Bolivia - Emergency Social Fund Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 8449 PROJECT PERFORMANCE AUDIT REPORT BOLIVIA EMERGENCY SOCIAL FUND PROJECT (CREDIT 1829-BO) MARCH 20, 1990 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CONES - National School Building Council ESF - Emergency Social Fund FONEK - National Fund for Mining Businesses GOB - Government of Bolivia INE - National Institute for Statistics IRR * Internal Rate of Return AU - Ministry of Urban Affairs NGO - Non-Governmental Organization SDR - Special Drawing Right SNC - National Road Service Government of Bolivia Fiscal Year January 1 - December 31 Currency Exchange Rates Name of Currency (abbreviation): Bolivian Peso ($b) Exchange Rates: USS1 - Sb Appraisal Year Average 2.06 Implementation Period Average 2.29 Completion Year 2.45 FOR OFF USE ONLY THE WORLD SANK Wash1gton D.C. 20433 U.S.A. Oke of trctowteeal Opffaties IvAutiwo March 20, 1990 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Performance Audit Report: Bolivia - Emergency Social Fund Project (Credit 1829-B0) Attached, for information, is a copy of a report entitled "Project Performance Audit Report: Bolivia - Emergency Social Fund Project (Credit 1829-BO)" prepared by the Operations Evaluation Department. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authoriastion. IOR OFFKIL Un ONLY PROJECT PERFORMANCE AUDIT REPORT BOLIVIA EMERGENCY SOCIAL FUND PROJECT (CREDIT 1829-Ba) Table of Contents FaSe No. PREFACE ....................................................... L BASIC DATA SHEET .............................................. ii EVALUATION SUMMARY ............................................ v I. Project Background .................................. 1 Project Objectives and Content .................... 2 II. Project Implementation .............................. 2 Disbursements and Continuous Resource Mobilization ...................................... 2 Management ........................................... 3 The Bank's Role ...................................... 6 III. Proect Outcomes ..................................... 6 IV. Findings ............................................. 7 Project Objectives. Content and Implementation ....... 7 Sustainability and Replicability ..................... 7 PROJECT COMPLETION REPORT PART I: PROJECT REVIEW FROM IDA'S PERSPECTIVE ................ 11 I. Project Identity .................................... 11 II. Background .......................................... 11 III. The Emergency Social Fund............................. 12 IV. Project Implementation .............................. 13 V. Project Results ..................................... 14 VI. Project Sustainability .............................. 19 VII. IDA's Performance ................................... 19 VIII. Borrower's Performance .............................. 21 IX. Project Relationships ............................... 22 This document has a restricted distribution and may be used by recipients only in the performance of their of8dal duties. Its contents may not otherwise be disclosed without World Bank authoration. Table of Contents (contd.) PART II: PROJECT REVIEW ROA BORROWER S PERSPECTIVE ......... 23 I. Comments on Parts I and III .......................... 23 II. IDA-Borrower Relationship ........................... 23 III. IDA's Performance ................................... 23 IV. Borrower's Performance .............................. 23 V. Strengths and Weaknesses of the Creditor's Relationship with Other Relevant Parties ......... 25 PART III: STATISTICAL INFORMATION ............................ 26 Related IDA Credits .......................................... 26 Project Timetable ............................................ 27 Cumulative Estimated and Actual Disbursements ................ 28 Project Costs ................................................ 29 Project Financing ............................................ 30 Project Studies . .............................................. 31 Sub-projects by Sector ....................................... 32 Beneficiaries, Employment and Principal Works ................ 33 Commitments by Requesting Agency .............................. 34 Status of Covenants .......................................... 35 Use of IDA Resources ......................................... 36 Figures: 1. Total Amount Approved per Inhabitant per Department in Rural and Utban Areas ................................ 37 2. Institutional Responses to Principal Problems ............. 38 Bibliography ................................................. 39 COMMENTS FROM THE BORROWER/COFINANCIER Attachment I: Comments from the Emergency Social Fund ..... 41 Attachment II: Comments from the Ministry of Planning and Coordination ............................ 42 Attachment III: Comments from the Cofinancier ............... 43 . 1 - PROJECT PERFORMANCE AUDIT REPORT BOLIVIA EKERGENCY SOCIAL FUND PROJECT (CREDIT 1829-A0) PREFACE This is a Project Performance Audit Report (PPAR) on the Bolivia Emergency Social Fund Project, for which a credit in the amount of SDR 7.8 million (US$10 million) was approved in June 1987. Except for a very small balance of about US$40, it was fully disbursed and the Closing Date did not require an extension. Total project cost came to US$53.1 million, compared with US$50.3 million estimated at appraisal, Because the project is defined as a part of a program that continued beyond the project period, the slightly larger "cost" represents a faster-than-expected execution of program activities during the project period rather than a cost overrun. The PPAR is based on the Project Completion Report (PCR), prepared jointly by the Borrower and the Latin America and the Caribbean Regional Office, the President's Report for this project, the Credit Agreement, the project files and statistics and other information obtained during an audit mission in August 1989. The OED staff undertaking tl-.e mission had an occasion to visit a sample of project works and to interview Emergency Social Fund (ESF) management and staff. Discussion with Bank staff involved in this project complemented the field work. As is customary in the preparation of audit reports, copies of the draft audit report were sent to the Borrower and the Cofinancier for comment in February 1990. The comments received have been reproduced as Attachments I-III. - ii PROJECT PERFORMANCE AUDIT REPORT BOLIVIA EMERGENCY SOCIAL FUND PROJECT (CREDIT 1829-B) BASIC DATA SHEET KEY PROJECT DATA Appraisal Jima Estimate "g Total Project Cost (US$ million) 50.3 53.1 Overrun (%) * A Credit Amount (US$ million) 10.0 10.0 Disbursed 10.0 Cancelled 0 Cofinancing (US$million equivalent) 10.2 10.2 Date Physical Components Completed ft 07/88 01/89 No. of Months since Credit Signature 22 28 Proportion Completed by Above Date (%) 62 100 Proportion of Time Overrun (S) * - 27 Institutional Performance - Excellent CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENT (in US$ million) IX 12/8. Di 12W Appraisal Estimate 2.5 9.5 9.9 Actual 2.0 5.4 9.8 Actual as % of Estimate 80 57 99 ./ : Since the project was defined as part of a program that continued beyond the project period, the larger cost figure represents a faster-than-expected execution of program activities (and disbursement of funds not specifically linked to the first phase of the program) rather than a cost overrun). ft : Date of last disbursement request, as individual sub-projects are not linked to specific portions of the total funding. - iii - STAF INPUT (Staff weeks) E R Al 19.tal Pre- appraisal 3.2 - 3.2 Appraisal 2.0 - 2.0 Negotiation 0.7 - 0.7 Supervision - 23.8 23.8 Total 5.9 23.8 29.7 OTHER PROJECT DATA Grigtnal Plan Actual First Mention in Files (IEPS) - 01/87 Negotiations 06/81 06/87 Board Approval 06/87 06/23/87 Credit Agreement Date 07/87 07/31/87 Effectiveness Date 09/87 11/19/87 Closing Date 01/31/89 01/31/89 Borrower Government of Bolivia Executing Agentey Emergency Social Fund (ESF) Follow-on Project: Second ESF Project Credit Number Cr. 1882-BO Amount US$27.0 million (SDR 19 million) Credit Agreement Date March 3, 1988 ALLOCATION OF CREDIT PROCEEDS (In SDR Millions) Initial Amended CateSory Allocation (12/06L82) Disbursements 1. SEI Sub-projects under Part A.1 of the Project 5.38 5.10 6.05 2. SA Sub-projects under Part A.2 of the Project 1.79 1.70 1.22 3. Consultants'services and studies under Part B of the Project 0.08 0.06 0.10 4. Fixed-term staff & office equipment - 0.31 0.43 4. Unallocated A- TOTAL 7.80 7.80 7.80 - t.v - MISSION DATA Stase of ~mnthi Ufber of DaPs SpecialisatLon Perormanoe Project Cyole rear Persons in the Pield ~epresented al Ratina kl Through pprasal 05187 3 10 X,C,A, n.a. Appralsal tbrouh soard Approval - - Board Approval 06187 1 10 E a.a. Thron8h 08187 1 10 E n.a. Effectiveneaa 1087 4 15 SZ,C,C Supervlslon A. P. D. 0. 12187 1 10 . .a. 04188 2 14 ,C 1 1 1 1 06,88 1 10 C I 1 1 1 10188 2 5 E, g 1 1 1 11188 2 16 s,C 1 1 1 1 al KeP to Speolalisation: E Bonml.t, C = onsultat, A * Assistant. Rl Koy to Status: A - Avatlable Pnds, P - Projet Mmt., D - Døv. Impaot, 0 - Overall Status, 1 - Problem fre project. -V. PROJECT PERIRMANCE AUDIT REPORT BOLIVIA EUERGENCY SOCIAL FUND PROJECT (CREDIT 1829-40) EVAUATIONLSMMAR Introduction A Credit of SDR 7.8 million (US$10.0 million) in support of Bolivia's Emergency Social Fund (ESF) was approved in June 1987 and became effective in September 1987. Total cost of this first phase of the ESP was US$53.1 million. Except for a balance of SDR32.21 (approximately US$40), disbursement of the Credit was completed on August 31, 1989. Project Objectives arA Content The Credit supported the activities of the Emergency Social Fund which had been created by the Government to cushion the impact of its stabilization policies introduced in August 1985 on the employment and incomes, particularly of poorer population groups. It consisted of numerow. small-scale sub-projects in productive and social infrastructure, and of non-investment interventions in education, health and nutrition. Implementation Experience Project implementation proceeded without major problems, despite the enormous workload on ESF to identify, evaluate and supervise a large number of widely dispersed sub-projects. The early success of the project and the commitment of the Bank to ESF led to resource mobilization by other donors on a large scale: by mid-1989, total commitments stood at US$140 million. Results to Date The project has been able to employ at its peak ar average workforce of 25,000-30,000. The program reached an estimated total of 1.0 million direct and 7.9 million indirect beneficiaries (the figures are not corrected for multiple benefits). Considerable expansions/improvements of the infrastructure were made and essential preventive health services such as vaccinations provided. sustainability The rapid pace and volume of project implementation has so far not left time for developing and putting into place a system of operation and maintenance including adequate provisions for funding. ESF is at present addressing this question. -vi - The project showed that an operation of this type can succeed provided a number of essential conditions are met: (a) Strong and unflagging governmental support at the top level, com- bined with a deliberate restraint from political intervention in the daily operations of the responsible agency; (b) an independent position of the responsible agency outside the regular government strue .ure; (c) transparency and high visibility of all aspects of the program; (d) limitation of the program to a fixed period which will help faci- litate the concentration of efforts and prevent procrastinatioi.; and (e) high quality leadership and personnel. PROJECT PERFORMANCE AUDIT REPORT BOLIVIA EMERGENCY SOCIAL FUND PROJECT (CREDIT 1829-99) I. PROJECT BACKGROUND 1. During the early 1980s Bolivia went through a period of unprece- dented economic and monetary instability: the relatively favorable condi- tions of the 1970s had led to a surge in investments whicb had resulted in the double burden of a high degree of foreign indebtedness and numerous misplaced investments. By about 1980 access to foreign capital markets became more difficult. A curtailment in imports to permit a continuation of foreign debt service put a serious strain on domestic resources (which was exacerbated by adverse weather and a fall in the world market price for tin, Bolivia's principal export commodity). An inflationary monetary policy by the Government and a distorted exchange rate regime led to a fall in exports and export-based revenues which in turn required more money creation. Thus was set in motion an ever expanding inflationary spiral. By 1985 Bolivia had joined the handful of countries which in modern history had experienced hyperinflation, with an annual rate in that year well in excess of 20,000 percent, and real-term GDP had shrunk by 10 percent vis-&- vis 1980. 2. In 1985 a new civilian Government decided on a drastic stabili- zation program: Government expenditures were brought strictly in line with the revenue base, and a massive devaluation of the national currency and subsequent stabilization of the exchange rate made the elaborate system of controls and licences existing thus far superfluous. Within weeks infla- tion came to a stop and made it again possible to put economic activities on a more solid footing. 3. This start towards economic recovery, however, had its costs: the liberalization of the economy made overt the .severe extent of overstaffing that had occurred in the past, particularly in the large public sector. The state mining corporation, COMIBOL, suffered from the effects of over- employment more than most other entities, in view of the downward turn in tin prices. Within about a year, from August 1985 to October 1986, it had to reduce its staff from about 28,000 to 15,000, with an eventual staffing target of less than 6,000 for the end of 1986. Overall, it was estimated that open unemployment in 1986 was in the range of 20 to 25%. 4. In the face of a social cost of such proportions, it became imperative for the Government to do something to cushion the negative effects of stabilization on the most vulnerable population groups, and to do so quickly, lest widespread impoverishment jeopardize social peace, and -2- with it the success of the stabilization program. The answer was a tempo- rary employment program to undertake numerous small and widespread invest- ment projects. The responsible organization, the Emergency Social Fund (ESF), was created a few months after the start of the stabilization pro- gram, but it was not until November 1986 that this institution was given its definite form. 5. In view of the large financial requirements of the program and the limited resources of the Government, the mobilization of foreign funds became the key task of the ESF during its early phase. The Bank was among the first potential donors approached, and responded with unusual speed and flexibility: between the first discussions (at a Consultative Group meeting in December 1986) and the presentation to the Board of a US$10 million IDA credit on June 23, 1986 there was a lead time of just half a year. An equally large contribution from the Government of Switzerland (SFr. 15 million or about US$10 million) was covered by a cofinancing agreement in December 1987. Project Objectives and Content 6. The purpose of the Credit was to support the Government's program to mitigate the adverse effects, particularly on employment and family incomes among the poorer population groups. The program was open-ended in the sense that of the total estimated cost of the first phase of US$50.3 million, US$14.0 million were still unfunded at the time of Board presenta- tion, and that this two-year first phase was seen as a breaking-in period in preparation for a larger volume of activities; however, it had been made clear that ESF's work would be limited to a three-year period, i.e., until the end of 1989). 7. The julk of the Credit (as well as of the larger ESF program) was to be spent on employment and income-generating sub-projects (US$6.9 million), a much more modest (US$2.3 million) on social assistance sub- projects, and a small amount of US$0.1 million for technical assistance activities (mainly studies), the rest of US$0.7 million remaining unallocated. 8. Examples of the first category of sub-projects were road improve- ments, erosion/flood control measures and irrigation works, and of the second, basic health and education services and school meals. Apart from the broad distribution of funds among the two blocks of sub-projects, the President's Report (no SAR had been prepared) specified only one numerical target, the creation of about 20,000 man-years of employment. II. PROJECT IWPMRWION Disbursements and Continuous Resource Mobilization 9. Considering the novel character of the project and the recent creation of the coordinating institution (ESF), initial delays were much less than could have reasonably been expected. They were explained first, -3- by the lack of familiarity of beneficiary agencies (who could range from , regional and local governments to church groups and other NGO's) with SF and its criteria and procedures and second, by a larger than anticipated number of sub-projects and their smaller size which required a greater work input per dollar spent. However, the Credit was disbursed within a period of about 20 months (December 16, 1987 through August 31, 1989; the original Clo,ing Date was January 31, 1989, by which time about 95 percent of the funds had been spent). Encouraged by this rapid progress in project iple- mentation, IDA had prepared, and the Board agreed to a second operation (Credit 1882 - 1 in the amount of SDR 19 million, or about US$27 million, approved on March 1, 1988). 10. More important, however, the Bank's commitments had served as a catalyst for financial participation by numerous bilateral and multilateral donors. By August of 1989, the ESF program had secured funds totalling US$10 million, and the institution was hoping to reach a total of US$180 million during the remainder of its mandate. In terms of mobilization and doployment of funds, the success of ESF became apparent long before the Credit was closed. Managment 11. A perceptive report on the early stages on ESF prepared by a con- sultant in December 1986 listed four essential conditions for the. und to establish its credibility and six risks which had to be avoided:j/ The necessary elements were (i) a maximum of transparency in procedures related to sub-project selection, eriluation and implementation; (ii) external supervision of project activities; (iii) auditing by independent outside auditors; and (iv) public disclosure of actions and results of the program. 12. The pitfalls to watch out for were (i) detailed and time-consuming studies and complex procedures which would stop the initial momentum of the program; (ii) an excessive centralization which would fail to activate local initiatives and support; (iii) political favoritism or patronage which would discredit the program both domestically and among potential donors; (iv) lack of effective controls; (v) an insufficient diffusion of activities; and (vi) permanence of employees and establishment of a cumber- some Government agency. 13. Fortunately, these dangers were avoided: after an initial assess- ment of the geographic and sectoral distribution of the unemployment and short-term poverty problems!/ a pilot phase preceding the preparation of the first ESF Credit was used to test and put in place criteria and 1/ I. Benavides, Bolivia's Emergency Social Program, December 1986, pp. 8- 10. 2/ The early discussions at the Bank were at pains to distinguish between the unemployment/poverty resulting from the stabilization and the longer- term structural problems, with the program being formulated to focus on the former. This argument, however, seems to have overlooked the simple fact that in this emergency situation a prompt and visible Government response was essential and that at the start there was so time for methodological refinements. procedures for selecting, appraising and implementing sub-projects, so that at the time of credit effectiveness the relevant instruments were already available (although they were constantly modified and improved during implementation). 14. Second, while ESF was a centralized organization with very few field offices, its project staff spent a considerable portion of their time in the field both on upstream and implementation work. This external func- tion grew during the course of the project in response to specific problems (an initial shortage of suitable project proposals and a concern with the quality of project implementation). Equally important, the devolution of project work to local agencies, both governmental and private, provided a large degree of grassroots participation and made possible the wide geogra- phic spread of project activities. 15. Third, the creation of an independent agency directly under the Presidency (instead of the initial arrangements under which ESF had been part of the Ministry of Planning) meant that the program enjoyed the full support of the country's highest office and its prestige, thus shielding it effectively from petty political influences which might otherwise have converted the ESF and its activities into a distribution system for politi- cal favors. This basis was reinforced by appointing to the post of ESF Executive Director (which carried ministerial rank) in succession three persons who had established records of successful entrepreneurs and who were instrumental in recruiting--and retaining- a highly qualified, hard- working and motivated staff. The creation of ESF outside the civil service structure and its regulations meant in turn that it was possible to offer the staff a more attractive remuneration, thus reinforcing the incentives that went with the offer of a unique professional experience. It is remarkable that the enormous workload--the administration of a financing volume of '"$140 million and the preparation/selection/appraisal of over 2,200 projects by mid-1989--was carried out by a total staff of about 130-- including 70-80 professionals and working with an administrative budget equivalent to only 3% of the financing volume. 16. Fourth, stringent cost controls and a continuous close quality monitoring in the field meant an effective obstacle to a wasteful or cor- rupt use of funds. ESF was basing its sub-project appraisal on a detailed, locally differentiated and continuously updated system of benchmark cost figures. The simplified award system was appropriate to the large number, wide geographic dispersion and often isolated location of the sub-projects: the implementing agency, on the basis of the before-mentioned benchmark cost figures, proposed a contract price (allowing for a profit margin on the order of 10-15 percent) to a contractor of its own choice (often the only one in the area) for contracts of up to US$250,000 equivalent; above that threshold, the Credit Agreement stipulated a comparison of at least three separate price quotations prior to contract award. 17. The obvious complement of these expeditious arrangements for contract award was a strict quality control on site by ESF staff throughout sub-project implementation. This aspect of the project developed during Credit implementation and became a key part of ESF's work. -5- 18. Fifth, throughout the duration of the program ESF was aiming at a wide regional spread of sub-projects. The total allocation of funds among the country's nine departments had been made by using a number of demo- graphic, economic and social parameters. However, initially this distribu- tion could not always be realized because the potential implementing agencies were very unevenly spread over the national territory, and their personnel had varying levels of relevant expertise. By the same token, the distribution of funds among the various types of investments/interventions diverged from the anticipated pattern because of inherent difficulties in programming certain types of activities. ESF responded to this imbalance by giving intensive assistance to agencies who did not have sufficient expertise in identifying, preparing and implementing projects. A key instrument in monitoring such a large and fragmented investment program was the computerized management information system which was developed in 1988 and gave ESF an unprecedented capacity for instantaneously adjusting the project portfolio to changes in the cost and financing situation. 19. However, there still remained considerable differences in the level of project activities within individual departments and provinces. This was indicative not so much of the relative severity of economic difficulties experienced but rather of an uneven distribution of implementing agencies and of their absorptive capacities. This discrepancy remains a challenge for the future. 20. Sixth, the temporary character of the ESF, setting it aside as an exceptional response to an emergency situation, has been preserved: at the end of 1990, after a one-year extension of its initial mandate, the Fund will cease to exist. 21. Having said this, however, it should be made clear that this does not in any way mean that Bolivia's adjustment process has been completed, nor even that the negative effects of stabilization have been completely overcome. It signifies, rather, that in the future a greater emphasis can be placed on more conventional methods of resource allocation and external financial assistance. 22. Nevertheless, certain elements of the ESF which are seen to have contributed to its success deserve to be carried over into the post-ESF period. Examples are the demand-determined nature of project identifica- tion (although in the future operating within a different framework of selection criteria and procedures to provide appropriate policy guidance) and the simplified procurement process for small and widely dispersed projects (provided an effective system of quality control is contributing the necessary checks and balances). 23. In particular, the extraordinary group of staff which was a central factor in ESF's success, and the unique institutional experience which they embody, should be preserved. Fortunately, this is being assured: starting in 1990, a new Social Investment Fund will (with a more narrow sectoral mandate as its name implies) absorb the core of the ESF team. -6- The Bank's Role 24. After its early and unequivocal commitment to the ESF and its unusual speed of reaction (para. 5) the Bank continued to play a supportive role. A review of the project files suggests prompt responses to any incipient difficulties, attention to detail and an appropriate degree of flexibility. The reading, as well as conversations with staff involved in the two credit operations, also reveal a distinct sense of personal and professional satisfaction of what was by all accounts a successful and worthwhile effort. III. PROJECT OAUCMES 25. Given the very short duration of the project and the recent date of Credit Closing (January 31, 1989), there is little that can be said so far about any long-reaching effects of the program (although there have been studies dealing with project beneficiaries and an initial effort to undertake an ex-post evaluation using cost-benefit criteria.y/ The outcome indicators available so far thus inevitably focus on the two aspects of resource transfer and of physical achievements. It would be highly desirable if, during the remainder of its mandate, the ESF would put in place a system for collecting a broad range of data on the program's impact in the main areas of activity. 26. In August of 1989, total disbursements stood at US$100 million, the total volume of approved sub-projects at US$140 million, and the target for the end of 1989 (US$180 million) looked achievable. 27. The program had reached an estimated 8 to 9 million direct and indirect beneficiaries (including, however, many multiple beneficiaries being affected by more than one sub-project). Among the more tangible achievements were: 9,000 houses; 300 schools and 40 cultural centers; 400 health posts; 640,000 textbooks and 64,000 school benches; 7,000 km of road improvements; 3,000 city blocks paved; 1.1 million m of sewerage canals and 230,000 m of water supply lines; 30,000 ha of irrigation perimeters and 1,700 ha of reforestation; 250 km of drainage canals and 200,000 cbm of erosion/flood control works. Non-investment projects included 120,000 meals, 2.3 million immunizations, and the training of 120,000 persons in vocational skills. Finally, 6,000 small-scale entrepreneurs benefitted from a credit program. 28. The vonthly employment volume directly attributable to the program was on the order of 25,000 to 30,000 during the peak period. With an estimated employment multiplier of 1.1 this meant that the total employment effect was in the range of 50,000 to 60,000. Most of the workers were young married males. Somewhat surprisingly, the share of displaced miners, ,1/ Bruce Herrick (Consultant): Ex-Post Project Evaluation. Emergency Social Fund, Bolivia (August 1989). -7. the main group of intended beneficiaries, was less than expected, due, it is thought, to the fact that most of them had technical skills which made them more easily employable elsewhere. 29. While the program reached a more than proportionate share of families in the lowest three deciles of income distribution, the very poor (lowest ten percent) were under-represented. This is explained by the location (mostly remote rural areas) and the structural (long-term) nature of extreme poverty in Bolivia which made their capture in a demand-driven assistance program very difficult. These marginal groups remain a challenge for ESF's successor institution and the regular channels of Government assistance. IV. FININGS Proiect Objectives. Content and Implementation 30. The main objective, to provide temporary relief for the population affected by the economic stabilization program while widening/ rehabili- tating Bolivia's infrastructure base, was addressed by a program that permitted a wide range of investments/interventions, thus increasing the likelihood of a broad response by potential project entities. After over- coming the initial skepticism of local governments and NGO institutions alike by showing speedy results, this expectation was proven correct. A deliberately flexible program content permitted en-route adjustments. Similarly, the procedural framework was sufficiently elastic to permit prompt corrective action: technical assistance efforts by ESF staff when the volume and quality of early project submissions did not meet expectations and a tightening of supervision following a growing concern over project quality later in the program were examples of an effective program management in situations for which there were no precedents to go by. The excellent and hard-driving leadership of the program and the quality and dedication of the staff created an environment in which there was no room for institutional inertia to develop. The Bank's unfailing commitment was an important factor in securing a broad base of bilateral and multilateral d,nor support. Sustainability and Replicability 31. A considerable volume of infrastructure has been created (or improvel) through the ESF program. The very speed of implementation and the size of the program did not leave time to put in place an appropriate system of maintaining and operating these physical assets. This is an area which becomes increasingly important as time goes on; the new Social -8- Investment Fund is likely to put this task on its agenda±I for the invest- ments under its purview; for other sectors, the responsible government line agencies and NGOs will have to address this issue in due course. 32. The ESF experience has been followed with great interest by other countries in the Region as evidenced by their active participation in an ESF workshop/seminar in August 1989 which reviewed the ESF program and its achievements. 33. Preliminary reflection suggests that the ESF model may not be easily transferable, and can certainly not be used as a blueprint. For one, few countries have been, or will be, facing economic disruptions on a similar scale as Bolivia did in 1985 and consequently, will be ready to adopt a similarly drastic set of policy measures. Secondly, strong and unflagging governmental support at the highest level, combined with a deliberate restraint from political intervention in its daily operations, would also be an essential condition for the success of such an agency. Thirdly, differences in a country's physical, economic, social and institutional setting would advise against a mere copying of a successful program. What would be more important would be a transfer of critical elements, such as the bottom-to-top approach in developing effective relief proposals, the establishment of a financial intermediary (rather than implementation) agency outside the regular Government structure but vested with the necessary authority, a sufficient degree of flexibility in criteria and procedures for project preparation and implementation, and the emphasis on excellence in leadership and staffing. / ESF management reacted with characteristic promptness and vigor to suggestions along these lines made during the meeting at the end of the audit mission, by assigning ESF staff to look immediately into O&M questions. -9- PROJECT COMPLETION REPORT BOLIVIA EMERGENCY SOCIAL FUND PROJECT (CREDIT 1829-O) July 3, 1989 (Revised February 2, 1990) Human Resources Operations Division Country Department III Latin America and the Caribbean Regional Office - 11 - PROJECT COMPLETION REPORT BOLIVIA EMERGENCY SOCIAL FUND PROJECT (CREDIT 1829-B0) PART I. PROJECT REVIEW FROM BAM'S PERSPECTIVE I. Proiect Identity Name: Emergency Social Fund Project Number: Credit 1829-BO Borrower: Government of Bolivia Executing Agency: Emergency Social Fund Amount: SDR 7.8 million Approval Date: June 23, 1987 Closing Date: January 31, 1989 II. Backgoud A. Economic Background 1. In 1985 Bolivia faced economic chaos, with an inflation rate of almost 24,000% per annum. At that time, the Bolivian Government began a comprehensive economic reform program which it has sustained for almost four years. This program aimed to reduce inflation, restore the external balance and regain economic growth. The stabilization and adjustment programs have achieved considerable success. Inflation was running at an annual rate of below 10% by the last quarter of 1986. However, the restrictive policies necessary to establish order within the economy combined with a severe decline in the prices of Bolivia's two major exports (tin and natural gas) to cause a fall in output. Real output has started to increase since 1987, though more slowly than the population. B. The Social Costs of the Economic Crisis 2. It is difficult to untangle the social consequences of the economic chaos of 1980-85 from the social costs of the adjustment process afterwards. Indicators of the standard of living, such as infant and maternal mortality, malnutrition and incidence of diarrhea worsened before 1985 and have only partially recovered since then. The infant mortality rate, at 124 per 1,000 live births, is twice the average for the region. This number is twice as high in some poor communities. In addition, malnutrition is widespread, particularly in the rural population of the highlands. The majority of Bolivians have experienced a significant decline in their standard of living since 1980. However, miners and some civil servants were particularly hard hit by the massive lay off affecting over 42,000 jobs in 1985 alone. Farmers in the surrounding mining communi- ties also suffered indirectly. - 12 - III. The pEergency Social Fund A. Origin and Background 3. The Emergency Social Fund (ESF) was created in 1985 to finance temporary employment and social assistance in recognition by the Government of Bolivia (GOB) of the need to cushion the social impact of the stabiliza- tion program and adjustment mea&ures undertaken at that time. In December 1986, the Association accepted the lead role in helping to restructure ESF, and in coordinating fund-raising efforts. The project was prepared, appraised and approved extremely quickly: appraisal took place in early May 1987, negotiations were held from May 26 to June 2, 1987, and the credit was approved on June 23, 1987 (Table 2, Part III). As the Bank Group's first project designed to alleviate the social costs of economic adjustment, ESF was thought of as a pilot operation. The credit amount was small (SDR 7.8 million), significant funds were set aside for institutional support, and provision was made for substantial supervision by IDA. A second credit (Credit 1882-40) was approved in March 1988 (Table 1, Part III). B. Description 4. ESP was designed (from its December 1986 revival) as a three-year emergency program, based in a newly created, but temporary institution reporting directly to the President. It aimed to provide short-term temporary employment to those groups most adversely affected by the austerity measures, and to provide basic social services in a time of reduced government expenditures. ESF was to provide a quick-disbursing mechanism for financing small sub-projects targeted to low-income popula- tions and areas. Eligible sub-projects included small-scale, employment- generating and income-generating projects such as: water supply, sewerage, health posts, schools, basic shelter, road improvement, irrigation, and erosion control. Sub-projects also included social assistance in health, nutrition and training. Overall, the ESF expenditure plan called for allocation of 750 of funding to support employment-generating and income- generating sub-projects, and 25% to social assistance sub-projects. 5. The IDA credit 1829-B0 (ESF I) supported the first eighteen months of ESF's operations. It was intended to finance about one fifth of ESF's total program (Table 4b, Part III), provide institutional support, and mobilize further international assistance. Initially, the program aimed to support sub-projects costing US$50.3 million (Table 4a, Part III). This objective was expanded under ESF I and ESF II to US$140 million, and eventually to US$180 million. The proceeds of the Credit were lent to the Republic of Bolivia, which passed them on, as a grant, to ESF. ESF, in turn, used the Credit, the co-financing funds and the allocation from the National Treasury to finance sub-projects on a grant basis. C. Project Design and Oranization 6. The size of the ESF first-year program was determined initially by financing availability and by internal operational capacity. In another departure from standard project procedures, procurement regulations for the project departed substantially from standard IDA procedures as well as the - 13 - Bolivian procurement procedures. Direct contracting was allowed for contracts under US$250,000, on the basis of unit prices controlled by ESF and approved by IDA. Shopping was required for contracts of more than US$250,000. 7. The sub-projects for ESF were prepared and carried out by local governments, regional development corporations, ministries, non- governmental organizations (NGOs) and community groups. These institutions requested financing from ESF, and ESF evaluated each sub-project based zn sectoral and regional programming priorities, a site inspection, strict cost eval-ation and expected social benefits. The sub-projects we:e executed by contractors (including NGOs) and supervised by a qualif,.ed third party. IV. Proiect Implementation A. Critical Variations in Project Imolementation 8. The implementation of the Emergency social fund Credit complied with the President's Memorandum in most of its fundamental aspects. The largest variation was in the rate of disbursement of the credit. Commitment and disbursement targets for 19,7 were achieved two months behind schedule due to the initial lack of sub-projects submitted (Table 3, Part III). The proceeds of the credit were to have been fully disbursed by July, 1988, but the request for the final disbursement was submitted only on August, 1989. The slower rate of disbursements was a result primarily of greater delays in the execution of sub-projects than anticipated (para. 40). In addition, the requirements for effectiveness were met two months late which had an effect on this quick-disbursing project. Targets for total funding of ESF over three years varied during the course of the project. Initially, ESF and IDA were striving to raise a total of US$140 million, and then ESF revised the amount to US$180 million. As of January, 1989, ESF had raised US$126.6 million. 9. Fewer social assistance sub-projects were financed than anti- cipated because fewer acceptable sub-projects of this type were submitted to ESF than anticipated. As a result, only 12% of funds went to social assistance sub-projects, instead of 25%. This was a result of the demand driven procedure to gain access to ESF funds. (The poorest communities, in many instances isolated rural areas, where promotional activities including technical assistance were needed to help prepare proposals, were at a disadvantage in preparing sub-projects). The average size of sub-projects was smaller (US$70,000) than anticipated (US$100,000). Finally, the close relationship between the Ministry of Planning and ESF, which was mentioned in the President's Report, was not maintained during execution, primarily because of work pressures on both sides, but this did not significantly affect project implementation. B. Factors Unforeseen 10. There were several unforeseen factors in project execution and in the IDA supervision requirements. The Development Credit Agreement for ESF I was amended iour months after being signed to include a provision for - 14 Swiss co-financing and to add a category to the Schedule 1 for financing fixed-term staff and office equipment. There were more sub-projects than anticipated because of their smaller average size and the large amount of co-financing. Thus, more supervision time was required from IDA than expected. The administration of co-financing proved to be particularly time consuming. During the FY1988 and FY1989, IDA spent overall 64.3 staff weeks in supervision and co-financing for the credit (Table 10, Part III). C. Proiect Risks 11. The risks identified during appraisal focused on the trade-off between providing rapid assistance and ensuring that resources were allocated where they would be most effective. A good balance was achieved, with ESF seeking always to speed up operations and IDA staff pressing ESF to refine their systems and strive for high quality of sub-projects. V. ProJect Results 12. Monitoring and evaluation of ESF have been extensive (Table 5, Part III). Results of these evaluations lead to several preliminary conclusions on the results of the project. A. Impact on the Adjustment Process 13. The Macroeconomy: The ec-onomic effects of ESF can be measured by its impact on foreign reserves, GDP growth and employment. ESF had secured over US$102 million in foreign loans and grants by the end of 1988. This represents over one quarter of the current account deficit for that year. Many of these funds were in the form of grants and some probably would not have been available without the ES?. Several donors have begun or resumed programs in Bolivia because ESF was able to ensure speedy and efficient implementation. ESF has contributed to the growth of GDP, increasing it by 2% in 1988 when the direct and multiplier effects of ES? investment are considered (Country Economic Memorandum, World Bank Report 7645-BO of 1989). Total investment for 1989 is projected to be US$100 million. 14. The direct employment effects of the sub-projects were high, although not targeted primarily to miners or public sector employees as originally planned. Ex-miners represented only between 15 and 20% of those hired for ES? sub-projects. One of the first studies done by the moni- toring unit of the ES? concluded that it would be difficult to target ex- miners in the employment generating sub-projects because some miners, skilled and sought after by employers, moved on rapidly to new jobs. Others were reluctant to consider jobs with ES? because their pay would be much lower than that received in the mines. 15. Indirect employment generation by ES? was estimated to be the equivalent of 1.12 times the direct employment. Of this, approximately 44% was generated by consumption of final goods, 50% by consumption of inter- mediate goods, and 6% from increased demand for capital goods. Accord- ingly, ES? is responsible for creating directly over 55,000 temporary jobs and indirectly 116,600 temporary jobs throughout the 1987-1988 period of adjustment. The cost per direct job created in economic infrastructure was - 15 - US$194. With the creation of these jobs, ESP has helped to mitigate social consequences of adjustment and, thus, aided the implementation and sustain- ability of the economic reform program supported by IDA. 16. The ESF had a significant impact on the reactivation of some sectors of .he economy. The construction sector was at a standstill in 1985. About 800 contracting companies were used ir ESF sub-projects, which represent most of the existing national firms. Suppliers of building materials also benefited from the project. For example, the 21,000 metric tons of cement used in ESF sub-projects represented 6% of domestic cement production nationwide. 17. Enhancing Government's Credibility: With the ectablishment of ESF, the Government hoped to demonstrate concretely that, despite the austerity measures, it had not forgotten the poorer segments of the society. Although the ESF was greeted with some skepticism initially, its ability to get things done has earned it broad-based respect. It is diffi- cult to travel any distance in Bolivia without encountering the familiar blue and white sign of an ESF sub-project. This has improved the image of the Government, and, ultimately, has helped to sustain the adjustment program. B. EM t 18. As of December 30, 1988 ESF had committed US$100.8 million and disbursed US$52.5 million in 1,474 labor-intensiv- s.cial and economic infrastructure sub-projects (Table 6, Part III). These sub-projects are expected to generate 269,040 man-months of employment, with 26,821 workers receiving wages in the month of January 1989. ESF should reach the goal set for its entire program (ESF I & II) of 35,000-50,000 man-years of employment generation over the life of the agency. 19. ESF directly employed workers representing 10% of the officially unemployed (the unemployment rate is 11%). This percentage goes up to 20% if direct and indirect employment effects are considered. A certain debate exists about the extent to which these new jobs have actually diminished unemployment. Since salaries in the construction sector have not risen, and since the labor supply has responded in a flexible manner (there are always more applicants than jobs available at each sub-project at current market prices), each job created can be assumed to have reduced unemployment. 20. The employment impact of ESF varied slightly from the appraisal assumptions, as follows: (i) workers on ESF-sponsored sub-projects were paid more (+13%) than foreseen during appraisal; (ii) there were fewer workers actually employed (-10%), and the total wage bill was very clos. to the budgeted amount (US$18 million); (iii) ESF salaries were lower than national average for unskilled labor (-13%); (iv) 99% of workers were male; and (v) two thirds of the employed (66%) were the only income-generating members of their household. (These results were derived from two represen- tative surveys in October 1987 and March i988, and were confirmed by the National Institute of Statistics-INE in October 1988). - 16 - 21. Although there is some leakage of ESF subsidies to middle-income households, ESF has succeeded in targeting mostly lower income households. On average, the workers on ESF sub-projects were poorer and less educated than other workers. The wage earned by ESF workers was not entirely incre- mental since the "unemployed" are usually earning some income in the informal sector. ESF workers earned on average 43% more than they would otherwise have made (INE, 1988). Over half of the ESF workers fall in the lowest four deciles of food consumption even with their ESF jobs; these workers would undoubtedly be even worse off without ESF. Not all workers were satisfied with their low ESF salary which they compared to their pre- crisis job. Nor did they feel that they were effectively applying their skills since they already had a higher skill level than required by construction (Report on Participant Evaluation, World Bank, 1988). 22. Short-term employment has been provided with reasonable efficiency in the use of resources. Sixty percent of funds, committed in infra- structure sub-projects, have an estimated (@A ante) average rate. of return of 22%. Smaller sub-projects for which an IRR was not computed are at least expected to have a positive rate of return. There has been no uneconomical use of funds, except for the first rotating credit fund with the National Fund for Mining Businesses (FONEM). FONEM, which received a grant of US$885,289 from ESF, did not have administrative capacity to administer these credits effectively. Overall, ESF expenditures in employ- ment generation activities are still being assessed by INE and the internal monitoring unit through aralys:s of a sample survey of household living standards. C. Infrastructure 23. Substantial indirect benefits were generated from the US$52.5 million (52% of total commitments) of social and economic infrastructure completed under ESF I and II. This infrastructure consisted of water supply and sewerage, housing, health posts, schools, urban improvement and roads. The corresponding social and economic benefits were not estimated at appraisal since ESF's primary objective was to transfer income through temporary employment maintenance. 24. The social and economic infrastructure, once completed, will benefit an estimated 1.2 million persons. More than 900,000 meters of sewerage and water supply works have benefited about 500,000 inhabitants of small towns and low income urban areas. About 30,000 persons, mostly fami- lies of relocated miners, have benefited from housing sub-projects (5,900 houses). About 230 public school renovations (105 completed), will benefit approximately 200,000 children. About 2,900 blocks of streets have been paved in urban centers, considerably improving traffic conditions and sani- tation. About 7,000 km of road improvement works, mainly on trunk roads, benefited some 490,000 subsistence farmers (Table 7, Part III). D. Social Services 25. As of December 31, 1988, US$10.3 million had been committed in social assistance sub-projects reaching about 45,000 beneficiaries, mainly low-income women and young children. In addition 2.3 million vaccinations - 17 - have been administered under these sub-projects. The quality of these sub- projects has remained a concern because their evaluation is largely subjec- tive. The success of social assistance sub-projects rests on a number of intangible factors, such as the demand for services, the quality of services, and the organizational capacity generated among beneficiary communities. The initial lack of demand for financing in social assistance sub-projects prompted ESF to promote this activity to NGOs more actively after October 1987. In an effort to assess more systematically potential efficiency and effectiveness of proposals, in March 1988, ESF created an assistance sub-projects' evaluation and supervision team, which has greatly improved the quality of social assistance sub-projects. E. Poverty Alleviation 26. The geographical distribution of ESF resources has been monitorad in an attempt to target the poorest areas of the country. Targets for each department were set and respected by ESF (Figure 1, Part III). These targets were determined according to each department's average level of income, health indicators, and institutional capacity. However, geographic targeting alone has obvious limitations in that all economic levels are found in each department. When ESF's impact on poverty is evaluated at the provincial level (there are 100 provinces in Lolivia and 9 departments), the mechanism for evaluating its targeting effort breaks down. 27. The limitations of this classification as a way to assess the poverty impact of ESF expenditures derive from the fact that even at the provincial level there is wide variance of household income. For example, the departmental capitals are all found within relatively wealthy pro- vinces, but there are substantial pockets of poverty on the fringes of these cities. It is in these pockets that ESF sub-projects are con- centrated. Here Bolivia's "new poor", the group which ESF was most anxious to address, can be found. Another limitation in the direct poverty impact of ESF expenditures is that the poorest communities are typically at a disadvantage to access the ESF funds. The poorest of the poor are found mostly within rural areas. They have the weakest institutions and the least access to information. Intermediaries, such as NGOs, are not always available in the most deprived areas for organizing sub-projects. F. Institutional Impact 28. One of the benefits of the ESF has been the positive impact on the development of national and local institutions. The ESF itself has finely honed its systems for sub-project identification, evaluation and supervi- sion. The ESF has also developed a capacity for mobilizing and channeling resources from abroad. Finally, the ESF has been a training ground for managers staff in public administration. At the local level, the ESF has worked with numerous institutions (Table 8, Part III). These institutions have, in turn, acquired experience in sub-project preparation and manage- ment. For example, the Ministry of Health, which had little prior exper- ience in preparing sub-proiects, benefited in particular from the project. - 18 - G. Women in Developpent 29. Although the public works sub-projects had virtually no direct impact on employment of women, ESF has been effective in addressing women's concerns through sub-projects for social assistance. Projects focusing on the needs of pregnant women, lactating mothers and their infants have received the highest priority. Such sub-projects range from nutritional surveillance programs and the operation of day-care centers to the con- struction of maternity services in hospitals. The sub-projects are geared toward activities which improve nutrition in the household and/or generate income. As noted, ESF has been less effective in generating direct employment for women. In particular, no suitable credit program for women's cooperatives has been presented to ESF at this date. Altogether, ESF estimates that 20% of total expenditures will address women's concerns specifically through social assistance and water supply p.-4ects in basic hygiene and sanitation. H. Environmental Impact 30. Numerous sub-projects have had a positive environmental impact. Among approved sub-projects are finance of erosion control sub-projects, through watershed management, as well as reforestation and sanitation in rural and peri-urban areas (together these represent 19% of total expendi- tures). No sub-project reviewed to date has been found to have a negative environmental impact. I. Procurement 31. The special procurement procedure of direct negotiation with the contractor proposed by the sponsoring agency on the basis of a schedule of work and unit costs, which was approved for this project, has worked satis- factorily. Costs have been economical, sub-projects have been executed according to specifications, and distribution among contractors has been equitable. Costs of some comparable civil works have been 20% lower under ESF than under the First Urban Project (Loan 1489-B0) and the La Paz Municipal Development Project (Credit 1842-B0). Three quarterly reviews have resulted in recommendations to continue procurement practices as they were designed. These reviews have been evaluated and endorsed by IDA's regional procurement advisor. 32. As of November 30, 1988, 25% of all sub-projects which had entered execution had undergone a contract change. However, contractors have not sought higher prices through the changes in their contracts as only 6% of contract re-negotiations have involved a price change. The changes accounted for only 2% of the total costs of sub-projects in execution. The bulk of contract renegotiations sought to correct technical deficiencies in sub-project formulation. Delays in contract execution were a concern in July 1988. These delays dropped to an acceptable level at the end of 1988 (para. 40). The time between the approval of sub-projects and the sig- nature of contracts was also reduced from 120 days in 1987 to about 60 days during 1988. 33. Concentration of sub-projects among a few contractors has not occurred. Over 800 contractors, representing most of the contractors work- ing in Bolivia, executed sub-projects. In order to avoid favoritism and - 19 - concentration among contractors, the Development Credit Agreement for ESF II imposed a $500,000 limit for any one contractor, subject to Bank review. As the number of sub-projects grew, the $500,000 limit came under increas- ing pressure. Any exception to this rule was granted only in one of the following circumstances, 12 cases in all: contractors with only one sub- project; sub-projects awarded on the basis of competitive bidding; sub- projects for which no other contractor existed; and sub-projects carried out in the social sectors by NGOs. J. Accounts and Audits 34. ESF's accounts have been reviewed by IDA periodically and always found in good order. An external audit of ESF's operations in 1987 has been performed and reported old accounts and transactions in order. The audit for 1988 is in progress (Table 9, Part III). A field review by IDA's regional audit specialist in March 1988 found that ESF has a sound account- ing infrastructure. VI. troiett Sustainability 35. Created under an emergency mandate, the ESF charter had a sunset provision of three years. However, a plan for transferring the experience and the systems of the ESF to the corresponding government ministries has been developed. A permanent Social Investment Fund is also being created to transform the ESF into a development institution closely coordinated with social sector ministries. Agencies soliciting sub-projects were screened for their likely ability to maintain their sub-projects. Cost recovery was required on all housing, water supply, and sanitation sub- projects. For example, with all housing projects, the beneficiaries must pay back the cost of constructing the house plus interest over a period of six years or more. Monthly payments are set according to the owner's income and payments go to the National Housing Fund. As owners do not have to begin payments until they have been in the house for six months, it is too early to evaluate systematically the compliance with cost recovery conditions. In the case of water supply and sanitation sub-projects, cost recovery methods differ depending on the institution implementing the sub- project. VII. IDA's Performance 36. The innovative design of the project required special attention from IDA. The project was appraised and approved within two months (para. 3). Supervision of the project was more intensive than usual, in partic- ular with respect to procurement, monitoring and evaluation of the social impact, and the approval of sub-projects. Supervision required an average of 29 staffweeks per year. The Association also helped mobilize and super- vise a large volume of co-financing. This role was materially aided by the keen interest which the Consultative Group members exhibited in ESF through their support. ESF was reviewed during the December 1986 and July 1988 Consultative Groups resulting in generous amounts of co-financing. Mediat- ing the changing demand for disbursements and the time required to br:ng the funds of the co-financiers on line was particularly challenging. * 20 - 37. In two years of implementation, the project has had three task managers from three different divisions. Extensive team work and adequate overlap has prevented any serious discontinuity. 38. Principal Lessons. Many projects such as ESF I are being con- sidered or implemented in other countries. Based on assessment of the ESF program, useful lessons for the design of these initiatives include the following: (a) Special care is needed to identify potential social costs at the beginning of adjustment programs so that actions can be designed to address them specifically. Similarly, emphasis should be given in the adjustment programs to targeting poverty alleviation. (b) The ESF program became a central element in the Government's macro-economic adjustment program. This is a vital factor explaining its success: in the absence of a strong economic program, the project would have had little rationale and ephemeral benefits. Likewise, the ESF is a major factor explaining the success and sustained adherence to the macro-economic program. (c) Experience with the ESF has demonstrated the need and benefits of allocating substantial supervision resources to projects of this type. The time required per co-financing agreement, alone, is substantial. The review of sub-projects also requires significant staff time. IDA made substantial and much needed inputs through the supervision process. (d) Once the ESF program was widely publicized and the sub-project review process was in place, the demand for ESF assistance expanded quickly. On occasion this growth in demand to finance high quality sub-projects exceeded funding availability, though not total commitments. In this regard, the time necessary for the co-financed funds to become available for disbursement should be evaluated conservatively to minimize cash flow problems. (e) With respect to the economic and social impact of ESF subsidies, the project has demonstrated that income transfers to workers and their households may clearly be effected through public works programs, as a transitional measure during adjustment. But the alleviation of structural poverty -- that is, assistance for groups that suffer from a combination of low income, and limited or no access to basic services, and demonstrate inferior health and educational profiles -- is more problematic under a strictly demand-driven approach as in ESF. (f) Experience in providing subsidies to the poor through geographic targeting demonstrates some success, but geographic targeting alone is not sufficient as a vehicle to reach the very poor because of quite wide variations in household income even within geographic jurisdictions. Undoubtedly, efforts to reach the very poor require targeting by means of fine-tuning programs at the . 21 - local level combined with promotional efforts to ensure participa- tion by the poor. It is particularly difficult to reach the very poor with social assistance projects, which are more difficult than infrastructure projects to prepare well. (g) Another factor in ESF's success, and a challenge for the future, was its emergency character. It avoided the paraphernalia of a permanent institution and operated quickly and efficiently. (h) Through the ESF project, cooperation between the World Bank and NGOs working in Bolivia has been enhanced tremendously. Simi- larly, relations have improved between NGOs and the Government. Although the NGOs were initially hesitant to work with a govern- ment institution, they came to view ESF as a reliable source of funding. From ESF's perspective, the NGOs proved to be very competent in preparing and supervising projects, particularly those in social assistance. (i) Finally, there are lessons to be learned from the leadership and institutional arrangement of ESF. ESF's first director was a dynamic and talented businessman and he surrounded himself with a first-rate staff, who followed management practices largely taken from their private sector background. Another important element in ESF's success was its institutional structure. As an auto- nomous institution which reported directly to the President, ESF had the necessary flexibility as well as direct and continuous support of the President. In addition, ESF could not have suc- cessfully managed its portfolio without adequate support systems, an extensive computer network and excellent processes for identi- fying, evaluating and monitoring sub-projects. VIII. Borrower's Performance 39. ESF has been regarded as a successful institution both by IDA and its co-financiers and within Bolivia. Any problems encountered by the ESF during implementation were overcome quickly (Figure 2, Part III). In February 1987, funding to achieve the then US$140 million target was uncertain, so a fund-raising unit was created. It has contributed greatly to the achievement of fundraising goals. Later in 1987, when it was discovered that the rate at which sub-projects were being submitted was slow, a promotion unit was created, which effectively helped agencies to identify and prepare projects suitable for financing. At the start of 1988, there was some concern that the quality of works being completed in ESF projects was not high enough. In response, the ESF hired a civil engineer to complete technical audits of all sub-projects. The technical quality of sub-projects has improved as a result of increased selectivity and improved supervision. 40. The most serious problem faced by ESF was rapidly mounting delays in the sub-project execution beyond minimal required time schedule. A program to decrease these delays included fining the contractors, and suspending disbursements to sub-projects. The average delay (measured by amount of time by which the project exceeded the original schedule in - 22 - implementation) went from a high of 81% in July 1988 to 74% in August, 52% in September, and 40% in December, a reasonable level for social sector investments. IX. Project Relationships 41. IDA maintained a positive working relationship with the Government of Bolivia throughout the project. The Association has encouraged ESF to work more with NGOs and to increase the participation of NGOs in the project. These efforts have been recognized and appreciated by the NGOs working in Bolivia. Outside of Bolivia, IDA cooperated with at least 13 co-financing agencies. The relationship between the Association and the ESF has been very close and constructive. Flexibrility and responsiveness were required on the part of both parties. A. Consulting Services 42. The IDA credit as amended in December 1987 included US$484,000 for consulting services, fixed term staff, studies and office equipment. Addi- tional resources were used to hire temporary consultants to deal with specific subjects, such as increasing the supervision of productive sub- projects; developing the cost/benefit data base and procedures used to calculate rates of return; standardizing the criteria and procedures for social assistance sub-projects; and developing a monitoring system for these sub-projects. Atcredit closing, US$563,000 had been used for fixed- term staff and office equipment, and US$131,000 for consultant's services and studies. B. Project Documentation and Data 43. The President's Memorandum was the essential guide in this project report as there was no Staff Appraisal Report for the project. The Development Credit Agreement, as amended, proved adequate and instrumental in defining clearly respective responsibilities. 44. Each co-financing agreement differed in form and substance. In some cases, there were as many as four separate parts to a "co-financing agreement": an agreement between the Republic of Bolivia and the co- financier; a grant agreement between IDA and the co-financier; general procedural arrangements governing co-financing between IDA and the co- financier; and, an Initiating Trust Fund Brief establishing the administra- tive procedures for the trust fund within the Association. In particular, it proved important that reimbursement to IDA of costs incurred while administering the co-financed funds be spelled out in the grant agreements. It was also essential that a Special Account be included in the agreement to facilitate the disbursement process. 45. The data for use in the PCR were readily available thanks both to the efficient systems operating at ESF and the project monitoring and evaluation. - 23 - PART II: PROJECT REVIEW FROM BORROWER' S PERSPECTIVE I. Comments on Parts I and III 46. ESF fully endorses the analysis and data presented in Parts I and III. II. IDA-Borrower Relationship 47. The relationship between IDA and ESF has been frank and open. At all times, since identification, IDA acted as a partner. Meetings between IDA staff and ESF staff were held in a spirit of self-evaluation, which had positive results for the project implementation. The Association stim- ulated the adoption of administrative and information systems which were transparent, a transparency which facilitated a positive working relation- ship with IDA and with co-financiers. The Association's receptivity, as well as ESF personnel's initiative, created a good environment for decision-making in project matters. III. IDA's Performance 48. IDA approved this project under exceptional emergency procedures. This response was decisive in the ultimate performance of ESF. Other aspects of the Association's support to ESF also contributed to the success of the project. IDA staff shared with ESF the responsibility for the preparation of internal Bank documents. The Association demonstrated flexibility in accepting not only the concept of an ESF, but also project implementation procedures which departed from normal procedures. IDA continued placing more importance on the substance and impact of the project than on its form throughout the course of the project. 49. IDA dedicated supervision resources to monitor the progress of ESF and carefully review sub-projects presented for its approval. The impor- :ance placed on efficient allocation of resources provided a beneficial balance to ESF's emphasis on the rapid disbursement of funds. 50. The changes of task managers required additional effort from ESF to inform the new staff and adapt to different styles of work. However, the transitions were made without significant interruptions in the work. 51. The influence and support of IDA facilitated the large fund- raising efforts. The role of IDA in this aspect cannot be overestimated. IV. Borrower's Performance 52. The Government of Bolivia assigned a high priority to ESF, which allowed ESF freedom to develop its programs in an independent and politi- cally neutral way. This autonomy was critical to ensure the Creditor's performance. 53. ESF developed an effective relationship with donor organizations. The capacity to formulate a coherent project, and the clear link. between - 24 - the project and the macro-economic and social strategies of the country, were important in attracting funding. As the sub-projects' pipeline grew, ESF maintained a policy of transparency. It reinforced the confidence of donor agencies and facilitated the evaluation and approval of sub-projects, disbursements of funds. It also removed bureaucratic obstacles. In particular, ESF earned managerial and technical credibility which fostered a relationship of partnership with IDA. 54. ESF fulfilled the expectations placed on emergency employment creation and social assistance. The project design also proved effective. Modifications in the management procedures were made to optimize resource allocation, to have an immediate income effect on the beneficiaries, and to achieve longer-term social and economic benefits. ESF was well-designed and aided by excellent management based on rapid decision making, with minimal bureaucracy. Within each department, training of personnel has been continual. Improvements in personnel performance have allowed an increase in the productivity of ESF while keeping ESF staff size to a minimum. This management style also instilled in ES? staff a certain mystique and pride which supported ESF's ambitious goals and quality of operations. 55. The target population of ESF was defined pragmatically, including low-income households and those which experienced a loss of income as a direct result of the adjustment process. ESF was criticized for selecting beneficiaries in an ad hoc fashion. Ths was a result of the practical impossibility of identifying pockets ot overty given the dearth of data. The gap between needs and resources also required simple selection proce- dures. While ESF reached poor populations, it rarely reached the most disadvantaged. However, the additional cost of being more selective as to the profile of its beneficiaries did not appear justified in an operation that was short-term and massive in scope. 56. The ability of each Department within ESF to create procedures which were simple, flexible and effective was largely responsible for the domestic and external credibility enjoyed by ESF. The Promotion department was able to attract a constant flow of sub-projects due to an aggressive attitude in marketing ESF to potential solicitors, aided by a team of professionals which gave technical assistance in sub-project preparation. The Evaluation department developed an automated system for evaluating costs and put into place mechanisms for approving sub-projects which were acceptable to ESF financiers. The Administration department defined proce- dures with intermediaries, such as the Central Bank, in order to facilitate the flow of funds. The Supervision and Control department established small regional offices, assuring ESF presence in each of its sub-projects and speeding up the pace of disbursements. The creation of the Promotion department and its transformation into Programming also demonstrated the ability to respond to new organizational needs as they arose. 57. The ESF procedures were made effective through the dedication of its staff. The emphasis placed on people as the pivotal point in the organization has been one of the most positive aspects of the ES?. How- ever, this emphasis made the ES? vulnerable to changes in personnel, and more difficult to transform into a longer-term institution. - ;5 - 58. Finally, the ESF has demonstrated that it is possible to create an institution capable of attracting external resources and disbursing them rapidly, with a large social impact, in a developing country where most institutions are weak or inoperative. V. Strenths and Weaknesses of the Borrower's Relationshi with Other Relevant_Parties 59. ESF had close relations with: i) government agencies involved in the raising and disbursing of funds; and, Ri) soliciting agencies. ESF worked in close collaboration with the Ministries of Finance and Planning and the Central Bank in fund-raising, the approval process in Congress, and in the disbursement procedure. Considering the Bolivian bureaucracy, the relation with these institutions was excellent, although interactions with the Ministries of Planning and Finance relied mostly on personal contacts between senior management. While the effectiveness of ESF did not suffer, a tighter coordination with these two ministries would have been preferable. ESF promoted operating procedures with the Central Bank which improved disbursements. The Central Bank assisted ESF by providing bridge financing , or "fiscal credits", that temporarily solved ESF's occasional cash flow problems. 60. ESF1s work with NGOs should be considered a benchmark in the history of relations between the Bolivian government and NGOs. It was the first time that the Government channelled resources directly to NGOs. At the outset, relations were difficult. The prior experience NGOs had with government control and regulation was very negative. In spite of these difficulties, ESF managed to channel US$20.6 million (not including US$7.1 million for grassroots organizations), or more than 15% of its financing to NGOs. 61. Government min tries responded unevenly to the ESF. Some took advantage of the financ'ng opportunities very early. Others, due to skepticism, inertia or lak of technical expertise to present projects, came to ESF only later. In general, the ESF demanded an accelerated pace of work and better administrative procedures from soliciting agencies. The effect on government institutions was particularly beneficial in the case of the National Road Service (SNC), the Ministry of Urban Affairs (MAU), and the National School Building Council (CONES). The ESF not only made possible the execution of sub-projects, but was able to initiate new programs which these institutions initially did not consider viable, such as labor-intensive road maintenance, low-cost housing, and a prototype school. These programs represent an important transfer of ESF experience. -26- BOLIVIA EMERGENCY SOCIAL FUND PROJECT (Credit 1829-40) Part III: STATISTICAL INFORMATION Table 1: RELATED IDA CREDITS Loan/Credit Date of Title Purpose Approval Status Credit 1882-40 Execute an employment March 1, In Second Emergency generation and social 1988 Execution Social Fund assistance program to Project meet the needs of SDR 19 million persons adversely (US$27 million) affected by the economic recession, and the adjustment and economic stabilization policies adopted by the Bolivian Government. Strengthen the administrative and operating capacity of the ESF. Mobilize other donors to support the financing of the above objectives. Assist the Bolivian Govern- ment in restructuring its Education and Health sectors. -27- BOLIVIA EMERGENCY SOCIAL FUD PROJECT (Credit 1829-BO) Table 2: PROJECT TIMETABLE Date Actual Planned Date Identification Mission Feb. 1987 Appraisal Mission May 1987 Credit Negotiations June 1987 June 1987 Board Approval June 1987 June 1987 Signature of Credit Agreement July 1987 July 1987 Credit Effectiveness Sept. 1987 Nov. 1987 Closing Date Jan. 1989 Jan. 1989 Credit Completion Aug. 1989 (Last Disbursement) -28- BOLIVIA EMERGENCY SOCIAL FUND PROJECT (Credit 1829-80) Table 3: CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS (US$'000) 1987 1988 1989 Appraisal Estimate 2.5 9.9 10.4 Actual 2.0 9.8 10.4 Actual as % of Estimate 8O 99 100 -k9- EMERGENCY SOCIAL FUND PROJECT (Credit 1829-40) Table 44: PROJECT COSTS Appraisal Estimate Actual Local Foreign Local Foreign/1 Ite= A E ICoA stas Exchange_Costs Ct t= tal --------- (US$ M)----------- ----------(US$ M)----------- Infrastructure 33.68 3.74 37.43 36.67 4.49 41.16 Sub-Projects Social Assistance 11.23 1.25 12.48 7.64 0.69 8.33 Sub-Projects Services of 0.33 0.08 0.41 0.68 0.00 0.68 Consultants and Studies Fixed-term staff -- -- -- 1.53 1.40 2.93 and office Equipment Total 45.24 5.07 50.31 46.52 6.58 53.10 1/ Estimate based on averages by sub-project categories for total ESF program. -30- BOLIVIA EMERGENCY. SOCIAL FUND PROJECT (Credit 1829-80) Table-A: PROJECT FINANCING Planned (Loan/Credit Surce Agreement)_ Revised/a Final (US$000) a (US$-000) % (US$'000) % IBRD/IDA 1. Infrastructure Sub-Projects 7,041 6,675 7,912 2. Social Assistance Sub-Projects 2,342 2,225 1,602 3. Consultants' Services and Studies 105 78 131 4. Fixed-term staff and Office Equipment - - 406 563 5. Unallocated .720g 240 Total 10,208 20 10,208 19 10,208 19 Co-Financing Institut. 16,260 b/ 32 Switzerland c/ 10,199 c/ 19 10,199 c/ 19 Other External Sources 14,020 28 22,693 43 22,693 43 Domestic 10.000 20 10,000 19 10.002 19 TOTAL 50,488 100 53,100 100 53,100 100 a/ Reallocated Dec. 6, 1987 b/ Co-Financinging Institutions not specified at appraisal c/ Co-Financing agreement dated Nov. 10, 1987 for SFr 15 million (exchange rate, US$1.0 - SFr 1.4707) Note: Exchange rate SDR- US$1.3088 (December, 1988) TABLE 5 PROJECT brUDIES at project closure date Study Purpose Status Conclusions Impact on ESFs Cost (in US$ (main) Operations WW source of funds 1. Survey of 600 To characterize the group Completed It is not possible to design Orientation for 9.000 relocated miners sociologically. identify programs that exclusively target Promotion Oirectorate its needs and how best this group because relocated TGN to meet them. miners are absorbed into the population receiving thee. Their main needs are housing and education. . onitorinq Study To evaluate the impact of Completed The ESF is performing satis- Feedback for the directors 55.000 1valuatson of ESF*s the ESF on employment. in- factorily in employment gener- of the ESF regarding design actions and projects come distribution and ation. Its impact on institu- and correction of actions. IDA 1 assistance in relation to tions and contractors is the proposed goals. significant. The Assistance program must direct its actions in a more planned fashion. 3. Participative Evalua- To make an evaluation of Completed few people know about the ESF. None as yet 72,500 tion beneficiaries of the ESF's Those who dothink it is doing = 32.500 IDA I works and of the commu- a good job. + 20.000 UNDP nity's perception of the The beneficiaries consider * 20.000 USAID ESf. the wages low. (Sugar Quota) 4. Macroeconemic impact To evaluate the macroeco- Completed The ESF1s actions mobilize a Feedback for continuation 5.000 of the ESF nomic impact that the ESF*s non-negligible sector of the if ESF IDA I actions can have the economy. Each job created by the ESF generates 1.13 additional jobs. TABLE 6 SUBPROJECTS BY SECTOR as of December 31. 1968 ham at Settor No. of Original Jobs/ Cost Beneficiaries Disbursed to date bi ESF projects amount of month per man Direct Indirect Amount % comp eted contract enerated month ASA: Children's canteens 11 517.387 307 1685 2.085 61.328.61 12 ASA: ay-care centers 15 791.909 626 1265 4,471 117.336.64 Is ASA: School lunches 13 925.192 314 2946 33.434 553,213.21 60 ASA: Greenhouses and community gardens 2 1S8.156 138 1146 4,250 15,254.63 to ASA: Other (nutrition) 7 645.942 750 861 755 18.528 105.952.07 16 ASS: Preventive services 4 167.063 73 2289 23.228 28.476.80 17 ASS: Rural Primary Health Care Program 16 937.003 961 975 70.406 251,317.09 27 ASS: Urban Primary Health Care Progrem 3 235.932 96.084 120,493.52 51 ASS Epidemiology (nat. and regional level) 3 1.091,180 2,453.596 790.429.68 72 ASS: Other (health) 2 42.119 50 812 520 9,846.70 23 ASC: Integrated Education Programs 19 817.893 260 3146 4.292 58.449 377.599.87 46 ASC: School desks 31 1.779.166 3.283 542 5.650 1.028.014.54 58 ASC: School books 2 378.812 640.000 350,381.55 92 ASC: Tech. training 8 407.802 40,274 109.806.44 27 ASC: Productive Tech. Training-Rural 11 584.596 700 835 25.026 221,283.63 38 ASC: Productive Tech. Training-Urban 3 37.726 54 699 1.805 26.436.69 70 Institutional Support 12 829.272 735 1128 365,810.65 47 TOTAL: Social Assistance 162 10.347.150 8,251 1254 45.037 3,437,818 4.852,982.32 47 I E/I: Urban improvement 159 11,302.464 58.778 192 454,750 7.198,617.21 64 W Ell: Access roads 174 19.405.092 98.653 197 752,230 10.146.797.34 52 ' ElI: Irriqation 55 3.682,487 16.024 230 65.947 175 1.811.503.79 49 L/I: Drainage 31 3.204.185 14.252 225 137.420 1.388.137.71 4$ 1/I: Erosion control and forestation 54 4.612,011 24.261 190 128.161 3.373.222.82 73 El: Other 31 1,023.366 12.430 82 235,575 510,133.66 50 E/I: Gabions program 4 437.076 1.345 325 13.500 145,561.58 33 ElI: Productive infrastructure 29 933.320 4.595 203 1.000 36.015 626,914.40 67 TOTAL: Economic infrastructure 537 44,600.001 230,338 194 66.947 1.757,826 25,200.908.51 57 ISO: Water :upply & sewerage 242 17,996.899 77,263 233 100 546.261 8.67i.396.52 48 ISO: Housing & housing support 81 13.256.055 40,976 324 28.025 2.955 6.760.852.14 S) ISO: Health-related construction 103 4.926.938 20.481 241 1.164.928 2.090.363.90 42 ISO: School construction 334 12.783.830 36.405 351 590 216.639 5.681.558.16 44 ISO: Cultural projects 28 1.035,271 2.797 370 680 647.624.23 63 ISO: Other 49 1.467.145 4.206 349 79.763 1.043.064.42 71 ISO: Construction of shelters 53 2.330.869 6.065 384 24 10.085 1.063.361.00 46 ISO: Other education-related construction 47 2.369.446 11,184 212 52.983 1.331.915.49 56 lOTAL: Social infrastructure 937 56.166,453 199,377 282 28.739 2.074.300 27.290,135.86 49 PRO: Revolving funds 8 2.232.455 43 191 600 1.577,738.80 ?1 PRO: Production of Ilaterials 26 3.500.871 9.544 367 60 1.245.300.36 36 PRO: Other 11 1.097.756 1,613 681 1.448 21.156 51,737.66 5 IOJAL: Production Support 45 6.831.082 11.200 610 1.448 21.816 2.874,776.821 42 (,RAND IAL 1681 117.944,686 449.166 263 142.171 7.291.760 60.218.803.51 St Amount sn US$ Note: includes ESFI and ESF II Projects. -33- BOLIVIA EMERGECY SOCIAL FUND PROJECT (Credit 1829-B0) Table7: BENEFICIARIES, EMPLOYMENT AND PRINCIPAL WORKS as of December 31, 1988 Approved Employment (in Man-Years) 37,470 No. of Persons Fed (breakfasts, lunches) 49,977 No. of Dwellings Built 5,934 No. of Trainees in Training Program 24,787 No. of Schools and Other Education Centers 228 No. of Cultural Centers 29 No. of Health Post and Centers 352 No. of Vaccines Administered 2,350,598 No. of Textbooks Supplied 640,000 No. of Desks Supplied 48,874 No. of Persons Benefited with Small Loans 600 Km. of Road Improvements 6,984 Street Paving (in blocks) 2,882 Km. of Drainage Canals 243 M3 of Retaining Walls and/or Gabions 125,773 Linear Meters of Sewerage Systems 780,009 Linear Meters of Water Systems 158,760 Linear Meters of Irrigation Channels 27,775 Ha. of Irrigated Land 27,991 Ha. of Reforested land 1,449 *NB: Where construction is involved, the data relate to new construction/repair/completion/expansion or finishing. Only one main impact of each sub-project has been considered. TABLE 8 COMMITHENTS BY REQUESTING AGONcy as of December 31. 198 A. IN OESCENDING ORDER BY AOUNTS B: IN DESCENDING ORDER BY hNER OF PROJECTS Requesting Agency Amount Projects Requesting Agency Projects Amount 1. Development corporations 16,878.536 240 1. Development corporations 240 16.878.536 2. Municipalities (departeAt caitals) 11.568.912 144 2. Religious institutions 204 9.294,617 3. Nongovernmental organizations 11,562.336 174 3. Nongovernmental organizations 174 11.562.336 4. National Road Service 11,472,471 79 4. Municipalities (department capitals) 144 11.568.912 6. Ministry of Urban Affairs 9.689.274 73 5. Grassroots organizations 119 7.171.454 6. Religious institutions 9.294.617 204 6. National School Construction Council 94 4.589.079 1. Grassroots organizations 7.171.454 119 7. Othpr municipalities 92 6.420.226 8. Other municipalities 6,420.226 92 8. National Road Service 79 11.472,471 I 9. Cooperatives 4.834.141 55 9. Ministry of Urban Affairs 73 9.689.z?4 10. National School Construction Council 4,589.079 94 10. Water utilities 71 3.578.014 11. Prefectures 4.214.204 10 11. Prefectures 70 4.214.204 12. Water utilities 3,578.014 71 12. Cooperatives 55 4.834.141 13. Pavement Promotion Board 3,392.919 20 13. Primary and secondary schools 55 2.187.757 14. Other Government Ministries 3,019.575 34 14. National Group for Solidarity and 46 2.036.660 Social Development 15. Primary and secondary schools 2.187,757 SS 15. Other Government Ministries 34 3.019.575 16. National Group for Solidarity and 2.036.660 46 16. Others 28 1.044,233 Social Development 17. Ministries of Health 1.889.953 21 17. Other State agencies 27 1.243.334 18. Other State agencies 1.243.334 27 18. UNICEF 22 308.777 19. Others 1,044.233 28 19. Ministry of Health 21 1.889.953 20. Hospitals and clinics 991,538 11 20. Pavement Promotion Board 20 3.392.919 21. No specific requesting agency 556.646 2 21. Hospitals and clinics It 9915,638 22. UNICEF 308.777 22 22. No specific requesting agency 2 556,676 TOIAL 119,944,686 1.681 TOTAL 1.681 119,944,6 Note: includes ESF1 and ESP II Projects. TABLE 9 STATUS OF COVENAUTS At Credit Closing Date Description in the Development Credit Agreement Deadline Present Status Comments 1829-0 of July 31. 1987 A. Lou.rdiad fldis.I I (a) Keep records, accounts and financial statements N/A The ESF has done so. External auditors have veriI sed 01WI t Ions (Section 4.01.) compliance with this condition. (b) (M) Audit records, accounts and statements 4 months Done for 1987: 1988 The external auditors have sub- (Section 4.01.b.i) after close audit in process of mitted reports complementing the (ii) Timely submission of audit findings of year preparation financial statements, which were (Section 4.01.b.ii) produced on schedu'e. (iii) Provide any additional information requested by IDA (Section 4.01.b.Mii) (c) Regarding expenditures concerning which with- N/A The ES has done so The external audit ha% vdlidated drawals have been aede from the Credit account the 1967 statements. Tht audit (Section 4.01 .) for I is in progress. (i) keep accounts; (ii) keep the records for one year after IDA has received the audit report; (iii) allow IDA representatives to examine the records; (iv) ensure that the records and accounts are included in the annual audit. Coaitions (a) Take out insurance or make provisions against N/A All fixed assets owned risks that are consistent with normal practice by the [SF are insured (Section 5.01) against all risks (b) Follow sound administrative, financial and I/A The ESF has a first- It is probable that with the management practices, with the support of rate team of profes- increase in the volume of work administrative staff sionals capable of the existing administrative administering operations team will have to be swiftly, transparently strengthened. and on schedule. (c) Maintenance of offices and property In general N/A The ESF fully satisfies (Section 5.01.c) this requirement. -36- ERGENCY 80CIAL, PUND PROJECT (Credit 1829-20) Table 10:IUSE OF IDA RuSOURCES A. Staff Inutg Stage of Project CPole Planned Pinal Through Appraisal n.a. 3.21 Appraisa through Board Approval n.a. 2.72 Soard Approval Through Effectiven~e* n.a. 8.67 SupervIion n.a. 42.58 TOTA, 57.18 E.gg: Co-finning .anoun~ for additfonal 7.2 staff weeks. 8. fissus Stase of 1nthl Nuber of Days SpecIalation Performnce Project Cy41e Tear Persons in the Field Repreented g Ratin kl Through Appratsal 05187 3 10 E,C,A, n.a. Appratsal through Board Approval -- - Board Approval 06187 1 10 B n.a. Through 08/87 1 10 E n.a. Effecttveness 10187 4 15 E,E,C.C ~ervtslon A. P. D. 0. 12187 1 10 E U.&. 04188 2 16 E,C 1 1 1 1 06188 1 10 C 1 1 1 1 10188 2 5 2,9 1 1 1 1 1188 2 16 E,C 1 1 1 1 Al ey to Specialisationz E Eonomst, C - Consultant, A - Assstant.. >. Key to Status: m Avallable Punds, P m Projet Mgmt., D u Dov. Ipat, 0 - Overall statu, 1 - Problem free project. - 37 - Figure 1 TOTAL AmOUNT APPROVED PER INABITAM PER DEPARMENT IN RURAL AND URBAN AREAS as of December 31, 1988 15C *RUM. 100 50 NAL LP2 m c2 PTS mU TI 04 pNm NÅL. - National ORU - Oruro LPZ - La Paz TRi - Tarija CBmA - Cochabamba CaQ - Chuquisaca SCZ - Santa Cruz BEN - Beni PTS - Potosi PND - Pando * US$ per inhabitant - 38- Figure 2 INSTITUTIONM. RESPONSES TO PRINCIPAL PROILEMS PROBLEM RESPONSE JANUARY'1? F UNCERTAIN FUNDING M CREATION OFTHE DEPT OF FUNDRAISIN A M J RYTHYM OF SLOW APPROVAL J INCLUSIONOF PRODUCTIVE PROJECTS A INSUFFICIENT DEMAND OF PROJECTS 8 CREATIONOPHEDEPARTMENTOF PROMOTION 0 N D JANUARY16 CUESTIONSABOUTTHEQUALIYOFPPM 8C7S F CRE ION OF THE TECHNICAL FISCAL UNIT M INCUSION OF THE INSTITUTL SUPPORT PROM A EXCESSIVE DEMAWD FOR PROJECTS M REFNCINGOFSELECTEDPROJECTS J DEAYS IN11E PROGRAMIED EXECUTION J DRASTICMEASURESTOACCELERATEEXECUTION A 8 O DECISION'TOETEND ESF UNTIL DEC.1990 AND TOCREATETHESOCIALINVESTMENTFUND N DECEMBER'8 DIVISIONOFTNEDEPARTMBTOFCONTROL OF PROJECTS INTO TWO SPECIALIZED DEPTS. CASHROW PROBLEMS - 39 - BIBLIOGRAPHY 1. Studies a. Survey of Relocated Miners, November 1987. b. Macroeconomic Impact of the ESF, Unidad de Analisis de Politicas Economicas (UDAPE), December 1989. c. Manitoring Study Evaluating ESF's Actions and Projects, July 1988. d. Participative Evaluation, December 1988. 2. Procurement Reviews a. Procurement Review for ESF II, Credit 1882-BO, May 1988; September 1988; December 1988; March 1989. 3. Co-financing Agreements and Amendments a. Amendment of the Development Credit Agreement for ESF I, Credit 1882-BO, December 1987. b. Amendment to the Schedule of Arrangements for the Administration of Funds Available from the Government of the Netherlands, July 1988. c. Development Grant Agreement with the Netherlands, July 1988. 4. Amendment to the IDA Credit Agreement, August 1988. e. Initiating Trust Fund Brief with the Swedish International Development Authority, August 1988. f. Letter of Understanding with the Government of Switzerland, September 1988. g. Swedish Development Grant Agreement, December 1988. h. Agreement for the Administration of Certain Funds to be made Available by the Government of Sweden, December 1988. i. Letter of Understanding with the OPEC Fund, June 1989. 4. Other Reports a. Marshall, Handover Notes for ESF I and II, July 1988. b. Newman, Information on Workers in Bolivia's ESF, January 1988. c. Mid-Project Review for ESF II, Credit 1882-B0, January 1989. d. Country Economic Memorandum, Bolivia, March 1989. - 41 - COMMENTS PROM THE BORROWER ATTACHMENT I March 2, 1990 International Development Association 1818 H St., N.V. Washington, D.C. 20433 Gentlemen: RE: Emergency Social Fund Project Credit 1829-B0 This is to confirm that the Government of the Republic of Bolivia has reviewed the Project Performance Audit Report for the above-referenced project dated February 9, 1990 and has no objection to its being distributed in its present form to the Association's Board of Executive Directors. S futrely yours, Lic. Mar*oMercado aca Minister, Ixecutive Director of ESF - 42 - COMMENTS FROI THE BORROWER ATTACHMENT II March 2, 1990 International Development Association 1818 H St., NW.V. Washington. D.C. 20433 Gentlemen: RE. Emergency Social Fund Froject Credit 1829-BO This is to confirm that the Government of the Republic of Bolivia has reviewed the Project Performance Audit Report for the above-referenced project dated February 9, 1990 and has no objection to its being distributed in its present form to the Association's Board of Executive Directors. Sincerely yours, AmaliaAnaya Stuart. Subsecretary for Social Policy Ministry of Planning and Coordination - 43 - COMiENTS .oM THE COFINANCIER ATTACHD1~T III 03 90 11:52 SWISS EMBASSY FAMt (202)387-254 001 T E L E r A X Washingt.on, D.C. , .Mprrph 9...199» Number of pages. inclusive first page: .. Gender: Embassy of Switz.erl. Washington, D.C. Signature: ..... .... . S. Nellen Destination; .. s?t.ancc Sppda The World Bank. Room 1 6175 (Fax: 676-1494) Ret.-.NSIAG Ref . : . . . .*... .. .. . . A.... Subject.; Compult-n Report, DA-Credit No. 129 to ESF-Boivia. ''aii cutirM¢E SEP%O&: RE* COPLf1to REPORTO IDA-CRfDt NO* 1f.29 10 ESF-80LiVtes WF #AVE. 190 COMMENT oftM krSPECT T0 TMf r0MPETg0N REP,A,. S< PLt6SE ,0 AMan. SINCE Ivs;f SOMS OEVE4PMEIT COOPPRATIONs fiERNf p* VE6110