Honduras - Social Investment Fund Project

')ocument of The World Bank FOR OFFICIAL USE ONLY Reot No. 9148-HO STAFF APPRAISAL REPORT HONDURAS SOCIAL INVESTMENT FUND PROJECT FEBRUARY 6, 1991 Human Resources Operations Division Country Department II 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 AND EQUIVALENT UNITS Honduras Lempira - US$5.5 SDR 1.0 - US$1.43 WEIGHTS AND MEASURES 1 Hectare (ha) - 10,000 m2 1 Metric. Ton (mt) - 1,000 kg 1 Kilometer - 1,000 m GLOSSARY OF ACRONYMS BANASUPRO - National Supplier of Basic Products EC - European Community DGE - General Statistical Office ESP - Emergency Social Fund of Bolivia FHIS - Honduran Social Investment Fund GNP - Gross National Product GOH - Government of Honduras GTZ - German Agency for Technical Corporation ICB - International Competitive Bidding ILO - International Labor Organization JBS - Social Welfare Board KfW - German Credit Institute for Reconstruction LCB - Local Competitive Bidding MHS - Multiple Purpose Permanent Household Survey MOE Ministry of Education MOH - Ministry of Health MOP - Memorandum of the President NGOs - Nongovernmental Organizations PRAF - Family Assistance Program RUTA - Regional Unit of Technical Assistance SANAA - National Water and Sewerage Service SECOPT - Ministry of Communications and Public Works SECPLAN - National Planning Ministry SOEs - Statements of Expenditure UN - United Nations UNDP - United Nations Development Program USAID - United States Agency for International Development WFP - World Food Program FISCAL YEAR January 1 - December 31  FOR OFmFCIAL USE ONLY HONDURAS SOCIAL INVESTMENT FUND PROJECT STAFF APPRAISAL REPORT Table of Contents Pate CREDIT AND PROJECT SUMMARY I. THE HONDURAN ECONOMIC REFORM PROGRAM AND THE SOCIAL EMERGENCY Recent Economic Developments . . . . . . . 1 The Economic Reform Program . . . . . . . . . . . . . . 1 Extent of Poverty in Honduras . . . . . . . . . . . . . . 2 Effects of the Adjustment Program on Prices and Employment 4 Effects on Health and Nutrition Indicators . . . . . . . 4 Effects on Education Indicators . . . . . . . . . . . . 5 Inadequate Delivery of Social Services . . . . . . . . . 5 Government Strategy . . . . . . . . . . . . . . . . . . . 7 Rationale for Bank Involvement . . . . . . . . . . . . . 8 II. THE GOVERNMENT'S EMERGENCY SOCIAL PROGRAMS A. THE SOCIAL INVESTMENT FUND . . . . . . . . . . . . . . . . 9 Objectives and Approach . . . . . . . . . . . . . . . . . 9 Institutional Structure . . . . . . . . . . . . . . . . . 11 Target Population . . . . . . . . . . . . . . . . . . . . 11 Organization and Staffing . . . . . . . . . . . . . . . . 12 Technical Assistance . . . . . . . . . . . . . . . . . . 13 Program Targets and Capacity . . . . . . . . . . . . . . 14 Main Participants in FHIS Projects . . . . . . . . . . . 14 Project Promotion, Identification and Preparation . . . . 15 Project Appraisal . . . . . . . . . . . . . . . . . . . . 16 Project Approval . . . . . . . . . . . . . . . . . . . . 17 Project Implementation and Supervision . . . . . . . . . 17 Operational Manual . . . . . . . . . . . . . . . . . . . 18 Coordination with Ministries . . . . . . . . . . . . . . 18 Management Information System . . . . . . . . . . . . . . 18 This report is based on the findings of an appraisal mission which visited Honduras in October/November 1990. Mission members were J.J. de Saint Antotne (mission leader), A.M. Arriagada, J. Newman, C. Bertao, T. Castaneda, G. Rioseco (RUTA), R. Cisneros and G. Leiva (consultants). The mission was joined by Messrs. D. Neuhaus and I. Oltmann of the KfW. 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.  - 2 - S. THE PILOT NUTRITION ASSISTANCE PROGRA . . . . . . . . .. . 19 C. TEM SOCIAL SECTOR RESTRUCTURING PROGRAX . . . . . . . . . . 21 D. THE LIVING STANDARDS MEASUREMET STUDY . . . . . . . . . . . 22 Ill. THE PROJECI Origin of the Project . . . . . . . . . . . . . . . . . . 24 Objective . . . . . . . . . . . . . . . . . . . . . . . . 24 Description . . . . . . . . . . . . . . . . . . . . . . . 24 Implementation . . . . . . . . . . . . . . . . . . . . 26 Project Costs and Financing Plan . . . . . . . . . . . . 27 Procurement r . o . . o . o o * * o . * * * * * * * * * * 29 Supervision and Reportng .. .. ........ . . 32 Disbursements . . . . . . . . . . . . . . . . . . . . . . 32 Documentation of Expenditure . . . . . . . . . . . . . . 33 Accounts and Audits . . . . .. ........... 33 Cost Recovery . . . . . . . . . . . . . . . . . . . . . . 34 Recurrent Costs... . . . . . . . . . . . . 34 Monitoring and Feedback .. . . . . ........... 34 Women's Participation . . . . . . . . . . . . , . . . . . 35 Envirormental Effect . .......... . . . .. 36 IV. BENEFITS AND RISKS . . . . . . . . . . . . . . . . . . . . 37 V. AGREEMENTS REACHED . .......... . . . . . . . . . 37 Recommendetion . . . . . . . . . . . 39 Annexes 1. Organic Lav of the FHIS . . . . . . . . . . . . . . . 40 2. Organization Chart of the FHIS . . . . . . ... . . . 49 3. Social Infrastructure Projects . . . . . . . . . . . . 50 4. Social Sector Projects . . . . . . . . . . . . . . . 57 5. NGO in iondura . ..... .............. 59 6. Total Project Costs . . . . . . . . . . . . . . . . . 67 7. Financing Plan .... .. . . . . . . . . . . .. 68 8. Disbursement Schedule . . . . . . . .. . . . . . . . 69 9. Pilot Nutrition Assistance Program . . . . . . . . . 70 10. Methods of Procure.ment . . . . . . . . . . . . . . ... 77 11. Informal Sector Projects . . . . . . . . . . . . . . . 78 12. Documents included in the Project File . . . . . . . . 82 IBRD Nos. 22872 - Access to Basic Sanitation 22873 - Malnutrition Rates 22874 - Access to Potable Water  lHNDURhS SOC