Argentina - Maternal and Child Health and Nutrition Project

Document of The World Bank FOR OFFICIAL USE ONIM Report No. P-6054-AR fDORANDUM AND RECOMENDATION 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$100 MILION TO THE ARGENTINE REPUBLIC FOR A MATERNAL AND CHILD HEALTH AND NUTRITION PROJECT JULY 14, 1993 MICROGRAPHICS Report No: P- 6054 AR Type: MOP 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. ������� ro �� � �� � .� � �� •� • zz • � �. � �, � � . � � � .�b � � � . �. � S � �+ ,., •��о � � � � �Q Ct � � � � � � � � . ��рΡио'�. � � � � � �' А т � е"� р�* MQ � �-► А ;р о"С � �' ® � �'+ С � � �• �,, `� С �� о' 4� � �'• с � � � `" � г р �� О � ~ � � � W � v� � °о � �-- О � � � � � О �, ч.. �' � �. � � �. � и � ... FOR 0MCUL USE ONLY REPUBLIC! OF ARGENTINA M&TERNAL AND CHILD E[EALTH AND NUTRITION PROJECT Lem and Project Summary Borrower: Argentirte Republic Beneficiary: Provincial and municipal public agencies Amount: US$100 million equivalent Terms: Aimuity with 15 years maturity including a 5-year grace period, with interest at the Bank's mandard variable rate MS AfiViQM FInancing Elm. 1AXd Foreign Total o" 96.0 4.0 100.0 Government 2.4 60.0 Total 153.6 6.4 160.0 Environmental C Economic Rate of Return: Not applicable Poverty caftory: Program of targeted iraffventions Staff AppraW Report: Report No. 11790-AR hup: IBRD No. 24782 This document has a restricted distribution and May be used by reciPients only in the peformance of their official duties. Its contents May not Otherwise be disclosed without World ;Aank a, ithofization. MEMORANDUM AND RECOhMMATION OF THE PRESIDENT OF THE NTRNATIONAL BANK POR RECONSTRUCTIOW AND DEVELOPMENT TO THE EXECUTIVE DIECT*RS ON A PROPOSED LOAN TO THE ARGENTINE REPUBLIC FOR A MATERNAL AND CHILD HEALTH AND NUTRITION PROJECT 1. The following memorandum and recommendation on a proposed loan to the Argentine Republic for US$100 million equivalent is submitted for your approval. The proposed loan would be repayable over 15 years, including five years of grace, with interest at the Bank's standard variable rate. The Argentine Republic would be the Borower and the Ministry of Health and Social Action (MSAS) would be the coordinating agency. 2. Background. Argentina suffered a prolonged period of economic decline during the 1970s and 1980s. Savings and investment rates plummeted in response to the unstable economic climate. Capital flight contributed to worsening unemployment and poverty. The currency was often devalued, and the ratio of public debt to GDP rose to nearly 100 per cent. Chronic public sector deficits fueled inflation and were not effectively addressed by four major stabilization programs. 3. The present Administration, which took office in mid-1989, quickly proceeded to address the major macroeconomic imbalances with substantial success. Mor reforms included drastically reducing public deficits, pegging the peso to the US dollar, large scale vprivatization of public enterprises, and improving revenue-sharing with the provinces. As a result of these and other reform measures, the combined public sector deficit of 10.5 per-cent of GDP in 1989 was eliminated and replaced in 1992 by a 0.6 per cnt suplus. In 1991 and 1992, GDP grew on average between 8 and 9 per cent per annum. 4. Although recent economic growth and public sector reforms have begun to reduce unemployment and poverty, the Government recognizes that targeted interventions are also required to improve the living conditions of the poor. One of the highest priorities is reducing mortality and morbidity among poor mothers and children. 5. Argentina is ill-prepared to respond to the health and nutrition needs of its poor. As a result of poor targeting and management, food supplementation programs have been wasteful Primary health care services suffer from dilapidated physical infrastucture, and poor organization and support systems, i.e. logistics, , supervision and staff training to provide the intended coverage. Poor children suffer not only from inadequate health care, but also from lack of preschool programs to enhance their mental and social -2- 6. As a result of inadequate focus and ineficiency, maternal and child mortality in poor periurban areas (which comprise three fourths of the total number of poor) is excessively high: in 1985-87, maternal and infant mortality were 1.6 and 1.8 times higher than the respective national averages of 27 per thousand and 5 per 100,000. These rates translated into 17,000 deaths in 1987, most of them related to preventable causes. As a result of limited early childhood development efforts, the vast majority of poor children enter school unprepared for the learning tasks that face them, which in turn leads to high rates of grade repetition and school dropouts. 7. In the short term, the Government's strategy is geared to improving and expanding (through provincial investment projects), maternal and child health and nutrition services. In the medium term, major reforms are contemplated, both of national policies and of provincial organization, management and financing. 8. Rationak for Bank Involvement. The Bank is becoming deeply involved with social sector reform in Argentma. Over the last few years, it has been assisting the Government in developing the analytical base, reorienting policies and strengthening institutions for human resource development through the ongoing Social Sectors Management Technical Assistance Program (SSMTAL, Loan 2984-AR). The Bank is also helping to improve the provinces' administration and financial base under the Provincial Development Project (Loan 3280-AR). Increased attention to social sector development and poverty alleviation are priority objectives of the Bank's Country Assistance Strategy for Argentina as discussed by the Board on February 16, 1993 in association with the Finandal Sector Adjustment Loan (Report No. P-5862-AR). The proposed MCHN project would be the first Bank social sector investment operation in Argentina after many years. It would have a--- strong poverty alleviation impact, with benefits expected to reach about 500,000 mothers and young children in poor periurban areas. If successful, the project would represent a major breakthrough in several respects: first, responsibility for final design and operations would be transferred to local authorities in support of the Government's decentralization policy; second, the operation would represent one of the first instances of targeting assistance on the poor in Argentina; third, management information systems, the use of process and impact indicators and monitoring mechanisms would ensure transparency and permit accountability; and fourth, the project would initiate a process of reform in the health sector from the bottom up to rationalize health care delivery and financing. This process would be strengthened by regional health care restructuring projects supported by the Bank (beginning with the Greater Buenos Aires project under preparation) to improve equity and cost effectiveness of services in both the public and private subsectors. The Government is strongly committed to the project, as evidenced by the fact that it has already allocated counteipart funds for this fiscal year, has done an excellent job of preparing the project with the assistance of UNICEP, and has established and made operational a strong and autonomous project coordinating unit. -3- 9. Project Objectives. The project's objectives are to expand and subsequently maintain coverage of good quality basic health care, niwtion and child development services for the poor, in order to reduce mortality and morbidity, and enhance primary school performance. Taking into account existing budgetary and other resource constraints, the project would target services based on levels of poverty and the existence of large numbers of poor people. Basic services would be standardized to maximize impact and to facilitate ease of operations and monitoring. 10. Project Description. The project's components would be: (a) maternal and child health care and nutrition: improved quality and efficiency of a basic package of MCHN interventions including prenatal, child delivery and postnatal care, and immaization; nutrition surveillance and education, as well as food supplementation targeted on poor mothers and children; (b) child development: in existing child care centers, providing children between the ages of two and five with health care, nutrition supplementation, and learing and social development opportunities to enhance creativity, language use and knowledge acquisition through play and work; and (c) Institutional development: analyses of preschool, school feeding, and food supplementation programs; a national nutrition survey, a national social communication campaign, project impact evaluation studies, and short term studies of MCHN and related areas of priority to provinces. The project would finance eficiency improvements and expanded capacity of ambulatory health services and delivery services in maternity wards of local hospitals; the appointment of critical staff, and staff training and incentives; basic rehabilitation of physical plant; purchases of simple equipment, drogs, medical kiputs and small amounts of food supplements; and consultant services. Additionally, technical assistance would be provided to provinces not participating in the project to help them prepare subprojects for inclusion under a possible second MCHN project, and, more generally, to help address key elements of improve resource use in the MCHN area. 11. The project would fund three-year municipal subprojects in six aheady selected provinces (Buenos Aires, Cordoba, Entre Rios, Mendoza, Santa Fe, and Tucuman) based on agreed criteria. Criteria include large numbers of poor (as defined by Census data and periodic household surveys), administrative and financial capability, self-hell) commitment, as well as agreement with the proposed basic health care, nutrition and child development service packages and administrative and technical procedures described below. The first subproject, in the Florencio Varela Municipality of Buenos Aires Province, anounting to about US$7.0 million was reviewed during appraisal and is ready for immediate implementation. Additional subpojects in the provinces of Tucuman (US$18 million equivalent) and Santa Fe (US$18.5 million equivalent) are now being reviewed by the Bank Preparation of subprojects in the additional three provinces would commence in the last quarter of 1993. 12. The project would be implemented over a six-year period. Total project cost would be US$160 million with a foreign exchange component of US$6.4 million. The project .4- would be financed by the Bank (US$100 million), the FedeR Goverament (US$40 million) and provincial governments (US$20 million). Detailed cost and financing estimates are provided In Schedule A. Procurement and disbursement methods, and the disbursement plan are In Schedule B. Retroactive financing of US$10 million (10% of the Loan) is proposed for start-up expenditmrs incurred from February 1, 1993 (including setting up and staffing the project coordinating and executing units, introducing prvincial support services, and beginning the process of selecting consultants to carry out the proposed national studies). 13. Sustainability. At the federal level, the project constitutes the first stage of the Government's National MCHN Program, which has wide public support and the personal commitment of the President of the Republic. The project was allocated US$1C million at the federal level for 1993, and counterpart funds are included In MSAS's 1994 budget request. Provinciallmunicipal incremental recurrent costs would be financed by the Federal government counterpart contribution on a declining basis. Specifically, incenental recurrent purchases of food, drugs and other materials, and incremental recurrent salaries would be financed as follows: 100 %, 70%, and 30% during the first, second and third year of implementation by the federal government, with the balance, as well as all incremental costs beginning in year four being provided by provincial and/or municipal budgets. This would be specified in the subsidiary agreements between the MSAS and the participating provinces. Provincial allocations would represent less than 5% of provincial social sector resources. Health package unit costs are estimated at US$40 to US$50 per year per beneficiary; expanding the project to cover all 2.4 million poor mothers ana children in urban areas would cost about US$100 million per year, which would represent about 5% of existing public health care budget allocations and, therefore would be financially feasible even without taking into account projected efficiency improvements and savings in unit costs. 14. Implmentation Arrangements. The Federal Minister of Health would have ultimate responsibility for project execution through the Secretaries of Health and Technical. Projects. The national Coordinating Unit (PCU) under the two secretaries would be responsible for day-to-day coordination, monitoring, fund transfers, liaison with participating agencies and impact evaluation. Provincial and municipal authorities, with the support of project executing units (PBU) would implement the project's provincal investment component. UNDP would provide technical assistance in administration and fund transfers. UNICEF would assist with staff training and community participation elements. 15. Agreed Actions. Already defined, agreed and/or established am: (a) the health and autritin profile of the poor, as well as mapping of target poverty areas and existing services; (b) the health, nutrition and child development service packages, and their unit costs; (c) model nationallprovincial and provincial/municipal agreements; (d) provincial participation crit*ra (e) manuals for orgaiztion, management, accounting, reporting, prcurement, monitoring/evaluation, auditing and legal aspects; (f) investment proposal guidelines; and (g) the national PCU, and the PBWs for the first three participating provinces. The Government has made suitable arrangements for handling procurement The draft Loan Agreement and -5- the model subsidiary agreements which will be signed by each parkcpating province incorporate the commitment of participating provinces to reform their school feeding programs and maximize staff redeployment to reduce incremental operating costs. The first subsidiary agreement, with the Pfvince of Buenos Aies, has been signed. During negotiations, final draft audit procedures ard short lists of independent auditors; as well as impact evaluation indicators were agreed. As a condition of disbursements, each participating provincial governor must sign its subsidiary agreement with the MSAS and, when warranted, with the participating municipal mayors. 16. Emironmental Assesment. The project has been classified as Type C. 17. Expected Benefits and Risks. Improved and better targeted health care and nutrition programs would help reduce mortality and morbidity among the poor and improve tho efficiency of resource use. Preschooler programs, which today consist mostly of day care centers limited to providing some supplementary feeding and minimal care, would offer more comprehensive development programs, thereby improving learning abilities in primary schooL An estimated 500,000 poor mothers and young children would benefit directly from the project. The potential for improving resource use and impact of existing school feeding programs is substantial in view of their size (representing 10% to 15% of total provincial health and nutrition recurrent expenditures in some provinces), and their poor targeting (they currently benefit the middle classes more than the poor). 18. The main risks are associated with the poor planning and implementing capacity of provincial and municipal health, social action, and education ministries. To reduce risks the project would help strengthen the capacity of the feddral MOH toproid technical assistance toprvnces. Simple design, detailed implementation procedures and the possibility of adapting standard norms to reflect local conditions and needs would enhance implementability. Only six provinces, all of them providing easy physical access to the target population and with adequate fiscal and administrative capacity would participate. Provincial and municipal government support would be ascertained upfroat through the required preparation of investment proposals and other commitments to enhance resource use (such as the reform of existing school feeding programs). Field services would be improved gradually. Performance would be assessed on the basis of a few, critical process and outcome indicators easy to measure and manage. The pardcipation of UNICEF and/or other specialized agencies in training and community mobilization would increase absorptive capacity and local ownership. Experiments would be carried out to determine the feasibility of targeting, efficiency improvement and cost recovery alternatives which might be introduced during implementation. Furthermore, the autonomous PCU would have the required flexibility to carry out its duties free of bureaucratic interference at the national level, while provincial ministries of health and welfare would be strengthened and would gain firsthand experience in implementing development programs. Major operating bottlenecks would be avoided, since each province would implement its subprojects independently of the others. Ponds not used by executing provinces and municipalities would be transferred to -6- other municipalities in the six provinces or to other provinces that meet the selection criteria based on agreed formulae which would be incoported in the federalprovincial government subsidiary agreements. 19. Recommendatiia. 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. Lewis T. Preston President Atlacinnents July 14, 1993 Schedule A ARGENTINA MATERNAL AND Rrr.n REALTH AND NUIRITION PROJECT Estimated Costs: Local Foreign Total % of e Coast -t S S$ rfilla- Compaets Provincial and Municipal Subprojects 116.8 6.3 123.1 82 Natonal Nutriton Survey 0.0 5.6 4 ProjeCt impact Evaluadon 1.. 0.0 1.9 1 Studios, Auditing and Tech. Asistance 1.5 0.0 1.5 1 Social Coixnmiention Canai 4.0 0.0 4.0 3 Instiuional Development 4.0 0.0 4.0 3 PCU 10.3 0.1 10.4 7 TOTAL BASE COST 144.2 6.3 150.6 100 Physical Contigencia 0.8 0.0 0.8 Price Contingenies 8.6 0.0 8.6 TO1AL PROJECT COST 153.6 6.4 160.0 FINANCING PLAN Source 14oject Cost Dutie Total Percmnt of Cast Local Foreign Total & Taxes Cost Pr~ject - Total Bank 96.0 4.0 100.0 0.0 100.0 65.0 62.5 Federal Goveramnt 31.8 2.0 33.8 6.2 40.0 22.0 25.0 Provices 19.6 0.4 20.0 0.0 20.0 13.0 12.5 TOTAL 147.4 6.4 153.8 6.2 160.0 100.0 100.0 Estated 11RD Dsbursemts: FY94 Fa95 FY96 FY97 FY9 FY99 Annual 11.0 21.6 22.0 21.7 14.4 9.3 Cumulative 11.0 · 32.6 54.6 76.3 90.7 100.0 Economic Rat. of Return: Not applcable Poverty Category: Program of targted interventiona Schedule B Page 1 of 2 ARGE NTINA MATERNAL AND CM AND NVTRITION PROJECT PROCIJREMENT MET ODS BY CATEGORY ai (USS'000) CATE00tY 106 L08 OTdER NIFB TOTAL Ptornco Varste subproject civit vorks 1,066 533W 1,599 _______(_(1,066) (533) (1,599) Goods; Orugs 959 959 (0) (0) Pood 1,188 1,188 tel (loi Equpmnt & Véhiotes 554 238g/ 792 (446) (191) (637m Training 450 450 (450) -450) 8alaries.¢~ 1,768 1,768 ___________________________ __________ (0) (0) TechnicaA sistance 423 423 (423) * (423) subtotat Ptorencio Varse Subprojet 1,621 1,644 3,916 7,180 ((1,512 (1,597) (0) (3,109) Studies, T.A.. Nationi Nutrition 11,863 11,863 survey, 8 Impact evaluation (11,863) (11,863) Social Commication Caopoign 4.000 4 000 (4(4,000- (4000) POUg/ 15,202 15,202 (15,202> (15,202) suTOTAL 4.000 1.621 -28,709 3,916 38,246 (4,000) (1r512) (28,663) CO) (34.175) Future Provincial and "unIcipal subprojects-- Civil Iiorks 12,000 29,607 1,000/ 42,607 (12.000) (296 (1,000) (42.607 Goods: Orug- 14,948 14,948 (0) (__0) Food 8,337 8,337 (0) (0) iquipment & Vahicles 4,000 9,331 1,000/ 14,331 (4,000> (9,331) (1r000) (14.331) Training 3,642 3,642 (3,642) (3,642) salariesg/ 32.644 32,644 ______________________ _______________ (0) (0) Technical Assistance 1,245 1,245 -(<1,245) - <1 243 Subtotat future Provincial and 16,000 38,938 6,887 55,929 117,74 *fi!Su o_Çs(16,000> -38,938) (6.887> (0) (61.M25 T nicet Assistane for 4,000 4,000 'r1AL 20,000 40,559 39,596 59,845 160,000 (20,000> (40,450) (39,550) (0) (100.00> I/ Totale Include taxes -,rd contingencies. Amounts In parenthesis show attocatI of lotn procoeds. / Direct contracting. Local sbopping. includes taxes. Inctudes staff salarias, offfe sq0rpment, maerials, consultancles, end operationot epss. Schedule B Page 2 of 2 ARGENTINA MATERNAL AND CHILD AND NUTRITION PROJECT ALLOCATION AND DISBURSEMENT OF IBRD LOAN Amount of the Loan Percent of Expenditures Allocated (Expressed to be Fianced Ca in US Do1lar Eauiv. Subprojects - Civil Works 35,000,000 100% - Goods (except drugs and food) 11,800,000 100% - Consultant Services and Training 4,61 ,000 100% Consultant Services - Social Communication, Campaign, 12,000,000 100% Nutritional Survey, Impact Evaluation Audit and Studies - PCU 12,600,000 100% - Institutional Development 4,000,000 100% Unallocated 20,000,000 TOTAL 100,000,000 Schedul C ARGENTINA MATERNAL AND CHILD AND NUTRITION PROJECT Timetable of Key Project Processing Events (a) 'lme taken to prepare 14 months (b) Prepared by: MSAS/UNICEF (C) First Bank Mission: April 1992 (d) Appmisal Mission: March 1993 (e) Negotiations: June 1993 (f) Planned date of Effectiveness September 1993 Schedule D Page 1 of2 ARGENTINA MATERNAL AND CHILD AND NUTRITION PROJECT Status of Bank Group Operations in Argentina Statement of Bank Loans (as of May 31, 1993) Amount (less Loan # Fiscal Year Borrower Prof ect Name cancellations) Undisbursed Fully disbursed loans (34) $3,560.6 $0.0 2592 1985 YPF Gas Utilization & Tech. Assistance $180.0 $10.1 2641 1986 Argentina Water Supply 1 $60.0 $14.8 2751 1987 Argentina Power Engineering $14.0 $0.2 2854 1987 Argentina Power Distribution $276.0 $162.5 2920 1988 Argentina Municipal Development $120.0 $72.2 2970 1988 BNA Agriculture Credit $106.5 $0.0 2984 1988 Argentina Social Sector Tech. Assistance $28.0 $8.0 3015 1989 Argentina Tax Administration I Tech. Assistance $6.5 $0.5 3280 1989 Argentina Provincial Development $200.0 $184.7 3281 1991 Argentina Water Supply II $100.0 $99.0 3292 1991 Argentina Pub. Enterprise Refrom (PEREJ) $23.0 $12.6 3297 1991 Argentina Agriculture Services $33.6 $25.5 3362 1991 Argentina Pub. Sector Reform Tech. Assistance $23.0 $19.3 3394 1992 Argentina Pub. Sector Reform (PSRL) - $325.0 $0.0 3416 1992 YPF, S.A. Hydrocarbon Engineering $28.0 $21.0 3460 1992 Argentina Tax Administration II Tech. Assistance $20.0 $12.2 3520 1993 Argentina Yacyreta II $300.0 $185.5 3521 1993 Argentina Flood Rehabilitation $170.0 $167.5 355 1993 Argentina DDSR Support $450.0 $0.0 3556 1993 Argentina Pub. Enterprise Reform II (PEREL II) $300.0 $100.0 3558 1993 Argentina Financal Sector Adjustment (FSAL) $400.0 $194.8 3611 1993 Argentina Road Maintenance VI $340.0 $0.0 TOTAL $6,724.1 of which has been repaid $1,893.3 TOTAL NOW OUTSTANDING $4,830.8 AMOUNT SOLD $12.8 of which has been repaid $12.8 TOTAL NOW HELD SY THE BANK D4g1 TOTAL UNDISSURSED 11A 壑―-！닌！:, MAP SECTION IBRD 24782 70 BOLIVIA 60• PARAGUAY SALTA TuCUMAN CHACO BRAZIL SANTIAGO 30 30 LDEL 40 NTRIIONPAOJEC 4O SAN CdýRbo ASnlFENR JUAN -ECNdTa' RE z hýýø« SAN .<,. LUIS'4, tu URUGUAY $N o Pla d PovnceCpt 041.5 100N AIRE0S00 50 LARES u PAMPA I NELIQ Å R G E N T l N A RI MATERNAL,CHILD HEALTH PILAND 40° NEGRO NU.TRITION PROJECT 40° Project Provirnces ø Selected Prøvince Capitals CHUBUT National Capita[ m-n=Province Boundaries ....International Boundaries MILES 0 100 200 300 400 500 SANTA i i CRUZ KILOME11ERS 0 200 400 600 800 FALKLAND f$LAN0$ SJ,Ekflool oandW- =4 o is for Par f Word *bny udq onz; TIERRA wk~ roc~o 80* r0* FUEGO 60• APRIL 1992