Tunisia - Population and Family Health Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-5421-TUN MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$26 MILLION TO THE REPUBLIC OF TUNISIA FOR A POPULATION AND FAMILY HEALTH PROJECT MARCH 4, 1991 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 EOUIVALENTS (As of September 1990) Currency Unit = Tunisian Dinar (TD) US$1.00 = TD 0.85 TD 1.00 = USS 1.18 FISCAL YEAR January 1 - December 31 ABBREVIATIONS MOH Ministry of Public Health ONFP National Office of Population and Family Planning (Office National de la Famille et de la Population) PIU Project Implementation Unit  FOR OFFICIAL USE ONLY REPUBLIC OF TUNISIA POPULATION AND FAg(L HEALTH PROJECT Loan and Proiect Summary Borrower: Republic of Tunisia Amount: US$26 million equivalent Terms: Repayable in seventeen years, including a five year grace period, at the Bank's standard variable interest rate. FinancinQ Plan: Government US$ 37.2 million IBRD USS 26.0 million Total USS 63.2 million Economic Rate of Return: NA Staff Apgraisal Report: Report No. 9128-TUN This document has a restricted distribution and may be used by recipients only in the perfor. lance of their official duties. Its contents may not otherwise be disclosed without World Bank authoo7atier  MEMORANDUM AND RECOMMENDATIONS OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF TUNISIA FOR A POPULATION AND FAMILY HEALTH PROJECT 1. The following memorandum and recommendation on a proposed loan to the Republic of Tunisia for US$26 million equivalent is submitted for approval. This loan would provide investment finance for a Population and Family Health Project, and would have a term of seventeen years, including five years of grace, at the standard variable interest rate. 2. Backuround. Thanks to three decades of broad based commitment to family welfare, social equity and economic growth, Tunisians have secured impressive improvements in their living standards. Important milestones include the achievement of universal primary education, the reduction of infant mortality by two-thirds and the quadrupling of female labor market participation. At the core of this transformation is the successful encouragement of smaller family size through improved education, health and family planning services and better opportunities for women, a process which has received sustained community support at all levels. The Total Fertility Rate has declined from 7.1 to 3.5 children per woman, the lowest in the African continent and the Arab world. This massive demographic shift will tilt development opportunities in Tunisia's favor for many years to come, as labor force growth rates become more manageable, savings and consumption patterns more balanced, and infrastructure needs less daunting than in most otherwise comparable countries. 3. The country's planners emphasize the need for further reduction in the rate of population growth through the equitable and efficient provision of health and education services. These are essential components of Tunisia's human resources strategy, underpinning an increasingly open and dynamic economy. However, the challenges implied in reaching the next stage of the demographic transition - aiming at replacement-level fertility by about 2010 - are in many respects more daunting than in the past. The number of couples to be provided with family planning services will have to double between now and the year 2000. Furthermore, as contraceptive prevalence in urban areas and among the educated middle-classes is already quite high, the couples whose needs must be understood and addressed will increasingly be the poor in hard- to-serve rural areas. These couples suffer disproportionately from high infant and maternal mortality and benefit less from the health and social benefits of family planning practice. The health services most likely to meet their requirements should simultaneously address their family planning needs and other priority health concerns. Resources will have to be targeted resolutely toward this constituency, in spite of protracted fiscal austerity. 4. Rationale for Bank Involvement. Following two Bank-supported operations in population and health launched in the 609 and 70s, the proposed population project offers a notable opportunity to help Tunisia safeguard past achievements in family welfare and meet the challenges of moving to the next stage of the demographic transition. As external grant support for the  -2- Tunisian population program has sharply declined over the last few years, due to demand from countries with even more urgent needs, the Bank's continued technical and financial support is vital, as is its integrated perspective on reproductive health care provision and community outreach. 5. The proposed operation complements the recently approved Employment and Training Fund loan and the FY89 Education and Training Sector loan, aimed at improving access to basic education and adapting the existing labor force to changing job patterns. It is closely related to the proposed Hospital Restructuring Support project, which is presented in parallel with this project. This restructuring project seeks to rationalize resource use in the health sector overall, and especially to provide room for improvement in basic health services by a comprehensive restructuring o' major teaching and specialized hospitals, which would allow adjustments in the burden-sharing arrangements between the State, patients and insurers. Together with an operation addressing higher education reform planned for FY92, this integrated human resources program illustrates the "Tunisian model" which links social services directly to productivity, adjustment and growth. 6. Proiect Obiectives. The project aims to reduce both fertility and mortality nationally by targeting the provision of basic health services to relatively underprivileged groups. For the public sector, this implies reaching about 30,000 new family planning acceptors per year, and continuing to serve over half a million women with such services throughout the project period. Further reductions in mortality levels would be addressed through: (i) increasing access to integrated family planning and maternal and child health services; and (ii) improving the quality and flexibility of basic health care and the first level of referral care. These improvements would also alleviate the pressure on higher level hospitals and thereby complete a fundamental medium-term overhaul of the sector's cost-effectiveness. 7. Proiect Description. The project would be the first 5-year phase of a 10-year basic health services development program. During this first phase, emphasis would be placed on training and deploying staff for underserved areas, in accordance with a "needs index" developed during project preparation. The focus of basic health services would be on family planning, reproductive health care and child health. To accommodate these services and ensure privacy for the clients, physical spaces of clinics would be expanded, appropriate equipment provided and the availability of a minimum range of essential drugs &ssured. The project would also strengthen outreach activities and improve supervision and operations research. First-tier referral facilities, i.e. district hospitals, maternities and diagnostic centers, would be strengthened through the provision of laboratories, X-ray equipment and ambulances. In addition, the project would improve pre- and in- service training of staff, strengthen management capacity and strategic planning at the central and regional levels and improve the maintenance system for vehicles, equipment and buildings. These institutional improvements would be consolidated in the second 5-year phase, which would also modify and extend the range of services provided based on early implementation experience and evaluations.  8. Organization and Imylementation. The project would he managed by the Directorate of Basic Health Care in the Ministry of Health (MOH), in collaboration with the National Office of Family Planning (ONFP), a specialized aqency reporting to the same Ministry. The latter would retain its lead role in research and development, information, education, and staff development on contract to the Ministry, and focus on developing services in the private sector and in the most dispersed areas. Routine client services are increasingly being delivered by MOH staff. At the local level, the existing MOH Regional Directors would supervise implementation, assisted by the ONFP delegate. At the central level, a small project imp.ementation unit (PIU) would monitor regional performance and keep project accounts. A project steering committee, chaired by the Minister of Health, and including the heads of the main functional departments and of ONFP, would meet at least twice a year to review overall progress, including evaluating reports prepared by an external audit team with the help of local universities. 9. Cost and Financing. The total project cost is est'mated at US$63.2 million equivalent including duties and taxes, with a foreign exchange content of US$36.2 million equivalent. It would be financed as follows: (a) the proposed IBRD loan of US$26 million equivalent would cover 72% of the foreign exchange component or 56% of total project costs, net of taxes; (b) the Government would finance the remaining US$37.2 million equivalent, including local costs (US$27.0 million equivalent including US$16.4 million in taxes and duties) and US$10.2 million equivalent in foreign exchange. Discussions with bilateral and multilateral grant donor agencies covering the bulk of this foreign exchange requirement, representing drug and contraceptive imports, are well advanced and expected to be finalized shortly. A breakdown of project costs and the financing plan are shown in Schedule A. Amounts and methods of procurement and the disbursement schedule are shown in Schedule B. A time- table of key processing events and responsibilities, and the statue of Bank Group operations in Tunisia &re given in Schedules C and D respectively. The staff appraisal report No. 9128-TUN, dated February 11, 1991, is being distributed separately. 10. Agreements reached durina Neuotiations. The Government provided assurances that: (a) the annual growth rate of the non salary operating budget for basic health services would be positive and at least equal to the annual growth rate of the overall MOH non salary operating budget; (b) detailed regional resource allocation and implementation plans will be developed in accordance with the "needs index", and submitted to the Bank by December 31 of each year for review and comments; (c) a study/evaluation of basic health services' maintenance system for vehicles, equipment and buildings will be completed by December 31, 1992 based on terms of reference to be reviewed with the Bank before December 31, 1991, and a maintenance system implemented before December 31, 1993;  -4- (d) the necessary foreign exchange will be made available by the Government for the purchase of contraceptives; and (e) the PIU will be established and maintained throughout the project. 11. As conditions of Loan Effectiveness, the project's resource allocation and implementation plan for the first year of project operation will be submitted to the Bank for approval, and the appointment of the Director of the PIU will be confirmed. 12. Benefits. The project would improve and expand the basic health care system nation-wide and adapt services to the specific health needs of women and children. Because the poor in general and the rural poor in particular have little access to other sources of health care, the project would narrow disparities in health status between regions and social classes. Access to quality family planning services is of particular benefit to the poor: it contributes to child survival and health and permits the woman to regain her strength between pregnancies. Confidence in child survival, in turn, reinforces a couple's motivation to limit their family size. 13. In addition, the project would contribute to reducing patients' incentives to seek care in better equipped and staffed higher level hospitals, which are currently overburdened by people who could have been served closer to home, earlier in the disease process and at lower cost. Reducing the pressure on higher level hospitals would permit them to fulfill their mission as providers of specialized services and facilitate the containment of health care costs in the system as a whole. 14. Risks. Possible risks include the fungibility of budgetary resources in the health sector, which could draw resources away from the basic health care program in general and the needs of low-visibility rural ccmmunities in particular. In this case, this risk is reduced by the explicit recognition of the political imperative of reaching the rural poor, tangibly demonstrated in a sharp increase in funding for such public services in the draft 1991 budget. A more durable solution to this perennial problem is being sought through reform of the hospital sector (para 5). 15. The longstanding difficulty in attracting qualified staff, especially female nurses, for service in rural areas is the most serious risk to be overcome. However, as the employment market for health professionals in urban areas becomes saturated, transfer of the relatively small number of additional staff needed to rural assignments Is proving easier. The fact that working conditions in the health centers will improve through project inputs, that staff will be rotated to and from service in different levels of the system, including through rural-based mobile clinics, and that comprehensive in- service training will be introduced, is expected to contribute to attracting and retaining the necessary staff. In addition, conditions of service for public health physicians have recently been modified to include a 2-year mandatory assignment in underserved areas. 16. Environmental Imoact. No adverse impact on the environment is expected from the limited project financed civil works or from the basic health  activities it supports. Since the project would contribute to slower population growth and help contain population density, it would tend to reduce pressure on natural resources. The proposed project was determined to be in screening category C which includes projects which seek to enhance environmental conditions. 17. Recommendation. I am satisfied that the proposed loan would comply with the articles of Agreement of the Bank and recommend that the Executive Directors approve the proposed loan. Barber Conable President Attachments Washington D.C. March 4, 1991  6 - Schedule A REPUBLIC OF TUNISIA POPULATION AND FAMILY HEALTH PROJECT Estinmated C9sts and Financino Plan Estimated Proiect Costs: I' Local Foreign total - (USS( mi t l on) - A. FIRST-TIER SHC SERVICES 1. FIXED SERVICES 4.5 5.8 10.3 2. OUTREACH SERVICES _.3 _ 18.6 Sub-Total 13.8 15.1 28.9 B. REFERRAL SERVICES 1. INFRASTRUCTURE IMPROVEMENTS 2.4 2.1 4.5 2. MEDICAL EQUIPMENT 1.4 2.6 4.1 Sub-Total 3.8 4.7 8.5 C. QUALITY IMPROVEMENTS 1. TRAINING 1.0 0.0 1.1 2. DRUGS, CONTRACEPTIVES AND CONSUMABLES 3.9 11.1 15.0 3. MAINTENANCE PROGRAM .0 O.O 0.0 Sub-Total 5.0 11.1 16.0 D. PROJECT MANAGEMENT 0.3 0.1 0t4 TOTAL BASELINE COSTS 22.9 30.9 53.9 Physical Contingencies 1.0 1.3 2.3 Price Contingencies 3.1 3.9 7.0 TOTAL PROJECT COSTS 27.0 36.2 63.2 .. ..................................... ... .... .... .. .................................................... 1/ Includes US$16.4 million in taxes and duties Totals may not add up due to roun.ding. Financlr1 Plan: IBRD 26.0 26.0 Government 27.0 10.2 37.2 Total 27.0 36.2 63.2  7. Schedule B REPUBLIC OF TUNISIA POPULATION AND FAMILY HEALTH PROJECT Procuremrent Methods a (US$ million) Total Pro,ect Element ICB LCB Other Cost Civ.l Works 58 35 93 (4.6) (2.8) (7.4) Von,cles 17.8 17.8 (9 8) (9.8) [q..pment 6.1 2.5 1.5 10.1 (4.4) (1 7) (1 0) (7 1) TA and Training 1.7 1.7 (1.7) (1.7) Operating Costs 12.3 12.0 24.3 (0.0) (0.0) (0.0) ... . . .. . .. . . - -- ---.- ------ ----- ------ ----- ------ ----- ------ ----- ------ ----- ------ ----- ------ ----- Total 36.2 8.3 18.7 63,2 (14.2) (6.3) (5.5) (26.0) --- --- -- ----- - - . . .. ... .. .. -- - - - - - -- - - - - - -- - - - - - -- - - - - - - - -- -- - -- --------- a Figures in pafantheses are the respective amounts financed by the Bank loan. Disbursement Rates Amount Cateqorv US$ Million % financed by the Bank Civil Works 6.8 80 % of total expenditures Equipment and initial stock of spare parts 15 5 100% of foreign expenditures, 100% of local expenditures (ex .^nj vehicles factory cost) and 70% of local expenditures for items purchased locally Expert services & Training 1.7 100% of total expenditures Unallocated 2.0 Total 26.0 Estimated Disbursements: Bank Fiscal Year 92 93 94 95 96 97 --------(US$ million)- Annual 0.2 4.2 7.8 8.0 4.4 1.4 Cumulative 0.2 4.4 12.2 20.2 24.6 26.0 Rate of Return: Not applicable  -8- Schedule C REPUBLIC OF TUNISIA POPULATION AND FAMILY HEALTH PROJECT Timetable of Key Prolect Events and Resoensibilities 1. TIMETABLE: (a) Time taken to prepare: 15 months (b) Prepared by: Government with Bank assistance (c) First Bank Mission: June 1989 (d) Appraisal mission departure: October 1990 (e) Date of Negotiations: January 1991 (f) Planned Date of Effectiveness: July 1991 (g) Relevant PCRs: Cr. 238-TUN: PCR of April 12, 1983. Ln. 2005-TUN: PCR Ref. Sec. M90-1323 of October 16, 1990 2. RESPONSIBILITIES: Task Manager: Maria Mac Donald, Sr. Population Specialist, EMTPH Peer Reviewer: Steven Sinding, Population Adviser, PHRDR Division Chief Andrew Rogerson, EM2PH Director: Kemal Dervis, EM2DR  _9- Schedule D (page 1 of 2) The Status of Bank Group Operations in Tunisia Statement of Bank Loans and BOA Credits (As of December 31, 1990) US$ Million Amount Loan cr Fiscal (less cancellations) Credit No Year Borrower Purpose Bank IDA Undisbursed Fifty-eight loans and 10 credits fully disbursed 1,276.15 75.15 Of which SALs, SECALS, and Program Loans /a 2781 1987 Republic of Tunisia Ind. & Trade Policy 150.00 2754 1987 Republic of Tunisia Agric. Sec. Adj. 150.00 Sub-total 300.00 2108 1982 Republic of Tunisia Fifth Highway 32.50 2.20 2223 1983 Republic of Tunisia Urban Development II 25.00 8.05 2234 1983 Republic of Tunisia Central Tunisia Irrig. 13.70 3.64 2255 1983 Republic of Tunisia Urban Sewerage II 34.00 14.98 2346 1984 Republic of Tunisia Mining Tech. Asst. 7.80 0.69 2368 1984 Republic of Tunisia Seventh Water Supply 50.00 23.57 2429 1984 Republic of Tunisia Second Urban Transp. 33.00 12.05 2455 1984 STEG Fourth Power 21.52 0.25 2502 1985 Republic of Tunisia Northwest Agric. Prod. 8.80 5.64 2522 1985 Republic of Tunisia Export Industries 26.04 0.51 2554 1985 Republic of Tunisia 2nd Elec. & Mech. Ind. 24.44 6.56 2573 1985 Republic of Tunisia Irrigation Mgt. Improve. 17.00 9.81 2605 1986 Republic of Tunisia Gabes Irrigation 21.70 7.51 2735 1987 Republic of Tunisia Energy Conservation 4.00 3.55 2736 1987 Republic of Tunisia Fourth Urban Transport 30.20 11.61 2865 1988 BNT BNT IV 30.00 13.64 2870 1988 Republic of Tunisia Forestry Development 20.00 13.31 2896 1988 Repu s. of Tunisia Highways Maint. & Rehab. 63.00 44.80 2911 1988 Republic of Tunisia 2nd SMS Industrial Dev. 28.00 17.40 * 2962 1988 Republic of Tunisia SAL I 150.00 56.73 3023 1989 ETAP Petroleum Exploration 5.50 5.50 3054 1989 Republic of Tunisia Education & Training 95.00 89.36 3064 1989 Republic of Tunisia Fifth Urban 58.00 19.37 * 3078 1989 Republic of Tunisia ASAL II 84.00 74.00 * 3109 1990 Republic of Tunisia PERL 130.00 82.72 3217 1990 Republic of Tunisia Research & Extension lb 17.00 17.00 3255 1991 Republic of Tunisia Employ. & Trg. Fund lb 12.00 12.00 TOTAL 2,318.35 75.15 r,56.45 Of which has been repaid (only amortization) 643.87 15.79 Total held by Bank and IDA 1,674.48 59.36 Amount sold 34.82 of which repaid 26.93 Total Undisbursed 556.45 SAL, SECAL or Program Loan /a Approved after FY80 /b Not yet effective  - 1k' - Schedule D (page 2 of 2) Statement of IFC Investments in Tunisia (As of December 31, 1990) Original Gross Commitment Fiscal US$ Million) Year Obligator Type of Business Loan Equity Total 1962 NPK-Engrais Fertilizers 2.00 1.50 3 50 1966/ Societe Nationale Dev. Finance Co. - 2 30 2 30 70/78 d'lnvestissement (now BDET) 1969 COFIT Tourism (now BNDT) Dev. Finance Co. 8.00 2.25 10.25 1973 Societe Touristique Tourism 1.63 0.30 1.93 et Hoteliere RYM SA 1974 Industries Chimiques Chemicals - 0.64 0.64 du Fluor 1975 Societe d'Etudes et Tourism 2.53 0.63 3.16 de Developpement du Sousse-Nord 1984/ Societe Tunisienne de Leasing Co. 3.47 0.47 3.94 86 Leasing 1985 Societe Miniere de Spath Mining Co. - 0.24 0.24 Fluor et de Barytine (Fluobar) 1986 Societe Industrielle Textiles and Fibers 5.00 3.21 8.21 des Textiles (SITEX) 1986 Adwya S.A. Pharmaceuticals 2.38 0.30 2.68 1987 Rozzi Edilizzia Prefabricated 1.47 0.41 1.88 Industrializzata Panels (REIT S.A.) 1987 COMETE Engineering Engineering Services - 0.04 0.04 1988 Societe des Industries Textiles & Fibers 2.88 2.15 5.03 Textiles Reunies S.A. (SITER) Total gross commitments 29.36 14.44 43.80 Less cancellations, terminations, repayments, sales and exchange adjustments 18.60 3.34 21.94 Total commitments held by IFC 10.76 11.10 21.86 of which undisbursed 4.35 0.04 4.39 Does not include participants