1994 and again in March 1995 cut its original 1995 budget by a total of 3.9 percent or US$1.6 billion (from US$42.9 billion to US$41.3 billion). The cuts in federal social sector expenditures were slightly lower - about 2.4 percent (from US$27.9 billion to US$27.2 billion) - because social security programs and several social programs based on transfers to the provinces, and thus linked to earmarked taxes, were not affected by the cuts. Excluding social insurance expenditures, the federal budget for the traditional social sectors was reduced by about 6.3 percent, from US$8.6 billion to about US$8.1 billion. The programs suffering the largest cuts were education (down by 9.2 percent), health and labor (3.5 percent each). 1.16 Despite these recent cuts, total social spending in the adjusted 1995 budget in real terms remains approximately unchanged from the actual spending levels of 1994 (a small increase of 0.6 percent). At the same time, the adjusted 1995 budget for non- social expenditures is 5.9 percent lower in real terms than the actual level of spending in 1994 (Table 1.2). As a result, the share of social spending in the overall budget is expected to rise from 64.5 percent in the 1994 executed budget to 66 percent in the adjusted 1995 budget. In other words, in the face of budget cutbacks, the Federal Government thus far has protected social spending relatively more than other areas and has maintained social spending in absolute terms. 7 Table 1.2 Argentina: Federal Budgetary Expenditures In 1994 Pesos 11 1994 Budget 1995 Budget Adjustment Change 1995/94 Executed Initial Adjusted 1995 * Initial Adjusted (1) (2) (3) (3)Y(2) (2)y(1) (3)Y(1) A. Social Expenditures 26,303.7 27,101.4 26,456.3 -2.4% 3.0% 0.6% A.1 Social Sectors 6,750.3 8,355.4 7,829.9 -8.3% 23.8% 16.0% A.1.1 Targeted programs 2,644.6 3,774.2 3,655.2 -3.2% 42.7% 38.2% A.1.1.1 IBRD targeted programs 320.5 412.8 382.4 -12.2% 26.8% 13.1% Apoyo solidarlo a mayores (ASOMA) 5.5 53.1 41.8 -21.3% 874.2% 666.9% Plan social agropecuario 6.9 5.8 4.9 -16.5% -16.0% -29.9% Generacion do empleo 1/ 138.0 179.1 179.1 0.0% 29.8% 29.8% Control de enfermedades prevalentes 10.6 12.5 4.9 -60.8% 18.2% -53.7% Acciones compensatorlas en educacion 129.8 123.0 96.5 -21.5% -5.2% -25.6% Norm., suminist.y superv. de vacunaciones 10.9 15.5 13.2 -15.1% 42.5% 21.0% Control de enf. transmisible por vectores 17.2 20.1 18.8 -6.3% 16.8% 9.4% Invest. y control de enf. do Chagas 1.7 3.7 3.2 -12.8% 117.1% 89.2% A.1.1.2 Other targeted programs 2,324.0 3,361.4 3,292.8 -2.0% 44.6% 41.7% A.1.2 Universal programs 4,094.8 4,581.2 4,174.7 -8.9% 11.9% 2.0% Education 2,180.5 2,551.1 2,335.8 -8.4% 17.0% 7.1% Salud 983.7 916.3 829.8 -9.4% -6.9% -15.6% Others 930.7 1,113.8 1,009.1 -9.4% 19.7% 8.4% A.2 Social Insurance 19,553.4 18,746.0 18,626.3 -0.6% -4.1% -4.7% B. Other Expenditures 14,488.0 14,626.7 13,68.4 -8.8% 1.0% -5.9% Total PublIc Expenditure (A+B) 40,791.7 41,728.1 40,091.7 -3.9% 2.3% -1.7% Source: Ministry of Economy. 1/ Assuming GDP deflator growth of 3%. 2/ Includes other non4BRD programs. I By March 1996 1.17 The adjusted 1995 federal social budget of US$27.2 billion includes social insurance (US$19.2 billion) and traditional programs "targeted" to the poor (US$3.8 billion) and of a more "universal" nature (US$4.3 billion). Even after taking into account the announced budget cuts, the changes in spending between 1994 and 1995 vary substantially among these three categories -- a real decline of 4.1 percent for social insurance and real increases of 2 percent for universal programs and of 38 percent for the targeted programs. In other words, despite the fact that the social programs directed to the poor have been cut in 1995 about the same amount as the rest of the federal budget, planned spending for these poverty programs is still more than one-third higher than in the previous year of 1994. The Government's decision to continue raising the budget of some of these programs in the future would be tempered by the fact that some programs require significant improvement in internal efficiency more than increased financing. 8 1.18 If the Federal Government makes any additional budget cuts before the end of 1995, however, these could fall heavily on the traditional social expenditures, resulting in real declines in overall social outlays and eroding the increases that the targeted programs currently expect to receive. This is because the current system of obligatory and automatic national revenue transfers to the provinces (co-participation), and the financing of other programs such as social security and interest on public debt that are difficult or impossible to cut, leave the Government with a narrow base of a little more than a fifth of the total budget from which any or all cuts would have to occur. Under these circumstances, it is critical that the Government protect and increase the efficiency of its spending for health, nutrition, education, rural development, and employment and income support programs targeted to the poor. E. Government Social Policy and Strategy 1.19 The Government's letter of social policy dated October 10, 1995 (Annex 1) argues that the intensification of economic growth and the maintenance of stability would strengthen overall social conditions in the country. The Government intends to attach high priority to the development of policies to create new employment opportunities and to invest in human resources (through education, training, and health services) to prepare people for a competitive labor market. 1.20 To fight against unemployment, the Government is implementing a very comprehensive policy. First, the Government is setting measures to improve the functioning of the labor market: (i) the Law on contracts (Ley de Modalidades de Contratacion, passed in March 1995) prescribes a three month probationary period for apprenticeship contracts and streamlines part-time work; (ii) the Law on small and medium enterprises (Ley de PYMES passed in March 1995) provides more flexibility over contractual modes, labor practices and provides separate considerations for collective bargaining agreements; (iii) the Compensation Insurance Law (Ley de Riesgos de Trabajo submitted to the Congress) would reduce the costs supported by the wages; (iv) the Law on bankruptcy (Ley de Quiebras submitted to the Congress) would consolidate the economic restructuring process and subsequent sectoral shifts; and (v) a law to modify the actual system of labor negotiations and labor contracts will be sent to Congress. Second, the Government announced in August 1995 a package of measures to increase employment and fiscal revenues: (i) a reduction of labor taxes will be done progressively between September 1995 and January 1996, reducing the cost of labor by about 7.5 percent in Buenos Aires to 20 percent in provinces like Chaco, Formosa and Santiago de Estero; (ii) workers with salaries above $2000 per month will not receive family allowances and the money saved will be deposited in a special fund for emergencies and training for low income workers; (iii) enterprises that hire workers over 55 years of age will be exempted from all labor taxes and contributions for these workers; and (iv) the minimum age for employment, which at the present time is 14 9 years, would be increased and education or training for all the population below the minimum age would be guaranteed. 1.21 To improve the quality and efficiency of spending for the social sectors, the Government has sought the assistance of the World Bank. Major projects to strengthen primary, secondary, and higher education have recently begun or are about to be finalized. The recently effective Decentralization and Improvement of Secondary Education Project (Ln.3794-AR) will strengthen the central education ministry and seven provincial ministries. The Higher Education Reform Project (Ln. 3794-AR), which has already been approved, will support a series of efficiency-enhancing measures, including increased financial autonomy for universities, an accreditation and evaluation system for public and private institutions, and a more transparent financial mechanism for allocating federal resources to Argentine universities. 1.22 Similarly, important initiatives are being carried out for the health sector. The ongoing Maternal and Child Health and Nutrition Project (Ln. 3643-AR) is targeting poor mothers and young children in the urban poverty belts and the underdeveloped northern provinces. A recently approved Provincial Health Development Project (Ln 3931-AR) will transform public hospitals into independent trusts, strengthen the management systems, develop hospital accreditation, and test new hospital reimbursement practices. To enhance the efficiency of the more than 3 percent of GDP spent through the Argentine health insurance system, the Government is planning to undertake a reform program, with the help of a World Bank loan. 1.23 The development and implementation of an effective social policy is severely constrained by the paucity of information and of appropriate systems to target, monitor and evaluate social development actions, especially those meant to benefit the poor. The Federal Government, through the Secretaria de Desarrollo Social (SDS), is spearheading the development of targeting approaches for social programs and the monitoring and evaluation of resulting actions. More specifically, SDS is launching a program called SIEMPRO (Sistema de Informaci6n, Evaluaci6n y Monitoreo de Programas Sociales) that would establish the information system to help improve social program management in Argentina. With SIEMPRO's assistance, corresponding capacity in poverty monitoring and targeting, evaluation and monitoring of social programs would be developed in the provinces, which are now primarily responsible for delivering social services. The Government is also encouraging the participation of non-governmental and community-based organizations in programs specifically directed to the extreme poor to complement weak public service delivery. 10 2. ASSISTANCE STRATEGY A. Rationale for Bank Involvement 2.1 The proposed loan is fully consistent with the Bank's Country Assistance Strategy which was presented to the Board on May 4, 1995, with the Provincial Bank Privatization project (Ln. 3878-AR). The strategy focuses on supporting Argentina's efforts to: (a) consolidate and deepen structural reforms, with strong support during the 1995 crisis period; (b) reduce poverty and develop human resources; and (c) rebuild the country's deteriorated infrastructure base. The proposed loan for the Social Protection Project, part of a US$1.3 billion emergency package offered by the Bank to Argentina (and including operations to reform the banking and health insurance sectors), would help safeguard the delivery of critical social services to the poor and those most adversely affected by the current economic crisis, particularly the unemployed, and improve the efficiency of social expenditures. Thus, the proposed project would support objective (b), related to poverty reduction and human resources development. 2.2 The Bank is already contributing substantial resources to improving the quality, efficiency and effectiveness of social services in Argentina through a set of lending operations in education and health, plus a health financing study and a recent poverty assessment. In addition the Bank produced a background report entitled "Labor Market and Institutions" for the Argentina Country Economic Memorandum (CEM) which provides an analysis of the employment situation, a description of recent labor policy reforms, and orientations for future governmental action. Through these activities, the Bank has developed sector knowledge and strong ties with social sector agencies that enable it to play a unique role in assisting Argentina during the current economic crisis. B. The Role of Other Donors 2.3 The IDB has recently approved a US$450 million Social Sector Adjustment Loan, designed to disburse in three tranches between July 1995 and June 1996. The IDB and the Bank have worked closely together, both in Washington and in the field, to ensure consistency in the operational design and conditionalities of their respective operations. The key conditionality in the IDB operation relates to maintaining for 1995 at least 85 percent of the planned federal expenditure of US$1.039 million for a broad "basket" of 23 targeted social programs. This is complemented by the proposed condition in the Social Protection Project that the Government achieve at least 100 percent of planned 1995 spending for key social programs (within the basket of 23 programs) in the areas of employment, education, health and nutrition. To ensure that federal social spending is rationalized over the coming years, the World Bank project contains a conditionality that the Government carry out a public social expenditure 11 review. The Bank's project finances a major effort to build capacity to evaluate social programs and improve their design and management. 2.4 There is strong complementarity between the IDB and World Bank operations at the individual sector and program level. IDB's support for a national nutrition plan and for improvements in the Ministry of Health's maternal and child health care program are matched by World Bank protection of the ASOMA nutrition program. Similarly, in the area of labor and employment, the IDB loan focuses on the implementation of new labor legislation and the development of a labor market information system, while the World Bank operation supports improvements in the design and management of public works employment programs and the development of a more effective surveillance system for unemployment insurance. C. Lessons Learned from Other Operations 2.5 There has been no previous Bank experience in Argentina with this type of project, which finances a number of existing social programs for a two year "time- slice." A similar operation - the Mexico Program of Essential Social Services (PROSSE), (Ln.3912-MX) - will be in an early implementation stage by the time the Argentina operation is ready for Bank approval. Some lessons learned from the preparation phase of the Mexico project are that: (a) it is important to identify up-front social programs that use procurement and financial accounting practices already acceptable to the Bank, to ensure that government expenditures would be eligible for Bank financing; (b) choosing a limited number of relatively large social programs greatly simplifies implementation; and (c) social expenditure conditionality should be simple, clearly monitorable, and should build in some flexibility for adjustments in the "outer" years to be agreed between the Government and the Bank. Each of these lessons has been taken into account in the proposed project. A major effort has gone into reviewing procurement and accounting practices during pre-appraisal and appraisal. In the end, only Federal Government programs in employment and education would be financed directly with the proposed loan. The expenditure conditionality would set an aggregate floor level for 1996, but would be defined in greater detail during consultations between the Argentine Government and the Bank during the last quarter of 1995. 2.6 Relevant lessons learned from Bank experience with social investment funds (SIFs) are now relatively abundant. The major lessons, which were taken into account in the design of this operation, include: (a) appropriate integration of a social fund as part of a country's poverty alleviation strategy and overall economic reform program; (b) complementarity of SIF subprojects with other investments in the social sectors; (c) the desirability of financing small, technologically simple projects with substantial community involvement; (d) the need for transparency; (e) the need to attract high- caliber staff by maintaining a non-bureaucratic environment and paying competitive 12 salaries to induce higher productivity; (f) the importance of using some monitorable form of poverty targeting; (g) the involvement of both decentralized agencies and NGOs/grassroots organizations in subproject implementation; and (h) the inclusion of strong supervision mechanisms, both by the social fund during subproject execution and through careful donor supervision. 2.7 Lessons of previous Bank technical assistance operations, incorporated into the design of the proposed project, include: (a) Technical assistance (TA) projects should be limited in scope, to permit focused implementation and supervision; (b) borrower commitment and ownership of the project is essential to ensure implementability; (c) continuity in project management is required to ensure sustainability; and (d) appropriate institutionalization of the systems recommended or resulting from the TA assistance should be sought. 3. THE PROJECT A. Project Objectives 3.1 The project's major objectives are to: (a) protect critical social programs for the poor and the vulnerable during the period of severe fiscal restraint in 1995 and 1996; (b) assist in providing income support to those who would be adversely affected by the economic measures, especially those who would lose their jobs; and (c) improve the focus and management of social programs by promoting transparency and efficiency, participation of the civil society, and better targeting of social services to the poor. The project supports the implementation of the Government's social policy (see Annex 1). 3.2 The project would protect planned 1995 spending for nine key social programs, of which four would be financed partly by the Bank Loan. The latter would be employment and training programs which respond to the recent marked increase in unemployment being experienced in Argentina. For 1996, the set of programs to be protected would be discussed and agreed with the Bank in late 1995. However, for the purpose of estimating project costs, the budgetary allocations of the 1995 protected programs are used for 1996. At appraisal a critical review of each of the selected social programs was carried out, to ensure that benefits go to appropriate beneficiaries, program management is relatively efficient, and procurement is generally in line with Bank guidelines. 3.3 The project would also test a new mechanism - the pilot phase of the Participatory Social Investment Fund (Fondo Participativo de Inversion Social, FOPAR) - for channeling financial resources to targeted community-based subprojects, strengthening social organizations and carrying out small-scale investments to address basic needs. The project would finance a program of technical assistance (Sistema de Informaci6n, Evaluaci6n, y Monitoreo de Programas Sociales, SIEMPRO) to develop 13 methodologies and systems for improving the targeting, evaluation and monitoring of national and provincial social programs. B. Project Description 3.4 The project would have three major components: (A) Priority Social and Income Support Programs; (B) Pilot Participatory Social Investment Fund (FOPAR); and (C) Improvement of Social Information, 'Targeting and Monitoring of Social Programs (SIEMPRO). While FOPAR and SIEMPRO are discussed as separate components of the Social Protection Project, they are essential parts of one SDS program - the Participatory Social Development Program (Programa Participativo de Desarollo Social, PRODESO) created by Resolution No. 2851 of September 15, 1995. Each component of the Social Protection Project is described in detail in the following sections. Component A: Priority Social and Income Support Programs (US$366.8 million, or 88 percent of total cost) 3.5 Under this component, loan funds would be used to finance a share of the 1995 federal budget for selected social programs in the areas of employment (PROAS/PRENO, APRENDER (ex-PRONAPAS) and FORESTAR), and education (PLAN SOCIAL EDUCATIVO). At the same time, the budgets of nine highly- effective social programs, i.e., those mentioned above plus others in the areas of nutrition, health, and rural development, would be protected in 1995 and 1996. The protected programs have a total authorized (March 1995) budget of about US$300 million for 1995 (Thble 3.1). 3.6 The nine protected programs were selected for Bank financing using the following criteria: (a) effectiveness of targeting to the poor; (b) ability to provide income support to the unemployed; (c) internal program efficiency; and (d) potential for further rapid improvements in program effectiveness. The current targeting mechanisms and proposed measures for improving program efficiency over the next two years of the protected programs are described below and in Annex 2. Likewise, sample monitoring indicators for the majority of those nine programs are presented in Annex 3. At negotiations, some indicators and corresponding information being generated by the Budget Evaluation Department (DEP) in the Secretariat of Finance were discussed. Assurances were obtained that the Government would furnish the Bank not later than December 15, 1995 a set of indicators, satisfactory to the Bank, to be used for the monitoring of the execution of the protected programs (para. 9.1 (e)). 3.7 Maintaining and Improving Public Social Expenditures. The nine protected programs are a subset of the larger "basket" of 23 targeted federal social programs with a March 1995 budget of US$1.039 billion (Annex Table 2.1). As part of the 14 IDB loan for social sector adjustment approved in 1995, the Government has agreed to maintain the authorized budget of this basket and to spend in aggregate at least 85 percent of the authorized budget for 1995. 3.8 To ensure that critical social programs receive adequate budget support during 1995 and 1996, during negotiations, agreement was obtained that: (a) The Government would ensure that its expenditures in 1995 for the above protected social programs would amount in the aggregate to at least US$300 million and would inform the Bank in writing, no later than February 28, 1996 of the actual level and composition of 1995 expenditures for the protected programs (para. 9.1(a)); (b) By no later than December 15, 1995, the Government would furnish the Bank a report on the physical and financial performance of the protected programs for the first semester of the year (para. 9.1(b)). (c) By no later than December 15, 1995, the Government would provide the Bank with a proposal, acceptable to the Bank, describing the size and composition of the selected employment programs to be financed by the Loan under component A of the project during 1996 (para. 9.1(c)); the submission of this satisfactory proposal to the Bank is a condition of disbursement for Component A for 1996 (para. 9.2(a)); and (d) By December 15, 1995, the Government would furnish to the Bank evidence that it has budgeted sufficient funds for the protected programs in 1996 in an aggregate amount at least equal to US$300 million (para. 9.1(d)). 3.9 Public Social Expenditure Review. To improve the longer-run efficiency of public spending for social programs, the DNPGS of the MOE would carry out in 1996 a major review of public expenditures for the social sectors. Loan funds would be used to finance this review. If the Government deems appropriate, the results of this review could be used as an important input in the formulation of the 1997 budget. Draft terms of reference for the study were reviewed during negotiations and were found to be generally satisfactory. The Bank provided some comments on the terms of reference and will further exchange views and information with DNPGS on the matter. It was confirmed at negotiations that the Government, through DNPGS, would provide the Bank with final terms of reference, satisfactory to the Bank, not later than 6 More specifically, the IDB project stipulates that the authorized budget for the basket cannot be changed unless the overall federal budget is cut by more than 4 percent. If the overall budget is cut by more than 4 percent, the cut in the authorized budget for the basket cannot be more than half of the overall percentage reduction. In addition, the basket is divided into two groups of programs: Group A with a budget of US$762.9 million, and Group B with a budget of US$276.6 billion. Actual expenditures for 1995 must exceed 90 percent of Group A, but only 70 percent of Group B. This yields an average of 84.7 percent. 15 December 15, 1995; and forward to the Bank a copy of draft reports on federal social expenditures not later than May 31, 1996, and on provincial social expenditures not later than December 31, 1996. (para.9.1(f)). Selected Programs for 1995 3.10 The following sections describe in detail the characteristics of the education and employment programs which would be partly financed by the Bank loan. Other programs selected for budget protection but for which loan funds would not be used are described in detail in Annex 2. 3.11 Education Program (Plan Social Educativo, or PSE). The PSE began in January 1993 as a way for the federal government to help poor disadvantaged communities and to guarantee greater equity in the access to basic education. The PSE was created as an instrument to implement the Federal Education Law of April 1993, which extends compulsory education to nine years of schooling for each child, establishes the principle of free basic education, and calls for special federal programs to ensure universal access to basic education. The PSE's objectives are to: (a) improve the teaching process by providing textbooks, teaching materials, and teacher training; (b) support innovative school-based quality improvement projects; and (c) increase access by building new schools, rehabilitating existing schools, and closing precarious facilities. 3.12 PSE beneficiaries are children living in areas with the greatest percentage of the population in poverty. In addition, the Ministry of Culture and Education (MCE) targets schools with: (a) sub-standard facilities; (b) more than two shifts a day; (c) existence of boarding facilities; (d) high repetition and drop-out rates; (e) rural area locations with scattered populations; (f) a high percentage of working, indigenous or migrant pupils; and (g) insufficient physical capacity to meet local demand. An operational manual provides guidance to municipalities and schools on accessing the PSE. 3.13 PSE's initial 1995 budget of US$129 million has already been reduced to US$99.4 million. The project would protect this reduced budget by financing: (a) about 2 million textbooks and 5 million exercise books; (b) teaching materials paid through direct transfers to about 6,000 schools (at US$7 per pupil, US$50 per classroom and US$2,000 per school); (c) construction of 107,500 m2 of new schools; and (d) rehabilitation of 500 schools. 16 Table 3.1: Targeted Social Programs (US$ millions) Original March 1995 Responsible Agency Budget Budget A. Programs with Loan Financing 1. Plan Social Educativo 129.7 99.4 Ministerio de Cultura y Educaci6n 2. APRENDER ' 30.5 20.4 Ministerio de Trabajo 3. PROAS/PRENO 62.0 62.0 Ministerio de Trabajo 4. FORESTAR 8.0 Ministerio de Trabajo Subtotal 222.2 189.8 B. Programs without Loan Financing 5. PEP 30.0 30.0 Ministerio de Trabajo 6. Apoyo Solidario a los 54.7 30.1 Secretaria de Mayores (ASOMA) Desarollo Social 7. Normatizaci6n, 28.8 18.6 Ministerio de Salud y suministros y supervisi6n de Acci6n Social vacunaciones y control de enfermedades agudas prevalentes (Immunizaciones) 8. Control de enfermedades 24.5 20.6 Ministerio de Salud y transmisibles por vectores Acci6n Social (Chagas) 9. Programa Social 6.0 4.5 Ministerio de Agropecuario Economfa y Obras y Servicios Pdblicas Subtotal 144.0 103.8 GRAND TOTAL 366.2 293.6 3.14 The Bank loan would finance: (a) up to 75 percent of the civil works (construction/repair of classrooms), or approximately US$39.5 million; and (b) up to 75 percent of the cost of textbooks, or approximately US$6.2 million. 3.15 Employment Programs. The Argentine government's employment policy is based upon employment law No. 240315 of December 1991. It is reflected in three types of programs managed by the Ministry of Labor and Social Security (MTSS): employment programs, training programs, and unemployment insurance (Table 3.2). These programs are financed from the Fondo Nacional de Empleo (FNE), which Funding in the original budget corresponds to the PRONAPAS program now abandoned. The remaining funds have been reallocated to APRENDER. 17 receives resources from an earmarked tax of 1.5 percent of salaries. There are numerous similar direct or indirect employment/training programs, such as the Programa Joven financed by the IDB and the Programa de Capacitaci6n Tgcnica implemented by other ministries or by the provinces. In some cases, there is overlapping among programs. The current structure can be confusing for potential users and generates high administrative costs. Table 3.2: Programs Financed b the Fondo Nacional de Empleo 1995 A. MPLYMENT PROGRAMS Prgaa de Entrenamiento Ocupacional (PRENO) 14.4* Programa de Asistencia Solidaria (PROAS) 39.6 Programa Nacional de Pasantias (PRONAPAS) 30.5 Programa de Empleo Privado (PEP) 30.0 Programa de Empleo de Inter6s Social 9.6 Programa de Subsidio a las Primas de Accidentes 1.4 Programa Asistencia Crediticia p/Empleadores 10.0 Programa de Apoyo a las Pymes 7.5 Programa de Apoyo al Observatorio Laboral 0.7 Ayuda Econdmica al Concluir Periodo Seg/Desemp. 5.0 Programa de Gesti6n de Politicas de Empleo 5.5 Agencias Publicas de Colocacion 0. Subtotal of Employment Programs 154.9 B. TRAINING PROGRAMS 26.7 C. UNEMPLOYMENT INSURANCE 279.0 TOTAL 460.6 *without the contribution of the Secretaria de Desarrollo Social. 3.16 The resources of the FNE are expected to decline from US$562.9 million in 1994 to US$460.6 million in 1995, mainly because of lower payroll taxation rates and a decrease in overall employment. The outlook for 1996 is also gloomy. In this context, the project would support the policy of the MTSS to increase the efficiency of its employment programs by: (a) eliminating the least effective programs; (b) reducing program administrative costs; and (c) improving monitoring and supervision in order to strengthen targeting and reduce fraud. A major objective is to reduce the cost per beneficiary, which has already dropped from US$2,083 in 1993 to US$1,581 in 1994, These programs correspond to the budget as March 1995. PROCRED and PROPYMES, programs which are aimed at providing incentives to employees to hire unemployed are not implemented and are phased out. 18 and is expected to drop further in 1995 to US$927 and in 1996 to US$740. The IDB would complement the World Bank project by addressing the improvement of the labor market regulatory framework and the administration and functioning of employment offices, in order to provide better information to the public. 3.17 The MTSS has already adopted a series of measures designed to improve its employment and training policy by: (a) closing the least efficient programs such as "Programa de Empleo de Interes Social" (PROEDIS), "Programa de Subsidio a las Primas de Accidentes ", "Programa Asistencia Crediticia para Empleadores" and "Ayuda Economica al Concluir el Periodo de Seguro de Desempleo;" (b) merging PRENO into PROAS in a single management structure; (c) eliminating the "Programa de Apoyo a las PYMES" and merging its funds into "Programa de Empleo Pyivado," and (d) closing "PRONAPAS" and allocating the funds to a new program "APRENDER." The MTSS will continue to rationalize its programs during the project. 3.18 Institutional strengthening of the MTSS. The project would finance technical assistance for a total cost of $3.5 million necessary to increase the efficiency of the employment and training programs. This technical assistance would support five main activities: (a) a broad review of Argentine employment/training programs, focusing on their consistency with employment issues, impact and level of compliance with targeted objectives, administrative costs and cost-effectiveness, in order to provide the basis for the design of new employment and training policy; (b) design of an information system for unemployment insurance that would strengthen verification of individuals' eligibility; (c) improvements in the targeting and management of employment and training programs (for instance, by setting up a methodology in PROAS to select the public works to be financed, using poverty and employment indicators and standardized subproject documentation); (d) improvements in labor market intermediation services; and (e) institutional strengthening of the MTSS, principally to build the capacity to monitor and evaluate employment and training programs. In addition, the project would finance the following equipment for a total cost of $1.3 million: (a) in the MTSS, ten micro-computers along with printers and other communication equipment for monitoring programs and communicating with decentralized agencies in the Provinces; and (b) in the implementing agencies in the Provinces, 110 microcomputers (an average of 4 by agency) and related printing and communication equipment. To help coordinate the implementation of this technical assistance, no later than January 31, 1996, the MTSS would hire a project manager for the duration of the project whose terms of reference and qualifications are satisfactory to the Bank (para. 9.1(g)). 3.19 PROAS/PRENO are two public works programs which differ only in their financing plans and geographic locations. PROAS is implemented in the provinces of Salta, Chaco, Misiones, Tucumdn, Formosa, Jujuy, Santiago del Estero, Buenos 9 PROCRED and PROPYMES, programs which are aimed at providing incentives to employees to hire unemployed are not implemented and will be phased out. 19 Aires, Corrientes, Catamarca , Santa F6, San Juan, and La Rioja, with the provinces contributing about 7 percent of total costs. PRENO is implemented in the provinces of Mendoza, Chubut, Cordoba, Entre Rios, Rio Negro, Neuquen, San Luis, Tierra del Fuego, La Pampa and Santa Cruz, which contribute about a third of total costs. The MTSS finances the stipends given to the beneficiaries who participate in the public works (US$39.6 million for PROAS and US$14.4 million for PRENO in 1995), the Secretaria de Desarrollo Social covers the cost of tools and materials (US$37.5 million for PROAS and US$12.6 million for PRENO), and the provinces bear the implementation costs at the local level (US$6.1 million in PROAS and US$12.9 million in PRENO). Since August 1995 those two programs have been merged into one single program called PROAS. 3.20 PROAS/PRENO is used for the provision of water and sanitation, housing and schools rehabilitation and other social infrastructure. By recruiting the poor, disabled, and chronically unemployed, and by paying an allocation of about US$200 per month, PRENO and PROAS effectively target the most needy households. About 2,000 projects are financed every year and about 44,000 households currently benefit from the programs -- 33,000 from PROAS and 11,000 from PRENO. By selecting basic social infrastructure for rehabilitation, they also contribute to poverty reduction. An operating manual provides guidance to the municipalities on preparing projects. In each province, a representative of the MTSS supervises the preparation and implementation of the project. 3.21 APRENDER. This apprenticeship program was created by Ministerial decision No. 461 of June 13, 1995. APRENDER benefits youths aged 16 to 25 with less than secondary education, facilitating their entry into the labor market. For each apprenticeship contract, it finances the costs to the employer of social insurance (US$9 per month) and of accident insurance premiums (US$12 - US$15/month) for 6 to 12 months. APRENDER provides scholarships to unemployed young persons attending on-the-job training in private firms. The number of beneficiaries is expected to be 60,000 a year. APRENDER will use the remaining funds of the PRONAPAS, which provided scholarships to unemployed young persons attending on-the-job training in private firms. 3.22 FORESTAR (created by Ministerial decision No. 122 of August 7, 1995), finances a monthly allocation of US$200 unemployed persons hired by firms working on reforestation projects. Such payments may continue for a maximum of three months. A total of US$8 million has been budgeted for this program for 1995. 3.23 PEP/PYMES (created by Ministerial decision No. 47 of January 18, 1995 and modified by decision No. 110 of August 1, 1995), is an apprenticeship program designed to promote employment in small and medium scale private enterprises (less than 100 employees). The beneficiaries are young persons 16 to 25 years old, women, and unemployed persons more than 45 years old. They receive a US$200 allocation 20 from the PEP every two months during their contract, which cannot exceed 12 months. Employers are expected to match the Government's contribution. 3.24 The proposed World Bank loan would finance: (a) 75 percent of the cost of training and stipends of the selected employment programs; and (b) 100 percent of the technical assistance and equipment needed for institutional strengthening of the MTSS. (see para 3.18). Component B: Participatory Social Investment Fund (Fondo Participativo de Inversion Social, FOPAR (US$36.7 million or 8.7 percent of total cost). 3.25 FOPAR is a two-year pilot social fund channeling resources to community- based, demand-driven projects, with involvement of local NGOs and close coordination with provincial and municipal formal structures. In this pilot phase, FOPAR would finance basic social needs of the extreme poor in selected districts in the northern provinces of Argentina. FOPAR would place important emphasis on targeting poor communities and vulnerable groups; developing the capacity of poor communities and social organizations to identify suitable projects, mobilize resources, and implement selected projects; and testing transparent mechanisms for channeling resources to social operations. 3.26 FOPAR's financing would support: (a) community-based subprojects; and (b) institutional development. The first subcomponent, with a total cost of US$25.8 million, would finance the implementation of a range of subprojects, with priority for small-scale infrastructure and strengthening of community organizations. Maximum subproject size would be US$100,000. An initial set of subproject types has been selected; however, given FOPAR's pilot nature, this initial set would be revised periodically to be responsive to the actual needs of poor communities. During negotiations, agreement was obtained that any revision of eligible subproject types would be subject to the prior approval of the Bank (para. 9.1(j)). The initial set of subproject types include: (a) Development and strengthening of community organizations, including strengthening of grassroots organizations, development of community leaders, training in the use of basic social services, and promotion of community development, which would primarily be undertaken by NGOs. (b) Small-scale infrastructure, including the construction, rehabilitation or extension of small water systems, drainage, environmental sanitation, small community works (pedestrian bridges, sidewalks, slope protection, etc.), and community infrastructure (health posts, education centers, cooking/dining and other communal facilities); (c) Revolving funds for credits to urban micro-enterprises, including those for the self-employed. These subprojects would aim at income and 21 employment generation, including capacity building of managerial abilities. Two pilot revolving funds not larger than US$350,000 would be established, whose operations would be contracted out through a competitive process with an NGO or some other organization experienced in financial intermediation; and (d) Other eligible types of subprojects as defined in the FOPAR Operational Manual. 3.27 The second FOPAR subcomponent, institutional development, has a total cost of US$10.8 million. This component includes the establishment of institutional arrangements (see Chapter 4) to operate the pilot project, including staffing, training, technical assistance for project appraisal, supervision, ex-post evaluation of community-based subprojects, and office equipment. 3.28 Community-Based Subprojects. With respect to its first subcomponent as described above, FOPAR's approach and strategy for subproject selection would vary depending on the type and location of poverty being addressed, the assessment of potential beneficiaries, and the existing institutional framework at the local level. Two types of communities would be addressed: (a) poor communities in small towns and rural or semi-urban areas; and (b) deprived neighborhoods in urban areas located in the outskirts of provincial capitals. The distinguishing characteristics of these communities are elaborated in the FOPAR Operational Manual. 3.29 In poor communities, groups have an acute lack of the most essential services and employment opportunities are scarce. However, most of these communities tend to have social networks which provide a good foundation for organizational strengthening. Support to poor communities would focus on strengthening grassroots organizations with the aim of promoting participation, and on addressing critical needs as defined by the communities themselves. Projects would be formulated by grassroots organizations and be evaluated by FOPAR on a project-by-project basis. Based on preliminary surveys undertaken by FOPAR, subprojects for these communities would tend towards construction or rehabilitation of social infrastructure, training in the management of basic social services, and creation of the capacity to identify and formulate projects suitable to community needs. 3.30 In the case of deprived neighborhoods, poverty tends to originate from a sharp decline in wages and employment, aggravated by migrations from rural areas. These areas normally show poor housing conditions and low levels of access to social services and basic infrastructure. In these neighborhoods, the starting point is to identify specifically vulnerable target groups. These communities normally have limited active social networks, because of the existence of many vulnerable groups and/or migrants from other areas. The vulnerable groups include female-headed households, children under the age of four, and unemployed young people. Given that in the provincial capitals there is a relatively large number of intermediary NGOs involved in social 22 issues, FOPAR intends to target its interventions to pre-identified neighborhoods by inviting proposals aimed at vulnerable groups. These proposals would be evaluated according to pre-established criteria. This process is further described below. Whenever demand exceeds available resources, final selection among eligible projects would be made by provincial councils. 3.31 Community subprojects would be supported in the form of grants to community organizations, or exceptionally to NGOs or public agencies. Loan proceeds would finance 80 percent of subproject costs and the balance would be provided by the communities themselves. In those cases where communities are unable to raise the required counterpart funds, FOPAR would supplement their contributions, out of its own resources, by an amount determined during the subproject appraisal. 3.32 Targeting. Poverty maps have been developed by FOPAR at the district level based on information available from the population census and the household surveys. The NBI was used as a key indicator. Based on this criterion, poverty is concentrated in 92 out of 122 poorest districts in the ten northern provinces of Argentina. FOPAR would allocate its resources to these 92 districts in proportion to the total population with NBI. This targeting methodology has been further refined by defining criteria for selecting poor communities and deprived neighborhoods, with strong emphasis on the identification of vulnerable groups. Poor communities would be eligible if they are located in a district with at least 40 percent of the population with NBI and would receive higher priority if they are not being served by existing programs. A similar approach would be taken for selecting and prioritizing neighborhoods in the provincial capitals. As lessons are learned during the first year of project implementation, FOPAR would refine the identification of municipalities with high poverty incidence and the corresponding priority criteria for FOPAR resource allocation. 3.33 Project Cycle. The project cycle to be used by FOPAR includes targeting, promotion and identification of needs and projects, appraisal and selection, implementation, and ex-post evaluation. Guiding principles and procedures for all these processes are described in the FOPAR Operational Manual. Although community-based subprojects are demand-driven, FOPAR has established resource allocations and activity targets based on the criteria discussed above. Poor communities and deprived neighborhoods would be selected through promotion efforts involving local authorities, NGOs, and grassroots organizations. A field appraisal would be carried out by FOPAR's regional offices and completed by the Project Evaluation Unit in the Head Office. This group would also handle the selection process for project proposals for deprived neighborhoods. Implementation would be the responsibility of communities. FOPAR has established a project supervision scheme for monitoring to be carried out by the Regional Offices. An information data base would be established for all projects completed. In-depth ex-post evaluation would be done for a sample of completed projects. 23 3.34 Monitoring and Evaluation. FOPAR would undertake periodic evaluations of its interventions. This is considered a critical tool during the pilot phase, to provide continuous feedback for assessing policies, methods and procedures to achieve its objectives. Evaluations would attempt to establish the contributions that each intervention has had for raising the living standard of beneficiaries. It would also determine: (a) how well project objectives have met community needs; (b) the degree of acceptance and satisfaction among beneficiaries; (c) preliminary effects of the project on the community: and (d) actions undertaken by the community to ensure the sustainability of the solutions provided by the project. The FOPAR Programming Unit, in close collaboration with SIEMPRO, would undertake internal evaluations through established information channels as a permanent monitoring of impact. In- depth external evaluations of FOPAR's instruments and modes of intervention would be carried out. Participatory workshops with beneficiaries would also be organized as part of these evaluations, as well as annual ex-post evaluations of subprojects. A set of monitoring indicators to assess FOPAR's implementation progress is shown in Annex 4. Component C: Technical Assistance for the Improvement of Social Information and Monitoring and Evaluation of Targeted Social Programs (Sistema de Iqformacidn, Evaluacidn y Monitoreo de Programas Sociales, or SIEMIPRO, US$14.4 million or 3 percent of total cost). 3.35 The primary objective of SIEMPRO is to serve as a catalyst in changing the focus and management of social programs by promoting transparency, participation of the civil society and appropriate targeting of social services to the poor. It specifically aims to: (a) establish a social information base for timely monitoring and analysis of the situation of the poor and vulnerable groups and thus serve as a basis for targeting social programs; (b) define and apply appropriate methodologies and systems for targeting, monitoring and evaluation (ex-ante/ex-post) of social programs especially directed to the poor and vulnerable groups; (c) assist SDS in disseminating and transferring developed methodologies and social information systems to appropriate national and provincial agencies, and (d) assist the national Social Cabinet to establish priorities and assure coordination of social programs directed to the poor. 3.36 SIEMPRO's components are described below. Key activities, corresponding schedules and expected results are summarized in Annex 5 (Matrix of Key Activities). During negotiations, assurances were obtained that any substantive change in the Matrix of Key Activities would be satisfactory to the Bank (para. 9.1(q)). A 24 SIEMPRO Project Document elaborating component features, institutional framework and implementing mechanisms was reviewed and found satisfactory by the Bank. This Document was sent to the Bank with a letter of the SDS Secretary dated June 15, 1995. Draft terms of reference of major studies were also reviewed by the Bank during appraisal. 3.37 Social Information and Targeting. This component would enhance the type, timeliness and availability of information to improve the targeting, design, monitoring and evaluation of social programs targeted to the poor. Whenever appropriate, SIEMPRO would coordinate its actions with the National Directorate of Social Expenditure Programming (Direccion Nacional de Programacion de Gasto Social, DNPGS) of the MOE. The project would finance the: (a) establishment and maintenance of a permanent and updated social information data base using primary and secondary data sources, in collaboration with appropriate statistical institutions (primarily INDEC), other government, academic and non-governmental institutions; (b) technical improvement of some social indicators and household data information including the development of a geo-referenced set of social information; (c) a special survey on access to social programs in relation to living conditions to be carried out by INDEC; (d) participatory qualitative studies (PQSs) which would assess the vulnerable groups' perspective on life conditions, survival and coping strategies, as well as required actions to reduce poverty; the PQSs would be subcontracted to independent research groups or NGOs; (e) development of vulnerability indices based on selected indicators which would permit the representation of the heterogeneous poverty characteristics in small areas; and (f) development of appropriate criteria and methodology for targeting of social programs. 3.38 Since INDEC would supply the bulk of detailed population and household data to SIEMPRO, as well as carry out a special survey on access to social programs in relation to living conditions, SDS and INDEC signed a Subsidiary Agreement on June 7, 1995. This Subsidiary Agreement sets out the terms and conditions for INDEC's provision of information, as well as SDS' commitment to provide the necessary consultant services and use of equipment for the generation of information which are not normally produced by INDEC. Assurances were obtained during negotiations that unless agreed with the Bank, SDS would not terminate, amend or fail to 25 enforce any provision of this Subsidiary Agreement (para. 9.1 (o)). It was also confirmed that the draft terms of reference and tentative design of the survey on access to social programs in relation to living conditions, prepared in coordination, with DNPGS in areas of its competence, would be furnished to the Bank for its review and comment (para. 9.1(p)). The specific actions to be carried out under the Subsidiary Agreement are summarized in Annex 6. 3.39 Evaluation and Monitoring of Targeted Social Programs. This component aims to establish a system of monitoring and evaluation of targeted social programs to assist the Social Cabinet in its coordination function. The activities of this component started in the first quarter of 1995. An initial compilation of information on national targeted social programs was prepared and served as an important background document for Component A of this project. The SIEMPRO component would finance the: (a) establishment and periodic updating of a data bank on national and provincial social programs especially directed to the poor and promotion of similar data bank for NGO projects. The data bank would include, among others, information available from DNPGS of MOE, the national social ministries, the Ministries of Social Action or equivalent agencies at the provincial level, and NGOs; (b) development of selected methodologies and systems to monitor and evaluate selected national and provincial social programs, including beneficiary assessment surveys and monitoring of methods implemented by targeted social programs; and (c) carrying out diagnostic evaluation of selected ongoing targeted social programs in coordination with appropriate national and sectoral agencies. During negotiations, it was confirmed that any SIEMPRO activity on social program evaluation using a methodology that includes public social expenditures among its variables would be carried out in coordination with DNPGS (para. 9.1(r)). 3.40 Dissemination and Transfer of Methodologies and Systems to National and Provincial Agencies. The SIEMPRO unit in the SDS would disseminate the social information, targeting and evaluation methods and systems, as well as provide technical assistance, to appropriate national and counterpart provincial agencies. Specifically, SIEMPRO would finance: (a) training programs and workshops for national and provincial agencies on social management, including the application of the methodologies and systems for targeting and monitoring and evaluation of social programs; 26 (b) a demand-driven Technical Dissemination Plan (TDP) which would: (i) establish small provincial SIEMPRO units (Unidades Ejecutoras Provinciales, or UEPs) in the counterpart provincial agency to set up the social information system and monitoring/evaluation or provincial social programs targeted to the poor; and (ii) as needed, carry out monitoring and evaluation and/or other technical studies related to social programs supported under Component A of this Project. Through a flexible subcontracting mechanism based on demand, the TDP would gradually transfer systems and methodologies and associated training in the provinces. This mechanism would also be a flexible device for assisting, when needed, technical studies required by programs being supported under Component A of the Project. The operational procedures for the TDP are explained in Chapter 4 and in Annex 7. The establishment of the TDP mechanism was confirmed during negotiations (para 9.1(t)). (c) promotion of the participation of NGOs in the process of monitoring and evaluation of social programs; (d) the development and application of a social communication strategy to disseminate the progress being achieved in improving the management and transparency of public social resources; and (e) elaboration of an institutional plan to absorb SIEMPRO into the permanent structure of SDS. 3.41 Institutional Strengthening and Management. The project would support the establishment of a SIEMPRO unit in the SDS (Unidad Ejecutora Central, or UEC), including a three-person group for social policy analysis that would make technical inputs to the Social Cabinet. The preparation of plans and strategies to institutionalize SIEMPRO in SDS' structure would be supported. Also, the preparation of the second phase of SIEMPRO would be financed. 3.42 Environmental Impact. The project does not present major environmental risks, and therefore an environmental rating of "C" applies. 4. INSTITUTIONAL ARRANGEMENTS FOR IMPLEMENTATION 4.1. The Ministry of Economy (MOE) would oversee the implementation of Component A, drawing on the support of program managers from the MCE and the MTSS. The SDS which is implementing PRODESO would be responsible for the oversight of FOPAR (Component B) and SIEMPRO (Component C). The detailed institutional arrangements for implementation are described below. 27 4.2. The Ministry of Economy would be responsible for the execution and coordination of Component A. At appraisal, the MOE provisionally designated the Director of the National Directorate of Projects with International Organizations (Direccion Nacional de Proyectos con Organizaciones Internacionales, DNPO1) as the Bank's main interlocutor for this component. Agreement was reached during negotiations that, as a condition of disbursement, the MOE would appoint a Project Coordinator to supervise the implementation of Component A (para. 9.2 (a)). The principal functions of the Coordinator were discussed during appraisal and draft terms of reference were sent to the Bank. In addition to a number of functions related to ensuring compliance with specific loan conditionalities and reporting on the selected programs, the Coordinator would manage the Special Account. ). The Coordinator would also collaborate with the Budget Evaluation Department (Direccion de Evaluacion Presupuestaria, DEP) of the Secretariat of Finance in the periodic monitoring of the physical accomplishments of the selected programs (para. 3.6). Agreement was also reached that the MOE would hire a Project Officer on or before January 15, 1996 to assist the Coordinator in the daily operational tasks (para. 9.1 (g). In addition, agreement was also reached during negotiations that MTSS would hire by January 31, 1996, and retain until project completion, a Project Manager to coordinate the technical assistance, as well as other Loan administrative and reporting requirements for the Loan financing of the selected employment programs (para. 9.1 (g)). 4.3 As previously mentioned, FOPAR and SIEMPRO are integral parts of a Programa Participativo de Desarollo Social (PRODESO). The organizational chart of PRODESO is shown in Annex 8. The internal institutional setting of FOPAR and SIEMPRO is discussed in detail in the following sections. It is important to note that the Unidad de Coordinacion Administrativo Financiera, (UCAF), within PRODESO would carry out the financial, procurement, legal and other administrative support services required for the implementation of FOPAR and SIEMPRO. The Coordinator and staff of this unit would be financed under the budgets of FOPAR and SIEMPRO. Because of the important financial management and control functions of this unit, agreement was obtained during negotiations that SDS would maintain this unit with appropriate staffing including a Coordinator whose qualifications and experience would be acceptable to the Bank. 4.4 FOPAR. During the pilot phase, FOPAR would be structured as part of the PRODESO "special program" within the SDS. This scheme, used for other Bank- financed projects in Argentina, would ensure sufficient autonomy and flexibility of operation, and provide for a pilot phase prior to the institutionalization of any future FOPAR activities. 4.5 The FOPAR institutional framework would be structured in three tiers. At the central (federal) level there would be an autonomous Project Unit, acting as the head office for the program, and assisted by an advisory committee, whose main role would be to advise on strategic directions and policies of FOPAR. The Project Unit would 28 be headed by a National Coordinator reporting to the SDS Undersecretary of Social Projects and would evolve to have about 25 professional staff. At the provincial level, there would be a local office and a provincial council (Consejo Provincial Participativo), created to assist in the targeting process within provinces. Up to ten provincial offices with a staff of about 3-6 each would be established. A local council would be established at the municipality level (Consejo Local de Desarrollo Social), composed of local institutions and potential beneficiaries. It would become a forum for local participation, focusing on needs assessment, project formulation, priority setting and identification of poverty areas at the local level. 4.6 The internal functions of FOPAR would be comprised of programming, promotion, project evaluation, monitoring and control, and administration and finance. Provincial Offices would be responsible for promotion, and monitoring and control.at the local level. They would also coordinate the interaction with the provincial and district councils and other entities at the local level. 4.7 The organizational structure and operational procedures of FOPAR were reviewed during appraisal. Policies, structure and basic guidelines have been documented in an Operational Manual, a draft of which was reviewed during appraisal and found satisfactory by the Bank. A final draft of the Manual was reviewed by the Bank during negotiations. The official issuance of the FOPAR Operation Manual is a condition of disbursement (para. 9.2(d)). The National Coordinator, two line managers and one regional manager had already been appointed by appraisal. Confirmation of the establishment of a FOPAR Unit in SDS and the appointment of all key staff (National Coordinator, two line managers, and the first provincial coordinator) with terms of reference and qualifications satisfactory to the Bank is a condition of disbursement (para. 9.2 (c)). At negotiations, assurances were obtained that: (a) FOPAR would maintain a National Coordinator, as well as Line and Provincial Coordinators with qualifications acceptable to the Bank ; and (b) any substantive change in its organizational structure and Operational Manual would require prior Bank approval (para. 9.1(k)). 4.8 FOPAR would launch the program in two provinces before the end of 1995 and would expand it progressively to the rest of the provinces in the northern region. FOPAR would closely monitor the rate of expansion and the coverage at the district level during the initial months of implementation, balancing the expectations which would be created at the local level through promotion activities with FOPAR' capacity for expansion. It was agreed during negotiations that provincial councils would need to be established before any funds are disbursed for subprojects in the provinces (para. 9.1 (1)). 4.9 FOPAR would approve grants for community-based subprojects following procedures established in the Operational Manual. Subprojects for poor communities would be approved directly by FOPAR. Meanwhile, proposals for deprived neighborhoods would be declared eligible for financing by FOPAR, in accordance with 29 the standard solicitation forms for proposals. Whenever there is a resource constraint, the final selection among eligible subprojects which have passed a technical appraisal would be made by the provincial councils. FOPAR would enter into grant agreements with representatives of beneficiaries organized into an executive committee (Nucleos de Beneficiarios), specifying the obligations of the beneficiaries to complete the subproject, and to implement it in accordance with specified procedures for procurement, accounting and auditing. Model grant agreements have been reviewed and found satisfactory. Agreement was obtained at negotiations that FOPAR would submit for the Bank's no objection: (a) the first five grant agreements for subprojects, including their appraisal reports; (b) any subproject which does not meet the eligibility criteria set forth in the Operational Manual; (c) the standard solicitation forms for inviting subproject proposals for deprived neighborhoods in provincial capitals; (d) the standard technical documents (letter of invitation, terms of reference for proposals, the evaluation report, the recommendation for award and the proposed contract) for the fiduciary arrangements for the micro- enterprise revolving funds; and (e) a copy of each subproject summary sheet for its ex-post review in a format acceptable to the Bank (para. 9.1 (m)). Because of the pilot nature of FOPAR and the need for a tight monitoring of activities, a Mid- Term review would be held no later than March 31, 1997 (para. 9.1 (w)). 4.10 SIEMPRO. A SIEMPRO Unit (Unidad Ejecutora Central, or UEC) would be created under the SDS Subsecretary of Social Projects (see Annex 8 for SDS and SIEMPRO organization charts) as provided for in the PRODESO resolution. The UEC, which would have about 23 staff, would consist of a General Coordination Department and three subunits corresponding to the functions described in Chapter 3. The detailed functions of each of these departments are described in the SIEMPRO Project Document. The establishment of a SIEMPRO UEC with staff whose terms of reference and qualifications are satisfactory to the Bank as reflected in the SIEMPRO Project Document is a condition of disbursement (para. 9.2 (e)). Agreement was obtained during negotiations that the Government would maintain the SIEMPRO UEC Coordinator and staff with qualifications satisfactory to the Bank. 4.11 At the provincial level, SIEMPRO would set up small executing units (Unidad Ejecutora Provincial, UEP) in the Ministries of Social Action that would adhere to the SIEMPRO program. It is estimated that about ten provinces would request the SIEMPRO technical assistance in the next two years. As described in Chapter 3, the UEPs would receive not more than US$200,000 assistance in the form of consultant services and computer hardware/software. Provinces with unsatisfied basic needs (NBI) of more than 25 percent would receive priority for this assistance (see Annex 7). The SIEMPRO central unit would carry out diagnostic missions to selected provinces to disseminate information on SIEMPRO objectives and missions, as well as review the provincial institutional framework for social information generation and analysis. Thereafter, the provincial participation in SIEMPRO would require two steps. First, the SDS needs to receive a request from the Office of the Provincial Governor or the 30 Minister of Social Action (or equivalent agency) requesting the installation of SIEMPRO (carta de adhesi6n). Second, a Subsidiary Agreement (Convenio de Adhesi6n) would be signed between the SDS and the Ministry/corresponding counterpart agency, detailing the resources that would be committed and the implementation arrangements between SIEMPRO and the provincial agency. As of April 1995, SDS had received letters from some provincial officials including those of the Governor of Santiago del Estero and the Minister of Social Action in Misiones requesting the start-up of SIEMPRO in those provinces. It was agreed during negotiations that the draft subsidiary agreements (Convenio de Adhesion) for the first two provinces joining SIEMPRO would be furnished to the Bank for its review (para. 9.1(s)). 5. PROJECT COSTS AND FINANCING PLAN A. Project Costs 5.1 The total project cost is estimated at US$417.9 million equivalent, including taxes. The total cost of Component A (Priority Social and Income Support Programs) is estimated at US$366.8 million, of which US$91.2 million would be foreign exchange (25 percent of total component cost). This estimate reflects the 1995 budget for three employment programs and one education program (Table 5.1), as well as an assumption that the 1996 budgets for these, or other programs that may be selected, would be similar to those of 1995. This estimate also includes an amount of US$5.3 million to finance the cost of consultant services and office goods and equipment for the Ministry of Labor and the public social expenditure review, as well as for the coordination of Component A in the Ministry of Finance. 5.2 The total cost for Component B (FOPAR) is estimated at US$36.7 million, of which an estimated US$10.6 million would be foreign exchange (29 percent of total cost), including price and physical contingencies. Contingencies are not applied to subprojects under Component B since any changes in the cost of subprojects would be compensated by the total number of subprojects. The total cost for Component C (SIEMPRO) is estimated at US$14.4 million, of which US$3.6 million would be foreign exchange (25 percent of total cost), including price and physical contingencies. Foreign inflation rates are estimated at 2.6 percent over the period 1995-97, and local inflation rates are estimated at 3 percent for 1995, and 2.6 percent for 1996-97. Table 5.1 summarizes the estimated costs by project component. Detailed cost tables are shown in Annex 9. 5.3 Because of the special nature of this project (i.e., the greatest proportion of the costs is actual budgetary reimbursement for existing social programs) estimated contingencies are not significant. The estimated total project cost includes contingencies of US$2.1 million equivalent (less than one percent of base costs). 31 Physical contingencies of US$0.4 million are for other goods and equipment under Component B and Component C. Price contingencies (US$1.7 million equivalent) reflect projected price increases for foreign costs for Components B and C. Table 5.1: Project Cont Summary by Component (USS Milion) % % Total Foreign Base Component/Subcomponent Local Foreign Total Exchange Costa Priority Social and Income Support Programs A(i) Social Programs 1. Education Program for Schools in Poor Areas (Plan Social Educativo) 124.0 72.8 196.8 37 47 2. EmploymentiTraining Programs (PROAS/PRENO) 97.2 10.8 108.0 10 26 3. Apprenticeship Program (APRENDER) 36.7 4.0 40.7 10 10 4. FORESTAR 14.4 1.6 16.0 10 4 Subtotal Social Programs 272.3 89.2 361.5 25 87 A(ii) Intitutional Development for Employment Programs, Public Social Expenditure Review & Program Admin. (Consultant services & computer & office eqpt.) 3.3 2.0 5.3 38 1 Subtotal Priority Social and Income Support Programs 275.6 91.2 366.8 25 88 Pilot Participatory Social Investnent nd (FOPAR) 1. Community-Based Subprojects 18.1 7.7 25.8 30 6 2. Institutional Development a/ 7.4 2.6 10.0 26 2 Subtotal Pilot Participatory Social Investment Fund (FOPAR) 25.5 10.3 35.8 29 9 C. Improvement of Social Information, Targeting and Monitoring of Social Programns (SIEMPRO) 1. Social Information and Targeting 3.7 1.0 4.7 21 1 2. Monitoring and Evaluation of Targeted Social Programs 2.1 0.9 3.0 30 1 3. Dissemination and Transfer of Methodologies and Systems 2.9 0.8 3.7 22 1 to National and Provincial Agencies 4. Institutional Strengthening and Management a/ 1.1 0.7 1.8 39 0 Subtotal Inprovement of Social Information, Targeting and Monitoring of Social Programs (SIEMPRO) 9.8 3.4 13.2 26 3 rOTAL BASE COSTS 310.9 104.9 415.8 25 100 Physical Contingencies 0.3 0.1 0.4 25 0 Price Contingencies 1.3 0.4 1.7 24 0 OTAL PROJECT COSTS 312.5 105.4 417.9 25 101 e/ Incudes cost of UCAF stawith 65% charged to FOPAR and 35% charged to SIEMPRO. B. Recurrent Costs and Project Sustainability 5.4 Component A of the Project would not entail incremental recurrent costs, as the programs to be financed are already under implementation. The main purpose of 32 this component is to sustain these ongoing programs during 1995 and 1996, at which time Argentina is expected to have achieved the economic and fiscal adjustment that would permit the Government to continue financing priority social expenditures. Operational expenses under Components B and C, are less than one percent of the total project cost. In the case of Component B, which is a pilot project, the recurrent cost would be incremental only if the Government decides to convert the pilot operation to a regular program after two years. In the case of Component C, there are plans to institutionalize the SIEMPRO functions in the SDS, with the strategy and the timing of this effort to be defined in the second SIEMPRO operation. C. Financing Plan 5.5 The proposed fixed rate US Dollar single currency loan of US$152.0 million would finance 36 percent of total project cost. The Government would finance the remaining US$265.9 million equivalent or 64 percent of total project cost. Consistent with the objective of protecting existing government social programs from further budget cuts, the Bank share of financing for Component A is a modest 30 percent. Since Components B and C are for pilot investments in a social fund and in poverty analysis and program management, the Bank's share of planned spending is correspondingly higher, at over 70 percent. Table 5.2 below summarizes the project's financing plan. The loan would be made to the MOE which would make the funds available to executing agencies for the implementation of the project. Also, assurances were obtained during negotiations that the MOE would provide the counterpart funds needed by Components B and C up to an estimated amount of US$13 million during project implementation (para. 9.1(u)). A PPF of US$1.5 million granted for the preparation of Components B and C would be refinanced under the Loan. Table 5.2: Financing Plan -- By Component (in US$ million) A % B % C % TOTAL % Government 250.9 68.0 10.7 1/ 30.0 4.3 30.0 265.9 64.0 World Bank 115.9 32.0 26.0 70.0 10.1 70.0 152.0 36.0 TOTAL 366.8 100.0 36.7 100.0 14.4 100.0 417.9 100.0 11 "Includes beneficiary contributions estimated at US$2 million. 5.6 Argentina is eligible for single currency loan terms under the expanded SCL program. Including the proposed loan, Argentina has selected single currency loan terms for US$652 million (43-47 percent) of its expected FY96 borrowing program of US$1.4-1.5 billion. 33 6. PROCUREMENT, DISBURSEMENTS AND AUDITS A. Procurement 6.1 Under Component A, the Bank would finance eligible expenditures for small civil works and remuneration of short term employees under education and employment programs following applicable procurement national laws: the Financial Management Law (Ley de Administraci6n Financiera), which supersedes the General Accounting Law (Ley de Contabilidad) and the Public Works Law (Ley de Obras Pblicas). The procedures provided under this legal framework have been deemed acceptable under the Bank's Guidelines (January 1995). Procurement of computer equipment not included in the protected programs would be carried out through international competitive bidding following the Bank's Guidelines (January 1995). 6.2 For this Component, the Bank would finance a time-slice (US$115.9 million equivalent) of the national budget allocated for civil works, remuneration for temporary fixed-term staff and training and stipends of the selected programs. Also, consulting services and computer equipment for institutional strengthening for the employment programs and the execution of a public social expenditure review would be financed under this component directly from the Loan's proceeds. Procurement under Components B and C would consist of purchase of office equipment and the provision of consulting services. 6.3 Due to the special characteristics of Component A, and the need to ensure rapid and timely disbursements, IBRD-financed procurement of goods would concentrate on contracts awarded under procedures acceptable under the Bank Guidelines (1995). Contracts for civil works would be awarded on the basis of comparison of price quotations. The computers and office equipment for Institutional Development under Component A would be procured following ICB procedures in accordance with the Bank's Procurement Guidelines (January 1995). A large portion of the loan would not involve procurement as the Bank would reimburse the Government for remuneration, training and stipends paid to qualified beneficiaries of the employment programs upon submission of acceptable payment certificates. The technical assistance for the employment programs, the public social expenditure review and the coordination of Component A would be contracted following the Guidelines for Use of Consultants by World Bank borrowers (August 1981). External auditing, as well as DEP's monitoring reports on the social programs would help ensure that these procedures are followed. 6.4 Loan proceeds would be used to reimburse the budget expenditures for the infrastructure component of the Plan Social Educativo (PSE). These are small rehabilitation works contracted individually by implementing agencies. The national coordinating unit for this program in the Ministry of Education in Buenos Aires has the capability of providing the Bank with acceptable documentation supporting actual payments made for these contracts. 34 6.5 In cases of decentralized social programs which provide services through NGOs or municipal or provincial governments (PROAS/PRENO, APRENDER, PEP and FORESTAR), a fraction of the cost of such services would be financed directly. These programs have easily measurable outputs and are executed in a cost-effective manner. 6.6 Under Component A, Civil Works for the PSE to be financed by the proposed loan would involve the rehabilitation and construction of classrooms for schools spread over the country. The cost of each contract would not exceed US$120,000 as a condition of eligibility for PSE financing, up to an aggregate amount of about US$93.8 million (Thble 6.1), of which approximately US$39.5 million equivalent would be financed by the Bank. The contracts for these works are currently being awarded on the basis of local shopping (comparison of at least three price quotations), which is acceptable to the Bank given the small size of each contract. 6.7 Textbooks under PSE would be subject to retroactive financing in the percentages and total amount specified under paragraph 6.15 below. 6.8 The Institutional Development (or technical assistance) part of Component A (for the employment programs, the public social expenditure review and the coordination of Component A) for a total amount of US$5.3 million equivalent (3.8 million for consulting services and 1.5 million for computers) would be financed directly from the loan account and contracted in accordance with Guidelines on the Use of Consultants by Rbrld Bank Borrowers and by the Wrld Bank as Eecuting Agency (August 1981). 6.9 Under Components B and C, procurement would be principally for office equipment, including computers and software's, and the contracting of technical assistance at the central level; and some procurement to be carried out by the Subprojects, for which grants are provided under FOPAR (Component B). 6.10 Goods would include photocopiers, personal computer hardware and software, and other office equipment and supplies for a total amount of US$1.5 million equivalent, out of which the Bank would finance US$0.6 million. These equipment would be procured by national or international shopping. 6.11 Consulting services for a total amount of US$17.4 million equivalent, out of which the Bank would finance US$12.8 million, and training and workshops for a total amount of US$3.5 million equivalent with US$2.7 million to be financed by the Bank, would be contracted following the principles set out under paragraphs 6.13 and 6.17 below. 35 Table 6.1: PROCUREMENT METHOD (US$ million equivalent) Procurement Method Procurement Element ICB OTHER NB.F. Total COMPONENT A 1. Civil Works 93.8 a! 93.8 (39.5) (39.5) 2. Textbooks 15.9 b/ 15.9 31.8 (6.2) (6.2) 3 Institutional Development (a) Consultants' Services 3.8 3.8 (3.8) (3.8) (b) Computer & Office Eqpt. 1.5 1.5 (1.5) (1.5) 4. Training and Stipends 40.7 d/ 40.7 (13.0) (13.0) 5. Remuneration for Temporary/ 124.0 d/ 124.0 Fixed Term Staff (51.9) (51.9) 6. Other Goods & Eqpt. 71.2 71.2 COMPONENT B 8. Grant for Subprojects 25.8 a/ 25.8 (18.5) (18.5) 9. Goods and Equipment 0.5 a/ 0.5 (0.2) (0.2) 10. Consulting Services 8.2 c/ 8.2 (5.4) (5.4) 11. Training and Workshops 1.3 c/ 1.3 (1.0) (1.0) 12. Administrative Expenses 0.9 0.9 COMPONENT C 13. Consulting Services 9.3 c/ 9.3 (7.4) (7.4) 14. Training and Workshops 2.2 c/ 2.2 (1.7) (1.7) 15. Goods and Equipment 1.0 a/ 1.0 (0.4) (0.4) 16. Administrative Expenses 0.4 0.4 17. PPF Refinancing 1.5 el 1.5 (1.5) (1.5) TOTAL 1.5 328.0 88.4 417.9 (1.5) (150.5) (0.0) (152.0) ICB = International Competitive Bidding NBF = Not Bank Financed a/ Shopping b/ Direct Contracting c/ Consulting Services d/ Not involving procurement c/ PPF Refinancing is for both Components B and C Note: Values in parentheses reflect Bank financing. 36 6.12 Subprojects would carry out their own procurement under the supervision of FOPAR with due concern for economy and efficiency in their implementation. Most of the subprojects would be undertaken by the communities themselves using labor intensive methods. Projects costing less than US$50,000 up to an aggregate amount of US$ 22.5 million equivalent would be implemented directly by the communities, assisted by NGOs, using voluntary work and allowing very small contracts when needed. The grant agreement for each subproject would specify the obligations of the communities, including procedures for procurement during normal supervision of subprojects. Civil works and goods for subprojects costing US$50,000 or more but less than US$100,000 equivalent, would be contracted to local small contractors or suppliers by comparison of at least three price quotations or national shopping, respectively. No individual subprojects' contract would cost above US$100,000 equivalent. The average subproject cost will be of US$10,000 equivalent. It is expected that 90 percent of the total number of subprojects, representing about 80 percent of the total value of subprojects financed, would be executed directly by the communities. 6.13 Technical assistance, training and studies under Components B and C would be carried out by individual consultants or consulting firms contracted in accordance with Guidelines on the Use of Consultants by librld Bank Borrowers and by the brld Bank as Executing Agency (August 1981). A standard invitation package would be used, including the Bank's standard form of contract for consultants services and model letter of invitation. 6.14 Other costs not involving procurement. Approximately 42 percent of the proposed projects costs or US$185.0 million equivalent would not involve procurement. These costs include training and stipends for trainees under the PRONAPAS program and remuneration for temporary fixed-term staff under the PROAS/PRENO, PEP and FORESTAR programs. 6.15 Textbooks under Plan Social Educativo in Component A would be subject to retroactive financing. A contract for a total of US$15.9 million equivalent was placed directly with the editors in observance copyright laws in effect in Argentina which applied for the selected books. The Bank has agreed to reimburse the Government for payments for textbooks made after March 15, 1995, up to an amount of US$6.2 million equivalent. The process for contract awards was reviewed by the Bank's mission during appraisal and found to be acceptable for Bank's financing. In spite of having purchased the books directly in obeyance of copyright legislation, the Ministry of Education (MOE) aggregated all requests from individual schools across the country and obtained wholesale prices in average 35 to 50 percent below regular cover prices. 6.16 Review of Procurement. Under Component A, prior review by the Bank would be carried out for the technical assistance contracts and for the ICB for the computer and office equipment for the Institutional Development component; the award of civil works contracts under Plan Social Educativo would be subject to sample post 37 review. Under Components B and C, for FOPAR, the first five grants for subprojects (and any subproject which does not correspond to the types established in the Operational Manual) would be subject to the Bank's prior review. The Bank would review ex-post, on a selective basis, contracts and bid evaluation for goods and civil works awarded under other procedures not subject to prior review by the Bank. 6.17 The Bank would review documentation for consulting services to be financed under the Loan. Bank prior review would be required for: (a) all contracts for consulting firms of US$100,000 equivalent or above; (b) all contracts with individuals (new or renewals) costing more than US$50,000 equivalent in aggregate during the calendar year. For consultant contracts with firms that cost less than US$100,000 equivalent and for individuals that cost less than US$50,000 equivalent, prior review by the Bank would only cover the corresponding terms of reference and the short list. This exception shall not apply to: (a) single source selection of consulting firms; (b) assignments of a critical nature as reasonably determined by the Bank; (c) amendments to contracts for the employment of consulting firms raising the contract value to US$100,000 equivalent or above; (d) amendments to contracts for the employment of individual consultants raising the contract value to US$50,000 equivalent or above; and (e) key staff positions of the project units in FOPAR and SIEMPRO (Table 6.2). B. Disbursements 6.18 The proceeds of the proposed loan are expected to be disbursed in accordance with the schedule shown in 'hble 6.3 over a period of two and a half years (i.e., three IBRD fiscal years), with the target of disbursing more than 30 percent of these resources before end-1995. Because the implementation period for both Components B and C is somewhat longer than for Component A, the project completion date is estimated to be December 31, 1997 and Loan closing date is June 30, 1998. 6.19 Retroactive financing of up to 20 percent of the loan or US$30.4 million equivalent would be available, including US$28.4 for Component A to help cover eligible expenditures for textbooks, civil works, technical assistance and studies, training and stipends incurred on or after March 15, 1995. For Component C, retroactive financing of up to US$2.0 million would be provided for eligible expenditures for consultant services, goods and equipment, and training and workshops incurred on or after June 12, 1995. In both cases, retroactive financing would be allowed on or after the above mentioned dates and, in any event, only up to 12 months prior to loan signing. 38 Table 6.2: SUMMARY OF PROCUREMENT REVIEW CATEGORY PROCEDURE PRIOR BANK REVIEW Civil Works (Plan Social Educativo) - Construction/Repair of classrooms Shopping None (No contract would exceed US$120,000) Computer & Office Equipment for Institutional Development in Comp. A. Other Computer Hardware & Software/ Office Eqpt.. in Comps. B and C ICB All Technical Assistance (Instit. Development in Comp A and Components B & C) Shopping None Contracts with firms for more than Letter of US$ 100,000 invitation All Contracts with individuals (new or renewals) that would determine a total of US$50,000 or more for the specific Letter of consultant during a calendar year. invitation All Contracts for Project's key staff Other All Table 6.3: ESTIMATED DISBURSEMENT TIMETABLE (For all Components) IBRD Fiscal Year 1996 1997 1998 Annual $80.6(*) $56.9 $14.5 Cumulative $80.6 $137.5 $152.0 *Includes an initial Special Account deposit of US$20.0 for Component A and US$3.0 million for Components B and C, retroactive financing of up to US$28.4 million for Component A, for eligible expenditures incurred on or after March 15, 1995, and retroactive financing of up to US$2.0 million for Components B and C for eligible expenditures on or after June 12, 1995, and PPF Refinancing of US$0.9 million for Component B, and US$0.6 million for Component C. 6.20 Thble.6.4 shows disbursement allocations. Disbursements would be made against the following categories of expenditures: 39 (a) For Component A: Disbursement percentages would be as follows for each category: 75 percent of expenditures for civil works; 75 percent for textbooks; 100 percent of the Institutional Development consulting services and computer and office equipment; and 75 percent for remuneration of temporary fixed-term staff under PROAS/PRENO and FORESTAR programs and for the stipends and training costs under PRONAPAS. (b) For Components B and C: 40 percent of expenditures for goods; 80 percent of the expenditures for training and workshops and for consulting services; and 70 percent of the grants for subprojects. 6.21 Withdrawal applications for consultant services with a contract value of US$100,000 or more and US$50,000 or more for the employment of firms and individual consultants, respectively, as well as the special cases noted in para. 6.14 would be supported by full documentation. Additionally, the first five grants by FOPAR for subprojects would be fully documented. Disbursements would be made on the basis of Statement of Expenditures (SOEs) against expenditures for contracts for: (a) all civil works; (b) contracts of less than US$100,000 and US$50,000 for the employment of consulting firms and individual consultants, respectively; (c) all subprojects (consistent with the FOPAR Operational Manual) other than the first five grants; and (d) disbursements against eligible expenditures not undertaken by contract. Supporting documentation for these would be retained and maintained by the Coordinating Unit in each program and would be available for periodic review by the Bank. 6.22 Authorities responsible for coordinating each Component would be responsible for ensuring that requests for reimbursement are made for eligible expenditures. These requests can only be made when the coordinating units for each program has incurred the expense and has sufficient supporting documentation (contracts, invoices, payment orders, etc.). For Component A, the Coordinator and/or his alternate would prepare an SOE at regular intervals (monthly) for presentation to the Secretary of Finance in the MOE. For Components B and C, the coordinating units at FOPAR and SIEMPRO would be able to draw on the Loan account directly. 6.23 Special Account . Two Special Accounts would be opened for this project in the Banco de la Nacidn: (a) a Special Account of US$20.0 million for Component A to be managed by the Ministry of Economy, and (b) a Special Account of US$5.0 million (with an initial deposit of US$3.0 million) for Components B and C, to be managed by designated authorities in SDS, FOPAR and SIEMPRO. Normal documentation requirements apply, except that in addition, a copy of the Bank statement from the institution holding the account detailing the transactions made and reconciled by the MCE and by SDS/ FOPAR/SIEMPRO, respectively, would accompany each replenishment request. 40 Table 6.4: WITHDRAWALS OF THE PROCEEDS OF THE LOAN Loan Allocation Percent of Expenditures CATEGORY (US$ Million) to be Financed COMPONENT A 1. Civil Works 35.5 75% 2. Textbooks 5.6 75% 3. Institutional Development 4.8 100% 4. Training and Stipends 11.9 75% 5. Remuneration for Temporary/ 46.5 75% Fixed-Term Staff 6. Unallocated 11.6 COMPONENT B 7. Grant for Subprojects 18.5 70% of cost of subprojects 8. Training and Workshops 1.0 80% 9. Consulting Services 5.4 80% 10. Other Goods and Equipment 0.2 40% COMPONENT C 11. Consulting Services 7.4 80% 12. Training and Workshops 1.7 80% 13. Other Goods and Equipment 0.4 40% 14. PPF Refinancing 1.5 TOTAL 152.0 41 C. Audits 6.24 All executing agencies would maintain records and account adequate to reflect, in accordance with sound accounting practices, the resources and expenditures in connection with the execution of the programs. These records would reflect the resources and expenditure in connection with the execution of the entire program. During negotiations, it was agreed that the MCE and the MTSS for the loan- financed programs, as well as SDS for FOPAR and SIEMPRO, would: (a) have the records and accounts for each fiscal year audited by independent and qualified auditors, with a separate opinion provided for SOEs, using generally accepted auditing standards and procedures; (b) furnish to the Bank no later than six months after the end of each fiscal year, a certified copy of the agreed audit reports; and (c) furnish to the Bank such other information concerning the records and accounts as well as the audit as the Bank would from time to time reasonably request (para. 9.1(i)). For all expenditures with respect to which withdrawal from the Loan Account were made on the basis of SOEs, and all expenditures with respect to which withdrawals were made from the Special Account, the coordinating units for the programs would upon request provide: (a) to MOE all records and accounts necessary to allow the timely performance of its obligations and (b) to the independent auditor, both the records and the supporting documentation. 6.25 The project's accounts would be available for inspection by the Bank. The annual audit reports would include, inter alia: (a) an audit of the project; (b) an auditor's opinion on the eligibility of expenses submitted through Statement of Expenditures (SOEs); (c) opinions on compliance with the financial-managerial covenants in the Loan Agreement; (d) an audit of the special account; (e) a management letter; and (f) a disclosure of the audit procedures utilized. The audit would be performed by independent auditors acceptable to the Bank. The terms of reference for the annual audits would be submitted to the Bank for its consideration. It was confirmed at negotiations that FOPAR would undertake and forward to the Bank annual ex-post evaluations of sample grants for subprojects based on terms of reference acceptable to the Bank (para. 9.1(n)). 7. MONITORING AND EVALUATION 7.1 Progress Reporting. For Component A, the Coordinator in the Secretariat of Finance would send a semi-annual progress report to the World Bank based on information provided by the implementing agencies and the DEP. DEP would prepare periodic information on the status of each of the protected programs reflecting, among others, accomplishment of program targets and financial performance. Reporting procedures have been agreed also for Components B and C. Assurances were obtained at negotiations that such semi-annual progress reports would be 42 furnished to the Bank by March 31 and September 30 of each year of project execution (para. 9.1 (h)). 7.2 Program Evaluation. Each of the protected programs would be evaluated during the life of the project. Evaluations would focus on the effectiveness of the programs in targeting the poor and unemployed: the internal efficiency of service delivery; the impact of programs on the income and welfare levels of the intended beneficiaries; and recommendations to improve targeting and efficiency. The evaluation studies would be managed by SIEMPRO, as part of its mandate to evaluate social programs in Argentina. SIEMPRO would execute letters of agreements (cartas de adhesion) with the program implementing agencies for the carrying of the evaluation studies. Assurances were obtained during negotiations that the terms of reference for the first two evaluations would be sent to the Bank for its review and comments by January 15, 1996; the first two evaluation studies carried out on the basis of said terms of reference would be sent to the Bank by May 31, 1996; and the evaluation studies of the remaining programs would be sent to the Bank by December 31, 1996 (para. 9.1 (v)). The timetable for these evaluation studies are also included in the SIEMPRO matrix. 7.3 As discussed earlier (para 3.9), the DNPGS of the MCE would carry out a critical review of federal social spending for the "targeted" programs amounting to nearly US$4 billion in 1995. The review would analyze the efficiency of these programs and would identify ways to improve their cost-effectiveness. The results of the first stage of this would be sent to the Bank by May 31, 1996. 7.4 World Bank Review Missions. In general, Bank missions would focus on the review of the quarterly budget release for the social programs supported under Part A of the Project, the field implementation of the pilot social investment fund under Component B, and the process and output results summarized in the Matrix of Key Activities under Component C. Special attention would be paid to monitoring the effectiveness of targeting to the poor, as well as the achievement of physical attainment of the different social programs. The supervision team would be carefully planned, involving staff and consultants with the necessary skills and experience for each of the supported social programs. It is estimated that 50 staff weeks each would be required for supervision in FY96 and FY97. This estimate takes into account the multi-sectoral nature of this operation, the institutional development aspects, and the procurement arrangements for some of the project activities. 7.5 In relation to Component A, the following actions would be implemented during World Bank review missions: (a) December 1995: to review the actual spending for the protected programs for the first three quarters of 1995 and to agree on the composition and budget for the social programs to be financed from the Bank loan in 1996; 43 (b) February 1996: to review the actual spending results for the protected programs for 1995 ; (c) August 1996: to review actual spending for the first two quarters of 1996; to discuss the results of the first stage of the public social expenditure review and of the first two evaluation studies on the protected programs; and (d) February 1997: to review the actual spending results for 1996; to discuss the results of the succeeding stages of the public social expenditure review and of the evaluation studies on the remaining protected programs. 7.6 Mid-Term Review. During negotiations, assurances were obtained that a Mid-Term Review would be held for Components B and C no later than March 31, 1997. It was also confirmed that for Component C, the Mid-Term Review would officially launch the start of preparation of the second phase of the SIEMPRO program (para. 9.1 (w)). 8. BENEFITS AND RISKS 8.1 The proposed project would help to reduce the social costs associated with Argentina's current economic crisis and related adjustment program. It would preserve critical social services for about three million Argentines currently living in poverty or facing unemployment. Of these, about 850,000 children and pregnant women would be vaccinated and over half a million persons protected from Chagas Disease; and about 170,000 poor persons would receive supplementary feeding. Nearly 2 million students would benefit from the Plan Social Educativo. The project would provide employment opportunities and develop the skills of about 200,000 currently unemployed persons, and would help improve the productive capacity of thousands of poor rural families. The pilot phase of the FOPAR would also help generate a new model for financing grass-roots poverty reduction activities using community participation. In the next two years, FOPAR will benefit about 70,000 families in the poorest districts of Northern Argentina. 8.2 The medium-term institutional development benefits of this operation include the improvement of the targeting, monitoring and evaluation of social programs through the technical assistance to SIEMPRO, strengthening of MOE's DEP in monitoring the physical and financial accomplishments of the protected programs, and enhancement of the Government's capacity to review social expenditure efficiency. At the same time, the project would assist in building federal and provincial capacity for social policy analysis and formulation and for monitoring and evaluating social programs. 8.3 The main risks facing the project are: (a) further budget cuts and (b) slow disbursement as a result of lack of local capacity and insufficient coordination between 44 the Ministry of Economy, SDS and the implementing agencies. The Bank and the IDB are working closely with the Ministry of Economy to safeguard the budget of the targeted social programs. Project conditionality related to public social spending in 1995-96 would reduce this risk. The second risk would be mitigated by concentrating on a small number of important social programs and by giving priority to implementing agencies with a demonstrated record of strong program management. Covenants for appointing the project coordinator and the hiring of the project officer and sub-coordinator in the Ministry of Labor will help to ensure that an accountable management team is in place at the outset of the project. Procurement and disbursement procedures have been designed to expedite implementation and reimbursement. 8.4 With respect to the loan terms, the Government expects the US dollar single currency loan terms to facilitate improved debt management, and the fixed interest rate to protect against possible market interest rate increases after the loan is fully disbursed. 9. AGREEMENTS REACHED AND RECOMMENDATION 9.1 The following agreements were reached or assurances were given at negotiations: Component A: Critical Social Programs and Support (a) By no later than December 15, 1995, the Government would furnish the Bank a report on the physical and financial performance of the protected programs for the first semester of the year (para. 3.8); (b) The Government would ensure that its expenditures in 1995 for the protected social programs would amount in the aggregate to at least US$300 million and would inform the Bank in writing, no later than February 28, 1996 of the actual level and composition of 1995 expenditures for the protected programs (para. 3.8); (c) By December 15, 1995, the Government would furnish to the Bank evidence that it has budgeted sufficient funds for the protected programs in 1996 in an aggregate amount at least equal to US$300 million (para. 3.8); (d) By no later than December 15, 1995, the Government would provide the Bank with a proposal, acceptable to the Bank, describing the size and composition of the selected employment programs to be financed by the Loan under component A of the project during 1996. (para. 3.8); 45 (e) The Government would furnish the Bank not later than December 15, 1995 a set of indicators, satisfactory to the Bank, to be used for the monitoring of the execution of the protected programs (para. 3.6); (f) The Government, through DNPGS, would provide the Bank with terms of reference for the public social expenditure review, satisfactory to the Bank, not later than December 15, 1995; forward to the Bank a copy of draft reports on federal social expenditures not later than May 31, 1996, and on provincial social expenditures not later than December 31, 1996 (para. 3.9); (g) MOE would hire a Project Officer on or before January 15, 1996 to assist the Project Coordinator in the daily operational tasks of supervising Component A. In addition, MTSS would hire by January 31, 1996, and retain until project completion, a Project Manager to coordinate the technical assistance, as well as other Loan administrative and reporting requirements for the Loan financing of the selected employment programs (paras. 3.18 and 4.2); (h) Semi-annual progress reports for Components A, B and C would be furnished to the Bank by March 31 and September 30 of each year of project execution (para. 7.1); (i) The MCE and MTSS would, for the selected programs to be financed: (a) have the records and accounts for each fiscal year audited by independent and qualified auditors, with a separate opinion provided for SOEs, using generally accepted auditing standards and procedures; (b) furnish to the Bank no later than six months after the end of each fiscal year, a certified copy of the agreed audit reports; and (c) furnish to the Bank such other information concerning the records and accounts as well as the audit as the Bank would from time to time reasonably request (para. 6.24). Component B: FOPAR (j) Any revision of eligible subproject types would be subject to the prior approval of the Bank (para. 3.26); (k) Any substantive change in its organizational structure and Operational Manual would require prior Bank approval (para. 4.7). (1) Provincial councils would need to be established before any funds are disbursed for subprojects in the provinces (para. 4.8). (m) FOPAR would submit for the Bank's no objection: (a) the first five grant agreements for subprojects, including their appraisal reports; (b) any subproject which does not meet the eligibility criteria set forth in the Operational Manual; (c) the standard solicitation forms for inviting subproject proposals for deprived 46 neighborhoods in provincial capitals; (d) the standard technical documents (letter of invitation, terms of reference for proposals, the evaluation report, the recommendation for award and the proposed contract) for the fiduciary arrangements for the micro-enterprise revolving funds; and (e) a copy of each subproject summary sheet for its ex-post review in a format acceptable to the Bank (para. 4.9). (n) would undertake and forward to the Bank annual ex-post evaluations of sample grants for subprojects based on terms of reference acceptable to the Bank (para. 6.25). Component C: SIEMPRO (o) The SDS shall not terminate, amend or fail to enforce any provision of the subsidiary agreement between SIEMPRO and INDEC (para. 3.38). (p) The draft terms of reference and tentative design of the survey on access to social programs in relation to living conditions, prepared in coordination, with DNPGS in areas of its competence, would be furnished to the Bank for its review and comment (para. 3.38). (q) Any substantive change to the SIEMPRO Matrix of Key Activities would be satisfactory to the Bank (para. 3.36). (r) Any SIEMPRO activity on social program evaluation using a methodology that includes public social expenditures among its variables would be carried out in coordination with DNPGS (para. 3.39). (s) The draft subsidiary agreements for the UEPS for the first two provinces joining SIEMPRO would be furnished to the Bank for its review (para. 4.11). (t) SIEMPRO would establish a mechanism (Technical Dissemination Plan) to finance the participation of Provinces in SIEMPRO (para. 3.40). (u) The MOE would provide the counterpart funds needed by Components B and C up to an estimated amount of US$13 million during project implementation (para. 5.5). (v) The terms of reference for the evaluation of the first two protected programs would be sent to the Bank for its review and comments by January 15, 1996; the first two evaluation studies carried out on the basis of said terms of reference would be sent to the Bank by May 31, 1996; and the evaluation studies of the remaining programs by December 31, 1996 (para. 7.2). 47 (w) A Mid-Term Review would be held for Components B and C no later than March 31, 1997. For Component C, the Mid-Term Review would officially launch the start of preparation of the second phase of the SIEMPRO program (para. 4.9 and 7.6). 9.2 Conditions of Disbursement: Component A: Critical Social Programs and Support (a) For 1995, the MOE would appoint a Project Coordinator with terms of reference and qualifications acceptable to the Bank for the implementation of Component A (para. 4.2). (b) For 1996, the Government would send the Bank an acceptable proposal for the size and composition of the selected employment programs to be financed by the Loan (para. 3.8); Component B and C: FOPAR and SIEMPRO (c) The establishment of a FOPAR Unit in SDS and the appointment of all key staff (National Coordinator, two line managers, and the first provincial coordinator) with terms of reference and qualifications satisfactory to the Bank (para. 4.7). (d) The FOPAR Operation Manual acceptable to the Bank would be issued (para.4.7). (e) SIEMPRO's UEC would be established and staffed with terms of reference and qualifications satisfactory to the Bank as reflected in the SIEMPRO Project Document (para.4.10). 9.3 Recommendation. Subject to compliance with the above conditions, the proposed project is suitable for an IBRD loan of US$152 million, with the guarantee of the Argentine Republic, for 15 years, including five years of grace at the IBRD's standard variable interest rate. 43 Annex 1 2 in6uMo ale Fconomla ARGENTINA SOCIAL PROTECTION LOAN LETTER OF SOCIAL POLICY October 10, 1995 Mr. James D. Wolfensohn President The World Bank Washington, D.C. Dear Mr. Wolfensohn: 1. This letter of social policy describes the Argentine Government's reform program and the various steps necessary for reforming the social sectors. To achieve these objectives and implement them in their entirely, the Government is requesting financial and technical assistance from IBRD. I. The Macroeconomic Framework 2. Price stability and sustained growth remain the centerpieces of the Government's economic program. The Government has made important progress since 1991. To eliminate fiscal deficits that were fueling inflation, the Government initiated profound structural reforms. As a result, monthly price increases dropped from over 30 percent at the beginning of 1991 to international rates in the second semester of 1993, inflation during 1994 was only 3.9 percent 3. By laying the basis for price stability, the Government has charted an agenda for the future with the following objectives: * the consolidation of stability through strict compliance with Law No.23928 of March 27, 1991 (the Convertibility Law), the preservation of fiscal equilibrium and the operation of a market economy with deregulated and unrestricted competitive.markets, and regulation by the state of non-competitive markets; * the strengthening of economic growth (annual GDP growth rates increased from 0.1 percent in 1990 to an average of 7.7 percent during 1991-1994) through increased levels of savings, investment, productivity, privatization of public 49 Annex 1 enterprises, private sector development and exports, and an intensification of trade, financial and technological integration of the Argentina economy into world markets; and the achievement of higher levels of employment and a more equitable distribution of income, both at a personal and regional basis, through consolidation of economic stability and growth, substantially increased public investment in human resource development and social services, and measures to promote regional development 4. Sustained economic recovery and improvements in welfare will continue to be achieved by undertaking lasting structural reforms in the public sector, improvement in national savings, and policy reforms that would continue to remote private sector activity through gains in productivity, lower domestic taxes, and factor market improvements. To ensure that the private sector remains the leading expansionary force in the economy, the Government is committed to maintain flexible and open markets free of domestic regulations and major external trade barriers, and with a strong financial sector to improve intermediation. The Government's program of market reforms covers the following areas: (a) Open market economy- The government has totally eliminated controls on prices, wages, interest rates, and capital flows as well as a complex network of subsidies and implicit taxes. The Government is committed to maintain such policies. Additionally, to facilitate more rational allocation of resources in the economy, and improve international competitiveness through the reduction of production costs and improvement of incentives for productive investment, the Government is committed to promote structural reforms by introducing and supporting legislation for: (a) liberalizing labor markets; (b) streamlining bankruptcy legislation; (c) reforming the health insurance cooperatives; and (d) encouraging the reform of provincial finances, including the reduction of inefficient taxes. (b) Trade Liberalization: The Government has made rapid strides towards opening the economy, in terms of flows of trade, capital, and technology. The import tariff structure has been simplified and the average tariff rate was lowered to approximately 14 percent To the extent that additional tariffs were reimposed for fiscal reasons, it is the government's intention to remove them as soon as practicable. Export taxes have been nearly eliminated, and most quantitative restrictions and other procedures that slowed the entry of trade, capital and 50 Annex 1 219into ae conomia y104. y tzWceoa 2SaSioi0 technology have been removed. The Government will keep the economy open to international competition and will keep Argentina's antidumping provisions in line with the respective GATT code. Moreover, the MERCOSUR treaty came into full effect in January 1995... As specified in the Treaty of Asunci6n, the Government eliminated most intra-MERCOSUR tariffs, dropped all other intra-market trade barriers, and established a common external tariff covering 85 percent of the positions in January 1995. (c) Financial Sector Reform: Financial sector reforms have been aimed at increasing financial deepening and the efficiency of financial intermediation. Following interest rate liberalization in 1987 and the elimination of directed credit by the Central Bank, the Government's strategy has been to increase depositor and investor confidence. Under the Convertibility Law price stabilization, liberalized interest rates, and tighter regulation and enforcement of liquidity, capital adequacy and provisioning requirements were the chief reforms that permitted financial deepening (M4) to increase from a low of 7 percent of GDP in 1990 to 19 percent in 1994. Similarly, capital market reforms, including the elimination of transaction taxes on securities trading and improvements in the regulation of public offerings, encouraged the development of a major emerging market Banks and non-bank corporations raised US$9.9 billion in equity issues and registered US$6.5 billion in bond issues during 1990-1993. The Government is committed to maintain liberalized interest rates and to refrain from directing credit allocation of financial institutions, and to further strengthen banking supervision. 5. In the aftermath of the Mexico crisis, the Government's immediate aim is to sustain past achievements through deepening reforms. The Government has already taken far-reaching steps that will consolidate stability and deflect the spillover effects from the crisis. Foremost among these changes are a deepening of public and financial sector reforms. These will strengthen confidence in sovereign debt, the financial sector, and the sustainability of the Convertibility Law. The following sections discuss these reforms as well as upcoming steps of the reform program. II. Social Policy 6. The objectives of the Government's social policy are to satisfy the basic needs of y the population and guarantee equality of opportunity. The purpose of its active social policy is to provide opportunities for the population to participate in the process of 51 Annex 1 l0indso ade Econoamia economic development and overcome the various causes and manifestations of poverty. A context for this policy is provided by the proposals and targets contained in the 1995- 99 Five-Year Plan. 7. Economic growth is essential for social development and the elimination of poverty, but it will fall short of this goal unless it is accompanied by appropriate active social policies. Consequently, the Government has allocated considerable resources over recent years in order to deal with the needs of the underprivileged and support the social sectors. Nevertheless, such policies have often achieved meager results, and the actions taken have been supply-based, fragmented and erratic, and characterized by fregmentation and a lack of transparency. 8. In present-day Argentina (as in most countries in the region that are experiencing similar problems of structural modernization), overcoming these difficulties requires abandoning the traditional approach of state intervention, adopting instead a new model of administration that is demand-oriented and combines effectiveness, efficiency, transparency and participation. 9. Consequently, the Government - through the Office of the Secretary for Social Development - has decided to prepare the way for the gradual establishment of a "National System of Social Policies," so that, in the medium term, a demand-oriented management model can be introduced, guaranteeing a necessary degree of participation and efficiency to achieve a measurable and quantifiable impact, thus producing substantial improvements in the standard of living and eliminating poverty. 10. In this process, the Government has the key role of setting policy, and regulating and coordinating the functions of the various stakeholders while simultaneously insisting on justice and equity for all. The criteria guiding its actions are decentralization, clear targeting, integrated approach, and participation. 11. Achieving increased efficiency is a function of having clear focus and responding to social demand. Consequently, consistent criteria must be applied to the allocation of resources in all administrative areas, the setting of precise goals, and appropriate levels of .control. It is therefore essential that all the agencies involved should be provided with the same mechanisms for monitoring and controL The National Government allocates resources according to its priorities, transferring them to the Provinces when necessary and monitoring their impact in the social sphere. 52 Annex I P/Anklho de "conomia Ovm LS iy y etmwceo6 CFdMca 12. Although the National Government must not relinquish its fundamental responsibilities, the principle to be applied is that the social agencies must operate as links among individuals, among the organizations themselves, and between the community and the Government For this reason, interaction between Government, NGOs and municipalities is essential for the development of social policy, and must increase. 13. Social programs must be defined in terms of their objectives and targets, and even though they are based on differing methodologies, they must include a consistent approach to evaluating results. Evaluation as an ongoing process in the design and implementation of programs is essential for achieving government objectives and ensuring that resources are efficiently used. Thus, evaluation - provided that it is correctly defined in terms of time, actors and processes - is one of the basic tools of the State and society for guaranteeing effective social policy. 14. The Government has called for an inventory of Targeted Social Programs that would indicate the degree of each program's financial execution and physical targets. This inventory will be based on data from the SIDIF (Integrated Financial Information System) operated by the Office of the Secretary of the Treasury (Secretaria de Hacienda). 15. The Social Cabinet (Gabinete Social) comprises officials from all agencies with a direct or indirect responsibility for social affairs, and entrusted with the use of their own funds. Consequently, the Social Cabinet has called upon the National Auditing office (Sindicatura General de la Naci6n) to audit the programs relating to employment food and the activities of FONAVL so that the principles applied by the various authorities can be made uniform and the findings can be disseminated. This instrument serves to reassert the full powers of the federal supervisory agencies over certain items of discretionary funding. III. The Development of Human Capital A. Public Social Spending 16. Since 1991, public social spending has acquired considerable importance relative to other types of public spending. This resulted from the reform of the State and the transfer of functions that could be delegated to others so that the State could concentrate on those activities assigned to it under the Constitution and relating to administrative management and the application of resources to the social sectors. The fact that public social spending has increased while public spending in general has declined is evidence 53 Annex I 210n414o ae Tcnomia 'y (91 a_ V e7etzi4Ceo4 tj&eod of the priority accorded to it by the Government Economic reorganization, GDP growth, and more efficient tax collection have produced the resources necessary for achieving these objectives. Nevertheless, the mere availability of financing does not guarantee its efficient use, and therefore constant efforts must be made - in line with clearly established principles - to provide guidance for all the institutional actors involved in policy making and implementation. 17. Ever since it was established, the Office of the Secretary for Economic Planning (Secretaria de Programaci6n Econ6mica) of the Ministry of the Economy and Public Works and Services has undertaken studies relating to public spending. These studies show that social spending has considerably increased vis-b-vis other forms of public spending, rising from 45% of total expenditures in 1980-83 to 65% in 1993-95. Its share of GDP increased from 14% in the former period to 18% over the last three years. A major component in public social spending is social security (which includes social insurance, social facilities, unemployment insurance and dependency allowances), and it has increased in recent years. In 1995 it accounted for more than half of public social spending and 10.4% of GDP. Health, culture and education are the most important items within the social sectors. Spending on health rose from 1.2% of GDP in 1980-83 to 1.7% in 1993-95, while spending on culture and education increased from about 3% of GDP at the beginning of the 1980s to 3.6% in 1995. Social welfare has maintained its share over recent years, despite a few fluctuations, while growth in other urban services and in labor has been comparatively large, especially since employment programs began to be implemented in 1993. 18. The need to institutionalize the study of such issues led to the establishment in mid-August 1994 in the Office of the Secretary for Economic Planning (Secretaria de Programaci6n Econ6mica) of the National Directorate for the Programing of Social Expenditure (Direcci6n Nacional de Programaci6n del Gasto Social), the Directorate for Consolidated Public Spending (Direcci6n del Gasto Pfiblico Consolidado), and the Directorate for Studies on Living Standards and Poverty (Direcci6n de Estudios sobre Niveles de Vida y Pobreza). The National Directorate reports directly to the Office of the Secretary for Economic Planning and its main purposes are to evaluate and prepare programs relating to consolidated public spending policies, their financing and their impact on the population, and also to prepare diagnostic and monitoring studies on living standards, such studies providing a framework for social and economic policy. Since the Government is aware that there is no direct correlation between current levels /of spending and the services provided, it is imperative to increase the efficiency and effectiveness of programs and improve the standard of monitoring. Annex 1 2/Aimtlso ae cOnomla B. Targeted Programs 19. In order to reduce the social costs of fiscal adjustment, the National Government intends to maintain its spending on certain social programs for the poorest members of the population at appropriate levels. A "basket" of social welfare programs has been selected from among those financed by the National Government which will keep its spending on these up to a suitable level during the adjustment period. Similarly, immediate action will be taken to improve these programs, with support from the Inter- American Development Bank. 20. Through the Office of the Secretary for Social Development (Secretaria de Desarrollo Social), the National Government is formulating a Social Food Plan (Plan Social Alimentario) to establish national policy on food assistance and identify mechanisms for implementing policy, with a view to increasing equity, efficiency and transparency in the use of resources. 21. As part of the anti-poverty policy being promoted by the Office of the Secretary for Social Development it will support integrated and participatory projects targeted to poor areas and to vulnerable groups. To this end, the establishment of a Participatory Fund for Social Investment (Fondo Participativo de Inversi6n Social) was identified as a priority need for supporting those groups living in extreme poverty. Its purpose is to produce social investment projects for areas and municipalities where there is extreme poverty, targeting these to households with high levels of unmet basic needs, thus dealing with the community's urgent needs and improving the quality of life of the most vulnerable groups. The Fund will provide support in the form of financial resources, technical assistance and training in the fields of health, nutrition, education, environmental sanitation, housing, and employment, among others. 22. It is essential that the process of social planning should include monitoring tools that reach out to all those involved in social spending. Each Province is free to set its own social investment priorities, but the National Government is also entitled to set priorities and play an active role in allocating expenditures. In this way, the State's social resources both combine with and encourage the financial efforts of the various Provinces in meeting the needs of critical areas. The need to set up an information system to coordinate the efforts of all stakeholders in social policy, while disseminating basic data on which they can base their decision-making, has provided the motivation for establishing SIEMPRO (Sistema de Informaci6n, Evaluaci6n y Monitoreo de Programas Sociales; System of Information, Evaluation and Monitoring of Social Programs), which is operated by the Office of the Secretary for Social Development Its 55 Annex 1 Kinedo d'e Wcnomia purpose is to develop a national information base, as well as training, monitoring and ongoing evaluation system for targeted Social Programs. The following are the main aims of SIEMPRO: - establish an information system relating to social groups affected by poverty that will make it possible to improve the formulation of programs and identify new social needs and problems; - improve the management of social programs by strengthening the institutional capacity of some provinces, thus contributing to bring about changes in the "culture" and practices of the State; - establish a monitoring and evaluation network for targeted social programs, at the national and provincial levels; - develop a National System of Training and Technical Assistance for the Management of Social Policies which would strengthen central units and various relevant agencies, to promote the adoption of new systems for managing anti-poverty policies. IV. Employment Policies 23. Since mid-1992, the Government has been developing a set of policies for promoting job creation and establishing an integrated system of unemployment allowances that will cover the basic needs of those persons temporarily unemployed. These programs are financed by the 1.5% levy on payroll established under the 1991 National Employment Law (Law No. 24013), which also created the National Employment Fund. 24. The National Government has been greatly concerned over unemployment and is therefore making considerable efforts to intensify and diversify its activities and programs so as to adapt them to the various needs of those affected. 25. As the programs are developed, the necessary changes are being introduced to make their management and administration more efficient - and transparent Nevertheless, greater efforts must be devoted to reducing the costs of programs, targeting them more precisely, and improving the mechanisms for evaluation and inspection. 56 Annex 1 inido ae conomia 26. A major objective is to enhance the social impact and effectiveness of programs promoting employment, targeting them more accurately toward those groups within the community that encounter the greatest difficulties in entering the labor force. Resource allocation must be improved, making it better and more efficient giving priority to those programs with the greatest social impact, and improving their implementation. The power to reallocate resources on a more rational basis will provide for greater flexibility in responding to changes in the labor market and in taking effective action to reduce any negative repercussions. The actions taken will simplify programs and reduce their cost, the purpose being to increase the number of beneficiaries covered. 27. Earlier labor legislation hadthe effect of increasing labor costs and limiting the demand for labor. Faced with this situation, the Government has undertaken an accelerated process of reform in order to reduce labor costs, create jobs, and improve human capital, preparing it for the demands of a more competitive market V. World Bank Support 28. The above presentation demonstrates the depth of the Governments overall public sector and social sector reform programs. The Government believes that financial assistance from the World Bank is essential to implement improvements in social sector programs. Sincerel , Domingo Feli Minister of Economy and Public Works an Services ―〕〕！幟’朧‘！緲‘”甽 合自I當畫呂雙鳥11 整唱口含居畫，呂！! 藝要l響互I藝J-l Ij―糁―。―-, 『日I豐1 IJ 務11-―亂 蘊―I-_―雜 糁―.1．圓蠻 !-“癥”&“誠“-&“矓‘“職“‘·IiI｝藝紹 名屆1 1519么 日I“•I!l贊必． 汁！:&“左：!::::&&!-&&“二鑰：&&&&&;&“〕賬邑 I-&：識”，。：&&’馳‘。“&cc&&&&&r&”們I d-,1.-:―亂 糾‘&‘亡斤玆‘&&&&&“杜’戀―&,&&&：。‘:e。“。：&n! 認l＿。．-．。名：____._.＿。盆。。。。00．•編l日I ·―：仁：‘。：::!::：。”:!-&&&&&&&&&&&&&&!-:- I:::&!&”一“!-“。‘&&&&&&&&‘仁“〕―〕― 呼‘&&,::::;:&&!-&&&&&&&&&&&“州！- 濟比”&&“縱―&&“悲”二比北“!-l華 l,&“亡必亡珍‘&&&&”絕e戀i,&&&&&&,&&&&&,l梁 卜由 ANNEX 1 -58 A~ Tab(4 1.2 ÅfjoRd01W Cceltaltdatad PU1311C Eximandtturlffl 5Y JUMSdIM001* 19~3 t löd.46 ligg t m m Ind 11914a 1. Tocat Ex2«dkur« r. et C13PI =3 33.-1 IL& IL7 2L3 2V Xa IT.4 203 cow ~ cm =1 =0 2L2 IgLo 17.9 1&4 112 14.9 IMLI ~ ~ Q~wnq~ 6.0 9.6 4.4 ej 9.9 lU 11.3 10.6 ICLA ~ ugs Gur mments 13 M 1.4 1.1 2.3 La 22 M SOCht ~ and MUM« RUMMU 14.4 18.4 15.3 t4.6 17.6 17.3 1&0 Mt ~amtr.cwwnmcnt 9.2 9.3 La 93 laz LT 6.4 ILO 9.8 P~~ Gwfwm~ " 4.6 6.1 5.4 c.t L3 u 7.3 muffaciud cc~m~ 0.4 0.9 L2 1.1 1.1 1.2 1.3 at whick: 1. ta 4~ 3.0 Lä L3 6.1 7.4 73 72 7.1 72 pamfä cowe~wc 4.0 4.3 4.2 3.1 U L4 147 17 1.0 1.3 1.1 t$ 1.6 1.4 11 0.3 0.0 a* oa 04 u GA GA t.1 J omar gackk aklimelmm 9.4 10.4 lao 1c41 103 111 Ilj lax åmom "offimm*sp 6.1 3.1 &j 4.4 4.4 44 U 4M ,Pmw~ ccw 3.4 4.8 4.5 4j 4.7 La L7 Le &4 Me~ care"~ 0.8 OJ a.10 1.1 1.1 ta 1.3 ta 1.2 1.2 om er momc~ 11 1114 lej 2" 13.1 111 iu lag u IGA ~mret Owe~ &.o 1%6 IL& ej TA ti u 4,2 ej ~ ~ Quo«~ 3.4 La 3.2 2.4 33 3.& 31 3.3 34 ålh~ Owe«~ 0.7 C47 0.7 oj u u Lä, u OJI Tetat Cm~ ~ (% Zkuu et~ iglo 1010 1100.13 IGLO Icao icao IGLO ICLO 1~ p~ co~namm 71.2 dal M? 644 du M CLI g" GL3 Prwk~ Offemmum UJ 2&9 UT Mf =4 al 30.3 al 3" 94~ 08 Queen~ 4.5 449 4.6 ta L? u 7-1 7.3, T.11 l.t44cfa&4~fTmdwuaan)t- IOLC Imo 100.10 IOLO Icao tcLO IOLG IGLO 103.9 PC4MU Guscenmum M& SLIP 97.3 17.1 WJ k4 g42 6" P~.~ <zwwm~ 31.9 37.4 341.4 IL4 35.4 X2 ear 38.3 306.7 -Muft~ om 9.4 1.7 01.1 L& 64 u 7.3 L7 ca ofwfticr. ma ~983~ 10CLO ICC.3 10LO 193.0 IGLO 1= ICLO IOLC 1~ aur ma 7&3 7&9 77.6 Tu 7U TU du M2 ZLT Mi 2z4 2U :41 3LI 1t4 21.1 0.10 3.4 4.3 u u u u u OJI M.2 cmar a~ IGLO 1034 ma IGLO IGLO 1= ma Icao IGLO p~ 061# 5&0 4?.3 43.4 AU du ag 301.1 37.4 3LI peur~~4~ 37.3 4&4 4" AU au ng 41.7 964 Afu~ Queen~ kf 4.7 L4 11.1 M 110 lu 1,44 1.2 Ginge fimpGåermne 18 IGLO *=2 113m12 icao icao lett IGLO Icao IGLO ~ W Ger 7?.7 MZ 80.4 mr M3 att fil BM Pm~ # c*offimmem 18,7 20.3 M& au V3 311 37.9 372 33A A*m~ au# 3.4 4.2 3.4 13 7.9 7.4 7.4 u 7.6 ä~ IÄrfaimännum I kom ttmt. PM~ aea meveceavt ".IL. mifilaw et *memelm. 18 trectucec n= mefflemma~ pmaft mempe egemefflön WMWUWAM and pubm cemt am~ I P*ce^4 pfeWAMW ~ *~ ac"MmenqL 59 Annex 2 SOME PROTECTED SOCIAL PROGRAMS (1995) - WITHOUT BANK FINANCING 1. Health: Vaccinations (Programa Ampliado de Imunizaci6n, or PAI, US$37.5 million or 6 percent of total cost). Towards the end of the 1970s the Ministry of Health began to implement an immunization program, which currently vaccinates: (a) infants and children against polio, measles, rubeola, mumps and neonatal tetanus; (b) at-risk groups against diphtheria, tetanus, and whooping cough; and (c) health workers against Hepatitis B. The program, which covers the whole country, is implemented by the Immunization Departments of the provincial Ministries of Health, using about 6,000 immunization centers nationwide. The program is effectively self-targeted, as the majority of those utilizing public health centers are low- income. In 1994, the immunization program had a 90 to 95 percent coverage of its target groups. 2. The physical targets of the program for 1995 and 1996 are: (a) more than 90 percent of children below one year old would receive all required vaccinations for this age group; (b) more than 90 percent of women of reproductive age in selected provinces would receive immunization against tetanus; and (c) more than 90 percent of health workers would be vaccinated against Hepatitis B. These objectives translate to targeted beneficiaries of about: 630,000 children below 1 year old, 340,000 health workers, and 140,000 women of reproductive age. For 1996, the estimated number of beneficiaries is similar to that of 1995. In addition, children of mothers detected to be positive with Hepatitis B would also be required to receive the appropriate vaccination. 3. The immunization program is coordinated and supervised by the Epidemiology Department of the MOH central office. This Department also provides the norms and guidelines to the Immunization Departments of the provincial Ministries of Health. The Epidemiology Department carries out a monthly technical supervision of the program based on the monthly report sent by the provinces on coverage and dosage of different types of vaccines provided. Field supervision visits are also carried out at least once a year by the professionals of the Epidemiology Department. Program improvements for which financing would be sought in 1996 include the acute need for updating the refrigeration units in the vaccination centers and training of health workers in the program. 4. The MOH Epidemiology Department receives monthly progress reports on the program from the provinces which are consolidated periodically to provide a feedback for the norms and decisions of the MOH. The MOH would send to the Bank a semi- annual progress report on the immunization program including, inter alia, a review of actual coverage vis-i-vis targets, detailed status of program expenditures by different 60 Annex 2 category of expenditures, status of procurement for items to be financed under the Bank Loan, and an updated execution plan for the following six months. 5. Health: Chagas Control Program (Programa de Control de Enfermedades - Chagas, US$45.5 million or 7 percent of total cost). The Chagas control program originated in the 1950s, when the first epidemiological survey and laboratory dedicated to the study of this disease were established. In the early 1980s, the program expanded with the passage of the Chagas Law (Ley No. 22360) and receipt of institutional development assistance from the World Health Organization (WHO). The program's current objective is to eliminate over the next five years the occurrence of new cases of the disease. This would be done by: (a) controlling the vectoral transmission of the Tripanosoma Cruzi parasite using insecticide treatment of infected houses and surrounding structures; (b) screening of pregnant mothers and monitoring children whose mothers are infected; (c) quality control of blood donated to the 857 laboratories that belong to the network of the Instituto Nacional de Chagas; (d) detecting and treating infected children; (e) assisting the rural population in improving their housing (up to a cost of US$2,500 per house) in order to eradicate the insect vector for the disease; (f) carrying out entomological surveillance of inspected and treated houses with community involvement; and (g) developing biomedical and operational research necessary for the program. 6. The Ministry of Health, which manages the Chagas program, targets the low- income rural population (more than 80 percent are families with Unsatisfied Basic Needs -- NBI) and those with difficult access to medical care. For 1995, MOH's goal is to disinfect about 217,000 houses (1.6 million persons) and to carry out entomological surveillance of about 800,000 houses (3.4 million persons). In addition, the quality control of blood supply and the control of mother-to-child transmission are estimated to benefit a total of 14 million persons. 7. The program is implemented by the National Chagas Service (Servicio Nacional de Chagas, or SNCH) under the Department of Sanitary Medicine of the MOH. Norm and policy formulation of the program is carried out by the Director of the Department of Epidemiology, the chief of the SNCH and the Director of the Instituto Nacional de Chagas. Field implementation and supervision are carried out with about 500 sanitary agents at the provincial level. Field supervision is also carried out at least once a year by professionals from the MOH central office. 8. The provincial MOH offices send monthly reports to the central office on the progress of program implementation, including the number of houses infected, treated, and inspected. On this basis, program targets are revised as necessary. The MOH central office consolidates these reports and prepares annual progress reports. Under the Project, the MOH Department of Epidemiology would send the Bank semi-annual progress reports on the program including, inter alia, a review of actual coverage vis- a-vis targets, detailed status of program expenditures by different category of expenditures, status of procurement for items to be financed under the Bank Loan, and 61 Annex 2 updated execution plan for the following six months. The primary monitoring indicators of program status are shown in Annex 2. 9. Nutrition (Apoyo Solidario a los Mayores, or ASOMA, US$86 million or 14 percent of total cost). The Secretaria de Desarrollo Social started ASOMA in 1993, as a way of offering nutritional and health assistance to the elderly poor. The program is designed to benefit people 60 years of age or more who do not receive a pension and are at high risk of illness on account of their poor nutritional condition. Of the 4.6 million Argentines over 60 years of age, 350,000 are in need of social assistance, based on the poverty index (NBI). Of these, 144,000 are now beneficiaries of ASOMA. 10. Targeting is achieved through a poverty map which uses the poverty index (a more sensitive index for this program is currently being tested). In addition, information is provided by each potential participant through an extensive questionnaire. This indicates, health condition, physical mobility, access to income and other social services, and family circumstances. Details of the ASOMA beneficiary population are currently being computerized. In situations where there are more eligible candidates for the program than resources, the final selection of beneficiaries is made by the community. 11. For most beneficiaries, the food -- valued at US$25 a month -- is packed in a 17-kilo box of commodities designed to provide 1500 calories and 40 grams of protein a day. A small fraction of participants receive daily meals in a dining facility. Nutrition considerations are reflected in the selection of the foods. 12. ASOMA's budget resources, currently amounting to about US$43 million for 1995, are transferred to the provinces. In most cases, the provincial governments organize competitive bidding for the purchase of the food. About 15 percent of the program is handled directly by non-government organizations, primarily church-related groups. An effort is under way to expand NGO involvement in ASOMA. 13. The ASOMA staff in the Secretariat of Social Development headquarters consists of about 50 persons including 21 professionals. Half deal with planning, while the other half review proposals, organize contracts, and manage project execution. The Subsecretariat for the Elderly audits the receipts for purchases of food. 14. An agreement signed in May 1995 between ASOMA and the Instituto Nacional de Servicios Sociales Para Jubilados y Pensionados (INSSJP), which runs the Programa de Atencion M6dica Integral (PAMI), should strengthen ASOMA. PAMI has successfully provided food to over 300,000 elderly persons receiving the minimum pension of 150 pesos per month. It would provide training and technical assistance to ASOMA and in some cases share its dining facilities. The collaboration would also help to eliminate any overlap between the two programs. 62 Annex 2 15. The team managing ASOMA is committed to undertaking a series of measures to improve the program's effectiveness. They include: (a) establishing procedures to assure continuity of food delivery, e.g., a guarantee of funding levels for food purchases and quicker reimbursement to the provinces through streamlining of reporting requirements; (b) adding to the ASOMA coordinating units representatives of major NGOs and community organizations, to assist in the selection of the neediest beneficiaries; (c) improving financial control systems; (d) strengthening management information systems, in order to avoid duplication of benefits, including recipients of food supplements under the PAMI program; (e) strengthening nutrition education activities to change beneficiaries' behavior; (f) incorporating as an investment objective to the program community service activities for children rendered by beneficiaries in exchange for the food package (e.g., the elderly would teach a child to read, help prepare a school meal, clear fields for preparing playgrounds, etc.); (g) organizing training sessions at each level of program implementation about how to improve targeting, reporting, purchasing, and mobilizing communities; and (h) developing a program of studies to measure the impact of ASOMA, assess the perception of the beneficiaries on the food ingredients and better target the program. Implementation of these institutional strengthening measures is estimated to cost US$1.8 million 16. Rural Poverty (Programa Social Agropecuario, or PSA, US$10.0 million, or 2 percent of total cost). The PSA pilot program was created in 1993 by the Secretariat of Agriculture, Livestock and Fisheries (SAGyP). The objective is to help improve the income of the economically active rural poor through the provision of financial and technical assistance. The original objective was to reach 30,000 producers nation-wide over three years. The program assists with the organization of producer groups (of about 6 to 20 households), which provides economies of scale and better bargaining power vis-4-vis marketing intermediaries. Technical assistance from national and local government institutions, NGOs, and the private sector provides access to better technology. Subprojects are financed in the form of both grants and credit, with the terms dependent on the type of investment. 17. The program benefits poor smallholders; i.e., those whose deficiencies in organization, infrastructure and technology and geographic isolation result in low productivity and vulnerability to better organized brokers. It also benefits the new poor i.e., those who have been affected by the privatization or restructuring of public and private companies such as sugar and tobacco enterprises, or the closing of mines, and are now returning to small-scale farming. Because of their small scale, limited possibilities for providing physical guarantees, and general lack of integration into the formal economy, these producers have no access to credit from commercial banks and do not have the means to contract technical assistance. 18. The program's beneficiaries must meet the following eligibility criteria: (a) the producers work and live on their farm; (b) the producer has no permanent hired labor; (c) non-agricultural income is lower than the wage of a rural worker; (d) the income from agricultural activities is less than double the income of a permanent rural laborer; 63 Annex 2 and (e) the amount of capital owned is less than US$20,000. Special efforts are made to ensure participation of indigenous populations through focused technical assistance and representation in decision-making bodies. The program is also working increasingly with underemployed rural laborers in small rural towns. Program funds are allocated to provincial coordinating units consistent with that province's proportion of small-holders as measured by the 1988 Agricultural Census, with over 70 percent of funds assigned to the Northeastern and Northwestern Regions. 19. PSA funds are used for: (a) training and technical assistance to staff, extension services, and small producers (about 10 percent of budget); (b) production subprojects (about 85 percent of budget); and (c) operating costs (about 5 percent of budget). Subprojects include home-consumption (autoconsumo)' for groups whose physical isolation or lack of organizational experience render commercial activities infusible, and associative productive enterprises (EPAs)2 for groups with better opportunities. From September 1993 to February 1995, PSA spent a total of US$15.3 million on almost 400 autoconsumo projects benefiting 4,200 families and about 750 EPAs benefiting over 9,000 families, at an average program cost of approximately US$227 per direct beneficiary. For autoconsumo subprojects, a grant of up to $100 per family and $2000 per group is provided to cover working capital (used for seeds or animals) and some fixed capital (primarily tools), contingent on contribution of labor by beneficiaries. The grant has to be "repaid" in kind, without interest, to a non-profit institution (e.g) school or hospitals) chosen by the beneficiaries. Autoconsumo projects consist primarily of vegetable gardens and poultry production. 2 EPA subprojects cover working capital and fixed assets (maximum of $50,000 per project, and not exceeding $1200 per family). Traditional activities receive two to six year loans with a grace period of at least one year and then are charged an interest rate of 6 percent per year on the outstanding balance. An additional non-refundable amount of up to 20 percent of the financing can be used to contract technical assistance. Labor has to be provided by the beneficiaries. Innovative activities have to be associated with research institutions (i.e., universities of INTA) and are provided with softer financing terms including longer time frames for repayment and interest rate of only 4 percent. EPA subprojects cover: (a) improvement or expansion of vegetable or fruit production; (b) introduction of new crops to diversify production; (c) improvement in small-scale cattle production; (d) small agro-industry; (e) rural handicraft production; (f) marketing improvements; and (g) improvement of production-related infrastructure. 64 ANNEX 2 Annex Table 2.1 Targeted Social Programs B u d g e t a s o f M a r c h 1 9 9 5 R e s p o n si b l e i g e n c Y Responsible Agenc A) PRIORITY PROGRAMS- J., ___39_______ 1. Desarrollo de Unidades Económicas Solidaias 51,987,547 Secretara de Desarrollo (PROSOL) Social 1.1 - Alimentación y nutrición y otros* 10,829,899 1.2 - Refacción de vivienda, agua y saneamiento' 26,786,648 1.3 - Contraparte programa de interacción 8,000,000 - Fondo de Inversión 7,000,000 - Preinversión 1,000,000 1.4 - Fortalecimineto de la sociedad civil y 6,371,000 C.E.N.O.C.* 2. Apoyo Solidario a los Mayores (ASOMA) 43,097,490 Secretaría de Desarrollo Social 3. Mejor Educación para Todos 50,078,731 Ministerio de Cultura y Educación 4. Mejoramiento de la Infraestructura Escolar 46,946,930 Ministerio de Cultura y Educación 5. Gestión de programas y proyectos educativos 52,777,269 Ministerio de Cultura y (Formac. y capac. docente) Educación 6. Implementación ley federal 24195 137,494,011 Ministerio de Cultura y Educación 7. Generación de Empleo 184,504,000 Ministerio de Trabajo 7.1 - Prog. Nacional de Pasantías (PRONAPAS)" . 30,500,000 7.2 - Prog. de asistencia solidaria (PROAS)" 39,600,000 7.3 - PRENO/PROEDIS" 22,400,000 7.4 - PEP" 30,000,000 7.5- Otros 62,004,000 8. Atención del Seguro de Desempleo 285,775,122 Ministerio de Trabajo '9. Programa Reconversión Centros de Salud y 36,277,000 Ministerio de Salud y Desarrollo Infantil (PROMIN) Acción Scocial 10. Normatización, suministros y supervisión de 13,558,131 Ministerio de Salud y vacunaciones Acción Social 11. Control de enfermedades transmisibles por vectores 19,382,809 Ministerio de Salud y (Chagas) Acción Social 12. Normatización y Asistencia en Nutrición Materno 31,730,574 Ministerio de Salud y Infantil Acción Social 13. Estudio, Seguimiento y Promoción de Economía 56,365,434 Ministerio de Economía y Laboral y Social (PROYECTO JOVEN) Obras y Social 14. Programa Social Agropecuario 14,509,000 Ministerio de Economía y Obras y Social 15. Provisión Agua Potable Saneamiento Cloacal Pobl. C 14,893,521 Ministerio de Economía y Carenciadas (PASPAYS) Obras y Social Source: Ministerio de Economia 65 ANNEX 3 CRITICAL SOCIAL PROGRAMS AND INCOME SUPPORT MATRIX OF KEY MONITORING INDICATORS SUBPROGRAM UNIT OF YEAR MEASUREMENT 1994 1995 1996 EDUCATION Education Program for Schools in Poor Areas (Plan Social Educativo) a) Books number 1,500,000 220,000 - b) Construction new m2 150,000 107,500 - c) Number of rehabilitated schools number 1,000 500 - (15,000 per school) d) Number of schools receiving number 4,000 (a) 6,000 (b) - padagogical equipment e) Number of teachers trained persons 50,000 - - f) Computer equipment number 4,000 - - g) Number of institutional projects number 1,000 500 - h) Number of libraries number 5,000 - - i) Number of students who benefit persons 1,950,000 - EMPLOYMENT Overall Indicators a) Average cost per beneficiary for all U$S $1,581 $927 $740 the programs b) Cost per beneficiary of the unemployment U$S $370 $250 - insurance scheme c) PROEDIS (to be phased out) persons - 2,500 - - number of beneficiaries Number of Beneficiaries - Employment Program (PROAS) persons - 38,000 - - Employment Training Program (PRENO) persons - 21,500 - Apprenticeship Program - PRONAPAS (until August 1995) persons - 12,000 - - APRENDER (after August 1995) persons - 50,000 - RURAL POVERTY Production Support Program for the Rural Poor (Plan Social Agropecuario) a) Number of new subprojects - Subsistence projects - - EPAs projects - b) Number of beneficiary producers persons - - - in subprojects c) Number of beneficiary producers persons - 22,000 22,000 in training courses d) Number of rural development agents persons 400 500 500 in training courses Notes: (a) $2,000/school + $80/class room + $7 per student. (b) $2,000/school + $50/class room + $7 per student. 66 ANNEX 3 CRITICAL SOCIAL PROGRAMS AND INCOME SUPPORT MATRIX OF KEY MONITORING INDICATORS SUBPROGRAM UNIT OF YEAR MEASUREMENT 1994 1995 1996 HEALTH a. Immunization Program (Programa Ampliado de Imunizacion, PAI) a) Percent of children under one year (esti- mated to be 700,000) vaccinated with: - OPV 3 (polio) percent 84.8% - DPT 3 (diptheria, pertussis, tetanus) percent 97.0% more than more thar - A.S. (measles) percent 95.6% 90% 90% - B.C.G. (tuberculosis) percent 107.3% (a) b) Number of women of reproductive age persons program 140,000 140,000 vaccinated against tetanus non-existent c) Number of health workers vaccinated persons - 80,000 80,000 against hepatitis B b. Disease Control Program (Programa de Control de Mal de Chagas) a) Houses inspected number 311,000 384,000 390,000 b) Houses infected number 19,066 20,000 20,000 c) Houses treated number 137,861 217,000 160,000 d) Houses treated/total houses percent 21% 33% 25% in the program area (b) e) Number of persons protected/total percent 6.9% 20% 24% population in the program area (c) NUTRITION Nutrition Program for the Elderly (Apoyo Solidario a los Mayores, ASOMA) a) Number of beneficiaries persons - 170,000 - b) Costs per beneficiary USS - $25 - c) Organizing beneficiary's registry files percent - - 90.0% d) Training of local program administrators number of courses - 24 24 Notes: (a) Problem of over-registering. (b) Maximum number of houses in the program area estimated to be 648,000 (maximum). (c) Total number of persons in the program area estimated to be 8.0 million. 67 ANNEX4 FOPAR: SAMPLE MONITORING INDICATORS SUBPROGRAM YEAR 1995 1996 Ist Sen. 2nd Sem. Ist Sem. 2nd Sem. PROVINCES 1. Cumulative number of provinces 2 6 * 8 1 10 incorporated 2. Local Development Committees 11 44 66 71 formed (cumulative number) 3. Cumulative number of subrproject 2 6 10 16 competitions POOR COMMUNITIES (rural, small towns, semi-urban) 1. Cumulative number of subproject 39 249 417 698 by period 2. Number of subprojects 39 210 168 281 in execution DEPRIVED NEIGHBORHOODS (urban areas) 1. Estimated number of subprojects 30 116 198 368 to be evaluated 2. Cumulative number of subprojects 15 58 99 184 approved 3. Number of subprojects in 15 43 41 $85 execution MICROENTERPRISE SUBPROJECTS 1 revolving 1 revolving fund fund 68 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 1: SOCIAL INFORMATION AND TARGETING OUTCOMES ACTIVIFY INSTITUTIONAL ARRANGEMENTS PROCESS IMPACT Parlicipaling InsiruTion-in-Charge Inslitatin DATE DATE 1.1 Establish SDS-SIEMPRO- MOE through INDEC Jun-7-95 SDS and INDEC interinstitutional UEC and DNPGS, other Agreement signed. agreements with National Ministries, Agreement esta- public and private Research Institutes, blshes parameters gencies for the Universities, for SIEMPRO to gain analysis for NGOs, private access to: social program institutes, etc. (a) microdata from the Nargeting. National Population and Housing Census; (b) the household survey database; (c) digital cartographic data- base; (d) any other information relevant to the SIEMPRO system; and (e) agreement to carry out special survey. Dec-15-96 Start the establish- Apr-31-97 SIEMPROs relations ment of SIEMPRO with the network of agreements with agencies producing agencies producing social information social information. established. 1.2 Provide technical SDS-SIEMPRO- INDEC, National Jul-1 5-96 Complete the support to Improve UEC Ministries, identification and the quality and Research analysis of priority availability of social Institutes, areas of improve- sector statistics. Universities, etc. ments of exisiting social sector statistics. Aug-1 5-96 Start activities to Oct-30-97 Availability of improve social reliable social sector sector statistics. information through the generation of new indicators for targeting, and elaboration of survey reports. 69 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 1: SOCIAL INFORMATION AND TARGETING OUTCOMES ACTIVITY INST1T7TlONAL ARRANGEMENTS PROCESS IMPACT Pamicipating Insitution-in-Charge Insututions DATE DATE 1.3 Develop the SDS-SIEMPRO- INDEC May-1-96 Complete the al database and UEC selection of sources ndicators, Including of information and ferenced the design of social formation system database. Aug-I1-96 Complete the Dec-1 5-97 Availability of updated incorporation of social information for selected information 23 provinces, Federal into social database. Capital, and 522 departments disaggregated at the census district level. Semestral, Periodic report on beginning updated database. Sep-30-96 Jan-1 5-96 Start the compatibili- zation and geo- referencing of three SIEMPRO databases (i.e. social indicators, social programs and NGOs). Oct-30-96 Complete a feasibility study for the geo- graphic information system (GIS) in SDS. 1.4 Develop the SDS-SIEMPRO- National Ministries, Mar-30-96 Start the semi-annual Oct-31-97 Strengthened monitoring and Universities, NGOs monitoring report on decision-making nalysis of the the social situation capacity for SDS situation of the for the SDS. and the Social vulnerable groups to Cabinet. assist in the decision- making process of Sep-30-96 Start the semi-annual Oct-31-97 Strengthened the SDS, the social monitoring report on decision-making cabinet and the the social situation capacity at the provincial for the provinces. provincial level by govemments. providing Information on the social situation at the local level. 70 ANNEX 6 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 1: SOCIAL INFORMATION AND TARGETING OUTCOMES_________ ___ ACTIVTfY INSTrTlONAL ARRANGEMENTS OUTOME PROCESS IMPACT Participating Institution-in-Charge Institutions DATE DATE 1.5 Establish SDS-SIEMPRO- National Ministries, Jun-30-96 Complete a report on Sep-31-96 Availability of ppropriate criteria UEC Universities, NGOs existing targeting methodologies and methodologies methodologies in the Information for or targeting of social programs of targeting social ll programs. SDS and other programs. National Ministries. Nov-3-96 Complete the definition of targeting methodologies for social programs. Dec-30-97 Complete the pilot test of the transfer of targeting methodologies for two programs in SDS. Jan-2-97 Start the transfer of Nov-30-97 Strengthened targeting methodo- capacity of 22 logies and Information programs in SDS to to 20 social programs use Information for in SDS and other targeting. National Ministries. 1.6 Construct SDS-SIEMPRO- INDEC Sep-30-96 Complete the vulnerability map for UEC vulnerability index. argeting and resource allocation Dec-30-96 Complete the ranking at geographic level. of 522 departments and 25 localities covered by the Permanent Household Survey, according to the vulnerability Index. Jun-30-97 Complete the incorporation of vulnerability index into georeferenced database. 71 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 1: SOCIAL INFORMATION AND TARGETING OUTCOMES ACTIVITY INSTTIUTIONAL ARRANGEMENTS PROCESS IMPACT Participating Imitution-in-Charge Institutions DATE DATE 1.7 Transfer of the SDS-SIEMPRO- Provincial Mar-30-96 Complete the Sep-30-97 Improvement In the ocess elaborated UEC Ministries diagnostics for 2 use of available the "Gerencla de pilot provinces of their information for Informaclon Social needs in the areas of formulation, design y Focalizacion." information, and targeting of equipment, training decentralized national and technical programs and assistance. provincial programs. Jul-30-96 Complete the installation of Information System in 2 pilot Provincial Project Implementation Units. Oct-1-96 Start the installation of Information System in the rest of selected provinces. 1.8 Carry out, with SDS-SIEMPRO- MOE through INDEC Jan-30-96 Complete the selection Aug-30-96 Strengthened capacity INDEC and DNPGS, a UEC and DNPGS. of programs to be of SDS for the design of Survey of Access to included in the survey. program coordination Social Programs in and use of survey for Relation to LMng poverty analysis and Conditions. Impact evaluation of social program. Mar-30-96 Complete the design of pilot survey instrument. Aug-30-96 Complete detailed TOR to carry out the following: (a) test of the questionnaire; (b) pilot survey; (c) procesing of pilot survey; (d) field work for final survey; (e) data entry; (f) consistency check for the data; and (g) validation of the data. I I 72 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 1: SOCIAL INFORMATION AND TARGETING OUTCOMES ACTIVITY INSTITrTIONAL ARRANGEMENTS PROCESS IMPACT Panticipating Institution-in-Charge Institufions DATE DATE Oct-30-96 Complete the elaboration of analysis plan for the survey. Nov-30-96 Complete survey taking for the MBA and the provinces. Feb-28-97 Complete the Oct-31-97 Available Information preliminary analysis on characteristics of of the survey data, the poor and the and start the vulnerable, redistri- dissemination of the butive Impact of results. social programs at national, regional and provincial level for the purpose of targeting. Oct-31-97 Publish the final results. 1.9 Carry out 7 SDS-SIEMPRO- NGOs Jun-30-96 Complete the first set Oct-31-97 Views of the qualitative studies on UEC of PQS (2 studies). beneficiaries on the vulnerable group's causes of vulnerable survival strategies life conditions and selected areas corresponding (Participatory survival strategies Qualitative Studies, are fed back to PQS). managers of social to improve the design and implementation of social policies. May-31-97 Complete the second set of PQS. (2 studies). Jul-31-97 Complete the third set of PQS. (3 studies). Subcompl.xls 10/11/95 73 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 2: EVALUATION AND MONITORING OF TARGETED SOCIAL PROGRAMS OUTCOMES ACTIV1TY INSTITUTIONAL ARRANGEMENTS PROCESS IMPACT Paricipaing Insitution-in-Charge Insirtutions DATE DATE 2.1 Set up the SDS-SIEMPRO- SDS Social Quarterly, Periodic update of the Sep-30-96 Systematic monitoring and UEC Programs beginning database of all monitoring and avaluation system of Dec-15-95 social programs evaluation of 30% of social programs in managed by SDS. the most important SDS. social programs managed by SDS. Dec-15-95 Start preparation of monitoring and evaluation reports on SDS-managed social programs based on guidelines to be provided by SIEMPRO. 2.2 Promote the SIEMPRO-UEC MOE through Dec-1 5-95 Complete SIEMPRO Mar-15-97 Systematic generation continuous DNPGS and other baseline database of of information on 30% monitoring and National Ministries. national programs. of the total number evaluation of targeted of national social ocial programs programs established. managed by National Ministries. Mar-1 5-96 Start workshops with Sep-30-96 Systematic social program monitoring and coordinators to evaluation of establish a joint selected social work plan on programs (estimated monitoring and to be about 30% of evaluation, existing targeted social programs). Apr-15-96 Start the operation of a social program registry office under SIEMPRO. Jan-1 5-96 Start the collection of data on provincial social programs. Quarterly, Update periodically beginning the social program Jan-1 5-96 database. 74 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 2: EVALUATION AND MONITORING OF TARGETED SOCIAL PROGRAMS OUTCOMES ACTIVITY INSTITUTIONAL ARRANGEMENTS PROCESS IMPACT Paurkipaing Instion-in-Charge Insmiunions DATE DATE Jul-31-95 Complete the preparation of ex-ante and ex-post program evaluation manual (to be subcontracted). Aug-1-96 Pilot test the to completed manual Aug-30-96 with one social program. Sep-30-96 Furnish the national social programs with completed manual. Dec-15-97 Complete beneficiary assessment of 8 social programs (to be subcontracted) Jun-1-97 Complete diagnostic evaluation of 8 social programs (to be subcontracted). Jan-15-95 Complete TOR for the first two evaluation studies. May-31-96 Complete the first two evaluation studies. Dec-31-96 Complete the next five evaluation studies. Jun-1-97 Complete other evaluation studies. Quarterly, Periodic reports on beginning the monitoring and Jun-30-96 evaluation being carried out on national social I_ 1programs. 75 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 2: EVALUATION AND MONITORING OF TARGETED SOCIAL PROGRAMS ACTIVITY INSTITUTIONAL ARRANGEMENTS PROCESS IMPACT Participating Inatitution-in-Charg Institutions DATE DATE Annual, Annual report on beginning goals and budget of Apr-30-96 social programs taking into account the results of the monitoring and evaluation of such programs, when available. 2.3 Collect, analyze SIEMPRO-UEC SDS, UEPs, NGOs Sep-30-96 Complete establish- Dec-30-96 Systematic genera- ad classify CENOC ment of database tion of information on information on NGOs of relevant NGO NGOs Involved In woring with social projects. targetted social potential beneficiaries programs. of targeted social Quarterly, Periodic update of programs. beginning NGO social project Dec-30-96 database. 76 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 3: DISSEMINATION AND TRANSFER OF METHODOLOGIES AND SYSTEMS TO NATIONAL AND PROVINCIAL AGENCIES OUTCOMES ACTIVIY INSTIUTIONAL ARRANGEMENTS PROCESS IMPACT Participating Insliulion-in-Charge [ntitutions DATE DATE 3.1 DisseminatIon and SDS-SIEMPRO- SDS departments Dec-1 5-95 Start of training and Jun-30-98 All of the SDS transfer of relevant UEC and national social workshops for staff programs and more SIEMPRO information, agencies. of SDS departments than 30% of the as well as systems and national social national social nd methodologies agencies, programs would for targeting, have used targeting monitoring and methodologies and evaluation of systems for social programs to monitoring and SDS departments and evaluation. national agencies. Quarterly, Periodic evaluation of beginning training and Mar-30-96 workshops being provided by SIEMPRO. 3.2 Dissemination and SIEMPRO-UEC Ministries of First phase: transfer of relevant Social Action in SIEMPRO Information, the provinces. May-i -96 --Complete Nov-30-96 Systematic 3ystems and formulation of generation of Tethodologies to strategy and plan for Information, as well )rovinces that would providing SIEMPRO evaluation of social jualify for SIEMPRO technical assistance programs In at least assistance. to the first two 4 provinces. provinces which have signed subsidiary agree- ments with SIEMPRO. Oct-1 5-96 --Complete process Jun-30-98 Systematic of setting up UEPs in generation of the two provinces, information, as well including the as monitoring and provision of computer evaluation of social equipment. programs in at least 3 additional provinces. 77 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 3: DISSEMINATION AND TRANSFER OF METHODOLOGIES AND SYSTEMS TO NATIONAL AND PROVINCIAL AGENCIES OUTCOMES ACIVITY INSTITTIONAL ARRANGEMENTS PROCESS IPACT Participaring Iitution-in-Charge Inslitutions DATE DATE .4 Develop a SDS-SIEMPRO- May-1-96 Complete strategy for Jun-30-98 About 200 govem- egy for training UEC social management officials Involved in training. targeted social a) social manage- programs trained on for government social management. lals; ) project identi- Sep-30-96 Start training courses Jun-30-98 About 180 national, Ion and on social management provincial, municipal ulation for agencies and NGOs ement technical staff trained echnIcal staff, NGOs. in social project nd community preparation. ders. Jun-1-96 Start training on project identification and formulation for government technical staff. Oct-30-96 Start training courses Oct-i -97 NGOs are for NGOs and integrated in the community leaders. process of monitoring and evaluation of social programs in the provinces participating in SIEMPRO. .5 Transfer SDS-SIEMPRO- Aug-1-96 Complete the design Mar-30-98 SIEMPRO structure IEMPRO to the UEC for the institutiona- and functions rmanent structure lization of SIEMPRO in absorbed in SDS. f the Secretaria de SDS, including "Direccion Nacional olo Social. definition of its del SIEMPRO" mission, organiza- created. tional framework and administrative processes. 78 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 3: DISSEMINATION AND TRANSFER OF METHODOLOGIES AND SYSTEMS TO NATIONAL AND PROVINCIAL AGENCIES OUTCOMES ACTIVITY INSTITUTIONAL ARRANGEMENTS PROCESS IMPACT Participating sbtitutin-in-Charge institutions DATE DATE Aug-15-96 -Start training on methodologies for targeting, monitoring and evaluation of social programs. Quarterly, -Periodic supervision beginning of progress of Dec-15-96 SIEMPRO activities in these two provinces. Second Phase: Nov-1 5-96 --Start extending above activities to other provinces which requested SIEMPRO assistance. .3 Carry out a SIEMPRO-UEC Oct-30-96 Complete definition of Nov-15-97 Improved public social communication social communication consciousness of strategy for SIEMPRO. strategy for SIEMPRO. the Importance of the SIEMPRO goals and activities. Dec-1 5-96 Start execution of Jun-30-98 All of the SDS defined communi- programs and more cation strategy. then 30% of the national social programs would have used targeting methodologies and systems for monitoring and evaluation. 79 ANNEX 5 SIEMPRO MATRIX OF KEY ACTIVITIES SUBCOMPONENT 3: DISSEMINATION AND TRANSFER OF METHODOLOGIES AND SYSTEMS TO NATIONAL AND PROVINCIAL AGENCIES OUTCOMES ACTIVITY INSTITUTIONAL ARRANGEMENTS PROCESS IMPACT Participating Institution-in-Charge Institulions DATE DATE Nov-1 -97 Start the process of absorbing SIEMPRO into the regular SDS organizational structure. Subcomp3.xls 10/11/1995 80 ANNEX 6 SIEMPRO KEY COMPONENTS OF SOCIAL DATA BASE FROM INDEC COMPONENT KEY DELIVERABLES FROM INDEC TO SIEMPRO SIEMPRO'S RESOURCES FOR INDEC 1. Population and Housing Census Data Base a) Provision of micro-data from the Population a) Use of equipment for 2 years to $25,000 and Housing Census for 1980 and 1991 prepare the data base. at the census district level. b) Contract of consultant services $72,000 b) Installation of software to process census for 24 months . data in SIEMPRO. Sub - total $97,000 c) Technical support and training to SIEMPRO for data processing. 2. Digital Cartography a) Provision of digital cartography for 23 provinces, a) Use of equipment for 2 years to $100,000 Federal Capital, 522 departments and localities speed up information digitization. with population > 10,000 at census district level. b) Contract of consultant services $100,000 b) Provision of digital cartography for rural localities S u b - t o t a l $200,000 with > 500 residents at the census district level. 3. Survey of Living Conditions and Access to Social Services a) Development of the sample frame for the survey. a) Development of sample frame $300,000 b) Design and pilot-testing of the survey questionnaire, b) Design, pilot-testing, and $108,900 and coordination with provinces to prepare for preparation of survey questionnaire survey taking. c) Carrying out the survey, and $821,100 c) Contract for survey taking for Metropolitan Buenos the delivery of clean data files. . Aires and for the Provinces. S u b - t o t a l $1,230,000 4. Analysis of Infant Mortality by Socioeconomic Factors a) Estimation of infant and under-5 child mortality a) Use of equipment for 1 year $2,500 by province, using the indirect methods, including to compute infant mortality. methodological annex. b) Contract of consultant services $74.400 b) Estimation of infant mortality by risk factor for all S u b - t o t a 1 $76,900 provinces, including the methodological annex. c) Production of a report with differentiation by at-risk subpopulation for all provinces. d) Comparision and reconcilation with estimated vital statistics in the Ministry of Health. e) Analysis of appropriateness of incorporating the indirect estimation method into the permanent registry of vital statistics. 5. Encuesta Permanente de Hogares (EPH) Provision for the next 5 years of complete EPH data base None which consists of EPH data from all localities for May and October rounds, including all ad hoc special modules. TOTAL $1.603.900 81 Annex 7 TECHNICAL DISSEMINATION PLAN (SIEMPRO) (PLANDE TRANSFERENCIA YASISTENCIA TECNICA) I. Objectives 1. During the first two years of its implementation, SIEMPRO would develop a program of gradual transference, technical assistance, and training based on the information, methodologies and systems developed for targeting, monitoring and evaluation of social programs especially directed to the poor. For this purpose, an amount of about US$2.0 million would be allocated for a Technical Dissemination Plan (TDP) under the proposed project with the following specific objectives: (a) assist in the establishment of small provincial SIEMPRO units (Unidades Ejecutoras Provinciales, UEP) in the provincial Ministry of Social Action or other counterpart provincial agency which would set up the social information system and monitoring/evaluation of provincial social programs targeted to the poor; and (b) finance the monitoring and evaluation and/or other technical studies for targeted social programs with priority for those supported under Component A of the Social Protection Project. H. Operational Mechanism 2. The TDP would operate on a demand-driven basis with respect to resource transfer to the provinces (i.e. objective (a) above). A provincial Ministry of Social Action or equivalent SDS provincial counterpart agency interested in receiving financial assistance for the above objectives would need to send a letter of request (carta de adhesion) to SDS-SIEMPRO. The primary eligibility criterion to qualify a province for TDP funding would be its poverty situation as characterized by its NBI level. Provinces with more than 25% NBI would receive priority in TDP funding. In case the requesting province qualify under this basic criterion, SIEMPRO would carry out a diagnostic evaluation of the requesting provincial agency, taking into account the following factors: (i) deficiency in availability of information for poverty monitoring; (ii) absence of clear targeting criteria in the social programs of the province; (iii) absence of systematic monitoring and evaluation of social programs; and (iv) internal institutional setting and inter-institutional linkages of the requesting provincial agency. Once SIEMPRO approves its inclusion, the provincial agency would need to execute a subsidiary agreement (Convenio de Adhesion) with SIEMPRO, which would set out the conditions for the resource transfer and the supervisory arrangements between SIEMPRO and the counterpart institution. This agreement would be accompanied by a Work Plan (Plan de 82 Annex 7 Trabajo) which would define the respective institutional responsibilities and expected outputs with their corresponding schedules. 3. After a subsidiary agreement has been executed between SIEMPRO and the participating province, SIEMPRO would contract the UEP coordinator and purchase the information system hardware and software for the UEP. Each participating province would receive funding of no more than US$200, 000 under the TDP in the form of consultant services, computer hardware/software and basic training. 4. In the case of national social agencies responsible for the programs under Component A of this project (i.e.. objective (b) above) some specific technical assistance, as necessary, would be supported through the TDP. Each proposal would need to be reviewed and approved by the Bank. A subsidiary agreement would be executed between SIEMPRO and the proponent agency to define the responsibilities for resource transfers from SIEMPRO and expected outputs from the agency concerned. 83 ANNEX8 SDS AND SIEMPRO ORGANIZATION CHART 1. Organization Chart of Secretariat of Social Development (SDS) SECRETARIA DE DESARROLLO SOCIAL Consejo del Menor y la Familia Instituto Nacional de Asuntos Indigenas Subsecretaria Subsecretaria Subsecretaria Subsecretaria Subsecretaria de la de Proyectos de de Accion Coordinacion Tercera Edad Sociales Vivienda Social Tecnica Administrativa 84 ANNEX8 SDS AND SIEMPRO ORGANIZATION CHART 2. Organization Chart of PRODESO SECRETARIA DE DESARROLLO SOCIAL SUBSECRETARIA DE PROYECTOS SOCIALES PRODESO SIEMPRO FOPAR UCAF 85 ANNEX 8 SDS AND SIEMPRO ORGANIZATION CHART 3. Organization Chart of SIEMPRO SECRETARIA DE DESARROLLO SOCIAL SUBSECRETARIA DE PROYECTOS SOCIALES Unidad de SIEMPRO Analisis de (Coordinacion) Politicas Sociales Sub- Coordinacion Gerencia de Gerencia de Monitoreo y Gerencia de Informacion y Evaluacion de Transferencia Focalizacion Progr. Sociales y Capacitacion Focalizados 11 86 ANNEX 9 ARGENTINA SOCIAL PROTECTION PROJECT Project Components by Calendar Year (USS Million) Totals Including Contingencies al 1995 1996 1997 To Priority Social and Income Support Programs A(i). Social Programs 1. Education Program for Schools in Poor Areas (Plan Social Educativo) 98.4 98.4 - 196. 2. Employment Training Programs (PROAS/PRENO) 54.0 54.0 - 108. 3. Apprenticeship Program (PRONAPAS) 20.4 20.3 - 40. 4. FORESTAR 8.0 8.0 - 16. Subtotal Social Programs 180.8 180.7 0.0 361. A(il). Institutional Development:Employment Programs, Public Social Expenditure Review and Pr ram Administration 2.6 2.7 5.3 Subtotal Priority Social and Income Support Programs 183.4 183.4 366. B. Pilot Participatory Social Investment Fund (FOPAR) 1. Community-Based Subprojects 0.0 10.1 15.7 25. 2. Institutional Development 0.9 4.4 5.6 10. Subtotal Pilot Participatory Social Investment Fund (FOPAR) 0.9 14.5 21.3 36. C. Improvement of Social Information, Targeting and Monitoring of Social Programs (SIEMPRO) 1. Poverty Information and Analysis 0.3 2.9 1.9 5.1 2. Monitoring and Evaluation of Social Programs 0.1 1.8 1.3 3. 3. TA for National and Provincial Social Agencies 0.1 1.9 2.0 4. 4. Project Management and Administration 0.1 1.0 1.0 2.1 Subtotal Improvement of Social Information, Targeting and Monitorn of Social Pro (SIEMPRO) 0.6 7.6 6.2 14. TOTAL PROJECT COSTS 184.9 205.5 27.5 417. at Figures for 1995 for Components B and C represent disbursements for PPF Refinancing. ARGENTINA SOCIAL PROTECTION PROJECT Components by Financiers (USS Million) Government World Bank Total Foreign Local Amount % Amount % Amount % Exchange (ExcL Taxes) A.Priority Social and Income Support Programs A(i) Social Programs 1. Education Program for Schools inPoor Areas (Plan Social Educativo) 148.0 75.2 48.8 24.8 196.8 47.1 72.8 124.0 2. Employment/Training Programs (PROAS/PRENO) 64.6 59.8 43.4 40.2 108.0 25.8 10.8 97.2 3. Apprenticeship Program (APRENDER) 26.6 65.4 14.1 34.6 40.7 9.7 4.0 36.7 4 FORESTAR 10.4 65.0 5.6 35.0 16.0 3.8 1.6 14.4 Subtotal Social Programs 249.6 69.0 111.9 31.0 361.5 86.5 89.2 272.3 A(ii) Technical Assistance for Employment Programs, Public Social Expenditure Review and Program Admnistration 1.3 24.5 4.0 75.5 5.3 1.3 2.0 3.3 Subtotal Priority Social and Income Support Programis 250.9 68.4 115.9 31.6 366.8 87.8 91.2 275.6 oo ~........................... 6.Pilot Participatory Social Investmient Fund (FOPAR) 1. Comimunity-Based Subprojects 7.3 28.3 18.5 71.7 25.8 6.2 7.7 18.1 2. Institutional Development 3.4 31.2 7.5 68.8 10.9 2.6 2.9 8.0 Subtotal Pilot Participatory Social-Investmient Fund (FOPAR) 10.7 29.2 26.0 70.8 36.7 8.8 10.6 26.1 .... ........ .Improvement of Social Information, Targeting and Monitoring of Social Progras (SIEMPRO) 1. Poverty nformation and Analysis 1.4 28.6 3.5 71.4 4.9 1.2 1.0 3.9 2. MonitoringandEvaluationofSocialSPrograms 0.9 26.5 2.5 73.5 3.4 0.8 1.0 2.4 3. TAforNationaland ProvincialSocialAgencies 1.3 31.7 2.8 68.3 4.1 1.0 0.8 3.3 4. ProjectManagementandAdministration 0.7 35.0 1.3 65.0 2.0 0.5 0.8 1.2 Subtotal Imlprovement of Social Information, Ta1geting and ntrn Sca Progra nistrationO 1 .::........ **** . .3 24.5 40 70.1 14.3 134 2.0 10.8 SOTAL DISBURSEMENT 265.9 63.6 152.0 3 6. 4 9 .0 1.4 32. N.B. Totals may n.ot sum exactly du to rounding. ARGENTINA SOCIAL PROTECTION PROJECT Expenditure Accounts by Financiers (US$ Million) Local Government IBRD Total Foreign (Exct Amount % Amount % Amount % Exchange Taxes) 1. Investment Costs A. Civil Works 61.6 51.5 58.0 48.5 119.6 28.6 72.0 47.6 B. Goods and Equipment 72.1 97.2 2.1 2.8 74.2 17.8 7.5 66.7 C. Textbooks 25.6 80.5 6.2 19.5 31.8 7.6 3.2 28.6 D. Technical Assistance - - 3.8 100.0 3.8 0.9 0.2 3.6 E. Training and Stipends 27.7 68.1 13.0 31.9 40.7 9.7 4.0 36.7 F. Operational Expenses 0.9 100.0 - - 0.9 0.2 - 0.9 0 G. Consulting Services 4.7 26.9 12.8 73.1 17.5 4.2 4.0 13.5 o H. Training and Workshops 0.8 22.9 2.7 77.1 3.5 0.8 1.2 2.3 1. Remuneration for Temporary/Fixed-Term Staff 72.1 58.1 51.9 41.9 124.0 29.7 12.8 111.2 J. PPF Refinancing - - 1.5 100.0 1.5 0.4 0.5 1.0 Total Investment Costs 265.5 63.6 152.0 36.4 417.5 99.9 105.4 31211 II. Recurrent Costs A. Administrative Expenses 0.4 100.0 - - 0.4 0.1 - 0.4 Total Recurrent Costs 0.4 100.0 - - 0.4 0.1 - 0.4 Total Disbursement 265.9 63.6 152.0 36.4 417.9 100.0 105.4 312.5 N.B. Totals may not smn mzactly due to rumling 89 ANNEX 9 ARGENTINA SOCIAL PROTECTION PROJECT Disbursement Forecast (USS Million) SCumulative IBRD Fiscal Year Disbursed During Cumulative as Percent and Quarter Ending Quarter Amount of Total . COMPONENT A FY96 31-Dec-95 48.4 a/ 48.4 42 31-Mar-96 13.0 61.4 53 30-Jun-96 12.2 73.6 64 FY97 30-Sep-96 21.2 94.8 82 31-Dec-96 21.1 115.9 100 ..COMPONENT B FY96 31-Dec-95 0.9 b/ 0.9 3 31-Mar-96 1.6 c/ 2.5 10 30-Jun-96 1.2 3.7 14 FY97 30-Sep-96 2.5 6.2 24 31-Dec-96 2.9 9.1 35 31-Mar-97 2.9 12.0 46 30-Jun-97 3.3 15.3 59 FY98 30-Sep-97 5.3 20.6 79 31-Dec-97 5.4 26.0 100 __.....__.._.._. :COMPONENT C FY96 31-Dec-95 0.6 d/ 0.6 6 31-Mar-96 2.4 c/ 3.0 30 30-Jun-96 0.3 3.3 33 FY97 30-Sep-96 0.6 3.9 39 31-Dec-96 0.6 4.5 45 31-Mar-97 0.9 5.4 53 30-Jun-97 0.9 6.3 62 FY98 30-Sep-97 1.1 7.4 73 31-Dec-97 2.7 10.1 100 Closing Date: June 30, 1997 (for Component A) June 30, 1998 (for Components B and C) a/ Includes an initial Special Account deposit of US$20.0 million and Retroactive Financing of up to USS28.4 million for eligible expenditures incurred up to 12 months prior to loan signing. b/ Includes PPF Refinancing of US$0.9 million. c/ Includes initial Special Account deposits of US$3.0 million for both Components B and C. d/ Includes PPF Refinancing of US$0.6 million.   :1&J、】泥J&4 ン、に・1ジ二y：こ4 :A手 』fwシei どAP