Colombia - Magdalena Medio Regional Development Project

Report No. PID6222 Project Name Colombia-Magdalena Medio Regional... Development Project Region Latin America and the Caribbean Sector Multi-sector Project ID COPE46031 Borrower Government of Colombia Implementing Agency National Planning Department Calle 26 No. 13-19 Bogota, Colombia Telephone: 341-9868, 336-1600 Fax: 281-3348 Date PID Prepared May 28, 1998 Project Appraisal March 16, 1998 Projected RVP Decision June 30, 1998 1. Country and Sector Background. The proposed project will contribute to the promotion of peace and development which has been identified by Government authorities and civil society representatives as Colombia's number one development priority. The project is one of the first lending operations in this new area of Bank assistance to Colombia which address the socio-economic determinants of violence. The multi-sectoral, 10 year program for which the Learning and Innovation Loan (LIL) is paving the way addresses the following country issues: the increasing economic and social toll of violence; the predominance of poverty in rural areas (70w of the population with incomes below subsistence live in rural areas); poverty and violence in rural areas are interrelated in complex ways which reflect historical and social roots; and much remains to be done to transform the important process of decentralization and citizen participation mandated by the 1991 Constitution into a reality. 2. Project Objectives. This project is a follow-up to the diagnostic and participatory planning first phase of the Program for Development and Peace of the Magdalena Medio Region (PDPMM) which has been underway for two years under the Consortium for PDPMM, with financing from the national oil company. The project development objective of this LIL is to develop the operational capacity of the Consortium, the citizens network and other partners to work together towards collectively defined objectives to reduce poverty and increase peaceful coexistence in the Magdalena Medio Region which includes 29 municipalities located in 4 departments. The two-year LIL would thus establish a solid basis for the detailed design and implementation of an ambitious 10 year community-led, multi-sectoral development program which could be supported by the Bank through an Adaptable Program Loan (APL). It would be part of a phased approach with the LIL supporting the phase of building operational capacity and testing approaches, followed by an APL to support two to three subsequent phases in which the scope and size of investments and emphasis on economic activities would increase in line with the growing implementation capacity of communities and local authorities, and the improving security situation which would improve the investment climate.  3. Project Description. The two-year project would have two components: Component 1. Capacity Building of Program Management. The objective of this component is to build the capacity of the Consortium and Citizen's Network to implement the PDPMM. Sub-Component 1.1 Consortium as Change Agent and Program Manager. The objective of this sub-component is to develop the Consortium's capacity to move from a participatory planning mode to an operational mode. To achieve this, the project would finance the Consortium's activities as change agent (strategy development; mobilization and technical support to citizen's network, communities and municipalities), program manager (design and implementation of new organizational, administrative and financial management systems; annual financial audit) and learning organization (internal monitoring, evaluation, and learning system; external evaluation). Expenditures would be for incremental operating costs of the Consortium (including full-time staff), consulting services, learning events, and goods. Sub-Component 1.2 Citizen's Network. The objective of this sub-component is to strengthen the citizen's network--a voluntary association of citizens and community organizations which is independent of the Consortium--so that it is capable of influencing public affairs and implementing development projects based on local initiatives. The project will fund learning events (workshops, training, study tours and exchanges within and outside the region), communications activities such as newsletters, and provide small grants for the municipal level of the network (nucleo) to carry out work plans. Component 2. Sub-Projects. The objective of this component is to develop, test and document approaches which bring together community processes and resources around specific development initiatives agreed upon by citizens and authorities of selected municipalities or sub-regions of Magdalena Medio. Sub-Component 2.1 Technical Assistance for Sub-Project Preparation. Under this sub-component, technical support will be provided to a community to develop a specific development initiative or sub-project. The loan will finance activities such as: technical advice, feasibility and design studies, building of management capacity, and establishing links with potential partners and financiers Sub-Component 2.2 Sub-Projects. The project will finance a proportion of the costs (services of consultants and NGOs, local operating costs, equipment and minor civil works) of specific sub-projects. It would have a phased approach (a "LIL within a LIL"): financing would begin in strategic areas such as education, health and environment which are well defined, and new areas such as economic development-employment generation would be phased in based on two criteria: the strategy is ready, and the implementation capacity of the Consortium and communities is judged sufficient to expand the component's scope. For each strategic area, a specific set of questions and lessons to be learned will be identified prior to financing any sub-projects, and subsequently will be monitored and evaluated. 4. Financing. The project would be financed by the IBRD (US$5.0 million) with counterpart financing provided by the national oil company and the central government. In addition, communities and local governments will contribute to financing of the sub-projects. -2 -  5. Project Implementation. The PDPMM is underway and receiving support from various sources; the project which fits within the framework of the Program is to be implemented in two years. The National Planning Department (DNP) has been designated as the Government agency responsible for the project. The Consortium CINEP-SEAP (two well-respected, Colombian NGOs which joined together for the specific purpose of preparing the program) has been designated as the project's implementing agency. The Consortium's role is largely that of a facilitator which promotes a process. Inherent in the participatory and partnership approach adopted by the program is the fact that the citizen's network, communities, and other partners such as local authorities, NGOs, central government agencies are the key actors when it comes to doing things. 6. In view of the learning nature of the project which requires flexibility and adaptation as it proceeds, semi-annual operating plans will be a key implementation mechanism. The plans will serve as a reference point for agreeing on activities to be undertaken, the budget, disbursement estimates, and performance indicators. The project will support the establishment and operation of a monitoring, evaluation and learning system consisting of an internal system woven into the Consortium's structure and the participatory process itself, and an external evaluation undertaken at eight-month intervals. 7. Sustainability. The ownership of the program is broad-based reflecting its origins (initiative of the Catholic church, national oil company, and oil workers union) and the participatory process carried out in the first phase which involved individuals, communities, NGOs, universities, municipal and departmental authorities, and the private sector. If the LIL successfully achieves its objectives then it should be sustainable and allow the program to move to the next phase which will have a much heavier emphasis on investment. The key risk is that armed groups may not respect the process, but so far this has been successfully handled. 8. Poverty Category. This project is part of the Program of Targeted Interventions since the incidence of poverty in the region is estimated to be high in both absolute and relative terms: 709 of the region's population have incomes below the poverty line and 53t have Unmet Basic Needs, compared to the national average of 19t below the poverty line, and the national averages for rural areas of 31- below the poverty line and 44t with Unmet Basic Needs. 9. Environmental and Social Aspects. The project has been rated category "B" due to environmental issues in the region. No adverse environmental impact of the project is expected. Positive environmental initiatives are to be undertaken under the third component such as: introduction of cleaner methods of gold processing which reduce mercury pollution of water, and integrated approaches to micro-watershed management. National norms concerning environmental licensing will be respected and the Consortium will define a screening mechanism for sub-projects. As part of the LIL, the Consortium will develop an adequate environmental assessment-review process for the next phase of the Program of increased investment activity. The PDPMM has put social issues at the heart of its approach and an explicit objective of the program is to build social capital. No negative social consequences of the program are foreseen. The program has been built using a participatory methodology which is a continuous process of social analysis with communities playing a central role. -3-  10. Program Objective Categories: Poverty Reduction (PA), Environmentally Sustainable Development (EN). Contact Point: Elsie Garfield, TM The World Bank 1818 H Street, N.W. Washington, D.C. 20433 Telephone No. (202)458 5454 Fax No. (202) 522 1500 Note: This is information on an evolving project. Certain activities and/or components may not be included in the final project. Processed by the InfoShop week ending June 5, 1998. - 4 -