Argentina - Second Social Protection Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No.: 19553 IMPLEMENTATION COMPLETION REPORT REPUBLIC OF ARGENTINA SECOND SOCIAL PROTECTION PROJECT (TRABAJAR II) [Ln. 41950-ARI January 14,2000 Country Management Unit for Argentina, Chile and Uruguay Human Development Sector Management Unit Latin America and the Caribbean Regional Office 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.  Currency Equivalent Current Unit = Argentine Peso US$ 1.00 1 peso FIscAL YEAR January 1- December 31 GLOSSARY OF ACRONYMS ANSES National Social Security Administration/Administracion Nacional de Seguridad Social CAS Country Assistance Strategy IBRD International Bank for Reconstruction and Development IDB Inter-American Development Bank MIS Management Information System MTSS Ministry of Labor and Social Security/Ministerio de Trabajo y Seguridad Sociall NGO Non-Governmental Organization PIU Project Implementation Unit SDS Secretariat of Social Development/Secretaria de Desarrollo Social SIEMPRO Information, Evaluation, and Monitoring System for Social Programs ISistema de Informacion, Evaluaci6n, y Monitoreo de Programas Sociales TRABAJAR Argentina Public Works Program Vice President David de Ferranti Country Unit Director Myrna Alexander Country Sector Leader Alexandre Abrantes Task Manager Polly Jones  FOR OFFICIAL USE ONLY Table of Contents Page PREFACE ............................................................1 EVALUATION SUMMARY ............................................................2 PART I. PROJECT IMPLEMENTATION ASSESSMENT Project Objectives and Description ......................................................4 Implementation Experience ......................................................7 Achievement of Original Objectives ......................................................7 Major Factors Affecting the Project ..................................................... 10 Project Sustainability ..................................................... 10 Bank Perfornance ..................................................... 12 Borrower Performance ..................................................... 12 Assessment of Outcome ..................................................... 13 Current and Future Operations ..................................................... 13 Key Lessons Learned/ Recommendations for Future Operations .................................. 14 PART II. STATISTICAL ANNEXES Table 1 Summary of Assessments ..................................................... 15 Table 2: Related Bank Loans/Credit ..................................................... 16 Table 3: Project Timetable ..................................................... 17 Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual .................... 17 Table 5: Monitoring Indicators ..................................................... 18 Table 6: Studies Completed ..................................................... 18 Table 7: Status of Legal Covenants ..................................................... 19 Table 8A: Project Costs ..................................................... 20 Table 8B: Project Financing ..................................................... 21 Table 9: Bank Resources: Staff Inputs (SW, Actual) ................................................... 21 Table 10: Bank Resources: Missions ..................................................... 22 Table 11: Type of Subprojects Approved ..................................................... 23 Table 12: Targeting Performance by Province ..................................................... 24 Table 13: Beneficiary Profile by Sex ..................................................... 25 Table 14: Program Coverage of the Target Population by Month ................................. 26 APPENDIX BORROWER CONTRIBUTION TO THE ICR 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.   IMPLEMENTATION COMPLETION REPORT SECOND SOCIAL PROTECTION PROJECT (LOAN 41950-AR) PREFACE This is the Implementation Completion Report (ICR) for the Second Social Protection Project (Trabajar Program), for which Loan 41950-AR in the amount of US$200 million was approved on June 20, 1997, signed on July 7, 1997, and made effective on September 25, 1997. The Loan was closed on June 30, 1999. The last recovery of the special was processed in early January 2000, together with a cancellation of about US$46,000. The ICR was prepared by Karla McEvoy, Human Development Sector Management Unit of the Latin American and Caribbean Regional Office and Kimberly Nead, consultant, under the supervision of Polly Jones, Task Team Leader. Esther Peckham and Christina Mullins, Team Assistants, were responsible for document production. The ICR was reviewed by Myma Alexander, Alexandre Abrantes, Martin Ravallion, Mark Hagerstrom, Paul Levy, and John Underwood. The Borrower prepared a separate report which is included as an appendix to the ICR. Preparation for this ICR is based, inter alia, on the Bank's final supervision/ICR mission, which took place in November 1998, the Loan Agreement, supervision reports, interviews with relevant Bank staff and Government counterparts, correspondence between the Bank and the Borrower, ex-post evaluations of subprojects, reports on targeting performance and the impact evaluation of Trabajar, and reports prepared by the Trabajar Project Implementation Unit (PIU).   SECOND SOCIAL PROTECTION PROJECT (LOAN 41950-AR) ARGENTINA EVALUATION SUMMARY Introduction i. The project supported Argentina's public works program known as Trabajar. The Loan was approved by the Board on June 20, 1997, signed on July 7, 1997, and declared effective on September 25, 1997. At the time of appraisal, total project costs were estimated at US$1200 million, of which US$200 million was to be financed by the International Bank for Reconstruction and Development (IBRD) loan, US$800 million by the Government of Argentina, US$100 million by the Inter-American Development Bank (IDB), and US$100 million by communities. Financing by the IDB fell through shortly before Board approval, after Bank management decided, at the request of the Government, to drop the conditions related to labor reform. The project closed on time, with the final recovery of the special account occurring in early January 2000, together with the cancellation of a small amount (US$46,000). Project Objectives ii. During 1995-96 poverty increased in Argentina, in large measure because of a rise in unemployment exacerbated by the Tequila crisis. The development objective of the second Social Protection Project was, thus, to reduce poverty by providing temporary income support to poor, unemployed workers hired in the Trabajar public works program. Benefits were also expected to be generated from the public works themselves, of which a large share would be located in poor communities. Two components made up the project: (a) financing of unskilled manual labor of Trabajar subprojects; and (b) financing of a Project Implementation Unit (PIU). Implementation Experience and Results iii. Approximately 17,000 subprojects were approved and implemented under the Trabajar program and as of April 1999 about three-quarters of these had been successfully completed. A larger than anticipated influx of project proposals at the beginning of project execution made it difficult, initially, to implement some of the planned improvements in the project cycle. This led to overwhelmed computer systems, while consequently delaying payments to beneficiaries. Although the share of payments affected was small (less than 5 percent), the problem affected some areas to a significant degree and caused demonstrations in several provinces. The PIU resolved the problem, with the full support of others in the Ministry of Labor and Social Security (MTSS), and for the remainder of the implementation period the process of making payments to the relatively large number of beneficiaries in diverse locations proceeded normally. iv. The project achieved its primary objective to reduce poverty by providing temporary income support (generally $200/month for about 5 months) to poor, unemployed workers. The project created slightly over 400,000 temporary jobs, generating nearly $400 million in payments 2  to workers. The number of beneficiaries was slightly under 300,000 because some workers participated in more than one project. This was about one-fifth of the estimated target population of poor unemployed. v. An evaluation completed in mid-1998 found that over half of participant households had incomes that placed them in the poorest 10 percent of the population. Nearly 80 percent of households were in the bottom 20 percent of the income distribution. Since the latest Bank estimate of urban poverty in Argentina is 29 percent (headcount), it is reasonable to conclude from this evaluation that the vast majority of participating households is poor. This is very good poverty targeting by international standards. The evaluation also found that the average net gain to households from participating in the program, after subtracting forgone income, equaled $103 a month, or about half of the average Trabajar wage of $200. Summary of Key Findings and Lessons Learned * Self-targeted public works programs can effectively direct the majority of cash transfers to the poor, provided the wage rate is set no higher than the ruling market wage for unskilled labor. Setting the wage rate at this level also minimizes perverse incentives by ensuring that employed people do not find program participation attractive. * Close monitoring is needed during project execution to ensure that targeting is working and to identify problems in the project cycle, as well as localities where performance has been poor or where communities have not benefited at all. - While the labor requirement and low wage rate effectively target benefits to the poor, proactive measures such as program promotion and technical assistance directed to less well endowed municipalities and NGOs are often necessary to ensure that the poor in these communities benefit from the program. Lack of resources to finance materials proved a stumbling block to coverage in some poor municipalities. * The cost-effectiveness of workfare programs like Trabajar depends in large part on the value of the assets created through the subprojects. Effective subproject evaluation, monitoring and supervision are critical to ensuring that the subprojects produce benefits for poor communities that go beyond temporary income transfers to unemployed members. With respect to evaluation, visiting the site of the proposed subproject prior to the approval decision is an important instrument to ensure that subprojects are appropriate and of good quality. After project approval, effective monitoring and supervision of projects, including periodic on-site visits, is essential to ensure the high quality of works and their timely completion. * Demand-driven programs like Trabajar present specific management challenges because it is difficult to predict and manage the inflow of subproject proposals. Unexpectedly high numbers of incoming subproject proposals can strain the capacity of regional and provincial staff to process them with adequate attention to ex-ante evaluation (for example, lack of capacity to execute site visits). Similarly, it can divert staff attention from promotion and technical assistance activities. 3  IMPLEMENTATION COMPLETION REPORT ARGENTINA SECOND SOCIAL PROTECTION PROJECT (LOAN 41950-AR) PART I: PROJECT IMPLEMENTATION ASSESSMENT I. Project Objectives and Description 1. Project Background. The continuing economic recession that started with the Tequila crisis perpetuated Argentina's high unemployment rate, which peaked at just over 1 8 percent in late 1995. In May 1996 the unemployment rate was still at 17 percent overall and 40 percent among the poorest 10 percent of the population. The second Social Protection Project was, thus, a follow-up to the first Social Protection Project, which safeguarded selected social programs during the 1995-96 crisis and provided income support to the unemployed via several employment and training programs administered by the Ministry of Labor and Social Security (MTSS). The loan also financed technical assistance to improve the MTSS's capacity to implement efficient and effective employment policies and programs. As part of the Government's effort to strengthen its social safety net, the MTSS had introduced the Trabajar program in March 1996 to replace another public works program which was widely perceived as ineffective. The new program was to provide low-wage employment in small-scale projects to unemployed heads of poor households. The first Social Protection Project had helped finance Trabajar in its startup phase and this support was extended under the second project as the program was scaled up. 2. Bank management first envisioned Social Protection II as a package: financing to expand Trabajar in order to address the continuing level of high unemployment in the short-run, tied to conditions related to reforms in the labor market with a view to increasing the potential of the economy to create jobs over the longer term. The proposed conditions covered two areas - enactment of reforms to decentralize collective bargaining and changes in the severance payment regime. Shortly after project preparation began, the President signed three emergency decrees which decentralized collective bargaining for small and medium-sized companies. At the same time, the Government presented legislation to the Congress which would make it easier for firms to lay off workers, including the establishment of a fully funded severance payment system. However, intermediate level courts declared several key aspects of the decrees unconstitutional, and severance payments legislation did not receive sufficient support in Congress. 3. Given this impasse, and at the request of the Government, Bank management eliminated the conditions before Board presentation. While the political environment at the time made it extremely difficult for the Government to implement labor market reforms, Bank management believed that there was commitment to continue to push forward on the reform (and the track record of the Government had been good). Thus, Bank management concluded that there was little to be gained from linking the project to the reforms. On the contrary, it might make reform more difficult for the Government. On the other hand, the Inter-American Development Bank, (IDB), which had planned to co-finance the project, decided against supporting the project given 4  the lack of progress on labor reform. The Bank decided that, even without the link to labor reforms, the project deserved its support, which would finance only 16 percent of total project costs, because Trabajar was targeted to the poor and our participation could help improve program management and effectiveness. In March 1998, as part of its commitment to the International Monetary Fund, the Government submitted new labor legislation to the Congress which passed later in the year, but it essentially left unchanged the existing labor market regulations in the area of collective bargaining and severance payments. 4. Another issue raised by the Bank during preparation was the possibility of the Government streamlining other social expenditures in order to free up more domestic resources for Trabajar. While agreeing on the desirability of the approach, the Government argued that in the short term such streamlining would be difficult to accomplish. The lesson leamed here is that in order to facilitate efficient reallocations of expenditures in times of crisis there is a need for an ex-ante public expenditure review. As a consequence of the dialogue, the Bank and the Government agreed that the Government would prepare a public expenditure review on its own, with financial and technical support from the Bank. This review was completed in late 1999. Objectives 5. The objective of the second Social Protection Project was modest - to provide temporary income support to poor, unemployed workers hired in the Trabajar public works program. Benefits would also be generated to communities from infrastructure projects, of which a large share would be located in poor communities. 6. The Project objectives were consistent with the Bank's Country Assistance Strategy (CAS) for Argentina. It supported the CAS objective of enhancing social development, including poverty alleviation and strengthening the social safety net. The increase in poverty that occurred in 1995-1996 was closely related to the growth of unemployment in Argentina. The CAS, which was discussed by the Board on May 15, 1997, indicated that the Bank would finance two operations in support of Trabajar in the 1996-98 period. 7. Social Protection II, without an explicit link to labor market reforms, did not address the long-term problem of high unemployment in Argentina. The expansion of Trabajar probably did not lower the chances for needed labor market reform by removing pressure for change. With 300,000 beneficiaries, the program reached 20 percent of the target group of poor unemployed.' 8. Project Design and Organization. The Trabajar Program has been managed by a small team within the Directorate of Employment and Training Policies in the MTSS. Day-to-day management was handled by the provincial Offices of Employment and Training. Sponsoring agencies-municipalities, provinces, national agencies and nongovernmental organizations (NGOs)-submit subprojects to the provincial offices for evaluation. Municipalities accounted for the largest share of project proposals (about two-thirds). The participation of NGOs 'It should be noted that Trabajar was not the only public works program operating in Argentina at this time. The MTSS operated two much smaller programs (Forestar and Community Services). In addition, some provinces organized programs. The largest of these was the Barrios Bonaerenses, managed by the Provincial Institute of Employment of the Province of Buenos Aires. During the 18 months from July 1997-December 1998, this program financed 176,847 workers. 5  increased slightly during the sharp expansion of the program, and their 16 percent share compares favorably with the experience of social funds in Latin America. The Ministry initially allocated program resources to provinces according to the distribution of poor unemployed throughout the country. While the Ministry made the initial inter-provincial allocation, the program was demand-driven. Budget resources were reallocated to respond to the differences in demand from provinces. 9. To be considered for approval, subprojects had to: (i) fall within the accepted menu of subprojects; (ii) be technically sound; (iii) be implemented in a short period of time (3 to 6 months); (iv) employ no more than 100 persons; and (v) offer a monthly wage of $200 or less to participating workers. The types of projects eligible for financing included minor construction, repair, extension and remodeling of basic sanitation infrastructure (potable water, latrines, sewers, drainage); social infrastructure (schools, health facilities, community centers, sports facilities); economic infrastructure (secondary roads, small bridges, sidewalks, bicycle paths, irrigation); and low-cost housing, gas, and electricity systems.2 10. Proposals were evaluated by trained professionals using a methodology that covered economic, technical, financial, institutional, environmental and social aspects of the subprojects. The evaluation incorporated checks on costs using a data base of unit cost comparisons for similar types of subprojects. Proposals that received a positive evaluation were considered for approval at monthly meetings held at the regional level. If the total financing needed in any month based on the number of viable projects exceeded the budget, the viable projects were ranked according to a series of criteria, the most important of which was the extent of poverty in the locality where the project was to be executed. If the project was approved, Trabajar funded the wage payments to the workers-beneficiaries and the sponsoring agency covered the cost of materials and any skilled labor. The sponsoring agency implemented the project, with periodic supervision throughout implementation from the provincial offices. Payments to workers were made through checks processed by the National Social Security Agency (ANSES) and paid directly to the workers in different payment locations (banks or post offices). Before payment, cross-checks were made to ensure that the beneficiary was not receiving unemployment compensation nor was employed in the formal sector. 2For a few months at the end of 1997, the Bank agreed to a temporary change in the operational manual in order to expand the list of eligible typologies to include community services. These were "service" projects, not construction, that included such activities as expansion of health attention, child and other feeding programs, old-age care, and child care facilities. During project preparation the Bank and the Government had considered including community services in the list of eligible project sub-types, but had decided against it for several reasons: these projects are more difficult to evaluate; the existing program in the Ministry was organized differently from Trabajar; and it was more difficult to ensure the sustainability of the project after financing from the program concluded. Nevertheless, these projects were popular with the Provinces because they demanded less counterpart resources and traditionally had hired more women as beneficiaries. Although the Ministry continued to operate the Community Service Program using its own resources, it was funded at a lower level than Trabajar. At the request of the Government, the Bank agreed to open the typology of eligible projects for a short period of time with a ceiling on financing. The central project implementation unit handled the evaluation and prepared the necessary materials to support this work, as well as the subsequent supervision. In the end, these projects accounted for approximately 8 percent of the portfolio. 6  II. Implementation Experience 11. The size of the loan-US$200 million-implied a quadrupling of the initial pilot Trabajar program and the project entailed a total of approximately $1.2 billion in small infrastructure works. Some questioned whether the program could absorb such a large amount of money and expand so quickly. As it turned out, the demand for sub-project financing was high and the MTSS implemented the loan on schedule. Because of the lack of IDB financing, the Government in fact increased its financing while the participating municipalities and other implementation agencies financed the largest share of total costs. The Bank's contribution thus amounted to only 16 percent. 12. Approximately 17,000 subprojects were approved and implemented under the Trabajar program in the time period covered by the Social Protection II Project. The months of August, September, and October 1997 produced the greatest influx of project proposals, just as the Bank's loan became effective. The large amount of proposals made it difficult initially to adhere to the planned evaluation strategy of visiting at least 30 percent of proposed project sites. In addition, the high volume overwhelmed computer systems, delaying payments to some beneficiaries. Although the share of payments affected was low (less than 5 percent), the problem caused demonstrations in several provinces. The issue received serious attention from both the PIU, as well as from other areas of the MTSS, and was resolved by improving the payments system, as well as arranging for special transfers to cancel outstanding obligations. After this, payments were processed normally despite the large number of beneficiaries and their diverse locations. III. Achievement of Original Objectives 13. Temporary financial assistance to unemployed poor. Social Protection II achieved its primary objective, to reduce poverty by providing temporary income support to poor, unemployed workers. The project generated slightly over 400,000 temporary jobs for which nearly $400 million in payments to workers were made. Since some workers participated in more than one project, the number of beneficiaries was slightly under 300,000 (compared to the target of 250,000). Most Trabajar participants (87 percent) received $200 a month. This level is the nationally mandated minimum wage and compares to an average income for urban unskilled workers in Argentina of about $350 per month. 14. Evidence on the extent to which Trabajar was successful in targeting the poor and the amount of the income gain to participating households is available from an impact evaluation completed in mid-1 998.3 The evaluation estimated the real income gains to households participating in Trabajar by combining information from a single cross-sectional survey of program participants with a much larger and comparable survey that was being implemented at about the same time under the Bank-financed Social Protection I project (SIEMPRO component). By matching the surveyed program participants with non-participants in the larger survey based on their characteristics, it was possible to create a counterfactual group and 3 See Jalan and Ravallion, "Income Gains to the Poor: Estimates for Argentina's Trabajar Program", July 1999, Policy Research Working Paper No. 2149, for a complete description of the methodology as well as the results. 7  estimate what program participants' incomes would have been if they had not participated in Trabajar. 15. The evaluation found that over half of participant households had incomes that placed them in the poorest 10 percent of the population. Nearly 80 percent of households were in the bottom 20 percent of the income distribution. Since the Bank's most recent estimate of urban poverty in Argentina is 29 percent (headcount), it is reasonable to conclude from this evaluation that the vast majority of participating households were poor. This is very good poverty targeting by international standards. This evaluation also found that the average net gain to households from participating in the program, after subtracting forgone income, equaled $103 a month, or about half of the average Trabajar wage of $200. 16. There is also have evidence of Trabajar's success in targeting resources to poorer departments.4 Under the first phase of Trabajar (1996), financed under the first Social Protection project, the poorest department nationally (with an incidence of unmet basic needs of 76 percent) received $30 per person more than the least poor department (in which 3 percent of the population have unmet basic needs). Under the second phase of Trabajar (1997-98) the poorest department received $80 more per person than the least poor department, a gain of almost $50 per person.5 Regardless of the high level of targeting and resources to the poorest localities, there were occasional complaints about the distribution of funds favoring the central administration's political party. In the province of Chaco, in which a separate analysis was made, there was evidence that the political affiliation of local authorities was associated with access to Trabajar resources within the province. 17. Participation by women did not increase significantly in the second phase of Trabajar compared to the first phase. They accounted for 17 percent of participating workers, compared to 15 percent in the first phase of Trabajar. The rate of women's participation varied greatly across provinces, with some having relatively high participation (30 percent) and others very low (5 percent). The main actions taken to improve the participation of women included expanding publicity efforts on the program, stressing the fact that participation was open equally to women and "jaw-boning" provincial managers and mayors in areas of low participation. Some consideration was given to implementing other measures, such as modifying the ranking criteria to give an incentive to projects incorporating more women or offering informal child care. The PIU and the Bank decided against such changes due to the difficulty of implementing certain measures (providing daycare would involve licensing issues) and hesitation to dilute the emphasis on self-targeting in poor areas. (Note: The more subtle efforts to increase the participation of women seem to be paying off gradually. The participation of women in the third phase of Trabajar has risen to 20 percent). 18. The 1998 impact evaluation study (Jalan and Ravallion) found no evidence of gender bias. The net wage gains from the program accruing to female participants are virtually identical to the gains for male participants. If there were a gender bias one would expect to see 4A department is the jurisdiction below the provincial level. There are 510 departments in Argentina. For greater Buenos Aires the equivalentjurisdiction ispartido. 5 Reports on targeting performance were prepared periodically during project supervision. For details of the analysis, see "Reaching Poor Areas in a Federal System", M. Ravallion's Policy Research Paper, No. 1901, and "Monitoring Targeting Performance when Decentralized Allocations to the Poor are Unobserved", Policy Research Working Paper, No. 2080. 8  unexploited welfare gains from higher female participation as shown in lower foregone income. This was not the case. However, the distribution of female participation was less pro-poor, as indicated by household income per capita; while over half of the members of participating families were in the poorest decile nationally, this was true of less than 40 percent of the members of female participants' families. This probably reflects lower wages for women in other work, making the Trabajar wage more attractive to the non-poor. (This may also explain why generally in some of the poorest provinces the program's ability to reach the poorest of the poor was not as great as in the richer provinces.) 19. Asset creation in poor communities. Coming to ajudgement on the performance of Trabajar in the area of asset creation is difficult because of the mix of development objectives and because the program worked in several sectors. It cannot be compared fairly with straight infrastructure projects that have no labor intensity or poverty/targeting objectives. Nor is it completely fair to compare it to other schemes that guarantee employment, but subordinate the infrastructure creation goals. Despite these difficulties, evidence from sub-project supervision and an evaluation of a sample of completed projects, indicated that in most cases the subprojects financed by Trabajar generated positive benefits for the communities in which they were located. These projects needed to be completed within a period of about six months, meaning that the benefits to communities were to be realized relatively quickly. The project menu of Trabajar also was designed to emphasize activities (water supply, social infrastructure, etc.) which would generate more than just temporary benefits: projects which included only activities such as cleaning drains, general maintenance, and the like were not eligible. Political and financial support for the program depended to a significant degree on assuring that the work completed was not wasteful. Moreover, given the very high counterpart requirement on the part of local authorities, it would be unlikely that they would direct resources to investments under Trabajar which did not generate benefits beyond temporary employment. 20. Table 11 in the statistical annex presents information on the number of projects completed in the major categories. The most common projects were works for improving drainage and sewers, as well as improvements to roads and urban infrastructure. Over 1,000 projects in educational infrastructure (classroom construction or school rehabilitation) were undertaken. A similar number of community infrastructure projects were executed, including day-care, community and sports centers. Trabajar also financed 1500 projects to construct low- cost housing, which were typically done at a far lower cost than those built under the Government's traditional public housing program, FONAVI, and were targeted to poor recipients. 21. Increasing subproject quality and ensuring timely completion was a challenge throughout Trabajar as operations sharply expanded. The Project set a goal of completing at least 70 percent of projects on time in the first phase of Trabajar6 and met this target. Although the rate of subproject completion improved during the second phase, the completion rate of 72 percent fell short of the target of 77 percent. An analysis of performance among provinces shows that 6 As the project progressed, instead of focusing on timely completion (one of the key monitoring indicators), the project implementation unit and the Bank chose "satisfactory completion." The definition of satisfactory completion was that the work could be used for the purposes intended. It was decided that this was a more important aspect of the quality of the projects finalized than whether a project was behind schedule, although information on delays in project implementation continues to be collected, analyzed and used. 9  nearly half of the provinces either met or exceeded the target of 77 percent. Poor performance was concentrated in a few areas (Tucuman, La Rioja, and Neuquen, for example). In addition, data indicate that over time, the share has risen as sponsoring agencies complete projects using their own resources. For the program as a whole, as of April 1999 about three-quarters of projects had been successfully completed. IV. Major Factors Affecting the Project Factors Not Subject to Government Control 22. The effects of the weather phenomenon El Nino were felt in at least four Argentine provinces, particularly in Misiones, and disrupted implementation. The floods caused by this unusual weather condition during the months of January and February 1998 made it difficult to implement new subprojects and delayed the completion of subprojects already in progress. Funds from Trabajar were used to support reconstruction subprojects in the wake of these floods. Factors Subject to Government Control 23. The Government's contribution of counterpart funds was higher than initially programmed, once the IDB co-financing was eliminated, and this allowed Trabajar to have a greater impact on poverty. This also allowed the program to respond quickly to the very large demands coming from the local communities and facilitated the program's rapid scaling up in the first year. Factors Subject to Implementing Agency Control 24. The high levels of commitment and competence within the PIU were the main factors behind the successful implementation record of Trabajar. Staff continuity also contributed to good results. Supervision reports indicate that the project performed satisfactorily throughout the implementation phase, and cost changes in the project were not significant. V. Project Sustainability 25. The funding of the Trabajar program by the World Bank represented a decision to finance a temporary program that would be phased out gradually as the increased flexibility of the labor market together with economic growth raised the rate of job creation in the Argentine economy and unemployment decreased. However, it is recognized that such a program could be a tool that is always "on the shelf' and implemented in times of economic crisis. If the Trabajar program is to be used in this way, it must be well-designed, particularly with regard to targeting and subproject quality and timely execution. 26. The Social Protection II project helped improve the design and targeting of the Trabajar program during the 1997/98 period; monitoring and evaluation have shown that Trabajar was extremely well-targeted to the poor, and although the demand for subprojects was high, the Government was able to meet the demand with relatively few difficulties. This indicates a high 10  probability that the program could continue successfully without Bank assistance.7 Moreover, the Government expressed its commitment to the Trabajar program by contributing more than anticipated in counterpart resources and in requesting a third Social Protection Project from the World Bank, which continues support for Trabajar. 27. At this point, the Trabajar program is funded for FY 2000, albeit at a declining level, and policy discussions are underway with the new administration to position Trabajar as an essential part of Argentina's social safety net program. The idea is for the program to be scaled up or down according to economic and social conditions. Thus, it is likely that the program, or some variation of it, will continue to be part of the Government's set of social protection programs. One point which needs to be determined is the optimal level of funding for the program during favorable economic conditions. Given the present poverty level of 29 percent and unemployment of about 14 percent, there is still a high demand for the program. Argentina's new Law of Fiscal Responsibility, which anticipates generating surpluses to be used when there is a cyclical downturn, ought to allow programs such as Trabajar to be scaled up more easily in the future when the need arises. These are areas addressed in the latest Poverty Assessment for Argentina, presently being reviewed with the Government. 28. Subproject sustainability. The Trabajar program financed approximately 17,000 projects in 18 months. Given the extraordinarily high number of projects funded in such a short period (an absolute necessity, given the objective of the program), the Bank and the PIU took several measures to promote the quality of subprojects financed by the program. A civil engineer evaluated a sample of subprojects financed under the first phase of Trabajar. This evaluation revealed that while the overall quality of subprojects was adequate, there was neither sufficient supervision nor ex-ante site visits to projects, which resulted in financing some inappropriate and substandard projects. The Bank loan therefore financed the hiring of additional evaluators (generally civil engineers or architects). It was also agreed that evaluators would make ex-ante site visits to at least 30 percent of proposed project sites, and that supervisors would visit projects a minimum of two to three times, depending on the size of the project, during construction. 29. The ex-post evaluation of subprojects under the second phase of the Trabajar program, undertaken one year later, revealed that these preventive mechanisms had helped improve the suitability of approved subprojects. It also revealed, however, that while the subprojects financed were better matched to community needs, subproject quality had remained at about the same level. The principle reasons that subproject quality had not improved were: (i) the high number of proposals received that prevented evaluators from making a sufficient number of ex- ante visits to project sites; (ii) lack of training in certain areas, such as environmental impact, of evaluators and supervisors; and (iii) in the case of water and sanitation projects, lack of comprehensive and integrated system plans. 7 Some mayors expressed the view that the number of projects that could be financed under a program like Trabajar was finite; eventually they would run out of these types of projects. This experience does not seem to be generalized so far given the fact that the demand for sub-project financing continues to exceed the available budget under the Third Social Protection Project. Some mayors were also concerned that if the program continued for a longer period of time, they would be seen as the employer of last resort. 11  30. The Bank and the PIU therefore worked together to revise evaluation and supervision guidelines, so that evaluators were now required to carefully choose the projects they visited based on technical, financial, and environmental considerations. The final supervision mission found subprojects to be of adequate quality, although further requirements to improve the quality of water and sanitation projects were suggested by Bank technical staff. Improvements in project evaluation and supervision were also incorporated into the follow-up project, Social Protection III. VI. Bank performance 31. The Bank team's assistance in the preparation, appraisal, and supervision of this project was satisfactory. In interviews, the Borrower indicated that they felt that the Bank staff and themselves were working together as a single team. They valued the expertise and technical assistance offered by the Bank, and viewed it as an integral factor in the success of the project. 32. The project was prepared in a short time, but even so, was well thought-out and designed. One of the most important contributions by the Bank team was the economic assessment of the program, distinguishing between the direct benefits (net income gain to poor workers) and indirect benefits (mainly the value of assets to communities) and the validation of the appropriateness of the wage ceiling the Government had set in the first phase of Trabajar, $200 a month.8 In addition, during project preparation agreement was reached on the design and implementation of the impact evaluation. The impact evaluation study supported by the project is considered, within the Bank, as an example of best practice of how a rigorous evaluation can form part of project design from the beginning and provide feedback in a timely fashion. The Bank took the lead in the technical analysis, but Government counterparts (the Secretaria de Desarrollo Social (SDS), as well as the PIU) took part in data preparation and analysis, thereby introducing them to a new methodology for impact evaluation. 33. Supervision missions were scheduled every four to six months to ensure that the targeting was on track and that subproject quality was adequate. As a result of supervision missions, changes were made in the Trabajar program in progress. For example, evaluators were provided more training in conducting environmental assessment of project proposals, since the supervision mission revealed weaknesses in this part of project evaluation. Also, additional publicity materials were published to further reach the poor and involve those who had never participated in the program, and discussions were held with provinces whose targeting was poor. The follow- up actions taken as a result of the supervision missions helped to improve the performance of the Trabajar program. VII. Borrower performance 34. As indicated in Table 1 of the statistical annex, Borrower performance was highly satisfactory at all stages of the project. The PIU in the Ministry of Labor was dedicated and capable. With a relatively small number of staff, it carried out numerous technical assistance 8 For more details on the economic assessment see Ravallion, "Appraising Workfare Program", Policy Research Working Paper #1955, August 1998. 12  activities for executing organizations, including municipalities and NGOs, and provincial offices. The quality and amount of the supporting materials produced by the PIU, including publicity materials, operational manuals, etc., was also high. The extent of communication and support given to the provincial offices appeared to be sufficient. The staff monitored the project carefully using a variety of indicators in order to re-evaluate the effectiveness of the program, to identify problems and to take corrective action where necessary. The PIU staff was also receptive to Bank advice and suggestions. For example, environmental evaluation had not been incorporated under the previous public works program. The PIU closely followed Bank advice on the design of this evaluation process, and took the initiative to make changes in the system during implementation. They were keen to hear the Bank's evaluation of the system's performance during supervision missions, and anxious to improve its effectiveness. Though environmental assessment was undertaken because of the Bank's requirement, the PIU viewed it as an opportunity to train staff in a relatively unfamiliar area and to improve subproject quality. 35. The PIU also responded quickly and effectively to unexpected problems, such as the initial delays in the processing and delivery of payments to participating workers and problems in proposal processing in some areas, and coped initially with a sharp rise in demand for subprojects. The contribution of the PIU and the provincial offices was instrumental in ensuring that the survey of Trabajar beneficiaries was carried out, and this in turn was crucial for the timely impact evaluation of the program. The PIU was quick to follow-up on recommendations made in supervision missions, and to identify problems and seek the Bank's assistance in resolving them. VIII. Assessment of Outcome 36. Social Protection II's outcome is judged satisfactory. As described in the preceding sections, the project's modest development objective - to reduce the impact of unemployment on poor households in Argentina - was achieved. Most targets set for the project were met or exceeded, and project management was very competent. The funds were disbursed on time, responding to a very large demand and the scaling up of the program to meet social needs. Targeting of benefits to the poor was excellent, and through continuous learning during the implementation period, a number of enhancements and refinements to the program's design were made. Moreover, as part of this learning process, the program became increasingly sensitive to the issues of gender and environmental impacts. Nevertheless, it cannot be claimed that the project had a major development impact, to warrant a highly satisfactory rating of project outcomes, because the project provided only temporary relief and did not help to improve the potential of the economy to generate jobs in the future. IX. Current and Future Operation 37. The Bank approved a follow-up loan to finance the third phase of Trabajar, which proved both beneficial and timely as the country entered into a second deep economic recession in late 1998, (brought on by the Asian and Russian crises), just after recovering from the recession caused by the Tequila crisis. The design of the third phase of Trabajar has been modified based on the experience of the second phase, and improvements in several areas are beginning to be seen, including better project completion rate and higher participation of women. The prospect of the program's sustainability, as long as it continues to be needed, is good. The Government has the mechanisms in place to start up this program quickly and efficiently, and the 13  existing program has shown that subproject quality, if these mechanisms are followed, can be adequate to good, and the targeting excellent. X. Key Lessons Learned and Recommendations for Future Operations 38. The key lessons learned and reconimendations are as follows: * Self-targeted public works programs can effectively direct the majority of cash transfers to the poor, provided the wage rate is set no higher than the ruling market wage for unskilled labor. Setting the wage rate at this level also minimizes perverse incentives by ensuring that the program does not attract employed individuals. * Close monitoring is needed during project execution to ensure that the targeting is working and to identify problems in the project cycle or poor performance in some localities. * While the labor requirement and low wage rate effectively target benefits to the poor, proactive measures such as program promotion and technical assistance directed to less well endowed municipalities and NGOs are necessary to ensure that the poor in these communities benefit from the national program. Lack of resources to finance materials proved a stumbling block to coverage in some poor municipalities, which is why, under Social Protection III, some materials for the poorest communities are being financed. * The cost-effectiveness of workfare programs like Trabajar depends in large part on the value of the assets created through the subprojects. Effective subproject evaluation, monitoring and supervision are critical to ensuring that the subprojects produce benefits for poor communities that go beyond temporary income transfers to unemployed members. With respect to evaluation, visiting the site of the proposed subproject prior to the approval decision is an important instrument to ensure that subprojects are appropriate and of high quality. After project approval, effective supervision monitoring -including periodic on-site visits-is essential to ensure the high quality of works and their timely completion. * Demand-driven programs like Trabajar present specific management challenges, in that it can be difficult to predict and manage the inflow of subproject proposals. Unexpectedly high numbers of incoming subproject proposals in a given month can strain the capacity of regional and provincial staff to process them with adequate attention to the ex-ante evaluation (for example, site visits). Similarly, it can divert staff attention from promotion and technical assistance activities. 14  PART II. STATISTICAL ANNEXES Table 1: Summary of Assessments A. Achievement o Objectives Macro Policie O 0 0 0 SectorPolicies 0 O 0 0 Financial Objectives 0 53 0 0 InstitutionalDevelopment 0 0 0 0 Physical Objectives 0 E0 0 0 Poverty Reduction El 0 0 0 Gender Issues 0 0 03 Other Social Objectives 0 0 0 0 Environmental Objectives 0 0 0 0 Public Sector Management 03 0 b 0 Private Sector Development 0 0 0 0 Other (spec,if) 0 0 0 0 Likely Unlikely Uncertain B. Proiect Sustainabilit 0 17~~~~1 0 C. Bank Perfo,mance Highly Satisfactorv Satisfactory Deficient Identfrcation 0 0 0 Preparation Assistance 0 0 0 Appraisal 0 0 0- Supervision 0 0 0 D. Borrower Performance Satisfactory Satisfactory Deficient Preparation 0 Ol O Implementation 0 0 0 Covenant Compliance 0 0 0 Operation (if applicable) Highly Highly E. Assessment of Outcome Satisfactorv Satisfactorg Unsatisfactorv unsatisfactorv 0 0 0 1 1 5  Table 2: Related Bank Loans/Credits Loant/crei!it title Purpose Year qf ppro val Status Preceding prain 1. Loan 3957-AR Social Protection I Project 1995 Closed 2. Loan 3643-AR Matemal Child Health & Nutrition 1993 In operation 3. Loan 4002/3 -AR Health Insurance Reform 1996 Closed 4. Loan 4004-AR Health Insurance Technical 1996 In operation Assistance 5. Loan 3860-AR Second Municipal Development 1995 In operation Project 6. Loan 3877-AR First Provincial Reform 1995 Closed Following operations 1. Loan 4164-AR Second Maternal & Child Health 1997 In operation 2. Loan 4218 Rio Negro Second Provincial Reform 1997 In operation Loan 4219 Salta Loan 4220 San Juan Loan 4221 Tucaumn 3. Loan 4366-AR Third Social Protection Project 1998 In operation 4. Loan 4398-AR Fourth Social Protection Project 1998 In operation 16  Table 3: Project Timetable Identifwation (Executive Project Sunmary) November 1996 November 1996 Preparation December 1996 December 1996 Appraisal March 1997 March 1997 Negotiations March 1997 April 1997 Board Presentation June 1997 June 1997 Signing July 1997 July 1997 Effectiveness July 1997 September 1997 Midterm reviw (if applicable) February 1998 February 1998 Project Completion December 1998 December 1998 Loan Closing June 1999 June 1999 Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual (US$ millions) Appraisal Estimate 100.0 200.0 Actual 168.9 200.0 Actual as % of Estimate 169% 100% Date of Final Disbursement: January 2000 17  Table 5: Monitoring Indicators Target Actual TarKget .4ctua Target Acttal Time Period 1997-June- 1997-98 1998-99 Nov. June/May June/June No. of workers 80,000 239,653 250,000 298,421 --- entering program % of Projects 70 70 77 72 --- Completed on Time Payments to 40 166 140 282 220 384 Beneficiaries (US$) Table 6: Studies Completed StUldv Iniliail Stated Purpose Status Outcome Ex-post evaluation of To ascertain quality of Completed Recommendations made subprojects financed subprojects financed (now and implemented to under TRIA14JAR with Bank's involvement) improve evaluation and program and identify areas for supervision of subprojects. improvement Special survey of To determine the program's Completed Adequacy of the targeting program participants success in targeting poor mechanism, and the and associated individuals and to estimate appropriateness of the wage analysis the net income gains from level were both participating in the program. demonstrated. Average net income is about half the wage rate. Monitoring Poor Area To develop and implement a Completed The method was Targeting sound method for rapid implemented from an early assessment of provincial stage within the project performance in reaching poor office in the MTSS, and re- areas done every 6 months, thus providing rapid feedback on this aspect of performance to the center and provinces. 18  Table 7: Status of Legal Covenants 3.03(a) 05 C Prepare and furnish to the Bank a plan for the future operation of the Project. 3.03(b) 05 C The Borrower shall... .afford the Bank a reasonable opportunity to exchange views with the Borrower on said [future operations of the Project] plan. 3.04(b) 05 C The Borrower shall maintain throughout the execution of the Project a Project Management Unit. 3.05 10 C The Borrowver shall ensure that the wage rates applicable to the services of temporary and fixed term workers under Part A of the Project shall not exceed Arg$200 pesos per month. 3.06(a)(1) 09 C The Borrower shall... .approve subprojects estimated to cost $350,000 or less and maintain until at least one year after the Closing Date the relevant documentation for the Bank's ex-post revievv. 3.06(a)(ii) 09 CD The Borrower shall... forvard to the Bank the relevant documentation for all subprojects estimated to cost more than $350,000 equivalent after said subprojects have been approved by the Project Unit. 3.07(b) 09 C The Borrower shall... .by February 15 and August 15 of each year of Project execution, furnish a semi-annual progress report...to include the results of the monitoring and evaluation activities perfonned pursuant to paragraph (a) of this Section. 3.07(a) 09 C The Borrowrer shall .. maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with the Monitoring Indicators, the carrying out of the Project and the achievement of its objective. 3.07(c) 09 C The Borrower shall ... include in the progress report to be furnished by February 15, 1998, a report on the progrss achieved in the carrying out of the Project since its beginning and setting out measures to ensure the efficient carrying out of the Project and achievement of its objective. 3.07(d) 10 C The Borrower shall. .. review with the Bank, by March 15, 1998 ... the progress report and take all measures required to ensure the efflicient completion of the Project and thc achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Bank's viewvs on the matter. 4.01(a) 01 c The Borrower shall maintain .., records and separate accounts adequate to reflect in accordance with sound accounting practices the operations, resources, and expenditures in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof 4.S01(19() 01 C The Borrower shall have the records and accounts referred to in paragraph (a) of this Section, including those for the Special Account, for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors amceptable to the Bank. 4.01(b)(ii) 0 1 CD The Borrower shall furnish to the Bank, not later than six months after the end of each year, the report of such audit by said auditors. 4,01 (bXiii) 01 CD The Borrower shall fumish to the Bank such other informiation concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. 4.01 (c) (i) 01 C For all expenditures with respect to which withdrawals from the Loan account were made on the basis of statements of expenditures, the Borrower shall maintain or cause to be maintained... .records and accounts reflecting such expenditures. 4.07(c) (ii) 01 C The Borrower shall retain.. until at least one year after the Bank has received the audit report for the fiscal year in which the last 19  withdrawal from the Loan Account or payment out of the Special Account was made, all records evidencing such expenditures. 4.07(c)(iii) 01 C The Borrower shall enable the Bank's representatives to examine suchi records (evidcncing expenditures made on the basis of statenments of expenditures). 4,07(c)f() 01 c The Borrower shall ensure that such records ...are included in the ainual audit referred to in paragraph 9b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and interal controls involved in their preparation, can be relied upon to support the related withdrawals. Schedule4, 10 C Prior to the issuance of any invitations to bid for contracts the proposed procurement plan for the Project shall be furnished to the Section 1, Bank for its review and approval... .Procurement of all goods shall be undertaken in accordance with such procurement plan as PasrfD shall have been approved by the Bank, and with the provisions of said paragraph I. Covenant types: 1. = Accounts/audits 6 Environmental covenants 2. = Rnancialperformance/revenue generationfrom 7 - Involuntary resettlenent benefidartes 8&= Indigenouspeople 3. = Flow and utiizaton ofprojectfwnus 9. Manitoring, review, and reporting 4. = Counterparlfunifing 10. = Projeditiletentaton not covered by categories 1-9 5. = Management asects of the project or executing fi.- Setoral or cross-setoral budgetay or other resource allocation agenc 12r = Sectorator cross-sedora pollcq/regulatoryAnstitulionatcadion 13. = Other Table 8A: Project Costs vppraivi Exlinutlze (USS.31) A4t.ttal/LatctS lEtintote (JASS1J) Local Foreign Total Local Foreign Total Item Costs Costs Costs Costs 1, Subprojects 1,000 178 1,178 1,035 183 1218' 2. Project 20 2 22 18.0 .2 18.2 Administration TOTAL 1,020 180 1,200 1,053 183.2 1236.2 I Estimates made at appraisal used an average labor share in total project cost of 33%. Analysis carried out during project implementation indicated that the labor share was at least 40 percent. 20  Table 8B: Project Financing Local Foreign Total Local Foreign Total Source Costs Costs Costs Costs IBRDIIDA 198 2 200 199.8 .2 200 Cofinancing Institution 100 100 0 0 0 Domestic Contribution 622 178 800 796 140.2 941 (Government of Argentina) Other (PFrivate) 100 100 100 100 TOTAL 1,020 180 1,200 1,075.8 140.4 1236.2 Table 9: Bank Resources: Staff Inputs (SW, Actual) wkvt Preparation 20.0 90.4 Appraisal 7.4 43.3 Negotiations 3.7 13.1 Supervision .3 .4 15.1 55.3 5.4 7.1 completion 10.1 18.4 TOTAL 31.4 147.2 15i1 55.3 15.5 25,5 21  Table 10: Bank Resources: Missions Sffq'ie of .lmzlkl/ N'vumhler Pars Specializ ed .tff Perjfi)rmance Rating Tipe of Project C(cle Yea- of in SHi/tv Repre.vtred Problemns Personvs Fieltd Implementation Development Status Objective Identiflcation/ 11/96 6 36 TM, TE, LE, CE Preparation 1/97 3 3 Appraisal 3/97 5 42 TM, LE, CE, ES Supervision 1 11/97 7 64 TM, LE, CE, ES, S S Ss Supervision 2 2/98 5 37 TM, LE, ES, SS S S Supervision 3 5198 5 35 TM, LE, CE, ES S S Key: TM = Task Manager CE = Civil Engineer TE = Training Expert ES = Environmental Specialist LE = Labor Economist SS = Social Scientist 22  Table 11: Type of Subprojects Approved Basic sanitation 3,646 Social infrastructure 4,528 Housing-gas networks-electricatiwan 1,768 Economic infrastructure 5,357 Community services and other 1,363 Total 16,662 Drainage and sewers 2,231 Educational infrastructure 1,155 Community/cultural infrastructure 1,374 Low-cost housing 1,480 Secondary roads 1,796 Vialidad urbana 2,063 Subtotal of six most common types of 10,099 projects Total of Projects 16,662 Typos of sub-proj.ot. Community SOrnice. other 8% Basic Sanitaton ,- ~~~~22% Economic _ _ Intrastructure 32% \ Soc~~~~~~~oial \ _ ~~~~~~~infrastructure Housiog-gos 27% E ic0triftiction 11% Sub-project sponsors Ncngcnmoientol 24 Procinc4.i oovemnnnt oroarurarnc_ 13%b 18% / _ Mcnlipai go-emneht 237 23  Table 12: Targeting Performance by Province under the Trabajar Program Targetinkg Difftrential (S/perso.n) Province Trabajar II Trabajar I Improvement- 1997-1998 1996-1997 Trabajar I to Trabajar 11 Buenos Aires -26.0 -4.4 No Catamarca 76.2* 33.8 Yes+ Chaco 40.3 27.9 Yes Chubut 96.8 -8.5 Yes Cordoba 399.7* 76.3* Yes+ Corrientes 72.2* -3.0 Yes+ Entre Rios 56.6 19.2* Yes Formosa 33.1 16.5* Yes Jujuy 154.4* 93.6* Yes+ La Pampa 39.3* -9.2* Yes+ La Rioja 13.6 -3.4 Yes Mendoza 111.9* 49.2* Yes+ Misiones -31.5 0.7 No Neuquen -3.0 2.2 No Rio Negro 188.4* 24.3 Yes+ Salta 210.4* 105.6* Yes+ San Juan 200.7* 90.8* Yes+ San Luis 112.8* 88.8* Yes+ Santa Cruz 24.3 -115.3 Yes Santa Fe 102.3* 16.9* Yes+ Santiago del Estero 85.5* 10.7 Yes+ Tucuman 198.0* 26.9 Yes+ AU Departments 109.7* 41.0* Yes+ Note: The targeting differential is the estimated difference between the program spending on families with unmet basic needs and those whose basic needs have been met. This is estimated by the regression coefficient of Trabajar spending per capita on the incidence of unmet basic needs per capita, across all departments in each province. So it can be interpreted as a measure of how well the program is reaching poor areas within provinces. A * indicates that the targeting differential is significantly different from zero at the 5% level; '"es" indicates that the targeting differential was greater under Trabajar 2; "yes+" indicates that (in addition) the targeting differential is significantly positive under Trabajar 2 24  Table 13: Beneficiary profile by Gender Federal capital 65.5 34.5 Partidos del 69.2 30.8 Conurbano Buenos Aires 80.7 19.3 Catamarca 93.0 7.0 Chaco 86.7 13.3 Chubut 84.6 15.4 Cordoba 87.7 12.3 Corrientes 77.9 22.1 Entre Rios 95.0 5.0 Formosa 81.4 18.6 Jujuy 83.0 17.0 LaPampa 92.3 7.7 LaRioja 84.5 15.5 Mendoza 84.0 16.0 Misiones 74.8 25.2 Neuquen 65.0 35.0 Rio Negro 77.4 22.6 Salta 85.6 14.4 San Juan 89.2 10.8 San Luis 85.9 14.1 Santa Cruz 70.2 29.8 Santa Fe 82.3 17.7 Rosario 67.9 32.1 Santiago del 80.0 20.0 Estero Tierra del Fuego 57.2 42.8 Tucuman 85.2 14.8 Total 83.1 16.9 25  Table 14: Program coverage of the target population by month WNumber ojf prticipai.fs dIiiided by estinated n timber of wmunnployed poor Date Number May-97 1.3 Jun-97 4.4 Jul-97 7.7 Aug-97 10.3 Sep-97 13.2 Oct-97 14 Nov-97 12.8 Dec-97 11.6 Feb-98 7.8 Mar-98 7.4 Apr-98 5.9 May-98 6.4 Jun-98 7.3 Jul-98 6.6 26  SECOND SOCIAL PROTECTION PROJECT (LOAN 41950-AR) ARGENTINA APPENDIX: BORROWER CONTRIBUTION 1. Marco General de acci6n de la Secretaria de Empleo y Capacitaci6n Laboral del MTSS Durante los ufltimos afios, en el marco de un profundo proceso de reestructuraci6n econ6mica, se ha registrado en la Argentina una tendencia creciente en los niveles de desempleo urbano y rural. Esta situaci6n de desempleo trajo como consecuencia la caida del ingreso en los hogares, afectando en particular a aquellos mas pobres. El incremento de la desocupaci6n ha adquirido el caracter de problema nacional, lo cual ha Ilevado a definir politicas emergentes para atender la coyuntura. Los indicadores de desocupaci6n registran una tendencia creciente en la liltima decada. Esta situaci6n promovi6 la necesidad de generar politicas focalizadas para atender a los sectores mas vulnerables, tanto por su situaci6n de pobreza como por sus calificaciones y posibilidades de acceso al mercado laboral. En tal sentido, las politicas socio-laborales se incorporan a las politicas sociales nacionales como parte de los programas focalizados que atienden, a trav6s de acciones de capacitaci6n y fomento del empleo, a los trabajadores desocupados en situaci6n de pobreza. Estimaci6n de Poblaci6n Total, Econ6micamente Activa y Desocupada Total Urbano (en miles de personas) *7777 7;0;00 f Poblac0X0iP6n Total000 !tS P.E.A.0 <DesocadosU;0 2.PERiODO Mayo 1995 30.438 12.477 2.170 Octubre 1995 30.692 12.307 1.959 Mayo 1996 31.049 12.387 2.044 Octubre 1996 31.308 12.589 2.047 POLiTICAS DE EMPLEO Y CAPACITACION LABORAL DEL MTSS A mediados de los afios 70' a nivel mundial, y en la Argentina en fecha mucho mas reciente, empez6 a hacerse evidente que dos elementos que parecian indisolublemente vinculados - el empleo y el crecimiento econ6mico - comenzaban a tomar distancia. En efecto, despues de la 27  crisis de los paises mas desarrollados, al recuperar la actividad econ6mica sus ritmos anteriores y al estabilizarse un cierto equilibrio de crecimiento, se observ6 que la recuperaci6n de la actividad econ6mica no habia redundado en la misma proporci6n en la creaci6n de puestos de trabajo. Para tratar de contrarrestar estos efectos, en muchos paises se inici6 el desarrollo de politicas de empleo, un conjunto de acciones destinadas, en algunos casos, a potenciar el impacto sobre el empleo de las politicas de crecimiento econ6mico y, en otros casos, a atenuar el impacto negativo que las politicas de crecimiento econ6mico tenian sobre el empleo. En la Republica Argentina, a partir de la sanci6n de la Ley Nacional de Empleo (N