Mexico - Program of Essential Social Services (PROSSE) Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 18850 IMPLEMENTATION COMPLETION REPORT REPUBLIC OF MEXICO PROGRAM OF ESSENTIAL SOCIAL SERVICES (PROSSE) (LOAN 3912-ME) January 22, 1999 Mexico Department Human and Social Capital Development Group 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 EQUIVALENTS CURRENCY EQUIVALENTS Currency Unit = New Peso (N$) US$1.00 = 9.9 New Pesos (December, 1998) FISCAL YEAR January 1 - December 31 ABBREVIATIONS & ACRONYMS CAPFCE Federal School Construction Committee (Comite Administrativo del Programa Federal de Construcci6n de Escuelas) CAS Country Assistance Strategy CGOCE Infrastructure Division of the SSA (Coordinaci6n General de Obra, Conservaci6n y Equipamiento) CONAFE National Council for Educational Development (Consejo Nacional de Fomento Educativo) CONALITEG National Textbook Commission (Comisi6n Nacional de los Libros de Texto Gratuitos) COTEIP Technical Committee for Budget Integration (ComiteTecnico de Integraci6n Presupuestal) ICB International Competitive Bidding ICR Implementation Completion Report IDB Inter American Development Bank IMF International Monetary Fund IMSS Mexican Institute of Social Security (Instituto Mexicano de Seguridad Social) NAFIN National Financing Company (Nacional Financiera S.N.C) PESE Special Employment Program (Programa Especial de Empleo) PIARE Integrated Primary Education Project(Programa Integral para Abatir el Rezago Educativo) PILEOT Project of Local Initiatives for Employment and Temporary Jobs (Proyecto de Iniciativas Locales de Empleoy Ocupaci6n Temporal) PROBECAT Labor Retraining Program (Programa de Becas de Capacitaci6n para Trabajadores) PROGRESA Education, Health and Nutrition Program (Programa de Educacion, Salud y Alimentaci6n) PROSSE Program of Essential Social Services (Programa de Servicios Sociales Esenciales) SED System of Performance Evaluation (Sistema de Evaluaci6n del Desempeflo) SEDESOL Secretariat of Social Development (Secretaria de Desarrollo Social) SEP Public Education Secretariat (Secretaria de Educaci6n Puiblica) SHCP Secretariat of Finance and Public Credit (Secretaria de Hacienday Credito Putblico) SIE Management Operating System (Sistema de Informaci6n Ejecutiva) SOEs Statements of Expenditures SSA Secretariat of Health (Secretaria de Salud) STPS Secretariat of Labor and Social Welfare (Secretaria de Trabajo y Previsi6n Social) Vice President Shavid Javed Burki Director Olivier Lafourcade Sector Manager Xavier Coll. Staff Member Anna Sant'Anna  FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT MEXICO PROGRAM OF ESSENTIAL SOCIAL SERVICES (LOAN 3912-ME) Table of Contents PREFACE ...............................................III EVALUATION SUMMARY ...............................................V PART 1: PROJECT IMPLEMENTATION ASSESSMENT ......................................1 PROJECT BACKGROUND ............................................... I PROGRAM OBJECTIVES AND DESCRIPTION ............................................... I Original Objectives ...............................................I Original Project Design and Organization .................... ..........................2 Amendments ...............................................4 IMPLEMENTATION RECORD ...............................................4 Basic Education Services ...............................................5 Basic Health Services .......6.......................................6 Retraining and Employment Generation ...............................................6 Food And Nutrition ...............................................7 Monitoring And Evaluation Of Social Sector Programs ............................................8 Procurement of Goods and Services and Disbursements ............. ..........9.......... ...9 ACHIEVEMENT OF ORIGINAL OBJECTIVES ............................................... 9 MAJOR FACTORS AFFECTING THE PROJECT .............................................. 10 Factors not subject to Government control. .............................................. 0 Factors subject to Government control . .............................................. 0 Factors subject to implementing agency control .............................................. 10 PROJECT SUSTAINABILITY .............................................. 10 BANK PERFORMANCE ...............................................11 BORROWER PERFORMANCE .............................................. 11 ASSESSMENT OF OUTCOME ...............................................11 LESSONS LEARNED ...............................................11 PART II: STATISTICAL ANNEXES .............................................. 13 Appendixes: A. Mission's Aide Memoire B. Government's Contribution to the ICR C. Government's Comments on 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.  I  iii IMPLEMENTATION COMPLETION REPORT MEXICO PROGRAM OF ESSENTIAL SOCIAL SERVICES (LOAN 3912-ME) PREFACE This Implementation Completion Report (ICR) presents an assessment of the implementation and results of the Program of Essential Social Services (PROSSE) in Mexico, for which Loan 3912-ME in the amount of US$500 million equivalent was approved by the Board on June 22,1995. The Legal Agreements were signed on June 23, 1995 and the Loan became effective on July 6, 1995. The Inter American Development Bank (IDB) co-financed this emergency program in the amount of US$500 million. PROSSE was intended to protect priority programs during the economic crisis, including those in education, health, and retraining and employment generation. The Loan was closed on June 30, 1998 and the final disbursement took place on July 2, 1998. The loan amounting to US$500 million was fully disbursed and the total project cost amounted to US$1.9 billion (actual project costs by components and financiers are present in Tables 7A and 7B). The Loan provided 25.7 percent of total project costs, as estimated at appraisal. The IDB loan of US$500 million was also fully disbursed and the project was rated fully satisfactory. The Government contribution of US$947 million represented 49 percent of total program costs. The ICR was prepared by Nydia Maraviglia (LCSHD Consultant) after a final mission that took place from November 9 to 13, 1998 in which she participated, together with Anna Sant'Anna (Task Manager) and Catalina Toledo (Consultant). This ICR is based on the findings of the project completion mission, documents in the project files in Washington Headquarters and the Mexico Department, as well as on several evaluation studies that were part of other related Bank financed projects in the labor, education and health sectors. The last mission Aide-Memoire is included as Appendix A. This report was reviewed by Carmen Hamann (Acting Sector Leader, LCHSD/LCC IC). The Borrower prepared its own evaluation of project execution; the final reports of each of the implementing agencies are available in the project files and a summary prepared by NAFIN is included in Appendix B. The Borrower was requested to comment on the Bank ICR and the response is included as Appendix C.   v IMPLEMENTATION COMPLETION REPORT MEXICO PROGRAM OF ESSENTIAL SOCIAL SERVICES (LOAN 3912-ME) EVALUATION SUMMARY Introduction The floating of the peso at the end of 1994 resulted on a severe currency crisis in 1995 and a sharp contraction of Mexico's economy. Other Bank documents, including the 1995 and subsequent Country Assistance Strategies (CAS) provide details on the crisis. The Program of Essential Social Services (Programa de Servicios Sociales Esenciales - PROSSE) was a significant part of IBRD and IDB response. It was to be disbursed in two years (1995-1996) and it was intended to protect essential social services, while providing an instrument for rapid transfer of foreign exchange to Mexico to alleviate the fiscal crisis. The Government strategy in the social sectors emphasized the critical importance of human capital formation in economic development and it attached a significant role to the government in programs directed to those objectives. Public policy in the social sectors emphasized targeting the most vulnerable groups and increasing efficiency by redirecting (in the medium term) resources to the most successful programs. Project Objectives and Description The PROSSE had three objectives: (a) protect essential social services for the poor through provision of textbooks to all students, teaching materials, maintaining access to pre-school, primary and lower secondary education, and providing a basic health care package; (b) strengthen existing social safety net measures, to cushion the poor from the effects of the economic crisis through retraining, the creation of short term employment and a nutrition program targeted to vulnerable groups; and (c) lay the foundation for measuring and implementing efficiency gains in the social sectors over the medium term through technical assistance and program monitoring. The loan objectives were in accordance with the strategy proposed in the 1995 IBRD CAS and the IDB Country Program Paper, both of which focused on the revival of growth, poverty reduction, and human capital development. The objectives were perhaps too ambitious in aiming at a significant increase in outreach to the poorest groups, under the prevailing  vi restrictive economic circumstances. Preventing deterioration of the conditions affecting lower income groups would have been a more realistic goal. Original Project Design and Organization The PROSSE was designed as a time slice operation to finance ongoing high priority social sector programs within the existing budgetary allocations. The supported five components were: a) Basic Education Services (US$593.3 million or 30 percent of total project costs) by the Education Secretariat (Secretaria de Educaci6n PiT1/ica - SEP) to improve equity in access and rise quality. This would be obtained by increasing access to pre-school, primary and lower secondary education for the poor and the rural indigenous children and by supporting two important elements affecting the quality of education: adequate physical facilities and access to textbooks. Programs to reach rural areas, under the National Council for Educational Development (Consejo Nacional de Fomento Educativo - CONAFE) would be supported by IDB, which would also finance construction of almost 6,000 school spaces for pre-school, and primary school classes, almost 4,000 educational spaces for secondary schools and 40 spaces for indigenous boarding schools through the Federal School Construction Committee (Comite Administrativo del Programa Federal de Construcci6n de Escuelas - CAPFCE). IBRD would finance the production of textbooks by the National Textbook Commission (Comisi6n Nacional de los Libros de Texto Gratuitos - CONALITEG). b) Basic Health Services (US$746.5 million or 37 percent of total program costs) was under the responsibility of Secretariat of Health (Secretaria de Salud -SSA), to finance immunizations for 20 million children annually against the most common preventable diseases, control and treatment of endemic and communicable diseases, screening and early detection of selected chronic diseases, family planning and reproductive health services, maternal and child health and pre- and post-natal care, health and nutrition education and social marketing, and civil works, equipment and maintenance for first and second level health facilities. c) Retraining and Employment Generation (US$644.2 million or 32 percent of total program costs) to be executed by the Secretariat of Labor and Social Assistance (Secretaria de Trabajo y Previsi6n Social - STPS) was intended to retrain 800,000 unemployed or under-employed workers in 1995 and 1996 through the Labor Retraining Program (Programa de Becas de Capacitaci6n para Trabajadores - PROBECAT) and, with IDB financing, to facilitate short term employment through the Special Employment Program (Programa Especial de Empleo - PESE) including employment in labor intensive activities in construction and maintenance of rural roads, spot road improvements, cleaning and draining canals, garbage removal, transportation, reforestation, and conservation programs for soil and water.  vii d) Food and Nutrition Programs for Vulnerable Groups (US$8.7 million or 0.4 percent of total program costs) would consist of distribution of a food supplement basket and providing a package of services to poor rural families, particularly to children under 5 and pregnant and lactating mothers. e) Monitoring and Evaluation of Social Sector Programs (US$2.1 million or 0.1 percent of total program costs) was intended to strengthen the capacity of the Secretariat of Finance and Public Credit (Secretaria de Hacienda y Credito Publico - SHCP) to measure, monitor and evaluate the outputs of social sector expenditures, thus providing the foundation for a system to measure efficiency in social sector expenditures in the medium term. Implementation Experience and Results This loan was processed in about two months responding to urgent financial requirements of the Government as a result of the 1995 economic crisis. However, implementation presented difficulties from the beginning. During the first year, disbursements were slow because some items originally included in the project design became ineligible for disbursement (e.g., textbook production). Moreover, there were delays as a result of decentralization of some of the Secretariats. Further depreciation of the exchange rate in late 1995 also contributed to decrease disbursements. By June 1996, only 60 percent of the Loan had been disbursed, compared to a forecast of 75 percent. And although it had been acknowledged since late 1995 that the project needed restructuring to include new programs and to simplify procurement, taking into account the diversity of items and the nature of the project, it took a long time for all the implementing agencies, the National Financing Company (Nacional Financiera SN.C. - NAFIN, and the Bank to complete this process. Cumulative disbursements through FY 1996 amounted to US$298.1 million, compared to an estimated US$400 million. In July 1996, NAFIN called a meeting to discuss the restructuring of the project and develop a realistic disbursement plan. This meeting was attended by the Banks and all the project executing agencies. NAFIN had previously proposed to the Bank to include new programs and change the Loan disbursement percentages, but these proposals could not be readily translated into a restructured project acceptable to the Bank. After the July 1996 meeting there were delays in sending supporting documents, such as procurement plans for the various agencies, and there were also overdue audit reports. Moreover, the Borrower was under an obligation to regularize the Special Account by replacing ineligible expenditures incurred in 1996, with eligible expenditures, and these proceedings were only completed by February, 1997. In all, it took until June 3, 1997 for an Amendment to the legal documents of the Loan to be agreed upon and signed. As a result of all the difficulties and delays, in 1996 (FY97) PROSSE was declared a "problem project" by the Bank; this rating was lifted after the signing of the Amendment. A one-year extension of the closing date as well as several changes in the legal documents allowed, from then on, for smoother procurement processing and faster disbursements. The following paragraphs present an overview of implementation by components.  viii The education component was intended to provide support to basic education services with priority on helping the poor, keep up with the nationwide distribution of textbooks for basic education, and improve the expansion of educational facilities. This component absorbed US$650.1 million of total program costs (33.4 percent compared to 30 percent planned at appraisal). With respect to the textbook sub-component financed by IBRD, six months after Loan effectiveness, the activity was no longer eligible for disbursements because procurement procedures were unacceptable to the Bank. In spite of this problem, the loan financed US$73.5 million for textbooks in 1995 through a one time exception for retroactive financing, accepted at Negotiations. After a lengthy process of restructuring, the textbook sub-component was replaced by school construction under CAPFCE during the last year of project implementation (in 1995 and 1997 this activity was financed by IDB). With Bank and other financing, CAPFCE built 7,946 school spaces including classrooms, workshops, annexes, laboratories and dormitories. The agency surpassed by 60 percent its physical targets for 1997 for distance education buildings under the "Telesecundaria" program, but under-performed by 73.6 percent the targets for primary school buildings, mainly because in 1996-97 construction for primary school facilities was decentralized to the states. With the restructuring of the IBRD Loan, the education sector received US$114.6 million of Loan proceeds or 23 percent of the total (compared to 22 percent estimated at appraisal). Health was the sector that received the largest support from PROSSE (US$899.3 million or 46.2 percent of total program costs, compared to a planned 37 percent). IBRD financing amounted to US$238.1 million or 47.6 percent of the Loan amount. The budgetary support for the health component corresponded to approximately 20 percent of the SSA total budget for health services during the project implementation period. In 1997, as part of the decentralization of health services to the states, the SSA incorporated 71 performance indicators to evaluate budget execution, moving ahead of the group of social sector agencies in the use of efficiency measures proposed by the SHCP. The SSA met its civil works targets and, what is even more important, carried out a substantial reform of the health construction system during the project period, by transferring to the states the responsibility for construction and maintenance of health centers and hospitals. The retraining and employment generation component of PROSSE amounted to US$382.0 million (19.6 percent of total program costs compared to 32 percent estimated at appraisal), of which the IBRD Loan contributed US$146 million in 1995 and 1996 or 29 percent of the Loan proceeds (slightly lower than the planned 31 percent). Bank financing was used to support the STPS fellowship program for the unemployed (PROBECAT). PROSSE enabled a large expansion of the STPS worker-retraining activities during the crisis, from a level of 42,000 to 46,000 fellowships per year in 1993- 94, to almost 400,000 in 1995 and 500,000 in 1996. The PROBECAT helped shorten the employment search period for those who, prior to the training, were at a disadvantage in comparison with the average unemployed worker, particularly women. The original design of the nutrition component included: (a) the distribution of staple foods (flour, beans, salt, sugar and oil); (b) food supplements; (c) nutrition  ix education to pregnant women; and (d) control of growth and development of children under 5 years of age, as part of the basic health care program of the SSA. In practice, several of these activities were not financed by PROSSE because in August 1997 the Government introduced a new program to fight extreme poverty, the Education, Health and Nutrition Program (Programa de Educaci6n. Salud y Alimentaci6n - PROGRESA), with national funds, that included nutrition interventions. Nevertheless, the SSA carried out nutrition activities under PROSSE specifically aimed at development and testing of a food supplement targeted to poor children under 5 years of age and pregnant women. Loan disbursements to support these food supplements amounted to US$4.7 million (included in the SSA disbursements) or 0.9 percent of the Loan amount, which closely matches appraisal estimates. IDB did not disburse for the nutrition component. PROSSE supported the development of a System of Performance Evaluation under the SHCP to monitor and evaluate federally funded programs in the social sectors. The objective was to provide a good basis for planning, programming, implementing and evaluating public expenditures in the social sectors. As planned at appraisal, this component was solely financed by IBRD and the Government. The monitoring and evaluation system was developed with the assistance of two internationally experienced consulting firms. The system was tested in eight social programs. This experience provided lessons that are now being applied for the expansion of the system to an additional 30 programs. The system operates on the basis of a series of key indicators and benchmarks measuring global impact, coverage, quality, technical efficiency and resource utilization, by program and by state. Data can be consolidated at various levels, and sensitivity analyses and projections can be produced as part of the system. The work of the consultant firms resulted in the preparation of user-friendly guides for the creation and use of indicators and for the conduction of courses; in addition, the firms provided technical support to the agencies participating in the system. Assessment of Outcome The Loan main objective of protecting the budgets of several essential programs in the social sectors during a period of economic crisis was fulfilled, to the extent that, as agreed with the Banks, in the 1996 budget the social sectors received 54.5 percent of the federal programmable budget, representing a 2.5 percent real increase, while the overall budget received only 1 percent increase in real terms. However, budgetary restrictions began to ease in 1997 and 1998 and therefore it may be concluded that although the project helped cover a critical gap, the operational delays in 1995-96 diminished the relevance of this emergency assistance program. The objective of establishing the basis for measuring the efficiency of social programs in relation to expenditures was fully achieved. Less clear was the success or lack thereof, in increasing program outreach to the very poor. Instead, it is more accurate to say that the project protected the budgets of essential social sector programs and averted the deterioration of human capital formation, benefiting in general the lower income groups.  x Major Factors Affecting the Project A sense of urgency on the part of the Banks and the Government to respond quickly to the economic crisis may have led to adoption of a program without due consideration to operational details, including modalities of procurement and disbursement particularly with respect to IBRD. In the case of the Bank Loan, the delays in processing Amendments appears to have been a combination of Government late responses to consultations and a slow process of development of consensus within the Bank regarding acceptable changes in eligible programs and disbursement procedures. Given the nature of this project, mainly intended as budgetary support to existing programs carried out by social sector agencies, the implementing agencies had little influence in the changes and choices that needed to be made to expedite disbursements. The dialogue was mainly between NAFIN and the Banks. Summary of Findings The main findings are summarized by specific sectors. In education, the expansion of school construction adopted as part of project restructuring benefited particularly lower secondary education, and to a much lesser extent primary education, as originally intended, because the funding to CAPFCE was provided during a period when school construction was being decentralized to the states, and this transfer of responsibilities applied particularly to primary schools. As a result, although the investment was useful toward benefiting marginal and rural areas, it only partly reached the indigenous groups intended in the original design. In health, all SSA's targets for preventive and curative programs in 1995 were surpassed, and almost all targets were exceeded as well in 1996. In addition, there were definite improvements in prevention of communicable diseases through immunization. In labor markets, the worker fellowships program was found in general to be a good tool for facilitating the securing of a job by the unemployed. But specific factors hindering the achievement of objectives were identified, and these findings were later applied to improve the program. More efforts are needed to measure costs of the employment programs in relation to benefits. The nutrition programs could not be implemented as planned, as explained earlier, although successful results were achieved with the supplemental formula developed by the SSA. Finally, the basis for a system of performance evaluation in the SHCP was firmly established. Key Lessons Learned The following lessons may be extracted from this project: (a) loans that have as a main objective rapid disbursement to provide Governments with budgetary support for specific programs in a time of economic crisis, should include disbursement items amenable to procurement that is both acceptable to the Bank and regularly used and legally accepted by the Government; (b) given the nature of budgetary support operations during economic emergencies, a sector adjustment operation, consisting of the release of tranches on the basis of physical targets and fulfillment of critical policy conditions would have been more efficient; and (c) although it is important to allow enough flexibility in an emergency operation in response to changed requirements through  xi restructuring and reallocations, it is also essential to base the initial design on solid principles that tie closely the program objectives with the operational considerations regarding, inter alia, procurement and disbursements.  PART I: PROJECT IMPLEMENTATION ASSESSMENT PROJECT BACKGROUND 1. The floating of the peso at the end of 1994 resulted in a severe currency crisis in 1995 and a sharp contraction of Mexico's economy. Other Bank documents, including the 1995 and subsequent Country Assistance Strategies (CAS) provide details on the origin of the crisis, the economic program adopted at that time by the Government and the evolution of the economy since then. The 1994-95 crisis prompted the Bank Group, in coordination with the International Monetary Fund (IMF), the Inter-American Development Bank (IDB), the United States, and other G-10 countries to respond with a large support program. The Program of Essential Social Services (Programa de Servicios Sociales Esenciales - PROSSE) was a significant part of the assistance provided by IBRD and IDB in response to the crisis. It was to be disbursed in two years (1995-1996) and it was intended to consolidate and complement other projects that were being financed by both Banks in the social sectors, particularly focusing on labor markets, health and education to protect essential social services (related Bank projects are listed in Table 2). Also, the project intended to provide an instrument for rapid transfer of foreign exchange to alleviate the fiscal crisis. 2. The Government strategy in the social sectors emphasized the critical importance of human capital formation in economic development and it gave the Government a significant role in programs that: have a high public goods element (as for example preventive care of child infectious diseases); enable economies of scale; and address failures of the market (such as health services for the uninsured population). During the period of economic crisis, public policy in the social sectors emphasized targeting the most vulnerable groups, sought efficiency by redirecting (in the medium term) resources to the most successful programs, and favored consolidation by eliminating program overlaps. PROGRAM OBJECTIVES AND DESCRIPTION Original Objectives 3. The PROSSE had three objectives: (a) protect essential social services for the poor through providing textbooks to all students and, on a targeted basis, teaching materials, maintaining access to pre-school, primary and lower secondary education in isolated rural areas, delivering a basic health care package, vaccines, pharmaceuticals and medical supplies and conducting community health outreach campaigns; (b) strengthen existing social safety net measures, to cushion the poor from the effects of the economic crisis through retraining, the creation of short term employment and a nutrition program targeted to vulnerable groups; and (c)  2 lay the foundation for measuring and implementing efficiency gains in the social sectors over the medium term through technical assistance and program monitoring. Assessment of Original Project Objectives. 4. The program objectives were in accordance with the strategy proposed in the 1995 IBRD's CAS and IDB's Country Program Paper of the same year, which focused on the revival of growth, poverty reduction and human resource development. It was one of six operations proposed by both Banks in response to the financial crisis, to provide a safety net to the most vulnerable groups affected by the crisis and protect the gains achieved in social indicators in recent years. The intention of protecting the most vulnerable groups was correct, as was the objective of avoiding a downward slide in social indicators. 5. It was feared that a reduction in real Government expenditures would place the social sector strategy, as well as the education, health and labor programs and projects, at risk, a lesson learned during the economic crises in the early 1980's, when many indicators deteriorated and the recovery process was costly. The objectives were perhaps too ambitious in aiming at an increase in outreach to the poorest groups; this would have been too difficult to achieve under the restrictive economic circumstances prevailing at that time. Moreover, the only changes in program design that emphasized a greater outreach of the poor were the training programs for the unemployed but the modifications were not very successful. A more realistic goal would have been preservation of the gains attained in recent years in the social conditions of lower income groups in general. Original Project Design and Organization 6. The PROSSE was designed as a time slice operation to finance ongoing high priority social sector programs within the existing budgetary allocations. The five components supported by the program were: a) Basic Education Services (US$593.5 million or 30 percent of total program costs) was to be implemented by the Education Secretariat (Secretaria de Educacion Puiblica - SEP) to improve equity in access and rise the quality of basic education. This would be obtained by increasing access to pre-school, primary and lower secondary education for the poor and the rural indigenous children and by supporting two important elements affecting the quality of education: adequate physical facilities and access to textbooks. The National Council for Educational Development (Consejo Nacional de Fomento Educativo - CONAFE), a program for improving the quality of basic education for the rural poor, would be supported by IDB, which would also finance construction of school facilities through the Federal School Construction Committee (Comite Administrativo del Programa Federal de Construcci6n de Escuelas - CAPFCE). IBRD would finance the production of textbooks through supporting the National Textbook Commission (CONALITEG). b) Basic Health Services (US$746.3 million or 37 percent of total program costs) under the responsibility of the Secretariat of Health (Secretaria de Salud - SSA), would benefit 33 million uninsured people through priority preventive programs, support to basic curative  3 services, and additions to basic health infrastructure. The IBRD Loan was to finance immunizations for 20 million children annually against the most common preventable diseases, activities to control and treat endemic and communicable diseases, screening and early detection of diabetes and other chronic diseases involving 4 million patients annually, family planning and reproductive health services for about 2.5 million women annually, maternal and child health and pre- and post-natal care for about 9 million patients annually and health and nutrition education and social marketing of public health programs. In addition, the IBRD loan would finance the construction, equipment and maintenance planned for 1995 and 1996 as part of SSA infrastructure program for first and second level health facilities and public health laboratories; only construction that could be completed within those years was eligible for financing. The civil works parts of the health component would be implemented by the Infrastructure Division of the SSA (Coordinaci6n General de Obra, Conservaci6n y Equipamiento - CGOCE). c) Retraining and employment generation (US$644.2 million or 32 percent of total program costs) was to be executed by the Secretariat of Labor and Social Assistance (STPS) and consisted of retraining 350,000 unemployed or under-employed workers in 1995 and 450,000 in 1996 through the Labor Retraining Program (Programa de Becas de Capacitaci6n para Trabajadores - PROBECAT), to be financed by IBRD. The effectiveness of PROBECAT, as well as of the new modalities that were tried under PROSSE, would be evaluated through studies carried out under another IBRD project (Loan 3549-ME). With IDB financing, the project would facilitate short term employment through the Special Employment Program (Programa Especial de Empleo - PESE) through the Secretariat of Social Development (SEDESOL) in all states not already covered under the IBRD supported Second Decentralization and Regional Development Project (Loan 3357-ME). PESE included construction and maintenance of rural roads, spot road improvements, cleaning and draining canals, garbage removal, reforestation, and conservation programs for soil and water. d) Food and Nutrition programs for vulnerable groups (US$8.7 million or 0.4 percent) would consist of distribution of a food supplement basket and provision of a package of services to poor rural families (particularly to children under 5 and pregnant and lactating mothers); these activities would be carried out by the SSA, SEDESOL and the Integrated Family Development - Desarrollo Integral de la Familia - DIF) as well as by state and municipal governments. IDB and IBRD would equally share the financing of the nutrition program with the Government. e) Monitoring and Evaluation of Social Sector Programs (US$2.1 million or 0.1 percent of total program costs) was intended to strengthen the capacity of the Secretariat of Finance and Public Credit (Secretaria de Hacienda y Credito Pzublico - SHCP) to measure, monitor and evaluate the outputs of social sector expenditures, thus providing the foundation for a system to increase efficiency in social sector expenditures in the medium term. The SHCP was responsible to carry out this program through the existing Technical Committee for Budget Integration (Comite Tecnico de Integraci6n Presupuestal - COTEIP) chaired by SHCP and including as members representatives of the National Financing Company (Nacional Financiera S.N.C. - NAFIN), several divisions of SHCP and the implementing agencies. Supervision was to be based on quarterly reviews. I  4 Amendments 7. Three amendments were required to the IBRD Loan and Guarantee agreements. The first, signed on January 4, 1996 made Loan 3012-ME a single currency Loan. The second, signed on June 3, 1997, simplified procurement procedures to make them more compatible with the diversity of purchases financed through the project. This amendment had the effect of accelerating disbursements. Through a third amendment, on September 19, 1997, Part A of the project was added to the "civil works" disbursement category, in order to allow for financing school construction to expand the education system in areas not previously covered. In addition, on April 16. 1997 the closing date from this l oan was extended by one year, to June 30, 1998, to enable a full disbursement of the Loan. Moreover, there were several formal reallocations of Loan funds among categories of disbursement throughout the project period. IMPLEMENTATION RECORD 8. Initial processing of this loan was expeditious, as an appropriate response to the then urgent financial requirements. Preparation was completed in about two months and Board approval, signing and effectiveness took place in less than one month (the project timetable is shown in Table 3). But implementation was initially very difficult. During the first year, there were no disbursements of the IBRD Loan because some items originally included in the project were ineligible for disbursement (e.g., textbook production). Moreover, many activities that were planned for the program were delayed as a result of decentralization of some of the Secretariats. Also there was further depreciation of the exchange rate in late 1995. By June, 1996, 60 percent of the IBRD Loan had been disbursed, compared to a forecast of 75 percent (Cumulative Disbursements are shown in Table 4). The need for project restructuring was recognized since late 1995. It was necessary to review current components and agree on new items for disbursement, and to simplify procurement procedures taking into account the diversity of the items to be procured. However, it took a very long time for all the implementing agencies, NAFIN and the IBRD to complete this process. To a lesser extent these problems affected also the IDB Loan for US$500 million, which was fully disbursed in two years according to the original plan. 9. In FY1996 disbursements were significantly below appraisal estimates and reached US$298.1 million compared to a US$400 million forecast. The FY1996 amount included retroactive financing and the initial deposit of US$100 million in the Special Account. To address this problem, NAFIN called a meeting in July 1996, attended by the Banks and the participating agencies, for the purpose of restructuring the project and developing a realistic disbursement plan. Prior to that meeting, in December 1995, NAFIN sent a letter to the IBRD proposing the inclusion of new programs, higher percentages of disbursements for various categories, and simplified procurement procedures and certification of expenditures, in order to meet the disbursement targets for 1995-96. However, most of these proposals could not be readily translated into a restructured project acceptable to the Bank. 10. After the July 1996 meeting, letters were exchanged between the Bank and the Government with proposals for an amendment to the legal documents. However, there were  5 delays in obtaining supporting documents, including procurement plans for the various agencies for 1997. Also, overdue audits were pending and the amendment could not be finalized until the Bank had received these reports. Moreover. the Borrower was under an obligation to regularize the Special Account by replacing ineligible expenditures incurred in 1996, with eligible expenditures. All these requirements were only completed in Februaryl997. In all, it took until June 3, 1997, for the Amendment to be finally agreed upon and signed. As a result of all the difficulties and delays, PROSSE was declared a "problem project" by the Bank management in FY96. but this rating was lifted after the mentioned Amendment to the Loan and Guarantee Agreements was approved. The changes introduced n the legal documents allowed for smoother procurement processing and faster disbursements during the extended implementation period, up to June 30, 1998. 11. In order to describe the performance of the IBRD Loan by sector it is necessary, in many cases, to refer to the overall performance of the programs supported by the loan (Key Monitoring Indicators are presented in Table 5). The implementation summaries presented below apply such a concept. Basic Education Services 12. The original component design provides support for basic education services placing priority in helping the poor, sustain the nationwide distribution of textbooks for basic education and improve the expansion of educational facilities. Six months after Loan effectiveness (in January 1996), the production of textbooks became ineligible for disbursements because the procurement procedures were not acceptable to the Bank (the Government follows national competitive bidding not allowing foreign bidders to compete). However, the IBRD loan disbursed US$73.5 million for textbooks in 1995, through a one-time exception, accepted at Negotiations, for purchases made through national competitive bidding. After a lengthy process of project restructuring, the Loan added the financing for school construction under CAPFCE during 1997. 13. Disbursements for CAPFCE amounted to US$41 million, after the Bank agreed to use a simplified reimbursement procedure similar to that used by IDB, consisting of accepting Loan withdrawal applications based on Certificates of Expenditures (SOEs) verified by external auditors. In 1997 CAPFCE surpassed its physical targets for building facilities for the "Telesecundaria" program by 60 percent (lower secondary education), but under-performed by 74 percent the targets for building primary school facilities. In all, CAPFCE built 7,946 school spaces including classrooms, workshops, annexes, laboratories and dormitories. These activities benefited particularly the lower secondary education level in marginal and rural communities and in areas affected by a devastating tropical storm. This investment was useful, but it missed the originally intended strong focus on indigenous communities. The under-performance in construction of elementary schools was the result of the decentralization of school construction to the states, which took place in 1996-97. The IDB loan financed the basic education program for the rural poor carried out by CONAFE and, during the 1995 and 1996 the construction of basic education infrastructure by CAPFCE. IDB financing for education accounted for 34 percent and IBRD's for 18 percent of the total costs of the component, estimated in US$650.1 or 33.4 percent of total PROSSE program costs.  6 Basic Health Services 14. The health sector received the largest share of the PROSSE program, with an estimated total of US$899.6 million or 46.2 percent of total PROSSE program costs. IBRD financing for this component amounted to US$238.1 million or 47.6 percent of the loan amount, compared to 38 percent estimated at appraisal. The resources applied to the health component were distributed as follows: Civil works (14.3 percent). pharmaceuticals and medical supplies (35.3 percent), educational materials (4.3 percent); other goods and equipment (8.3 percent), temporary salaries (17.5 percent), incremental operational expenditures (29.6 percent), and studies and auditing (0.7 percent). During the project implementation period, the SSA received a budgetary support of almost 20 percent of Ministry total budget for health services (excluding salaries for permanent staff). All the health targets for preventive and curative care in 1995 were surpassed, and almost all targets were exceeded in 1996 as well. In 1997, as part of the decentralization of services to the states, the health sector incorporated 71 performance indicators to evaluate budget execution, moving ahead of other social sector agencies in using efficiency measures proposed by the SHCP. 15. During the project period, there were definite improvements in prevention of communicable diseases through immunization. Coverage of immunizations of pre-schoolers reached 97 percent. Poliomyelitis was eradicated and there were marked reductions in the incidence of measles, diphtheria and whooping cough. Demand for curative services was lower than expected, in large part because of the success of preventive programs. Regarding civil works, established goals were reached and, even more important, the SSA introduced a substantial reform of the health construction system during the project implementation period with the transfer of responsibility for construction and maintenance of health centers and hospitals to the states. Retraining and Employment Generation 16. The actual cost of this program is estimated at US$381.7 million or 20 percent of total program cost, compared to US$644.2 million estimated at appraisal. IBRD disbursed US$146 million in 1995 and 1996 to supplement STPS' PROBECAT fellowship program and IDB US$129.3 million for the PESE program. IBRD disbursements for this component represent 29 percent of the Loan amount, thus making the employment sector the second largest beneficiary of Bank financing after the health sector. PROSSE enabled a large expansion of employment generating activities during the crisis. While in 1992 and 1993 fellowships provided by the PROBECAT program numbered 42,000 to 46,000 per year, in 1995 and 1996 the number of fellowships per year increased to almost 400,000 in 1995 and 500,000 in 1996. Together with the Labor Market and Productivity Enhancement Project (Loan 3542-ME), PROSSE supported training and retraining of the unemployed and under-employed labor force through four training models: (a) basic training for productive activities (in a school environment); (b) mixed training (in schools and enterprises); (c) re-training and re-conversion; and (d) training for self- employment.  7 17. The PROBECAT program was evaluated in 1994. In 1995 and 1996, the evaluations were directed to two variations introduced in the fellowship program, involving training for self- employment and support for local initiatives (Project of Local Initiatives for employment and Temporary Jobs - Proyecto de Iniciativas Locales de Empleo y Ocupaci6n Temporal - PILEOT). In both instances, control groups of unemployed persons were compared with persons who received PROBECAT fellowships. In general, fellowships were found to be an effective tool to facilitate the process of obtaining a job. At the same time, specific factors were found to either hinder or help the achievement of the program objectives, and these findings were subsequently used to improve the program. For those receiving training in a school environment, cost recovery was achieved after 9 to 17 months of taking gainful employment. On the other hand, for those who were 26 to 55 years of age and had recent work experience, the costs of training were not recovered. However, considering PROBECAT's equity objectives, the program is believed to have helped shorten the job search period for those who were at a disadvantage (particularly women), compared to the average unemployed worker. 18. Under the new modalities of training that were tested under PROSSE and had the objective of benefiting the lowest income unemployed workers, the concept of providing basic school education and literacy classes at the same time as work related training did not produce satisfactory results. Identification and recruitment of illiterate workers eligible for training was very difficult and desertion was high because of the precarious economic situation of the trainees and their low levels of education. Lessons learned with these experiences were used in assisting the same target population through other programs. 19. The evaluations of PILEOT conducted in 1995 and 1996 aimed to determine to what extent the training program facilitated self-employment (based on a sample of 338 program participants in 5 states) and to assess the impact of the local initiatives program in consolidating productive projects, increasing income, and facilitating employment of the beneficiaries (based on a sample of 188 cases in 3 states). Results of the evaluation of self-employment indicated positive returns to training. Average earning increased by 10.5 percent for the average beneficiary and by 25 percent for women. Nevertheless, 40 percent of the program participants spent an average 7 months seeking employment. Among those employed before and after training, self-employment grew from 27.7 percent to 35.4 percent as a result of the training, compared to 29 percent who engaged in self-employment after training among all program participants. The assessment of the impact of local initiatives indicated that earnings improved only slightly after training (from 1.3 to 1.4 minimum salaries per month), and as many as 21 percent of the sample was not gainfully employed after training at the time of the survey. This less than satisfactory result is partly due to poor selection of participants at the local level, where many people enrolled with the sole objective of receiving a subsidy during a period of great economic hardship. Program adjustments are planned to incorporate these findings. Food And Nutrition 20. The original design of the nutrition component included: (a) the distribution of staple foods (flour, beans, salt, sugar and oil); (b) food supplements; (c) nutrition education to pregnant women; and (d) control of growth and development of children under 5 years of age, as part of the basic health care program of the SSA. In practice, several of these activities were not  8 financed by PROSSE because in August 1997 the Government introduced a new program to fight extreme poverty, the Education, Health and Nutrition Program (Programa de Educaci6n, Salud y Alimentaci6n - PROGRESA), with national funds, that included nutrition interventions. Nevertheless, the SSA carried out nutrition activities under PROSSE specifically aimed at the development and test of a food supplement targeted to poor children under 5 years of age and pregnant women. Total cost of the component amounted to US$8.7 million of which the IBRD Loan financed US$4.4 million (included in the SSA disbursements) or 0.9 percent of the Loan amount, or approximately 50 percent more than estimated at appraisal. IDB did not disburse for the nutrition component. Monitoring And Evaluation Of Social Sector Programs 21. PROSSE supported the development of a System of Performance Evaluation (Sistema de Evaluacion del Desempeno - SED) under the SHCP to follow up federally funded programs in the social sectors. This activity was executed by SHCP's Unit of Budget Policy and Monitoring. The objective was to provide a good basis to plan, program, implement and evaluate public expenditures in relation to the impact of the programs being financed. Specifically, the system aims to measure the efficiency improvements in the use of budget resources, and to introduce a cultural change among public sector staff toward results and client satisfaction. The system was also intended to identify problems and inefficient practices and to seek improvements in the decision making processes regarding budget allocations. To achieve these objectives, the system developed appropriate criteria for measuring results, effectiveness, cost and quality of the services. 22. The SHCP engaged the services of two internationally experienced consulting firms to develop the system (the contents of this study are described in Table 6). In addition, a seminar was conducted in the Bank in Washington to assist the Government in identifying optimal design and best practices observed in other countries which already had a system to evaluate spending priorities. The seminar was attended by Government officials, representatives of the consulting firms engaged to provide technical support to SHCP, and professionals with experience in similar systems in other countries. 23. A computerized management operating system (Sistema de Informaci6n Ejecutiva - SIE) was developed to generate the following data for the selected social programs: (a) results of the implementation indicators; (b) level of effectiveness of the expenditure; and (c) achievement compared to programmed goals. The SIE was tested in eight social programs: PROBECAT (STPS), Solidaridad (Mexican Institute of Social Security--Instituto Mexicano de Seguridad Social -- IMSS); School Breakfasts (Integrated Family Development - Desarrollo Integral de la Familia -- DIF); Effective Management of Diarrhea Cases (SSA); Universal Vaccination (SSA); CONAFE (SEP); CONALITEG (SEP); and the "Telesecundaria" Program (SEP). The initial application of the system showed the importance of generating a demand for its use among the social sector agencies, the need to ensure the quality of the data entered into the system and the significance of stimulating the development of a new management culture based on results. 24. The system operates on the basis of a series of key indicators and benchmarks that, when reaching specific levels, alert program managers to problems or indicate the need for interventions or corrections. The implementation indicators measure global impact, coverage,  9 quality, technical efficiency, and resource utilization, by programs and by state. The system enables data consolidation at various levels and includes sensitivity analyses and projections. The work of the consultant firms resulted in the preparation of user-friendly guides for the creation and use of indicators and for training in system use. The consultants also provided technical support to the participating agencies (the studies and guides produced within this project are listed in Table 6). Procurement of Goods and Services and Disbursements 25. At Negotiations the Bank accepted for retroactive financing, purchases for production of school textbooks and/or purchase of paper through national competitive bidding, a procedure used by the Government, but usually not accepted by the Bank because it does not allow foreign bidders. The Amendment dated June 3. 1997 enabled procurement of textbook production/materials through contracts awarded under national shopping, up to US$79 million, to validate reimbursements for purchases of paper for textbooks that had already been made retroactively in 1995 under an agreement accepted at Negotiations. Because the Borrower did not introduce changes in the procurement procedures for textbook materials, these items became ineligible for reimbursement as of January 1996. As another example of procurement problems, at Negotiations, the Government and the Bank had agreed on the use of "limited international bidding" for procuring medicines, medical equipment and micro-nutrients, but this procedure is not legal in Mexico. Other complications that initially caused delays were the large number of small contracts that had to go through International Competitive Bidding (ICB), and required prior Bank review. Eventually, procurement, loan, and project staff agreed that ICB packages would be reviewed ex-ante and only large contracts over a pre-determined threshold would be subject to prior review. These procurement problems contributed in large measure to make this a "problem project" during FY1997. After the Amendment to the legal documents in June 1997, disbursements accelerated and with the decision to extend the closing date to June 30, 1998, it was possible to disburse the full amount of the IBRD Loan, albeit in three years and not two years as estimated at appraisal. ACHIEVEMENT OF ORIGINAL OBJECTIVES 26. The Loan main objective of protecting the budgets of several essential social programs during a period of economic crisis was fulfilled, to the extent that, as agreed with the Banks, in the 1996 budget the social sectors received 54.5 percent of the federal programmable budget, representing a 2.5 percent real increase, while the overall budget received only I percent increase in real terms. The budgetary restrictions began to ease in 1997 and 1998 and therefore the project covered a critical gap. However, the operational problems and delays experienced by the project in 1995-96 somewhat decreased the relevance and opportunity of this emergency operation. A positive, long-term result was the establishment of a basis for measuring the efficiency of social programs in relation to expenditures. Less clear was the success of lack thereof, in reaching and improving the situation of the very poor, since the project, by its very nature as an emergency operation, could not introduce new program designs to target more effectively the rural poor and isolated regions. Although labor market interventions did try to channel proportionately more funds to benefit poor communities, through new modalities of  10 fellowships, these attempts were not very successful. It is more accurate to say that the project protected the budgets of important social sector programs, averted program deterioration, and benefited, in general, the lower income groups in marginal areas, which is not a small accomplishment. MAJOR FACTORS AFFECTING THE PROJECT Factors not subject to Government control 27. A sense of urgency on the part of the Banks and the Government to respond quickly to the economic crisis led to the adoption of a financing plan with insufficient analysis of operational details, including particularly modalities of procurement and disbursement. Factors subject to Government control 28. The result of delays in processing amendments to the IBRD Loan documents appears to have been due to a combination of Government delayed responses to consultations and a slow process of decision-making within the Bank regarding acceptable changes in eligible programs and disbursement procedures. Factors subject to implementing agency control 29. Given the nature of this project, mainly intended to provide budgetary support for existing programs within specific social sector agencies, the implementing agencies had little influence in the changes and choices that needed to be made to expedite disbursements. The dialogue was mainly between NAFIN and the Banks. PROJECT SUSTAINABILITY 30. By preserving continuity of essential programs during a period of financial crisis the project prevented deterioration of the services and programs, which continued to perform appropriately through 1998, thus contributing to the development of human capital. With respect to the system of performance evaluation developed by the SHCP, the project provided the initial impetus for its development and good continuity is ensured thorough support currently being provided for its expansion and future use. As a result, it can be expected that budget allocations and strategic objectives will be much more closely linked in the forthcoming years. Furthermore, the work of the international consultants resulted in the development of evaluation expertise at local consulting firms that are currently assisting in the expansion of the system. The team appointed by SHCP to coordinate consultants and lead the development of the evaluation system is providing continuity to SED and working towards including about 30 additional programs in the process of performance evaluation.  11 BANK PERFORMANCE 31. The Bank acted promptly to a request from the Government of Mexico for assistance. It worked in coordination with IDB and arrived at an assistance package in record time, but it was less successful in anticipating the problems that would arise regarding the arrangements for disbursement of Loan funds to support specific ongoing programs. The obstacles faced as to the eligibility of items and components were identified early, during the first few months after Loan effectiveness, but consensus on the correct course of action to remedy the situation was slow to develop within the Bank. Finally, when amendments were approved, a one-year extension of the closing date was required to fully disburse the Loan. These problems did not affect the performance of the IDB loan to the same extent, because IDB adopted simplified disbursement and procurement procedures from the outset. Details on use of Bank resources in terms of staff and missions are presented in tables 8 and 9. BORROWER PERFORMANCE 32. The Borrower's implementing agencies cooperated with all requirements for information and reporting on the components supported by the Loan. The SHCP conducted appropriately the recruitment of two international firms for assisting in the preparation of the monitoring and evaluation system, appointed a team to carry out this component, and took a keen interest in obtaining information from other countries regarding their experiences in developing similar systems to evaluate the allocation of budget resources. NAFIN acted appropriately as the coordinating agency. There were, however, delays in providing audit and other progress reports. Also, annual project reviews took place in lieu of quarterly reviews, as initially agreed. Otherwise, legal covenants were fulfilled, with the exception of those relating to activities that were cancelled (e.g., part of the nutrition program and textbooks). ASSESSMENT OF OUTCOME 33. The IBRD loan assisted with the transfer of US$500 million to strengthen the budgets of the most essential social sector programs during a difficult period of economic crisis, albeit with some delays. The overall performance of the operation is rated as satisfactory (see Table 1, Summary of Assessments). It is less clear whether PROSSE protected especially the very poor, as intended in the original project design. It is more plausible that what the PROSSE protected was the continuity of ongoing programs that were reaching the lower income groups nationwide thus ensuring sustained human capital development. Overall, the project fulfilled a worthwhile function of preventing the deterioration of human capital gains that had been achieved during the late eighties and early nineties. It also built the foundation for implementing a system for measuring efficiency gains in social service programs. LESSONS LEARNED 34. The following were lessons learned from this project: a) In loans of the type evaluated in this report, that have as a main objective rapid disbursement to provide budgetary support to specific Government programs during a relatively short  12 period of time, the items selected for disbursement should be amenable to procurement that is both acceptable to the Bank and is regularly used by and is legally accepted by the Government. b) Given the nature of budget support operations, treating them as investment operations leads to confusion regarding items to be financed and method of disbursement. A sector loan consisting of the release of tranches on the basis of physical targets and fulfillment of critical policy conditions would have been a more efficient instrument in times of economic emergencies. c) Although it is important to provide for enough flexibility in this type of operation during implementation, by introducing modifications, reallocations and amendments in response to changed requirements, it is also essential to base the initial design on solid principles that closely tie the strategic objectives with the operational procedures affecting, inter alia, procurement and disbursements. FUTURE OPERATIONS 35. The Mexican government has requested Bank assistance for a new operation to support essential social sector programs, emphasizing the need to protect such program during the current period of severe fiscal constraints. Preparation of this operation is scheduled to start soon.  13 IMPLEMENTATION COMPLETION REPORT MEXICO PROGRAM OF ESSENTIAL SOCIAL SERVICES (LOAN 3912-ME) PART II: STATISTICAL ANNEXES Table 1: Summary of Assessments Table 2: Related Bank Credits Table 3: Project Timetable Table 4: Cumulative Estimated and Actual Disbursements Table 5: Key Monitoring Indicators Table 6: Studies included in Project Table 7A: Project Costs Table 7B: Project Financing Table 8: Status of Legal Covenants Table 9: Bank Resources: Staff Inputs Table 10: Bank Resources: Missions   15 Table 1: Summary of Assessments A. Achievement of objectives Substantial Partial Negligible Not applicable Macro policies '4 Sector policies i Financial objectives '4 Institutional development '4 Physical objectives '4 Poverty reduction '4 Gender issues i Other social objectives i Environmental objectives i Public sector management ' Private sector development i Other (specify) B. Project Sustainability Likely Unlikely Uncertain Sustainability A C. Bank performance Highly Satisfactory Deficient Satisfactory Identification ' Preparation assistance '4 Appraisal ' Supervision '4 D. Borrower performance Highly Satisfactory Deficient Satisfactory Preparation '4 Implementation '4 Covenant compliance ' Operation ' E. Assessment of outcome Highly Satisfactory Unsatisfactory Highly Satisfactory Unsatisfacy Assessment of Overall Outcome '  16 Table 2: Related Bank Loans Loan Year of Name/Number Purpose Approval Status Comments Basic Health Care I Improving and extending health care to the uninsured in 1990 Completed ICR dated June 3, 1997 (Ln.3272-ME) four of the poorest states and institutional strengthening at state level toward health services decentralization Basic Health 11 Support equitable access to a cost-effective package of 1994 Ongoing (Ln.3943-ME) quality health services for the uninsured and underserved in risk areas of II states; support state institutional development; and assist SSA assume leadership and policy role Primary Education I Assist the Government in improving the equity, quality and 1992 Closed ICR dated January 20, 1998 (Ln.3407-ME) efficiency of primary education, focusing on four Mexican states. Primary Education 11 To improve primary school students' academic 1994 Ongoing (Ln.3722-ME) achievement levels, reduce the high repetition and dropout rate, contribute to raising the human capital level, and redress some of the country's social and economic imbalances as part of the government's social compensatory program. Primary Education To help raise the standard of living of approximately three 1994 Ongoing (PIARE) (IDB million Mexican citizens born between the years 1990 and 846/ME) 2005 to families in the lowest income group through improvements in primary education levels. Manpower training Retraining for the unemployed 1989 Closed ICR dated November 30, 1993 (Ln. 2876-ME) Labor Market and Promoting private sector-led growth, easing costs of labor 1992 Completed PROSSE partially financed fellowship Productivity mobility and labor market adjustment and training components. Enhancement (Ln.3542-MEn ICR dated December 28,1998 (Ln.3 542-ME)  17 Technical Education Objective is to improve the quality of the technical 1994 Ongoing To provide greater support to project and Training education and training in Mexico so that it meets the implementation, supervision work has Modernization critical needs of the productive sector in a flexible manner. been transferred from headquarters to the (Ln.3805-ME) field. Decentralization and The Project seeks to increase access of rural poor to basic 1995 Ongoing Project expected to close on June 30, Regional social and economic infrastructure and income-generating 1999 Development 11 activities in the following states: Chiapas, Guerrero, (Ln.3790-ME) Hidalgo, Michoacan, Oaxaca, Puebla, Veracruz,and Zacatecas. Municipal The program is aimed at providing financing for 1994 Ongoing Development community-based small infrastructure projects, as well as Program (IDB institutional strengthening to small and medium 837/OC-ME) municipalities to improve their financial status and to make public service delivery more efficient.  18 Table 3: Project Timetable Steps in project cycle Date planned Date actual/ latest estimate 1. Preparation 02/20/95 02/19/95 2. Appraisal 03/01/95 03/12/95 3. Negotiations 05/17/95 05/04/95 4. Board presentation 05/25/95 06/22/95 5. Signing 06/23/95 06/23/95 6. Effectiveness 06/30/95 07/06/95 7. Project completion 06/30/97 06/30/98 8. Loan closing 06/30/97 06/30/98 Project Timetable 6-Dec-99 24-Jul-98 11-Mar-97 Iates -.~- - : +Ranned Actual 28-Oct-95 15-Jun-94 31-Jan-93 1 2 3 4 5 6 7 8 Processing Steps  19 Table 4: Cumulative Estimated and Actual Disbursements (Millions of US$) IBRD FY FY95 FY96 FY97 FY98 Appraisal estimates 100.0 400.0 500.0 Actual Disbursements --- 298.0 347.8 500.0 Actual as percent of --- 74.5 69.6 --- Revised Estimate Date of last Disbursement July 2, 1998 Disbursements 600 500 400 ~Appraisal Estinmates j300 200 .Actual 200 '(eDasburserrents! 100 0 FY95 FY96 FY97 FY98 1ank Fiscal Year  20 Table 5: Key Monitoring Indicators Key Implementation Indicators at Unit Original Targets set in Achieved as Percent Project Appraisal 1995, through 1997 of Dec. 31, Achieved (Revised Targets in 1997 over parenthesis) Original./ Revised _ Targets A. Basic Education Services -Mex$ million ' . Urban Kindergarten Classroom 1,038 852 -17.9 * Urban Kindergarten Annex 861 796 -7.5 * CAPEP Classroom 59 54 -8.5 * CAPEP Annex 338 298 -11.8 * Indigenous Kindergarten Classroom 798 286 -64.2 * Indigenous Kindergarten Annex 481 381 -20.8 * Rural Kindergarten Classroom 1,259 507 -59.7 + Rural Kindergarten Annex 1,155 1,236 -7.0 Sub-total Primary Schools 5,989 4,410 -73.6 * "Telesecundaria" Classroom 531 1,139 +114.5 * "Telesecundaria" Workshop 389 313 +8.3 * "Telesecundaria" Annex 1,165 1,727 +48.2 Sub-total "Telesecundaria" Schools 1,985 3,179 +60.2 * Dormitories Annex 40 64 +60.0 * Training Classroom 37 28 -24.3 * Training Laboratory 3 2 -33.3 * Training Workshop 154 32 -79.2 * Training Annex 569 231 -59.4 Sub-total Training 803 357 -44.5 Total School Construction 8,777 7,946 -9.5 B. Basic Health Services * Vaccinations Against Preventable Vaccination 44,477,882 50,203,605 113 Diseases * Coverage with Complete Vaccination Percent 89.8 89.9 100 Schedule for Infants Under I year . Coverage with Complete Vaccination Percent 96.2 97.1 101 Schedule for Pre-school Children * Detection and Control of Consultation 6,962,268 10,334,202 148 Communicable Diseases * Detection and Control of Acute Consultation 3,397,541 4,547,262 114 Respiratory Infections * Monitor Growth of Children Under 5 Consultation 14,425,054 15,704,828 130 * Monitor Health of Pregnant Women Consultation 5,535,235 5,669.156 102 and Infants * General Mortality Rate 4.7 4.6 * Infant Mortality Rate 17.0 15.20 'Target set in 1995, to be financed by IDB. In 1997 the IBRD Loan documents were amended to include financing for CAPFCE.  21 Key Implementation Indicators at Unit Original Targets Actual Percent Project Appraisal through 1997 Achieved as Achieved Revised Target () of Dec. 31, over 1997 Original/ Revised Targets * Infant Mortality Rate 17.0 15.3 * Under 5 Mortality Rate 5.2 4.9 C. Retraining and Employment Generation2 * School Fellowships for Unemployed Fellowship NA 371,642 * Mixed Training (school/factory) Fellowship NA 128,662 * PILEOT Fellowship NA 447,411 Sub-total, Fellowships for Unemployed Fellowship 800,000 947,715 118.4 * Training, School Courses Course NA 15,522 * Mixed Courses (School/Factory) Course NA 5,420 * PILEOT Course NA 28,537 * Sub-total, Courses for Unemployed Course 29,000 49,479 172.3 D. Nutrition Nutrition - Prevalence of Moderate and Rate 5.9 18.1 Severe Malnutrition Under 5 years of age Nutrition - Mortality Due to Nutritional Rate 19.0 16.5 Deficiency Under 5 E. SHCP Monitoring and Evaluation * Studies to develop system Study Contracting of qualified A study in four 100.0 firns to assist in the phases, development of a conducted with monitoring system for the assistance social sector investments of two toward future efficiency international gains consultant firms was undertaken and successfully completed 2Only global targets were established in 1995 for fellowships and courses.  22 Table 6: Studies Included in the Project STUDIES UNDER THE MONITORING AND EVALUATION COMPONENT (SHCP) Study 3 Purpose as defined Status Impact at Appraisal/ redefined SHCP Study for Development of a Develop five types of Completed Established a good basis for an Pilot System for Monitoring and indicators for eight evaluation system for social Evaluation of Performance and programs in Health, sectors; it is being expanded Results of Government Programs, Education, Labor after completion of this carried out in four phases, by two Markets, and project, with Government consultant firms: A.T. Keamey, Inc. Nutrition; the types of financing, to cover 30 And Booz Allen & Hamilton de indicators were as programs and its full Mexico S.A. de C.V. follows: impact, implementation has time Phase Unertadicoverage, horizon of about 10 years Phase l . Understanding the cost/effectiveness and Existing Information Systems and use of resources, their Applications. us ofrsucs quality, and user or Phase 2. Definition, design and beneficiary validation of indicators. perceptions. Phase 3. Establishment of the new system including equipment acquisition, installation , and testing of operations Phase 4. Final report and design of methodological guides and technical execution Methodological Guide for Creating In fulfillment of Completed As above Performance Measurement Systems above objectives (Booz Allen) Managers' Manual (Booz Allen) As above Completed As above User Manual (A. T. Kearney)) As Above Completed As above Methodological Manual for Costing As above Completed As above Public Policies (Booz Allen) Design of training Sessions As above Completed As above 3All studies described in this table are in Spanish (translated titles).  23 Table 7A: PROSSE Project Costs (US$ Million) Appraisal Estimates Actual Costs Item Local Foreign Total percent Local Foreign Total percent Foreign Foreign A. Education 444.1 149.4 593.5 25.1 520.1 130.0 650.1 20.0 B. Health 648.5 98.0 746.5 13.1 785.3 114.0 899.3 12.7 C. Labor Markets 535.6 108.6 644.2 16.9 382.0 0.0 382.0 0.0 D. Nutrition 6.0 2.7 8.7 31.4 7.4 1.3 8.7 14.5 E. Monitoring and Evaluation 1.5 0.6 2.1 28.6 1.2 0.3 1.5 20.0 F. FIV - 5.0 5.0 100.0 5.0 5.0 100.0 TOTAL PROJECT COST 1,635.7 364.3 2,000 18.2 1,696.0 250.6 1,946.6 12.8 Table 7B: PROSSE Project Financing (US$ Million) Appraisal Estimates Actual Costs Source Local Costs Foreign Total Local Costs Foreign Total Costs Costs Federal Government 1,000 - 1,000.0 946.6 946.6 IDB 308.8 191.5 500.0 374.7 125.3 500.0 IBRD 327.2 172.8 500.0 374.7 125.3 500.0 TOTAL 1,635.7 364.3 2,000.0 1,696.0 250.6 1946.6 FIV is the inspection fee charged by the IDB on its loans and represents I percent of the Loan amount.  24 Table 8: Status of Legal Covenants Descri~~4i9n of Cov~nant Coven, Present Original Reused Cm et a ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~Tp Status fulfill flil date date 202 (b) Open and maintain a Special Account. 01 C 07/06/1995 No comments. 3.03 Government and Bank undertake quarterly project 09 CP 12/05/1995 For calendar year 1995, the review was reviews. undertaken in December 1995. For calendar year 1996. the review was carried out in May 1996. For calendar year 1997, the review was carried out in July 1997. Therefore, instead of quarterly reviews, formal reviews were carried out only once a year. The project was completed in June 30, 1998. 4.01 (a) Maintain adequate financial records (continuously). 01 C 07/06/1995 No comments. 4.01 (b) i Submit audit reports of the financial records and of the 01 C 06/30/1996 All audit reports were submitted on or prior to the Special Account. due date and were unqualified. 4.01 (b) ii Submit audited records of the Project. 01 D 06/30/1996 T'here were several instances of delays in submission of Audit Reports. 4.01 (b) iii Submit certified monthly statements of the Special 01 C 08/06/1995 Certified statements of the Special Account were Account. submitted by NAFIN every time the Special Account was replenished from the Loan Account. Schedule 2, Carry out physical audits and qualitative assessments to 09 C 12/31/1996 International consultants contracted by SHICP Part E.2 monitor social sector expenditures. completed a system to monitor the performance of social sector expenditures. The system was successfully tested in 8 social programs and the final report was received by the Bank on April 20, 1998.  25 DescsriopHo of Covenant Covem Presnt eriginal Revisedy Comment ~~~~~~ ~~~~~~~~~~~ ~~~~Type Status fulfill ufl date ~ dt Guarantee 2.02 (a) (b) Provide the funds, facilities, services and other 03 C 07/06/1995 Satisfactory. resources required for the Project, in timely manner. For fiscal year 1995, release funds to PROSSE programs in accordance with Attachment I of the Implementation Letter. For the following years, release funds in accordance with Guarantee Agreement, Section 3.11 (b). 3.04 (b) Prepare and agree with the Bank on an implementation 10 NYD 12/31/1997 12/31/1998 Due to extension of the closing date for the plan following loan closure and implement it thereafter. Project from 06/30/1997 to 06/30/1998, the due date for compliance with this requirement was extended from 12/31/1997 to 12/31/1998. Completed. 3.06 Carry out a cost-effectiveness study of CONALITEG's 10 NC 07/31/1996 The fulfillment date for this covenant was July textbook production and distribution system, and 31, 1996. CONALITEG was excluded from the present the results and action plan derived from the Project as of January 1, 1996, and for this reason study to the Bank. the study was never carried out. 3.07 All health sector construction will be supervised by 10 C 07/06/1995 Construction of health facilities were not carried private consultants; NAFIN shall make the out under the project except for minor corresponding supervision reports available to the Bank. maintenance works affecting 258 health service units. These works were satisfactorily supervised. 3.08 For PROBECAT trainees, selection criteria to be 10 C 07/06/1995 Fulfilled. applied according to attachment IV of the Implementation Letter. 3.09 For nutrition, methodology should be according to the 10 NC 07/06/1995 The nutrition component was partly implemented 1992 pilot, implemented in high marginality by the SSA, covering (a) nutrition education to municipalities with constant beneficiary monitoring. pregnant women; (b) control of growth and development of children under 5 years of age; and (c) food supplements to poor children under 5 years of age and pregnant women. The sub- component "distribution of staple food" was not financed under the program.  26 Sction , ::: DescriptionofCovenant Coven Present Original Revised Comiments 7:- ; . .Type Status fulfill fulfill date date 3.10 Monitoring and evaluation system to be established as 10 C 06/30/1996 Fulfilled. Final report received by the Bank on per Attachment II of the Implementation Letter. April 20, 1998. 3.11 (a) Submit first quarterly report in 11/01/1995 and 09 CP 11/01/1995 Quarterly reports were provided during 1995. In subsequent reports in three-month intervals. subsequent years, these reports were updated at every supervision mission. 3.11 (b) Hold regular quarterly review meetings with the Bank, 10 CD 10/06/1995 Quarterly review meetings were replaced by review meetings during supervision missions. which have taken place approximately every six months. 3.11 (b) iii Reach agreement with the Bank on preliminary budget II C 11/15/1995 Agreements on budget allocations for the project allocations for PROSSE programs for the following were reached for every project implementation implementation year. year. 3.11 (b) iv Define budget and action-plan for PROSSE in 1996 10 C 02/15/1996 PROSSE budget and action plan were agreed with (and subsequent years) satisfactory to the Bank. the Bank for all years of project implementation. Covenant types: I = Accounts/audits; 2 = Financial performance/review; 3 = Flow and utilization of Project Funds; 4 = Counterpart funding; 5 = Management aspects of the project. Present Status: C = Covenant complied with; CD = Complied with after delay, CP = Complied with partially  27 Table 9: Bank Resources: Staff Inputs Actual Stage of Project Cycle Weeks US$(000) Preparation to Appraisal 22.7 126.5 Apprais s 38.2 95.4 Negotiations through Board Approval 4.3 14.2 Supervision 38.6 133.7 Completion 5.4 16.9 Total 109.2 386.7  28 Table 10: Bank Resources: Missions Performance Rating- Stage of Project Cycle Mouth/ Number SW in Specialized Staff Implementation Development Types of Problems Year of Field Skills Representeda Status Objectives c/ Persons Through Appraisal Identification/ B(2), C(2), D(2) J, H, Preparation 02/95 10 2 E n/a n/a n/a Appraisal Through Board Approval A, B(2), C(2), E, Pre-Appraisal/Appraisal 03/95 16 2 F(2),D (3), G, H, 1(2), n/a n/a n/a J Supervision Supervision 1 07/95 1 2 B S S n/a Supervision 2 12/95 3 0.4 B, D(2), S S n/a Supervision 3 04/96 1 2 B S S n/a Supervision 4 07/97 2 2 H, K S S n/a Supervision 5 03/98 3 2 F, H, K S S n/a Completion 1 1//98 3 1 F, H, J S S n/a a' A=Division Chief; B=HR Economist; C=Health Specialist; D=Education Specialist.; E=lnstitutional Development Specialist, F-Operations Officer; G=Financial Analyst; H=Social Sector Specialist, I=Procurement; J=Operations Assistant; K=Accountant b/ I=Problem Free; 2=Moderate Problems; 3=Major Problems; S=Satisfactory; U=Unsatisfactory  29 APPENDIXES   31 APPENDIX A Aide Memoire PROYECTO DE SERVICIOS SOCIALES ESENCIALES (PROSSE) PRESTAMO 3912-ME MISION DE TERMINACION DE PROYECTO DEL 9 AL 13 DE NOVIEMBRE DE 1998 1. INTRODUCCION Una misi6n del Banco Mundial, integrada por Anna Sant'Anna (Coordinadora del Proyecto) Nydia Maraviglia (Consultora) y Catalina Toledo Contadora Publica ( Consultora) realiz6 la ultima misi6n de supervisi6n del proyecto del 9 al 13 de noviembre de 1998, con el prop6sito de obtener toda la informaci6n necesaria para la preparaci6n del Implementation Completion Report (ICR). Con la valiosa colaboraci6n y coordinaci6n de Nacional Financiera se llevaron a cabo reuniones con las dependencias implementadoras de las cuales auin se requeriria recabar informaci6n complementaria. En sus trabajos, la misi6n recibi6 toda la colaboraci6n y el apoyo de los funcionarios de las agencias ejecutoras, lo cual agradece. La evaluaci6n final del este proyecto y la preparaci6n del informe del Banco (ICR) tomaran en cuenta que algunos de los componentes de PROSSE constituyen ampliaciones o complementos de otros proyectos financiados con prestamos del Banco, tales como el Programa de Modernizaci6n de los Mercados de Trabajo (Prestamo 3542-ME ) (1993-1997) y algunos de educaci6n. Los informes de cierre del Gobiemo y los ICRs del Banco correspondientes a dichos proyectos, asi como los informes de supervision del proyecto de Programa de Apoyo a los Servicios de Salud para la Poblaci6n Abierta ( PASSPA Prestamo 3272-ME )(1990-1996), contienen informaci6n detallada sobre implementaci6n y resultados que son relevantes para evaluar el desempefno de PROSSE, y que por lo tanto, se utilizaran, en la medida que sea necesario, en la preparaci6n del ICR. II. LOGROS DEL PROYECTO Los principales resultados de los trabajos fueron: Con base en la informaci6n de terminaci6n del Proyecto y a las metas fisicas alcanzadas, la misi6n considera que el Proyecto logr6 sus objetivos de apoyar al Gobiemo Federal para atenuar los efectos negativos de la crisis de 1994 y 1995, asegurando la continuidad de los servicios esenciales de salud, educaci6n y empleo enfocando a la poblaci6n mas vulnerable en todo el pais. Asimismo intent6 establecer las bases para un mecanismo de monitoreo que permitiera medir el logro o avance en la provisi6n de servicios en el sector social en Mexico. II.1 Seguimiento y Evaluaci6n del Gasto Social. El desarrollo de un Sistema de Evaluaci6n del Desempenlo (SED) a traves de Indicadores, fue ejecutado por la SHCP. El proyecto permiti6  32 cumplir con una primera etapa en el desarrollo del SED. El objetivo de largo plazo consiste en proporcionar a las diferentes unidades de la Administraci6n Puiblica Federal, una mejor base para la toma de decisiones en los procesos de planeaci6n, programaci6n, ejecuci6n y evaluaci6n del gasto, con informaci6n estrategica sobre los resultados sustantivos. Para el desarrollo del sistema, el Proyecto cont6 con la participaci6n de dos empresas consultoras internacionales, con experiencias similares a nivel intemacional; del trabajo realizado por ambas firmas qued6 un importante acervo de conocimientos y experiencias para las siguientes etapas del Programa. Como herramienta del SED se cre6 el Sistema de Informaci6n Ejecutiva (SIE), el cual se incorpor6 en cuatro sectores: educaci6n, empleo, nutrici6n y salud, enfocado en 8 programas especificos: STPS-Probecat, IMSS-Solidaridad, DIF-Desayunos escolares, SSA- Manejo efectivo en casos de diarrea, SSA-Vacunaci6n universal, SEP-CONAFE, SEP- CONALITEG y SEP-Telesecundarias. Actualmente la SHCP, con la experiencia de los trabajos realizados por los consultores intemacionales que participaron en el disefio del sistema y con recursos fiscales, esta trabajando en impulsar el (SIE) en 7 sectores: Salud, Agropecuario, Infraestructura, Energia, Laboral, Educaci6n y de Servicios, donde participan 33 dependencia y entidades Federales. En la primera fase el (SIE) contempla una serie de platicas de concientizaci6n al personal de las instancias participantes sobre la importancia y utilidad del monitoreo en los programas en general, pero sobre todo en los programas sociales. I1.2 Secretaria de Salud ( SSA). El presupuesto otorgado por el Gobierno Federal para atender los servicios de salud a la poblaci6n abierta durante el periodo 1995-1997 fue de $38.6 millones de pesos de los cuales $30.3 millones de pesos correspondieron al presupuesto ejercido por la Secretaria de Salud en entidades federativas y unidades centrales, de los cuales $13.8 fueron para gastos destinados a servicios basicos de Salud y donde los gastos erogados en el PROSSE ascendieron a $2.7 millones de pesos, representando un 19.5 percent. No obstante este porcentaje, la contribuci6n del PROSSE fue de gran relevancia para la consecuci6n de las metas establecidas y la consolidaci6n en el avance para alcanzar los objetivos plasmados en el Programa de Reforma del Sector Salud 1995-2000 Desembolso de la (SSA).- En los referente al PROSSE se establecieron como elegibles de desembolso los gastos financiados con recursos federales destinados a la atenci6n de servicios de salud de primero y segundo nivel. En 1997, al consolidarse la descentralizaci6n de los servicios de salud, fue necesario acordar con el Banco un esquema simplificado de certificaci6n de gasto, previa consulta con la Secretaria de Contraloria Desarrollo Administrativo, lo cual se autorizo por inica vez para efectos de desembolsos de gastos ejercidos por las entidades federativas los cuales ascendieron a $US 37.2 millones de d6lares. Al finalizar los dos afios de vigencia del Proyecto, la (SSA) desembols6 US$ 100.4 millones de d6lares ademas, tenia en tramite US$ 79.8 millones de d6lares adicionales, comparado con los US$ 218.0 asignados a esa dependencia. En raz6n del menor desembolso tramitado por los ejecutores, se obtuvo una pr6rroga de un afio en la vigencia del prestamo, autorizandose a la SSA  33 a continuar la gesti6n de desembolso auin cuando su monto rebasara el previsto originalmente para la dependencia. Asi, la SSA present6 desembolsos por $ US 237.9 millones de dMlares, cifra superior en 9.1 percent a lo estimado inicialmente. Evoluci6n de metas.- En el periodo 1995-1997, la SSA llev6 a cabo un profundo proceso de reforma de la cual formaron parte la descentralizaci6n de los servicios de salud a las 31 entidades federativas y al Distrito Federal, asi como la instrumentaci6n de un nuevo esquema de evaluaci6n basado en 71 indicadores de resultados que se instaur6 a partir de 1997. Se tienen avances en la prevenci6n de enfermedades a traves de la inmunizaci6n, la coberturas de vacunaci6n durante los uiltimos afios en la mayoria de los biol6gicos han sido superiores al 97 percent para los preescolares y se ha logrado la erradicaci6n de enfermedades como la poliomielitis, y una reducci6n sensible en la incidencia de sarampi6n, difteria y tosferina. Entre 1995 y 1996 se superaron las expectativas iniciales de inmunizaci6n. Respecto a las enfermedades cr6nico-degenerativas, en todas las metas se intensificaron las acciones particularmente en lo referente a la detecci6n y control del cancer cervico-uterino y mamario, la diabetes mellitus y la hipertensi6n arterial. 11.3 Secretaria de Trabajo y Previsi6n Social (STPS) Se obtuvo informaci6n sobre la parte del Programa de Becas de Capacitaci6n para el Trabajo (PROBECAT) financiada por el PROSSE. A traves de este proyecto, PROBECAT otorg6 947,715 becas y adicionalmente permiti6 incrementar la ayuda para transporte de becarios. Este componente cumpli6 con el prop6sito de ampliar considerablemente el programa de capacitaci6n durante los afnos 1995 y 1996, en respuesta al alto indice de desempleo resultante de la crisis econ6mica ( el PROSSE no financi6 actividades de capacitaci6n y empleo en 1997). PROSSE facilit6 ademas la flexibilizaci6n del programa, introduciendo esquemas piloto para atender las necesidades de capacitaci6n de los desocupados residentes en areas de bajos ingresos y de participantes interesados en establecerse por cuenta propia. Los resultados de estas inversiones fueron mixtos con aspectos positivos y otros que necesitan correcciones. Se presentaran en el ICR, en base a los hallazgos de encuestas y estudios realizados con financiamiento del Prestamo 3542-ME. 11.4 Educaci6n: Tal como se indic6 en el Ayuda-memoria del 18 de mayo de 1998, aunque el disefio original del proyecto habia contemplado apoyar al Comisi6n Nacional de los Libros de Texto Gratuitos ( CONALITEG ) en la reproducci6n de libros de texto, ello no fue posible por cuanto los procedimientos de adquisici6n seguidos por ese programa no estaban de acuerdo con las Normas del Banco. A fin de poder dar apoyo al sector educaci6n en el periodo de crisis, se enmend6 el documento de prestamo para incorporar al Comite Administrador del Programa Federal de Construcci6n de Escuelas (CAPFCE ), a partir de enero de 1997. El PROSSE desembols6 aproximadamente US$ 41 millones para el programa de construcci6n. III. ACUERDOS La misi6n obtuvo la informaci6n necesaria para proceder inmediatamente a la preparaci6n del ICR. Sin embargo, algunos datos estan todavia pendientes. La misi6n acord6 con el Gobiemo que las mismas seran brindadas al Banco durante la semana del 16 de noviembre, esos datos son:  34 a) NAFIN; cuadros de resumen sobre el costo real del proyecto al cierre y el dato comparativo sobre el costo total del programa de construcci6n escolar de CAPFCE;y b) SSA: indicadores de monitoreo actualizados. c)SHCP; indicadores del monitoreo actualizados de los programas piloto. El Banco tendra un borrador del informe ICR a fines de noviembre, para su publicaci6n final antes del 31 de diciembre de 1998. A principios de diciembre se enviara al Gobiemo dicho borrador.  35 APPENDIX B Government's Report PROGRAMA DE SERVICIOS SOCIALES ESENCIALES -- BIRF (PROSSE-BIRF) (3912-ME) INFORME DE TERMINACION DE PROYECTO Resumen de la vision del Gobierno de Mexico' Diciembre, 1998 Introducci6n El Programa de Servicos Sociales Esenciales surgi6 en 1995 como una respuesta del Banco Mundial y del Banco lnteramericano de Desarrollo a la crisis financiera mexicana que comcnzo en diciembre de 1994. El principal objetivo que sc perseguia era evitar que los niveles minimos de bienestar social de los sectorcs mas desprotegidos se vieran aflctados por la grave turbulencia economica que el pais enfrentaba. A partir de febrero de 1995 so iniciaron las pliticas entre la SHCP, NAFIN y ambos Bancos con cl fin de determinar aquellos programas gubernamcntalcs quc podrian scrvir de base para construir cl PROSSE. El monto del Programa se estimaba en 2,000.00 millones de dMlares de los que los bancos aportarian la mitad. La conjunci6n de esfuerzos de todos las agencias participantes conducieron a que cuatro meoscs despues, el 16 de junio de 1995, los Documentos Legales del prcstamo 3912-ME linanciado por el BIRF, por un monto de 500.() mdd, lueran suscritos por Nacional Financiera, la SHCP v cl propio Banco, cvidenciando esta rapidcz en la formalizaci6n de la operaci6n la voluntad del Banco Mundial por apovar a Mcxico a enfrentar la situaci6n por la que atravesaba. Rangos de tiempo similares se experimentaron para cl prcstamo otorgado por cl BID. Eiecuci6n del PROSSE-BIRF ltna premisa bisica quc fue manojada durante las etapas de Preparaci6n, Evaluaci6n y Ncgodacidn para lograr el exito del PROSSE fuc que el Banco flexibilizara sus procedimientos operativos en lo que se roforfa a los aspoctos de licitac-ioncs v desembolsos. Lo anterior en virtud de que la gran mayoria de los gastos quo xc presentarian para reembolso habrian seguido procedimientos acordes con la legislaci6n nacional en la materia, por lo que cn algunos no se apegarian a los criterios del BIRF. En la mavoria de los casos esta premisa lue observada por ambos Bancos, permitiendo que los desembolsos fluveran con oportunidad. No obstante, en otros, particularmente con el BIRF, se presentaron dilicultadcs para la aulorizacion de gastos efectuados por algunas agencias ejecutoras, por lo quo tue nocesario enmeindar los Documentos Legales a travts de un contrato modilicatorio (junio dc 1997). En cllos se estahlccieron cambios al Anexo de Licitacioiies para permitir que varias adquisiciones, particulaimente las del CoNALITI EG y SSA, flucran ologibles do desembolso. M I'rela.lr.|sh* EncoS 1 ainii d . C . i,.ruw, j .1c1 .Mi.t ik N.wi-il Iito. ir.X. S.N..  36 Adicionalmtente, debe sciialarse que los costos financieros del PROSSE lueron evaluados a un tipo de cambia de 5.9 pesos por d6lar (mayo de 1995), por lo que el pr6stamo presentaba, al final del segundo ano de ejecuci6n, un sobredimeensionamiento importante en virtud de que los gastos que se realizaban eran en pesos. Para solucionar este problema, Iue necesario incorporar a un nuevo ejecutor clentrn del PROSSE-BIRFyv adermis prorrogar el prestamo por un afio, a! 30 de juWio de 1998. A pesar de estos problemans, cuva soluci6n debe vislumnbrarse con mavor scriedad en futuras operaciones, se puede calificar al PROSSE como un programa que electivaimncte aVud6, durante sus dos primeros anos de ejecuci6n, at pais con la emergencia economica. Agencias Eiecutoras dcho ruc-ron las agencias cejeutoras del Gobierno que participaron en el PROSSE: CONAFE, SEDESOL, IMISS-Solidaridad, CONALIFEG, CAPFCE, SSA, STPS y la SHCP. De estas, las ultimas cinco estuvieron culbiertas por el prestamo del Banco Mundial. Cabe mencionar el caso del CAPFCE, el cual se incorpor6 al PROSSE-BIRF en el ultimo ano de ejecucion ante la necesidad de contar con mayor documcntaci6n clegil)hc de desembolso. A -ontinuaci6n sc presenta un resumen de las colaboraciones que a este inl'orme proporcionaron la STPS, la SSA v la ULnidad de Politica y Control Presupuestal, asi como el prestatario (NAFIN). Las colahoraciones iltegras .s adjuntan como anexos al presente documento. Sr-crrARiA DFL TRABAJO Y PAMIISI)ON SOClAL La estrategia de ajuste derivada de la (TiSis de finales de 1994 afect6 negativamente los niveles de ingreso v enpleo del pais: el desempleo lleg6 a 1216; los registros administrativos del IMSS indicaban una caida de snas de 60o en el n6mero de sus afiliados; los periodos de desempleo con duraci6n de nueve semanas o mAs sc registraban en 42