Argentina - Jefes de Hogar (Heads of Household) Program Project

Document of The World Bank Report No: 23710-AR PROJECT APPRAISAL DOCUMENT ONA PROPOSED LOAN IN THE AMOUNT OF US$600 MILLION TO THE ARGENTINE REPUBLIC FOR THE JEFES DE HOGAR (HEADS OF HOUSEHOLD) PROGRAM PROJECT Sector Management Unit for Human Development Country Management Unit for Argentina, Chile, Uruguay and Paraguay Latin America and Caribbean Region  CURRENCY EQUIVALENTS (Exchange Rate Effective July 15, 2002) Currency Unit = Argentine Peso I Peso = US$.30 US$1 = 3.50 Peso FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS AGN Auditorfa General de la Nacidn IDB Inter-American (National Audit Agency) Development Bank ANSES Administracion Nacional de la NBI Necesidades Bdsicas Seguridad Social (National Insatisfechas (Unsatisfied Social Security Administration) Basic Needs) CAS Country Assistance Strategy NGO Nongovernmental Organization CFAA Country Financial PEL Programa de Emergencia Accountability Assessment Laboral (Emergency Work Program) CONAEYC National Council for PSR Project Status Report Administration, Execution & Control EPH Encuesta Permanente de UNDP United Nations Hogares (Permanent Household Development Programme Survey) FMR Financial Management Reports SIGEN Sindicatura General de la Naci6n (General Audit Agency) IBRD International Bank for SINTyS Sistema de Identificaci6n Reconstruction and Nacional Tributario y Development (World Bank) Social (National System of Fiscal and Social Identification) ICR Implementation Completion SOE Statement of Expenditures Report Vice President: David de Ferranti Country Manager/Director: Myrna Alexander & Axel van Trotsenburg Sector Manager/Director: Ana-Maria Arriagada & Chris Chamberlin Task Team Leader/Task Manager: Theresa Jones  ARGENTINA JEFES DE HOGAR (HEADS OF HOUSEHOLD) PROGRAM CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 3 2. Main sector issues and Government strategy 3 3. Sector issues to be addressed by the project and strategic choices 5 C. Project Description Summary 1. Project components 9 2. Key policy and institutional reforms supported by the project 10 3. Benefits and target population 10 4. Institutional and implementation arrangements 10 D. Project Rationale 1. Project alternatives considered and reasons for rejection 13 2. Major related projects financed by the Bank and other development agencies 13 3. Lessons learned and reflected in the project design 14 4. Indications of borrower commitment and ownership 15 5. Value added of Bank support in this project 15 E. Summnary Project Analysis 1. Economic 16 2. Financial 17 3. Technical 18 4. Institutional 18 5. Environmental 20 6. Social 21 7. Safeguard Policies 23 F. Sustainability and Risks 1. Sustainability 24 2. Critical risks 25  3. Possible controversial aspects 27 G. Main Loan Conditions 1. Effectiveness Condition 27 2. Other 27 H. Readiness for Implementation 28 I. Compliance with Bank Policies 28 Annexes Annex 1: Project Design Summary 29 Annex 2: Detailed Project Description 31 Annex 3: Estimated Project Costs 35 Annex 4: Monitoring Indicators 36 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 38 Annex 6: (A) Procurement Arrangements 39 (B) Financial Management and Disbursement Arrangements 43 Annex 7: Project Processing Schedule 46 Annex 8: Documents in the Project File 47 Annex 9: Statement of Loans and Credits 48 Annex 10: Country at a Glance 51 Annex I 1: Letter from Argentina Government to President Wolfensohn 53 MAP(S)  ARGENTINA Jefes de Hogar (Heads of Household) Program Project Appraisal Document Latin America and Caribbean Region LCSHS Date: October 22, 2002 Team Leader: Theresa Jones Sector Manager/Director: Christopher Chamberlin Sector(s): Other social services (100%) Country Manager/Director: Axel van Trotsenburg Theme(s): Social risk coping (P) Project ID: P073578 Lending Instrument: Specific Investment Loan (SI) [X] Loan [ ]Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Loan Currency: United States Dollar Amount (US$m): $600.00 Borrower Rationale for Choice of Loan Terms Available on File: IZJ Yes Proposed Terms (IBRD): Fixed-Spread Loan (FSL) Grace period (years): 5 Years to maturity: 15 Commitment fee: .0.75 percent Front end fee (FEF) on Bank loan: 1.00% Payment for FEF: Capitalize from Loan Proceeds Initial choice of Interest-rate basis: Auto. Rate Fixing by period 24 months Type of repayment schedule: [X] Fixed at Commitment, with the following repayment method (choose one): annuity [ Linked to Disbursement , n g. SOUrce ri ', LocLal reiIn; Total C BORROWER 1349.00 38.00 1387.00 IBRD - 594.00 6.00 600.00 Total: 1943.00 44.00 1987.00 Borrower: ARGENTINE REPUBLIC Responsible agency: MINISTRY OF LABOR, EMPLOYMENT, AND SOCIAL SECURITY Address: Avda. L.N. Alem 640 Piso 15 Contact Person: Mirta Ward Tel: 54-114-310-6373/77 Fax: 54-114-310-6371 Email: MWard@trabajo.gov.ar Estimated Disbursements ( Bank FY/US$m): Annual 350.00 200.00 50.00 Cumulative 350.00 550.00 600.00 Project implementation period: 2 years Expected effectiveness date: 11/27/2002 Expected closing date: 07/30/2004 OCSPADl F.. P  A. Project Development Objective 1. Project development objective: (see Annex 1) The project would support the workfare part of the Jefes de Hogar (Heads of Household) Program, a social safety net launched 'by the Government of Argentina in April 2002 to alleviate the impact of rising unemployment due to the sharp worsening of the economic crisis. By May 2002 unemployment had increased to 21.5 percent for the population as a whole and to twice that level for the poor. The Jefes de Hogar Program provides a stipend of 15Q Argentine pesos/mo to an unemployed head of a household in exchange for participation in 4 hours of work in community services, small construction or maintenance activities, or training, including finishing basic education, or as a temporary employee of a private company. The household must contain one of the following: * children under the age of 18; * handicapped of any age; or * a pregnant woman. The Bank supported a previous workfare program of the Government (Trabajar - Work) in the second and third Social Protection Projects. Several features of the operation of Jefes de Hogar are similar to the previous program, but some aspects have been changed in order to respond better to the current social crisis. For example, implementation is more decentralized; organizations outside of the government have a greater role in both execution and monitoring, and the list of eligible workfare activities has been expanded. Through community services, the construction, rehabilitation, and maintenance of small infrastructure facilities, and the execution of productive projects (on a pilot basis), the workfare component of Jefes de Hogar would contribute to improvements in the living standards of the communities where the activities are located and create temporary employment for poor workers. Although the Bank would not finance all components of Jefes de Hogar, it would monitor implementation of the overall Program and any other employment program of the Government. The project builds on the experience of the Social Protection II and mI Projects. The Social Protection H-I- Projects financed the Trabajar program during 1997-2002. These projects shared the objective of supporting improvements in the Trabajar program, particularly in the areas of targeting, transparency of implementation procedures, the quality of sub-projects, and evaluation. The Social Protection II Project (Loan 41950-AR) closed as scheduled on June 30, 1999 and received a satisfactory rating on the Implementation Completion Report (ICR) and from OED. The Social Protection 111 Project is due to close on December 31, 2002 and has had a satisfactory rating during implementation. 2. Key performance indicators: (see Annex 1) The key performance indicators include the number of beneficiaries who are participating in an eligible activity, the amount of payments made to workfare participants, the share of subprojects (for which materials are financed) that have been completed satisfactorily (able to be used), percentage of beneficiaries with adequate registration information, and the extent of supervision of both supporting documentation on beneficiaries, as well as workfare activities, and targeting performance (as related to both income level of beneficiaries and geographical coverage). -2 -  B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 22049-AR Date of latest CAS discussion: July 19, 2001 Social development forms the core of the ongoing Bank program in Argentina. The theme has taken on even more importance given the recent worsening of the economic crisis, which has resulted in a rapid, substantial devaluation of the peso, and a variety of actions that have had the effect of sharply reducing economic activity. As a result, unemployment rates and poverty are increasing. Specific CAS objectives include: (i) the strengthening of social policy formulation and coordination of social protection programs, especially during the continued economic downturn; and (ii) the rebuilding of the institutional basis for improvements in human resource development to improve social welfare and the productivity of the work force over the medium term. Because of the need to continue to support poverty alleviation in the context of the economic crisis and deteriorating social conditions, the Country Assistance Progress Report (June 25, 2001) included additional Bank support to social protection programs in the proposed lending program. The proposed project supports the CAS theme of enhancing social development, including strengthening social services and social safety nets. Poverty levels in Argentina have been rising since 1995. In October 2001 (before the height of the economic crisis) it was estimated that 40 percent of the urban population were poor. Nearly 15 percent of the population were below the extreme poverty line, meaning that they did not have sufficient resources to cover a basic food basket. Preliminary evidence now indicates that as of May 2002 over 50 percent of the urban population fell below the poverty line. Even rural, agricultural-based communities- which are expected to benefit eventually from the devaluation of the Argentine peso given increased production - have been affected because of the lack of liquidity. The rate of unemployment which stood at 18 percent in October 2001 now stands at 21.5 percent. Unemployment rates are twice as high for poor, unskilled workers. When the economic crisis hit, Argentina did not have an adequate social safety net, leaving many of the poor uncovered by any program. In a survey carried out in June 2002, nearly all households in Argentina reported having changed their consumption pattems in response to the economic crisis. About 90 percent of households in the bottom quintile of income distribution have been forced to reduce consumption of even food. The economic crisis has had a strong impact on the education and health systems and there is growing evidence of deterioration in service delivery and key indicators of well-being. The same survey indicated. that nearly three-quarters of households with children in school had reduced purchases of school materials, and the share was nearly 90 percent for families in the lowest income quintile. 2. Main sector issues and Government strategy: Argentina has experienced 4 years of recession and the economy is expected to contract sharply in 2002, by 12-15 percent. The country faces serious financial and fiscal difficulties, and high and growing levels of unemployment and poverty. As a result, social conditions and stability deteriorated substantially in late 2001 and early 2002. In this context, it is imperative to have effective safety nets in place, including support to the poor unemployed. In spite of allocating a relatively large share of its budget to social spending, Argentina does not have an effective safety net - one that offers protection from key risks to the principal vulnerable groups. Social conditions have changed significantly during the 90s. Levels of unemployment and informal employment are higher and the inequality of income distribution has risen. The lack of an - 3 -  integrated response to these changed conditions has implied, in many cases, the multiplication of smaller, often uncoordinated programs attempting to target very specific groups. The significant participation of provincial (and to some extent municipal) governments intensifies the opportunities for overlaps, inconsistencies and inefficiencies. While the previous workfare program, Trabajar, had been very effective in reaching the poor, in recent years funding had declined and the resulting need for rationing had created opportunities for manipulation by political interests. The main response of the Government to the social emergency was to expand financial support to families in danger of economic deprivation. Through the creation of Jefes de Hogar, the Government of Argentina launched a large and ambitious safety net program very quickly. The number of other social-programs has been reduced and resources have been concentrated on this program. In addition, although the initial implementation of the Jefes de Hogar Program was not ideal, for the first time the Government of Argentina has addressed the important issue of how citizens relate to national programs by deciding to give municipalities and local consultative councils (comprised of public authorities, as well as representatives of civil society) the primary role, linked imperfectly through a service network. In addition, programs have been expanded to meet basic needs, particularly for food and medicine. Over the longer run there is recognition of the need to strengthen the social safety net on a more permanent basis, reduce social risks, and spur community development. It is the Government's intention to revamp many social programs, in collaboration with the provinces, which are responsible for about half of social spending in the country. In the future, particular attention would be paid to: (i) reducing duplication and administrative costs; (ii) improving targeting where needed and increasing coverage; and (iii) putting in place a registry of beneficiaries which can both help to target programs and reduce fraud. Poverty alleviation. Previous progress on the economic front in Argentina produced real gains in terms of reducing poverty and improving welfare in the first half of the 1990s. Poverty rates fell from 40 percent in 1990 to a low of 22 percent in 1994. However, since 1995, poverty rates have increased as a percentage of the population, and income distribution has become more skewed. The worsening of income distribution reflects the fact that the gains from earlier economic growth went largely to the more skilled and educated in the labor force, and not to the poor. In addition, unemployment has risen, and unemployment rates are higher among the poor than for the general population. Also, many poor are underemployed, have temporary jobs, or work intermittently in construction activities. The lack of full time and secure employment is seen by the poor as one of their most critical needs. Future anti-poverty efforts need to focus on three broad areas: First, reforms and policies that will lead to a pattern of more rapid growth and feature a high level of employment per unit of output; Second, improving the access of the poor to basic services, which will raise their overall welfare and, by improving their human capital, increase productivity and their ability to compete in an increasingly globalized economy; and Third, reducing the vulnerability of the poor to shocks and losses in income, chiefly by improvements in safety nets, to both protect the poor during economic downturns, and to keep them from making short term adjustments that will have negative impacts on their long term ability to escape poverty. Social Protection. Argentina traditionally has operated numerous social assistance programs: food, nutrition, health, employment, training, education, shelter, clothing, income subsidies, and other emergency programs, plus those aimed at strengthening communities. This assistance -4 -  appears to be strongly pro-poor: 65 percent of benefits go to the poor and 47 percent goes to the poorest 20% of the population. In the case of Trabajar, targeting was even better. An evaluation of the Trabajar program, supported by the Bank, found that 80 percent of benefits went to people in the bottom 20% of the income distribution, and over half of the benefits reached the lowest 10% (after factoring in foregone incomes). The issues with social assistance programs in the past have been mainly low coverage and the pro-cyclical bias in social spending. About 75 percent of the poor did not receive any public assistance and over half received neither public nor private help. Government spending was pro-cyclical, rising and falling with GDP changes. This situation has been even worse for the social sectors. Although targeted programs should be part of a social safety net that expands during a crisis, up until now they have fluctuated even more than total social spending: a 5 percent drop in GDP was associated with a 9 percent drop in social sector spending targeted to the poor. The Jefes de Hogar Program addresses some of these weaknesses by expanding coverage and increasing spending on the social safety net. Analytical work of the Bank has identified the key vulnerable groups in Argentina as: poor children, the elderly without pension coverage, and the poor unemployed. The Jefes de Hogar Program targets the first and third key vulnerable groups - the poor unemployed with dependents under the age of 18. 3. Sector issues to be addressed by the project and strategic choices: The assistance of the Bank to the Jefes de Hogar Program is a continuation of earlier efforts to help mnitigate the increase in poverty caused by mounting unemployment and to improve the efficiency of social spending in Argentina. As the economic crisis in Argentina has deepened in recent months, this role has become even more critical. The increased pressure on all social programs, coupled with the social unrest in the country, makes it critical to support measures to increase the fairness of the selection of beneficiaries, ensure transparent management, and ensure that spending reaches the most needy. There is widespread recognition that the Jefes de Hogar Program is a response to the sharp deterioration in the economy and high levels of unemployment. It cannot substitute for longer term efforts to stimulate higher employment creation that require a resumption of economic growth, implementation of labor market reform and improvement in the quality and relevance of Argentina's education system. In this context, the particular issues being addressed by the operation are as follows: Objective Eligibility Criteria The project supports the effort of the Government to make the selection of beneficiaries for social programs fair. While rigorous impact evaluations (1997 and 1999/2000) showed excellent targeting performance by the Trabajar program in reaching the very poor, there were accusations that clientilism was sometimes used to allocate the chances to work since there were not enough resources to include all applicants. In the Jefes de Hogar Program, the Government will provide financial support to any head of household who meets the eligibility criteria and fulfills the requirement to participate in eligible activities for 4 hours a day, approved by the municipal council where the beneficiary resides. Registration Process In Jefes de Hogar, municipalities register beneficiaries who meet the eligibility criteria, using a standard form that has been developed jointly with the Ministry of Social Development (Fornulario Unico) and includes information on household and individual characteristics. Registration information is sent to the Ministry of Labor (using either on-line or off-line applications) where the data is consolidated. Because of its disorderly start, the registration process has experienced problems. Some beneficiaries entered the program even though they were not registered in their municipality, the software developed was not -5 -  robust, and not all basic information on beneficiaries was entered into the database. During the last seven months the Bank has worked with the Government on improvements and substantial progress has been made. Payment Process Before making payments to beneficiaries, the National Social Security Agency cross-checks the information provided with other databases in order to ensure that beneficiaries are not participating in another employment program of the Ministry of Labor, receiving unemployment insurance, or have a formal sector job. During project implementation the cross-checks of other databases would be expanded gradually to include all current and retired provincial and municipal employees, all local employment programs or any other program which includes cash transfers to households (most non-contributory pensions, for example). Some progress in this area has already been made, including in the larger provinces such as Buenos Aires and C6rdoba. Under the previous Trabajar Program, some, but not all, provinces provided this data. In addition, the Ministry of Labor and the National Social Security Agency are exploring the possibility of carrying out additional data checks which could be used to strengthen the Program's ability to enforce a limit on participation to one member per household. These include making mandatory the provision of identity numbers for all household members, carrying out cross-checks with databases related to the education system and with health insurance beneficiaries. Progress in this area would be monitored during project implementation. In the meantime, the agency implementing the Social and Fiscal National Identification System (SlNTyS) is assisting to check the database of beneficiaries. Transparency and Social Control The Bank has worked with the Government in several areas to ensure the transparency of the Jefes de Hogar program. One of the key mechanisms intended to improve transparency and social control of the Program at the local level are the municipal consultative councils. The Presidential Decree that established the Jefes de Hogar Program required the establishment of municipal consultative councils, comprising the mayor, as well as representatives of other groups (public service providers, workers, businesses, churches, and civil society organizations). In large urban areas, councils covering a smaller area may also be organized. The role of the councils is to approve the proposals for workfare activities (both infrastructure and community services) proposed by municipalities, other public organizations, and civil society, and to be a channel for providing information and resolving complaints on beneficiary registration. Local councils are also responsible for taking appropriate action when there is evidence that a beneficiary does not meet the eligibility criteria. The Directorate of the Federal Employment System within the Ministry of Labor is monitoring the formation and operation of the councils and providing technical assistance. In many areas, the councils are relatively new, but in other localities, existing organizations formed earlier to address the social crisis, have become municipal councils. A national council plays a similar role for the Program as a whole (discussed in Section 4 under Project Description Summary). There are some preliminary encouraging signs on the role of the local councils. As of October, consultative councils had been established in slightly over 80% of localities. On average, there are 10 members in a council and participants representing private organizations (mainly nongovernmental and religious groups) account for slightly over half of the total members. In many localities, municipal councils supervise workfare activities. The work of the local councils will continue to be monitored. In addition, the terms of reference for an external evaluation of the performance of the local consultative councils has been approved and the study is expected to start shortly. Financing is being provided under the Social Protection IV Project. -6 -  The Bank is also promoting the publication of sufficient information on the Program. Information on the beneficiaries participating in the Program will be publicized. The Program will require that lists of those registered for the Program be made available in public places at the local level or through the internet. The City Government of Buenos Aires, for example, has made the list of beneficiaries available on its web site (www.buenosaires.gov.ar), and this practice would be promoted by the Ministry wherever possible, but particularly in large urban areas where the challenge of social control is greatest. The characteristics of the beneficiaries of the program will be monitored by consolidating the information in the registration forms. Summary information on the Program will also be made available on the Ministry of Labor's web site (www.trabaio.gov.ar), including data on the agreed project indicators (Annex 4). Other measures are also in place. An 800 number available 24 hours a day to handle questions and complaints has been operating since the start of the Jefes de Hogar Program. The Government has widely publicized the program. The Bank worked with the Ministry to establish a system of supervision of municipalities that would carry out random checks of the supporting information that municipalities are required to keep for each beneficiary. These checks would be done by staff in the provincial offices of the Ministry of Labor. There is a system of sanctions to be applied in cases of noncompliance with the requirements of the program. SINTyS (the agency in charge of the social and fiscal national identification system) has already undertaken an analysis and cross-checks of the list of beneficiaries paid under the Program in July and discovered no major problems, and would undertake a more complete cross-check using the data on participants in the Program before the end of November 2002 and provide the results and recommendations to the Ministry of Labor. In adlition to regular audits of the project undertaken by the audit agency (AGN) reporting to the legislature, the audit agency (SIGEN) reporting to the executive has a work plan for audits of the Program. Already audits have been carried out in about half of the provinces, in addition to an evaluation of the local councils, and the information system and internal controls for the database on beneficiaries. Additional local audits are planned as well as a follow-up analysis on the information system. The results of all audits have been posted on the SIGEN web site (www.sigen.gov.ar). A continuous audit of beneficiary payments is being put into place to be carried out by AGN. The Directorate for Studies and the Formulation of Employment Policies has initiated field work for a survey of beneficiaries in order to collect independent information on family characteristics, as well as compliance with the work or training requirement of the Program. Preliminary results should be available early in 2003. Finally, the Bank, in cooperation with the Inter-American Development Bank and the United Nations Development Program, is funding social monitoring by nongovernmental organizations of all social programs, including Jefes de Hogar, financed by these institutions. The results of that work would be published on the World Bank's web site in Argentina (www.bancomundial.org.ar). -7 -  Targeting Bank international experience on workfare is that targeting to the poor depends on setting an appropriate wage rate and enforcing the work requirement. Building on the tools developed in the Trabajar Program, this project will continue to promote targeting to the poor and support mechanisms to monitor and evaluate the poverty alleviation impact of the Jefes de Hogar Program. The targeting mechanism remains the low wage rate (Arg. pesos 150/mo, currently equivalent to about US$40), which is expected to be attractive only to those who are poor and with few prospects for employment, as long as the work or training requirement is enforced (see Summary Project Economic Analysis for more detail). Given the current economic uncertainties in Argentina, the maximum wage rate for the Jefes de Hogar Program will be reviewed periodically with the Government according to an agreed methodology. The Bank also has worked with the Government over the last 7 months to strengthen the link between the cash transfer and the work or training requirement. Initially, the work requirement was not enforced systematically and because no data was collected it was not possible to monitor performance at the local level. That situation has changed. First, municipalities would provide the names (and national identification numbers) of the beneficiaries participating in each training or work activity to the Ministry of Labor, via the provincial employment offices, or on-line directly to the Ministry. Second, the information system used for payments to beneficiaries would link each beneficiary to a specific activity, as was the case for the Trabajar Program. The Bank would finance only beneficiaries who are participating in a workfare activity, in accordance with the agreed operational manual. Third, a system of supervision of the fulfillment of the requirement to participate in an eligible activity for the entire program, not only the components financed by the Bank, has been designed with specific roles for the municipal councils and the provincial, as well as national, offices of the Ministry of Labor. Poorer areas will also be favored in the Program. They would be eligible to receive a higher share of financing to cover the cost of materials for subprojects, which would help to address obstacles caused by a lack of counterpart funding - expected to be even more of a constraint given the current fiscal difficulties of the Government. Efficiency of Social Programs The proposed new project will continue to support the efforts of the Government to improve the efficiency of social programs. These include implementation of reforms to subproject evaluation and supervision and rigorous evaluation of the impact of social assistance programs. Under the Social Protection m Project several important evaluations were carried out with the support of the Bank. These included a follow-up of Trabajar beneficiaries after they left the program, as well as an evaluation of a program that provided wage subsidies for private employment. Evaluation efforts in the proposed project will focus on evaluating the performance of Jefes de Hogar in targeting poor households, on poor-area targeting, the quality of sub-projects, and the impact of the sub-projects in the communities. The Bank loan is financing the inclusion of a module related to Jefes de Hogar in the October 2002 round of the biannual Permanent Household Survey carried out by the National Statistical Institute, through an agreement between the Ministry of Labor and the Institute. Data will be available early in 2003 that would provide the information necessary to evaluate the net impact of the Program, as well as its performance in reaching the poor. The evaluation would be carried out jointly by staff of the Bank and the Ministry of Labor, as has been the case for previous evaluations. In addition, the Country Department is supporting household survey work which would be used to monitor the impact of the current crisis on the poor, including the-role of the Government's safety net programs, such as the Jefes de Hogar Program. -8 -  Other Employment Programs In addition to Jefes de Hogar, the Ministry of Labor is operating another employment program ( Programa de Emergencia Laboral - PEL) that is being used to respond to conflictive local situations and to provide for the unemployed who do not meet the eligibility criteria of the Jefes de Hogar Program. Currently the program covers about 300,000 beneficiaries. The program is managed centrally by the Ministry of Labor and the beneficiaries receive the same monthly payment as in the Jefes de Hogar Program and are required to fulfill a work requirement. The Bank will monitor the implementation of this program, including overall spending, geographical distribution of beneficiaries, and work requirement, and promote the use of the same instruments for supervision and transparency for this program as for the Jefes de Hogar Program. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): 1. Subprojects. These will be small projects of community services; construction, rehabilitation, and maintenance of economic and social infrastructure (less than $75,000 in most localities; less than $200,000 in large metropolitan areas); as well as in the poorest, rural areas, small projects for productive activities, all sponsored mainly by either municipalities or nongovernmental organizations. Given the economic and social crisis and the pressure to find workfare activities for a large group of registered beneficiaries, community services would predominate. As materials financing is provided through the project, the number of infrastructure projects is expected to rise. 2. Project Administration. This would include the costs to the national government of administering the project, including financial charges for processing payments to beneficiaries, providing technical assistance, preparing progress reports, including the agreed indicators, computers and operational expenses such as travel and per diems 3. Supervision. This includes the cost of supervising the implementation of the Program at the municipal level. Municipalities would be supervised periodically to ensure that they have the supporting documentation for each beneficiary that establishes their eligibility for the Program. In addition, the activities in which beneficiaries are participating would be supervised, at least tWice for subprojects that receive materials financing, and on a sample basis for other activities. Supervision would be undertaken by provincial staff of the Ministry of Labor, supplemented by visits from the national level. Both municipal and provincial councils would also play a role in supervising the Program at the local level. 3. Monitoring and Evaluation. This would include evaluations of the targeting performance of the Jefes de Hogar Program and the impact of the subprojects financed in the community, beneficiary assessments. and monitoring of Program implementation according to the agreed indicators. The main evaluation study will be based on data gathered in the October 2002 round of the Permanent National Household Survey carried out by the National Statistics Institute. A special module on the Jefes de Hogar Program has been added to the survey questionnaire, in order to gather information on the characteristics of beneficiaries and compliance with the work requirement. The design of the survey will also permit a comparison with a panel of households interviewed in October 2001. The methodology for the study will be similar to that done for the Trabajar program (see "Income Gains to the Poor from Workfare:Estimates for Argentina's Trabajar Program " by Jyotsna Jalan and Martin Ravallion, Policy Research Working Paper, No. 2149). The survey data will be processed by January 2003 and preliminary results of the evaluation should be available by March/April 2003. -9-  '4@i