Madagascar - Public-Private Partnership and Information Management for Regional Development Project

Document of The World Bank Report No.: 20280 MAG PROJECT APPRAISAL DOCUMENT ON A PROPOSED LEARNING 1NNOVATION LOAN (LIL) IN THE AMOUNT OF US$ 4.6 MILLION EQUIVALENT TO THE REPUBLIC OF MADAGASCAR FORA PUBLIC-PRIVATE PARTNERSHIP AND INFORMATION MANAGEMENT FOR REGIONAL DEVELOPMENT PROJECT March 30, 2000 Water and Urban 1 Country Department 08 Africa Regional Office  CURRENCY EQUIVALENTS (Exchange Rate Effective 05/13/1999) Currency Unit = Malagasy Francs (MGF) MGF1,000= US$ 0.16 US$ 1 = MGF 6,218 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy DIMP Decentralized Infrastructure Management Program ECOLOC Program for the Assessment of Local Economies FTM National Institute of Geodesy and Cartography GOM Government of Madagascar GIS Geographic Information System IDA International Development Association INSTAT National Statistical Institute MATV Ministry of Town and Country Planning (Ministere de l 'Amenagement du Territoire et de la Ville) MOU Memorandum of Understanding NGO Non-Governmental Organization OECD Organization for Economic Cooperation and Development O.N.E Office for the Environment (Office de l'Environnement) PIMRD Public-Private Partnership and Information Management for Regional Development PIC Public Information Center (Centre Local d'Information pour le Developpement) PIP Public Investment Program RCP Regional and Country Planning Unit (Cellule Amenagement du Territoire) RDC Regional Development Committee RDF Regional Development Framework RDU Regional Data Unit (Cellule dI'nformation Regionale pour le Developpement) REA Regional Economic Accounts RIS Regional Information System TCP Town and Country Planning unit (Direction de 1' Amenagement du Territoire) Vice President: Callisto Madavo Country Director: Michael Sarris Sector Manager: Jeffrey Racki Task Team Leader: Patrick Canel  Republic of Madagascar PUBLIC-PRIVATE PARTNERSHIP AND INFORMATION MANAGEMENT FOR REGIONAL DEVELOPMENT PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 3 2. Main sector issues and Government strategy 3 3. Learning and development issues to be addressed by the project 4 4. Learning and innovation expectations 5 C. Project Description Summary 1. Project components 6 2. Institutional and implementation arrangements 9 3. Monitoring and evaluation arrangements 11 D. Project Rationale (This section is not to be completed in a LIL PAD) E. Summary Project Analysis 1. Economic 11 2. Financial 12 3. Technical 12 4. Institutional 13 5. Environment 15 6. Social 15 7. Safeguard Policy 16 F. Sustainability and Risks 1. Sustainability 16 2. Critical risks 16 3. Possible controversial aspects 18 G. Main Credit Conditions 1. Effectiveness Condition 18  2. Other 19 H. Readiness for Implementation 19 1. Compliance with Bank Policies 19 Annexes Annex 1: Project Design Summary 20 Annex 2: Project Description 25 Annex 3: Estimated Project Costs 40 Annex 4: Cost Benefit Analysis Summary 41 Annex 5: Financial Summary 42 Annex 6: Procurement and Disbursement Arrangements 43 Annex 7: Project Processing Schedule 50 Annex 8: Documents in the Project File 51 Annex 9: Statement of Loans and Credits 53 Annex 10: Country at a Glance 55 MAP(S) IBRD 30536  MADAGASCAR Public-Private Partnership and Information Management for Regional Development Project Project Appraisal Document Africa Regional Office AFTUI Date: March 30, 2000 Team Leader: Patrick P. Canel Country Manager/Director: Michael N. Sarris Sector Manager/Director: Jeffrey S. Racki Project ED: P062628 Sector(s): BI - Institutional Development Lending Instrument: Learning and Innovation Loan (LIL) Theme(s): Poverty Targeted Intervention: N Project Financing Data O Loan N Credit O Grant O Guarantee O Other (Specify) For Loans/CreditslOthers: Amount (US$m): 4.6 Proposed Terms: Standard Credit Grace period (years): 10 Years to maturity: 40 Commitment fee: 0 Service charge: 0.75% Financng Plan: Source o _ v ein Tota Government 0.50 0.00 0.50 IBRD IDA 0.36 4.24 4.60 Total: 0.86 4.24 5.10 Borrower: GOVERNMENT Responsible agency: MINISTRY OF TOWN AND COUNTRY PLANNING (MATV) Estimated disbursements ( Bank FY/US$M): FY 2001 2002 2003 2004 2005 Annual 1.7 0.9 0.9 0.7 0.4 Cumulative 1.7 2.6 3.5 4.2 4.6 Project implementation period: 4 years Expected effectiveness date: 06/30/2000 Expected closing date: 12/31/2004 ADS PAD F , Re? Marh, 2WO  A. Project Development Objective 1. Project development objective: (see Annex 1) The objective of this project is to assist the Government of Madagascar (GOM) and the country's economic regions in developing model methodologies and tools that will promote regional development and facilitate investment programming. This will be done on a pilot basis in at least three economic regions, Menabe, Anosy and Mangoro (see map 30536) along with other regions that may choose to participate as the project unfolds. It is expected that these methodologies and tools will be adapted for adoption in additional economic regions. The project will develop the following approaches, methodologies and tools: (i) Partnership between the public and private sectors,to better coordinate public and private investments and to create a business environment conducive to private sector growth in the economic regions; (ii) Participatory regional and local investment planning and programming processes, involving key stakeholders in the regions, in particular, the elected mayors, the business community and civil society; and (iii) Regional information and knowledge management systems, using current economic, geographical and social statistical data to guide decision-makers in defining regional and local investment priorities. 2. Key performance indicators: (see Annex 1) (a) Sector indicators towards the sector-related CAS goal: T;he CAS goal to which the project is related is to create an enabling and attractive business environment by strengthening the capacity of the public sector at the national, regional and local level to deliver quality services, and thus to encourage private sector investment. Upon project completion, it is expected that in the three selected pilot regions: (i) more than 50% of public investment planned (i.e. included in the Public Investment Program, PIP) for the subsequent three years, will clearly reflect local priorities, as they will have been determined by the existing Regional Development Committees (RDCs); and (ii) more than 50% of the total amount of public and private investments carried out in each pilot economic region shall have been financed by private sector entities. (b) Performance indicators related to the Project Development Objective: It is expected that, by the time the project is completed: (i) at least 50 % of economic regions shall have established their own RDCs; and (ii) public investment projects carried out in at least two pilot economic regions shall have been fnanced in accordance with the methodologies developed under the Project. -2 -  B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 16249-MAG Date of latest CAS discussion: 02/18/97 One of the main strategic objectives of the CAS is to strengthen the public sector's ability to deliver quality services, thereby creating a business environment that enables the private sector to thrive. The project is expected to significantly contribute to achieving this objective by identifying appropriate methods of incorporating the views of key regional and local stakeholders -- in particular, those in the private/non-governmental sector -- in the decision-making process through which regional development and local investment priorities are defined. Regional and local economic growth led by private sector investment is critical to development in Madagascar. Decentralizing the decision-making process for public investment, which must support private sector efforts in order to achieve economic growth, and building public-private partnerships in support of regional and local priorities, should contribute to the promotion of a more sustainable development. Creating a better business environment in each region requires better and more productive public investment. Such investment requires better coordination across sectors, i.e. improved geographic integration, and a systematic search for ways to create synergy between public and private sector investment. Better coordination and synergy, in turn, call for a decentralized decision-making process for preparing sub-national PIPs that is decentralized and takes place on the relevant geographic scale, i.e. at the level of the economic regions. Such improvements can only be achieved through a major change in the regional planning and investment programming processes. This change will require the introduction of appropriate regional information tools that this project will help design, test and use on a pilot basis. These tools are expected to improve key local stakeholders' knowledge and understanding of the main regional issues, and to help them make sounder decisions regarding regional development planning and investment programnming. 2. Main sector issues and Government strategy: Recent economic and sector work has highlighted some of the key policy and institutional issues affecting Madagascar's economic performance. Prominent among these issues is the economSs heavy dependence on public investment, which accounts for more than 60 percent of total investment, and of which a substantial part is devoted to regional and local efforts (social infrastructure, feeder roads) rather than national ones (highways, ports, airports). Also, public investment remains heavily dependent on external financing sources and its management is quite centralized and divided by sectors. The political decentralization that the country underwent in 1992 with the first elections of municipal councils and mayors has not been accompanied by a decentralization of the decision-making process for public investment. It is still managed by sector ministries at the central level, sector by sector, with limited consultation of stakeholders, in particular the business community. Furthermore, at present, the PIP preparation process is mostly characterized by a top-down and sector-specific approach, with little, if any, reference to regional economic development frarneworks. As a result, local investments rarely support each other, are geographically unrelated, are poorly maintained and are inadequate to create a favorable business environment and attract foreign and national private investors that could act as the driving force for economic growth. - 3 -  The problem stems in part from the absence of appropriate tools and from weakness in the existing ones. There is a need for new managerial and operational tools, such as: (a) regional development frameworks to ensure better coordination of public and private investments; (b) participatory mechanisms giving key local stakeholders a voice in local and regional public investment decision-making; (c) regional and local socio-economic and environmental inventories and reliable geographic data; and (d) improved coordination of GOM programs and donor interventions at the regional level. Within the last few years, GOM began addressing these issues through the preparation of the regional component of a broad GOM program, the Decentralized Infrastructure Management Program (DIMP, financed under Japanese grant No. TF-27008). The regional component of this program led in particular to the creation of RDCs in the Menabe (1996) and Anosy (1999) regions, formed through the voluntary association of the main public and private stakeholders in these two economic regions (private investors, local NGOs and elected authorities) to examine issues of importance for regional economic development and to influence decisions of regional and local interest. The Menabe region already attracts significant private investment and, as a consequence, has experienced substantial growth in fishery, fish farming and tourism. As for the Anosy and Mangoro regions, they may soon benefit from major private investment in the mining sector -- ilnenite and nickel extraction projects, respectively. For the private sector to be more active and develop further in these regions, major improvements in public investment efficiency and integration at the regional level are highly critical. In the Menabe region, some data collection and analytical work has been carried out with the RDC, in preparation for the design of the RDF. Continuation of this work is required to provide a basis for developing the regional PIP, in close consultation with the RDC and in coordination with donors. There is also a need to set up a sustainable GIS-based (Geographical Information system) information and knowledge management system. In the other two pilot regions, Anosy and Mangoro (especially the latter), this work has already started and should be pursued under the project with methodological assistance brought by the latter to the regions. 3. Learning and Development issues to be addressed by the project: The project will help the GOM design, test and refine a regional information and learning package for improved regional development planning and investment programming. The newly-created information and learning package will include methodologies and tools for: (i) establishing and/or strengthening partnerships along the lines of the RDC model among public and private stakeholders. (RDCs), to ensure a more participatory and decentralized decision-making process for identifying regional priorities; - 4 -  (ii) developing RDFs, through a participatory process bringing together public and private stakeholders represented on the RDCs; (iii) decentralizing to the regional level, the decision-making process for regional and local investments (Regional PIPs), by incorporating the views of RDCs into regional and local public investment priorities; (iv) setting up a GIS-based information and knowledge management system that provides local stakeholders with basic regional and local data, to be collected and updated by Regional Data Units (RDUs); and (v) assessing regional economies and the impact of investment on these economies, through use of an economic accounting system of the ECOLOC* type (for detail, see below), which would be used to monitor local economic performance and the evolution of local residents' welfare in the regions(The ECOLOC (Local Economiies) Program was established in 1997, following the West Africa Long Term Perspective Studies (WALTPS) and supported by the OECD Club du Sahel and MDP (Municipal Development Program for Africa). 4. Learning and innovation expectations: Z Economic 1 Technical Ol Social El Participation Ol Financial Zl Institutional O] Environmental O Other Economic. The project is expected to result in the design of a methodology for establishing regional economic accounts, including procedures to keep relevant inputs up-to-date, that will make it possible to assess the impact of public investment on regional economic development. For this purpose, the ECOLOC model will be tested in the three pilot regions and then customized to Madagascar's specific needs and conditions, capitalizing on the lessons learned from the pilot application. The model design will address the local decision-makers'need to have access to basic demographic and economic information for their region. A set of economic indicators will be developed to allow regional stakeholders to monitor local economic output and growth. These indicators will form part of the region's information system. The access of regional and local stakeholders to information is expected to foster an effective dialogue among local authorities, the private sector, civil society, the central administration and decentralized GOM services and the elected representatives, as well as develop regional capacity to manage economic growth. Institutional. The project provides for an assessment of the relevance and potential effectiveness of local public-private partnerships as part of the regional development and investment programming process. This partnership will be of two different setups under this project. First, project activities will rely on a strong public-private partnership to prepare RDFs and to define three-year rolling regional PIPs. This type of partnership will be embodied in the RDC process, where main regional and local public and private stakeholders are represented *. The project will include an assessment of the relevance of this institutional setup. Depending on the results of the assessment, a decision will be made by the GOM on whether it will continue to support the establishment of RDCs in other economic regions, or suggest amendments to this arrangement. *(The Menabe RDC includes representatives of key private investors in the region(operators in tourism and fishery, in particular), along with elected mnayors, local NGOs and officials from decentralized branches of the main line ministries. The Anosy RDC, set up along the same lines, -5 -  includes in particular, representatives of a mining company (QMM SA, a subsidiary of Rio Tinto in Madagascar) which envisages investing in an ilmenite mining project. The Mangoro RDC will include a representative of Phelps Dodge, which is considering a nickel extraction project near Moramanga, the region's main city.) Second, the RDCs, through a delegated contract management arrangement, will implement part of the project (Component A; see below for content). The contract manager (a private/non-govenmnental operator) will be in charge of managing contracts for goods and services. He will be commissioned to manage funds for this project component on behalf of the RDCs in the three pilot regions. Technical. The project is expected to define appropriate, sustainable technical solutions for providing key regional stakeholders with accurate and up-to-date information at the regional and local (commune) level as a basis for preparing and updating RDFs and regional PIPs. Pilot testing of the feasibility of a GIS-based information and a decentralized knowledge -management system will be carried out under the project. The feasibility of making data and information available to the public at large will also be assessed. This will be done in the Menabe region, and possibly in another region (Anosy), by testing the use of public information centers which will be open to the public. Participation. The project will include an in-depth assessment of the feasibility and effectiveness of participatory approaches for regional development and investment programming. Within each pilot RDC, the interests of all regional and local stakeholders, from both the private/non governmental sector and the public sector, are represented, and the project will seek to build and/or strengthen the decision-making capacity of the RDCs. The RDCs will participate closely in the preparation of RDFs and regional/local PIPs. The ex-post evaluation (included in the project) of this participatory process in the three pilot regions will determine whether this approach can be replicated in other regions of the country, in order to extend participatory plamiing countrywide, on a demand-driven and"first come, first served' basis. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The project includes three components: A. Pilot public-private partnership for regional planning and investment programmiing; B. Regional information and knowledge management; and C. Dissemination of the model to other regions. Component A: Pilot Public-Private Partnership for Regional Development Planning and Investment Programming (US$ 2.96 million) The objective of this component is to test in the Menabe, Anosy and Mangoro regions (and other economic regions deciding to adopt the process), on a pilot basis, the decentralization of the decision-making process for regional devel3pment planning and identification of investment programming priorities, including strengthened public-private partnerships. To achieve this objective, this component will support the following activities by the three RDCs: (a) capacity building for RDCs, in strategic planning and investment programming -6 -  through thematic workshops and seminars on key regional and local issues; (b) preparation and completion of RDFs, with technical assistance provided by the project to support the RDCs' Technical Commissions in their discussion and selection of economic scenarios for growth and of regional development priorities, with particular attention to the economic, social and environmental implications of different scenarios and priorities; (c) preparation of regional PIPs that are fully consistent with the RDFs, and GOM-donor coordination for the financing of regional PIPs; (d) setting up of RDUs to collect, update and disseminate information and data to RDCs; (e) setting up, on a pilot basis, of PICs as an off-shoot of the RDUs in two of the three selected regions (Menabe and Anosy), for distributing materials about regional and local development potential, public and private projects, and business opportunities; and (f) setting up of regional economic accounts (REAs) on a pilot basis (following the ECOLOC model) that can assess the impact of both public and private regional investments on local economic growth and residents' welfare. Provision has been made to finance studies and other support activities as well as the contract manager's fees and the increase in RDC operating expenses required in order to implement component A. Component B: Regional Information and Knowledge Management (US$ 0.78 million) The objective of this component is to put together a package of institutional arrangements, approaches, methodologies and tools to improve regional development knowledge, that could be applied throughout the country (the "Public-Private Partnership and Information Management' package). Component B will involve the following activities: In an initial phase, to make it possible for the RDCs to implement Component A of the project in the pilot regions, technical assistance will be provided in the following areas: (a) design of methodologies to prepare: (i) RDFs; and (ii) regional PIPs; (b) design of a Regional Information System (RIS) to provide each region with data relevant for: (i) strategic planning; (ii) investment programming; and (iii) regional economic accounting; (c) establishment of a Regional Economic Accounting (REA) system; Later on, building on the experience gained through the implementation of Component A, (d) follow-up and ex-post evaluation of preparatory methodologies of RDFs and regional PIPs, and preparation of reference methodologies; - 7 -  (e) follow-up and ex-post evaluation of use of RDUs and finalization of the RIS; (f) follow-up and ex-post evaluation of establishment and use of REAs; (g) design and production of information material; and (h) information and communication on regional planning methodologies. Provisions have been made to finance additional activities and the increase of operating costs (supported by MATV) for imnplementation of components B and C of the project and the monitoring of component A. Component C: Dissemination of the model to other regions (US$ 1.35 million) The objective of this component is to begin disseminating the regional model designed under Component B and tested under Component A to other economic regions in Madagascar. The activities to be carried out will include: (a) support to the establishment of the RCP Unit, in charge of technical assistance to regional planning in the pilot regions and of dissemination of infornation about the regional investment planning and programming model designed under component B; (b) development of communication skills of the RCP Unit; (c) dissemination of regional pilot experiences to other regions; and (d) support to the establishment of RDCs in other regions. Provision has been made to finance additional activities as needed to support the objectives of this component, in particular institutional studies in the event of the creation of autonomous provinces. hidimcat-iv 8ak. %o (A) Pilot public/private partnership 2.96 58.2 2.84 61.9 for regional plannmig and investment programming (B) Regional information and 0.78 15.3 0.72 15.7 knowledge management (C) Dissemination of the model to other 1.35 26.5 1.03 22.4 regions Total Project Costs 5.09 100.0 4.59 100.0 Total Financing Required 5.09 100.0 4.59 100.0 The 10 % difference between total costs and IDA financing represents GOM's in-kind contribution to the project in the form of staff, offices and equipment made available for the duration of the project, without any actual disbursement of counterpart funds. -8 -  2. Institutional and implementation arrangements: (See Annex 2 for summary chart) Overall project implementation will be supervised by an interministerial committee headed by the Prime Minister or his representative. All relevant line ministries involved in the PIP preparation will participate in the committee, including, the Ministers (or their representatives) in charge of Finance and Plan, Town and Country Planning, Budget and Decentralization, Agriculture, Environment, Industry and Mining, Public Works and Tourism. This committee will ensure (on an ex-post basis) that project activities are carried out and that the corresponding IDA funds are used in accordance with the objectives and modalities spelled out in the Development Credit Agreement. It will also facilitate sector and donor coordination for the preparation of the pilot regional PIPs. Component A The RDCs will be responsible for the implementation of the activities included in Component A of the project. IDA funds allocated to this component will be made available to the RDCs through a special account opened by MATV in the name of the contract manager selected (private/non-governmental sector) and managed by the latter. This manager will be in charge of procurement of consultants and goods upon request of the RDCs and on their behalf. The executing agency (contract manager) for this component will be selected on a competitive basis. A management contract (Convention) acceptable to IDA will be signed between the Borrower (represented by MATV) and the selected contract manager. This will be a condition for Credit effectiveness. This contract will specify the management system (contracts and financial management) to be put in place to monitor project activities, the reporting system, the audit requirements (see paragraphs below on Financial Management System and Audits), and the management fees (up to a maximum of 10% of the value of contracts actually managed). Memorandums of Understanding (Protocoles d'accord) acceptable to IDA will be signed between each RDC, the MATV and the contract manager for Component A. Each memorandum will specify the respective roles and responsibilities. of each party. The contract manager to be selected as the executing agency for Component A will: (i) assist the RDCs in the preparation of their annual program of activities; (ii) on the basis of these programs, establish the corresponding strategic procurement plans (subject to prior IDA review); (iii) manage the consultant services contracts (prepare terms of reference, select consultant, ensure quality control) related to the implementation of the program of activities; (iv) prepare progress and evaluation reports to be transmitted to the Borrower and RDCs; and (v) contract out required financial audits. Consultants to be hired by the contract manager on behalf of RDCs will be selected according to the Guidelines on the Selection and Employment of Consultants by World Bank Borrowers (January 1999). A special account will be opened for small consultant contracts less than the equivalent of $20,000.00 to give more flexibility and responsiveness to the RDCs' specific requirements. Consultant contracts above $20,000 will be submitted for direct payment by IDA after approval of the applicable invoices by MATV (RCP Unit). Components B and C Implementation of Components B and C of the project will be undertaken by the Town and Country -9-  Planning Directorate of MATV through a Regional and Country Planning Unit (RCP Unit) to be created within the ministry and staffed (prior to Credit effectiveness). This pilot unit will be appropriately staffed (as part of the government's contribution to the project) through full and part time re-assignments (mostly within the ministry) of civil servants specializing in: (i) regional planning, (ii) regional economy and investment programming, and (iii) GIS-based information systems. A coordinator, to be judged acceptable by IDA, will be appointed by MATV and financed under the IDA credit to (i) manage the unit for the duration of the project, (ii) execute the activities included in Components B and C of the project, and (iii) liaise with project stakeholders (principally the RDC, the interministerial committee and the contract manager for Component B). An accountant will be recruited for the duration of the project and will mentor a counterpart within the ministry. The RCP Unit will also act as the project's Technical Secretariat for the interministerial committee and will prepare quarterly progress reports and carry out mid-term and ex-post reviews of the project. As the executing agency for activities included in components B and C, the pilot unit will be in charge of managing consultant contracts and procuring goods required by the activities described. The selection of consultants and the procurement of goods will be done in accordance with Bank guidelines. A special account will be opened specifically for the payment of local consultants and goods. Incremental operating costs incurred by MATV in setting up and maintaining the RCP Unit and acting as the technical secretariat for the duration of the project will be covered under the IDA credit. Financial management Tfhe accounting and financial management of Component A of the project will be carried out by a contract manager to be hired on a competitive basis. The RCP Unit in MATV (Cellule Amenagement du Territoire) will be responsible for carrying out the accounting and financial management of Components B and C. To assist the RCP Unit, an experienced accountant (short-term consultant for the duration of the project) will be contracted out on a competitive basis. The contract manager and the RCP Unit will maintain separate accounts and furnish financial statements for the respective components to be carried out under their responsibility, according to International Accounting Standards and Bank/IDA Directives. However, the same accounting system will be used for all accounts and its design will permit computerized monitoring of financial transactions. The system to be introduced at the initial stage of project implementation is the one that was designed for the IDA-financed Tana Plain project (Credit 1512-MAG) also supervised by MATV. The Contract manager in charge of the execution of component A will carry out the upgrading of the financial management system. Upgrading will encompass the following aspects: (i) designing the accounts chart, to be adapted to the project activities categories, and creating a link between the cost categories of the accounting system and the categories detailed in the PAD (Project Appraisal Document); (ii) setting up an accounting procedures manual for the project that provides for reporting of required information and adequate guidelines to establish sound accounting practices and an efficient control of assets and resources; (iii) setting up of a management information system for all project components that ensures the management, monitoring and evaluation of the project; - 10-  (iv) building capacity of and training the RCP Unit staff to use the accounting procedures manual and the accounting software. The financial management system should, in particular, facilitate: annual programming of activities and project resources; accounting, financial and budgetary management of the project; procurement management; follow-up of project implementation progress; monitoring of key indicators to assess the results and impact of the project, in particular, regarding its impact on development objectives; preparation of progress reports and Project Management Reports as required by the LACI system (Loan Administration Change Initiative). Before Credit effectiveness, an assessment of the financial management system (to be transferred from the Tana Plain Project Implementation Unit and put in place by the RCP Unit and the contract manager) will be carried out by the financial analyst of the Bank. This assessment will establish whether all necessary measures have been taken to ensure efficient project management and monitoring. It will also cover the budgeting and accounting system, internal control procedures, quality of the accounting staff and audit provisions. Audits According to the Credit Agreement provisions, the financial statements of the contract manager and of the RCP Unit will be audited by independent auditors acceptable to IDA. This assessment will review, according to International Auditing standards, the fmancial statements, the Special Accounts (one for each executing agency) and statements of expenditures. The auditors' report will be furnished to IDA not later than 6 months after the end of each fiscal year. The terms of reference of the audit will be reviewed with the financial analyst of the Bank. 3. Monitoring and evaluation arrangements: The RCP Unit will monitor the overall progress of the project implementation. Consultants will be hired, as deemed desirable, to review this progress and assess (i) the project performance against agreed upon indicators; and (ii) learnig and innovation achievements. An ex-post evaluation of operations in the three pilot regions (and in any other region establishing an RDC during project implementation) will be carried out by the MATV (using consultant support) through the RCP Unit. This ex-post evaluation will assess in particular whether the project's achievements warrant extending the regional development learning package to other economic regions, as well as the economic justification, conditions and financing plan for such an expansion. D. Project Rationale [This section is not to be completed in a LIL PAD. Rationale should be implicit in paragraph B: 3.] E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): [For LIL, to the extent applicable] - 11 -  * Cost benefit NPV=US$ million; ERR = % (see Annex 4) o Cost effectiveness o Other (specify) Given the experimental and innovative nature of the project and the basic assumption that the proposed approach should have a positive economic impact - that it may not be possible to measure before project completion in the three pilot regions - (see Annex 4), no formal cost-benefit analysis was carried out during project preparation. Such an analysis, however, will be done as part of the project monitoring and evaluation sub-component to assess the feasibility of extending the new approach to regions other than those where it was tested under the project. In particular, a sensitivity analysis will determine the conditions under which the application of proposed methodologies and tools would be most cost effective. 2. Financial (see Annex 5): NPV=US$ million; FRR = % (see Annex 4) [For LIL, to the extent applicable] Since two Bank reports on local governments and decentralizatio4 produced in 1994 and 1998, provide a comprehensive view of municipal, financial and human resources in Madagascar (see Project files, Annex 8), no specific assessment of municipal finance in the three pilot regions was necessary for project preparation. The project, however, will include an assessment of municipal finance in the pilot regions through the setting up of regional economic accounts under component A (f). The results will be broadly disseminated via the information system when it becomes operational. The Menabe RDC has already started collecting detailed data on municipal finance in the region, which will help in assessing municipal capacity to maintain the investments included in the regional PIP to be supported under this project. The impact of private investments on municipal finance will also be estimated as part of the regional development planning and investment progranmning process. 3. Technicai: [For LIL, enter data if applicable or 'Not Applicable'] Preparation studies (see Project Files, Annex 8), along with a national conference held in 1998 in Antananarivo on geographical and statistical infonnation, have emphasized the importance of a Regional Information System (RIS)-- more precisely, a GIS-based regional information and knowledge management system-- to ensure data consistency, accuracy and updating. The technical, financial and institutional feasibility of setting up such a system will be assessed under the project and the project will also support its development. The preliminary design of the RIS was carried out during project preparation, and is currently being tested in two of the pilot regions. The RIS will make information on the regions available to external users as well, such as universities, private (national or foreign) investors, bilateral and multilateral donors, NGOs and development agencies. According to the preliminary design, the final design, fine-tuning of the system and the definition of technical standards will be the joint responsibility of the National Institute of Geography and Cartography (FTM) and the National Institute of Statistics (INSTAT). The two institutions will also operate as a clearing house for the data collected, to ensure consistency in the definition and reliability of regionally and locally collected information. If necessary, the data will be reformatted by them so that they are compatible with the RIS. In particular, FTM and INSTAT will have to clear users manuals, developing procedures proposed by the RCP Unit to update and maintain spatial and thematic data and also that of designing a community survey questionnaire for local governments. The data collection, updating process and mapping - 12-  will be administered in the regions themselves. In each pilot region, the regional INSTAT office will be responsible for data collection and quality control of the data collection methodologies. Other sources of data will be: (i) regional offices of line ministries; (ii) local governments ( communes), through their responses to a community survey questionnaire administered by elected local officials; and (iii) donor and/or private projects. Each RDU, under the local Prefect's control, will be responsible for entering the data so provided. FTM and INSTAT will be jointly responsible for further quality control and formatting of statistical and geographical data. INSTAT regional staff, on behalf of the RDUs, will monitor the flow of information between the different providers and the team responsible for managing the data. Assessments made during field visits have shown that INSTAT regional staff has frequently carried out household and community surveys and can travel to some of the countrys most remote areas. In the course of normal operations, they frequently obtain statistics from other line ministries and have established ties with most data providers involved in the RIS as it is envisaged. An institutional study included in the project will determine which legal arrangement will be the most appropriate for FTM and INSTAT to ensure those responsibilities after project completion. The RIS concept has been recently introduced in Madagascar. Applications to be carried out under this project do not involve sophisticated communication technologies and will not involve heavy data collection. Rather, the proposed system will optimize the use of basic data, easy to collect and issued on a regular basis by existing entities. Widely available and well-supported software packages (Microsoft Office, Adobe Acrobat and Arcview GIS) will be used. The hardware required for the development of the system includes standard IBM-compatible desktop computers, digitizing tables, color or B&W printers and a read-write CD-ROM drive. With the assistance of the contract manager,the RDCs' technical commissions will formulate their requests to the RDUs, which will use the RIS system to produce reports, maps and graphs to be used by the RDCs for decision-making on RDFs and investment priorities. 4. Institutional: 4.1 Executing agencies: For the implementation of Component A of the project, the option of having a contract manager as the executing agency on behalf of the RDCs for procurement and financial management was seen by GOM and the RDCs as the best way of handling these activities. In fact, RDCs as presently constituted have no formal legal status and would not in any case have been authorized to manage funds and contracts. In order to let them continue to enjoy the required flexibility and intellectual independence favored by their current setup, the option of institutionalizing RDCs was not recommended in the institutional assessment. The solution adopted for the implementation of Component A has the further advantage of simplifying project management by putting in place one facility (a single contract manager and a single special account) for all the RDCs. For the implementation of Components B and C, the RCP Unit of MATV will be the executing agency in charge of managing contracts and funds allocated to these components. Short-term consultants will be hired for the duration of the project (coordinator and accountant) to strengthen the financial and procurement management capacities of the RCP Unit of MATV. 4.2 Project management: - 13 -  The capacity of the proposed institutions (RDCs and MATV) to properly carry out all aspects of project supervision was assessed at the project preparation stage. Accounting, procurement, financial management and reporting requirements will be ensured by their respective executing agencies, that is, the contract manager to be selected for the RDCs for component A, and the RCP Unit to be put in place within MATV for components B and C. With regards to Component A of the project, an institutional study was carried out as part of project preparation, (see institutional assessment study mentioned in the Project Files, Annex 8) to assess the institutional capacity of existing RDCs and provide guidance for creating other RDCs outside the pilot regions. Under this study, the existing RDCs were subjected to an in-depth assessment and were found- as constituted in the Menabe and Anosy regions- not only to be capable of taking responsibility for implementing their respective part of the Component A of the project, but also to be the most appropriate regional entities for conducting activities across sectors in a participatory manner, leading to the adoption of RDFs and regional PIPs in their respective regions. However, it was also acknowledged that the RDCs, would need to heavily rely on an executing agency to perform procurement, accounting, and financial management associated with project activities in a satisfactory manner. Also, since RDCs need to concentrate on the substance more than on the management of funds and contracts in the particular case of a LIL, institutional arrangements need to make a clear distinction between project (and component) implementation in terms of their development impact and the management of contracts, funds and reporting/auditing requirements. Components B and C involve the development of methodologies, tools and technical standards that can be general applicable beyond the pilot regions. For this reason, it was agreed that the management of these components should be handled by an entity with national responsibility for town planning and regional development. It was decided, in consultation with the Prime Minister, that this responsibility would rest with MATV, whose Town and Country Planning Unit is specifically in charge of such activities. The directorate was assessed at the appraisal stage of the project and was found weak, both in terms of technical capacity and project management. This is mainly due to the fact that, so far, this directorate has primarily focussed on urban development and housing issues without getting much support from the donor community for the regional development aspect of its mandate. To address this lack of technical capacity the Project will allow MATV to put in place on a pilot basis a Regional and Country Planning Unit (RCP Unit) and to hire short-term technical assistants specializing in the areas of technical expertise required for adequately carrying out Components B and C of the project (regional planning, regional economy, creation of regional economic accounts and GIS-based information management). This unit, whose creation is supported by the project, will deal specifically with regional development issues and knowledge management methodologies and tools designed and implemented under the project. The rationale for such a decision is that MATV sees the project as a good opportumity to strengthen the regional planning aspect of its Town and Country Planning Unit. This RCP Unit will be staffed with MATV re-assigned personnel or assigned through other ministries, particularly the ministry in charge of planning (a regional planner, an economist and a GIS-based data management specialist). This will ensure the actual transfer of knowledge, technologies and know-how to the Unit's staff. 4.3 Procurement issues: The main issues on procurement are the assessment of (i) the Contract Manager which will be selected under component A; and (ii) the RCP Unit responsible for procurement under components B and C. 4.4 Financial management issues: -14-  The system to be introduced at the initial stage of project implementation (as mentioned under Institutional and Implementation arrangements - Financial management) will be assessed before effectiveness of the credit. According to the results, an action plan will be prepared. Once the contract manager has been selected and the RCP Unit is in place, a financial management assessment will be carried by the Bank's financial analyst. 5. Environmental: Environmental Category: C 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. An environmental assessment of this project was not conducted as part of its preparation, since the project deals with institutional strengthening and knowledge management, with the latter including data on environmental conditions in the pilot regions. However, as necessary, the National Environment Office (ONE) will prepare assessments for priority projects identified at the regional and local level. These assessments will be taken into account in the PIPs decision-making and prioritization process. Assessment of the environmental impacts of private investments are currently carried out by private investors, then reviewed by ONE. Moreover, the pilot regions are subject to a regional environmental assessment in the context of the Environmental II Project. 5.2 What are the main features of the EMP and are they adequate? Not applicable. 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: Not applicable. Not applicable. 5.4 How have stakeholders been consulted at the stage of (a) enviromnental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? Not applicable. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? Not applicable. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. The project does not address social issues specifically and, therefore, no social assessment was carried out during project preparation. However, because of the project's support for greater stakeholder participation in the process of programming public investment, it is likely that social needs and concerns will have come to play a more important role in the three pilot regions by the end of project. As a consequence, the PIPs developed for these regions will most likely better reflect and address social issues identified in the course of the dialogue entertained during their design. 6.2 Participatory Approach: How are key stakeholders participating in the project? An analysis of the stakeholders was carried out in two of the three pilot regions (Menabe and Anosy) during project preparation (institutional assessment, see Project Files, Annex 8). These analyses revealed the importance of the participation of elected mayors, local and regional economic operators (private and public), and the local and regional NGOs active in these regions, as primary stakeholders in the regional planning and investment programming process. This analysis supported the creation of RDCs - 15-  in those two regions. In the Menabe and Anosy regions, all primary stakeholders are represented on the RDCs, along with central government representatives, namely the regional prefect and subprefects and regional representatives of line ministries. These stakeholders have expressed clearly their strong interest and intent to participate in the regional development approach. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations'? Not applicable. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? Not applicable. 6.5 How will the project monitor performance in terns of social development outcomes? Not applicable. 7. Safeguard Policies 7.1 Do any of the following safeguard policies apply to the project? O Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) O Yes E No El Natural habitats (OP 4.04. BP 4.04. GP 4.04) El Yes Z No El Forestry (OP 4.36. GP 4.36) [ Yes 1 No El Pest Management (OP 4.09) El Yes 1Z No El Cultural Property (OPN 11.03) El Yes Z No El Indigenous Peoples (OD 4.20) El Yes Z No El Involuntary Resettlement (OD 4.30) El Yes Z No El Safety of Damns (OP 4.37, BP 4.37) Yes ZI No El Projects in International Waters (OP 7.50. BP 7.50. GP 7.50) El Yes Z No EL Projects in Disputed Areas (OP 7.60. BP 7.60, GP 7.60) El Yes Z No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. Not applicable. F. Sustainability and Risks 1. Sustainability: This section is not to be completed in LIL PAD. 2. Critical Risks (reflecting assumptions in the fourth column of Annex 1): F21 ~11,11iii Riski~ Wis RtiiPis Minmiztio eaure. From Outputs to Objective -16 -  Insufficient Government commitment to S The project includes workshops and seminars to support the process of (i) PIP raise GOM awareness and commitment. decentralization, (ii) replication of the model in other regions, and (iii) funding of regional PIPs as part of the RDFs. Insufficient donors commitment to the M The project will organize a seminar, a mid-term project's objectives; unwillingness on review, and regular roundtables gathering their part to coordinate on the pilot RDFs, donors. to fund PIPs at the regional level, and to harmonize rules for matching local resource mobilization on investment projects. Technologies used for the information N Project will test an affordable design, and user system are more expensive than expected, friendly tools and methods, and will amend and and not so user friendly; and regional redesign them as necessary. The project also capacity to properly maintain and update includes capacity-building and institutional- regional information systems is poor. strengthening activities for data providers and users in the pilot regions. PIP decision-makers are reluctant to use N Project will provide assistance (capacity the RIS. Insufficient participation of building, information workshops and seminars) local NGOs and private sector in RDCs to develop familiarity with new methodologies and in PIP preparation at the RDC level. and tools and to facilitate participation in the process. From Components to Outputs Contract management by the executing N Project provides for quarterly progress reports, agenciy (contract manager) of component periodic assessments and supervision tthat A is not timely and does not meet involve a monitoring of performance indicators expectations of the RDCs. of executing agencies, and in case of unsatisfactory performance of the contract manager, contract would be terminated and a more efficient executing agency would be selected. MATV staff is insufficiently committed to N Project provides for specific training of MATV its mission and reluctant to accept staff involved in project implementation, and the secondments to the RCP Unit in the opportunity for other concemed ministries, in MATV particular the Ministry in charge of PIP preparation process, to re-assign staff to the RCP Unit. Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) -17-  3. Possible Controversial Aspects: The strengthening of RDCs might be seen to be infringing upon some of the powers of the future regional-tier of government provided for in the revised Constitution of the Republic of Madagascar. Although the RDCs are mandated to work closely with these new regional governments once they are elected, there is potential for confusion. This risk is minimal, however, and any possible controversy should be resolved easily, as the RDCs clearly have none of the powers allocated to the regions by the decentralization law; in particular the RDCs will have no authority to manage public funds. It will be critical for the new regional authorities to understand the strategic role of RDCs. Elected local authorities (municipal tier) are already represented on the RDCs and they will have an opportunity during informational meetings to explain the specific role and the strategic mandate of RDCs. They will also have an opportunity to present the participatory approach used to build up the RDFs as a most effective way for local stakeholders to express their needs and contribute to discussions held in the Regional and Provincial Assemblies, once regional and provincial representatives are elected. Finally, elected representatives will find it advantageous to be able to rely on the participatory and consultative mechanisms that the RDCs allow to update priorities and programs required by the communities and the elected mayors in partnership with the private sector. Whatever will be the evolution of the institutional and administrative image of Madagascar, the key element will be ensuring that the elected representatives reflect the views of all primary regional private stakeholders including the business community and civil society. G. Main Credit Conditions 1. Effectiveness Condition 1.1 The following conditions have been met prior to project appraisal: (a) Regional Development Committees (RDCs) made up of local economic operators, elected representatives and representatives of the main local NGOs established in the Menabe and Anosy economic regions. (b) A team including representatives of the Steering Committee of the Menabe and Anosy RDCs, and of the RCP Unit is established by the GOM to interface with the IDA mission for project appraisal and negotiation; the composition of this GOM delegation is communicated to IDA. 1.2 The conditions to be met prior to effectiveness are the following: (a) A Regional and Country Planning Unit (RCP Unit) is created (by ministerial order) and adequately staffed. (b) The Borrower has recruited a contract manager for the purposes of carrying out component A of the Project in accordance with contractual arrangements satisfactory to IDA. (c) The Borrower has recruited: (i) an accountant for the RCP Unit ; and (ii) auditors to maintain project records and accounts. (d) The Borrower has adopted and submitted to IDA a Project Implementation Manual in form - 1 8 -  and substance satisfactory to IDA. 2. Other [classify according to covenant types used in the Legal Agreements.] H. Readiness for Implementation D 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 0 1. b) Not applicable. O 2. The procurement documents for the firstsix months' activities are complete and ready for the start of project implementation; and a framework has been established for agreement on standard bidding documents that will be used for ongoing procurement throughout the life of LIL II 3. The LIL's Implementation Plan has been appraised and found to be realistic and of satisfactory quality. 1 4. The following items are lacking and are discussed under loan conditions (Section G): The project Implementation Manual will have to be acceptable to IDA as a condition of credit effectiveness. It will include a detailed activity plan (and corresponding strategic procurement plan) for the first six months. 1. Compliance with Bank Policies D 1. This project complies with all applicable Bank policies. OI 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. 1,~~~~~~~/ Patrick P. Canel e' efrey S. Racki chael N. Sarris Team Leader I S- ctor Manager/Director ountry Manager/Director -19-  Annex 1: Project Design Summary MADAGASCAR: Public-Private Partnership and Information Management for Regional Development Project Sector-related CAS Goal: Sector Indicators: Sectorl country reports: (from Goal to Bank Mission) 1. Public sector to deliver 1.1 More than 50% of public 1. Periodic assessment of quality services and create an investments planned (included regional economy (via the enabling business in the PIP) for the next three ECOLOC methodology). environment in Madagascar. years reflect priorities as determined by RDCs. 2. Public expenditure review. 1.2 More than 50% of total 3. Regional public amount of projected total expenditure reviews carried investment will be by the out as part of the project. pnvate sector through the RDF. Follow-on Development Objective -20 -  Project Development Outcome I Impact Project reports: (from Objective to Goal) Objective: Indicators: 1. To assist GOM and the 1.1. At least 50% of economic 1. GOM reports on the results 1. Political stability and countr's economic regions in regions have established their of disseminatior. commitment of GOM to CAS designing model own RDCs. objectives. methodologies and tools that 2. Completion report by will promote regional 1.2. Public investment GOM and IDA. 2. Macro-economic trends development and facilitate projects carried out in at least support private sector investment programming. two pilot economic regions 3. Regional public investment increase in the have been fmanced in expenditure reviews. regions. accordance with the methodologies developed 3. Private sector investment under the project. projects in the mining sector of two of the three regions materialize. - 21 -  Output from each Output Indicators: Project reports: (from Outputs to Objective) component: 1. "Regional Learning 1.1. Regional Development 1. Project's mid-term-review. 1. Donors and GOM are package" for improved Committees (RDCs) committed to PIP regional planning and established - one in each of 2. Reports of the technical decentralization and investment progranming the three pilot sites. secretariat of the Project replication to other regions. designed and tested in three Steering Conunittee. selected regions. 1.2. Regional Development 2. Major donors are ready to Frameworks (RDFs) mapped 3. IDA's supervision mission harmonize their financing out in each pilot site according reports; joint evaluation rules of regional investments. to participatory approach (Bank-Borrower) mission guidelines. reports (annual); 3. Local NGOs and private sector actively participate in 1.3. Regional three-year, 4. Periodic client surveys; the RDCs. rolling PIP decision-making mid-term review. process is decentralized in 4. Potential investors use the three pilot sites (creation of 5. Quarterly progress and information provided in the RPIPs) and ready for disbursement reports. Regional Public Information implementation. Center. 6. Ex-post evaluation. 1.4. Regional roundtables for 5. PIP decision-makers PIP preparation, including actually use Regional main sectors, donors and Information Systems (RISs). regional stakeholders, held in each selected region by end of 6. Cost effective technologies project. for information systems are ready available and local 1.5. Sustainable Regional capacity to properly maintain Information Systems (RISs) and update RISs does exist. are operational in the three selected regions and allow for (i) periodical assessment of local economies; (ii) establishing and updating RDFs; and (iii) regional PIPs preparation. 1.6 Regional and municipal public information centers established in each of the selected regions (user's guides, brochures, information document) by end of project. 1.7 More than 80% of regional seminars, thematic workshops conducted by end of project. - 22-  2. Regional information 2.1 Detailed design for systems designed, tested and information systems established in three pilot completed and systems regions. operational in selected regions by the end of project. 2.2 Guidelines, user's manual and all relevant documentation completed and ready for dissemination to other economic regions. 2.3 MATV staff trained in methodologies and tools for dissemination of the system. 3. Dissemination mechanisms 3.1 Regional Development for the model to other regions. Country Planning Unit within MATV is fully equipped and operational for dissemination of regional kit (RDCs, RDFs, regional PIPs, RICs). 3.2 Activities carried out to raise awareness of GOM and donors on the necessity for implementing the proposed methodologies (seminars at the central level and workshops in the economic regions). 3.3 Dissemination seminars held in all new regions by end of project. 3.4 Evaluationreports of opinions and interests from, new regions produced. - 23 -  NEM PI gnatc Project Components / Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) A: Pilot Public-Private US$ 2.96 million 1. Quarterly progress and 1. Timely comimissioming and Partnership for Regional disbursement reports. efficient contract management Planning and Investment of local and international Programming. consultants by the contract manager and MATV in charge of implementing component A of the project respectively. B: Regional Information and US$ 0.78 mnillion 2. Supervision mission 2. Commitment of MATV Knowledge Management. reports. staff seconded to Regional and Country Planning Unit. C: Dissemination of the US$ 1.35 million 3. Periodic evaluation mission model to other regions. reports. - 24-  Annex 2: Project Description MADAGASCAR: Public-Private Partnership and Information Management for Regional Development Project By Component: Project Component 1 - US$2.96 million Pilot Public-Private Partnership for Regional Planning and Investment Programming I- Objectives The component objective is to test in the Menabe, Anosy and Mangoro regions (and other economic regions deciding to adopt the process) on a pilot basis, the decentralization of the decision-making process for regional development planning and identification of investment programming priorities, including strengthened public-private partnerships. II- Expected Outputs The following outputs are expected at project completion: (a) Regional Development Frameworks (RDFs) and Regional Public Investment Programs (PIPs) will have been discussed and agreed upon under the supervision of and with the approval of the Regional Development Committees (RDCs). (b) The pilot RDCs of Menabe and Anosy will be able to update and revise RDFs and regional PIPs as economic conditions evolve. (c) Institutional responsibilities and procedures for managing regional data and information of relevance for strategic regional planning and investment prograniming will have been defined. The capacity of regional data providers and information system users will have been strengthened; also, the regional base maps for preparing and updating RDFs and regional PIPs will have been digitized in all three regions. (d) Regional Economic Accounts (REAs), structured following the ECOLOC model, will be available in at least in two of the three pilot regions, and institutional responsibilities as well as procedures for maintaining and updating these accounts will have been defined. III- Detailed Description This component will include the following activities: a) Capacity building for RDCs Strengthening of RDCs capacity will be achieved through seminars and thematic workshops. Regional seminars. In each pilot region, regional seminars for members of the RDC will be organized at least twice a year for the four-year project period (eight or more seminars). Regional seminars will help RDC members (i) become more familiar with and better able to deal with regional and local (municipal) development issues, as identified and discussed in thematic groups; (ii) clarify and discuss regional economic development issues, scenarios and options for their respective regions; (iii) formulate - 25 -  draft RDFs and regional PIPs; (iv) stay closely involved in the review process for RDFs and regional PIPs; and (v) stay informed about, and receive trainng in using the Regional Data Units (RDUs) to make decisions and to revise RDFs and regional PIPs. The seminars will be prepared and organized with the assistance of facilitators (consultants) with good communication and planning skills. These facilitators will coordinate with the experts in charge preparatory analyses for RDFs and regional PIPs. They will prepare all presentations and necessary documents, secure appropriate locations for the seminars, and make all necessary logistical arrangements. They will be responsible for the detailed design and implementation of the seminar program, and will ensure the availability of the necessary equipment. They will direct and moderate program discussions, and will produce the final seminar summary. Regional thematic workshops. In-depth workshops will be organized on region-specific key issues such as regional demography and regional economy, employment, infrastructure, tourism, environment, and on other region-specific problems such as fires, deforestation, drought, food security, and fisheries. Themes and issues to be discussed during these sessions will specifically come out of the RDF and regional PIP preparation process. The RDCs' technical commissions (usually fewer than 10 persons each) will attend the workshop and discuss the workshop material, consisting of data collected, analyses carried out and reports delivered during the RDF and regional PIP preparations. The workshops will be led by senior professional consultants with expertise in the specific themes of the workshop. The project will cover the expenses incurred by RDCs to participate in the workshops; these expenses will be managed by the Contract Manager. b) Preparation and completion of RDFs In order to support the preparation of model documents, or Regional Development Frameworks (RDFs), in the three regions, the project will provide for hiring of consultants and short-term technical assistance with extensive experience in strategic planning and public investment programming. In each region, the preparation process will involve (i) analysis of development potential and the constraints; (ii) extensive consultations with stakeholders - RDC technical commissions; (iii) identification of key regional development issues; (iv) mapping out of contrasting economic development scenarios (with and without major private investment); (v) assessment of the economic and social impacts of each scenario; and (vi) finalization of the RDF on the basis of the scenario adopted by the RDC. To support this process, one senior international consultant (individual or firm) will be selected on a competitive basis in each pilot region. These consultants will also be called on to participate as resource persons in seminars and workshops organized for RDC members and members of RDC technical commissions. Completion of the RDFs is expected to begin during the second year of project implementation and end during the third year, according to the project progress in each pilot region. c) Preparation of regional Public Investment Programs (PIPs) Under the project, three-year rolling regional PIPS willbe prepared for each pilot region on the basis of the RDF adopted by RDC. To keep this exercise realistic and compatible with macro-economic constraints, the preparation of the regional PIPs will be framed into a low case and a high case scenario, - 26 -  both capped so as not to jeopardize the central government's capacity to provide counterpart funding for investment in other regions. Regional PIPs will start from an in depth analysis of previous public investment in the region (both locally and externally fnanced) and will include an assessment of prospects for further private investment in the region. Regional PIPs willpresent these prospects clearly and orient public investment towards endeavors that support private investment within the adopted RDF. Presentation of the regional PIPs will be formatted in a way that allows for a quick assessment of costs and financing plans, and of the economic, social and environmental impact of each proposed public investment. To this end, the project will provide for the hiring of expertise as required(consultants and short-term technical assistance), as in the case of the RDFs. Government and donor coordination on regional PIP financing will be facilitated through roundtables organized during the third year of project implementation. d) Setting up of Regional Data Units (RDUs) A Regional Data Unit will be created in each region. This RDU will include the key institutional data providers available in each region for all sectors (infrastructure, education, health, agriculture, and so forth), coordinated by the regional branch of INSTAT. The RDU will report to the regional prefects. The RDUs will respond promptly and as required to requests for information received from the RDCs during RDF and regional PIP preparation. The RDUs will make available to the public and to possible investors information about development projects (public and private), investment opportunities in land and real estate, environment and tourism, levels of municipal and regional finance and services, state of roads, and other relevant topics. The RDUs are expected to provide the core of a sustainable information system, including data collection and dissemination on key regional development issues. RDUs will be responsible for clearing data collected at the regional level. They will be in charge of: (i) as part of the preparation of RDFs and regional PIPs, coordinating and implementing the proposed procedures (under component B) for collecting, updating and processing regional/local data to be incorporated in the Regional Information System, including data required to set up and update regional economic accounts; (ii) producing, maintaining and updating basic maps in each pilot region, based on a common geographical reference unit (most likely the commune) and using a common GIS format so that any individual operator or organization can manage, query and analyze spatially distributed data. The project will allow for the acquisition of hardware and software for INSTAT to be able to properly maintain, update and process regional data. RDUs will be provided with short-term technical assistance by an international consultant specialized in information systems and data management (a single expert will travel to all three regions). This consultant will assist the selected regions in (i) setting up the RDU; (ii) defining the appropriate data collection and clearing procedures. The consultant will be in charge of carrying out training sessions for the main data providers and information users. The consultant selected will be familiar with the ECOLOC model (see (f) below). In the regions, the international consultant will rely on (i) a local data programming consultant (one in each region) who will ensure the training of RDUs in the use of the system, performing updates and - 27-  making information available upon request to authorized users; (ii) a local junior consultant with expertise in data entry/survey data collection who will periodically collect data not issued by existing data providers on a regular basis, including the communal survey described under component B. e) Setting up of Public Information Centers (PICs) The Menabe and Anosy regions will also be provided with experimental Public Information Centers (PICs). PICs will be located in subprefecture 5 in Menabe and subprefecture 2 in Anosy. PICs will disseminate information about (i) the region, with information material provided by the regional RDU; and (ii) the subregion, indicating its characteristics and development potential. PICs will have an open policy towards the public, including possible investors. Establishment of PICs will require the support of an expert in infornation and cormmunication who will be in charge of (i) designing an appropriate management system and information material; (ii) providing technical assistance in installing the equipment provided; and (iii) assessing the use of such equipment in order to make recommendations on refining its objectives, components and functioning. f) Setting up of Regional Economic Accounts (REAs) Better investment options triggered by the project participatory approach are expected to produce an increase in private investment and consequently to expand economic activities in the pilot regions. The authorities involved chose to adopt the ECOL{OC model, which integrates formal and informal sector activities, encapsulates functional relations between them and allows for better forecasting and monitoring of the economic impacts of changes in public and private investors' behavior. ECOLOC was felt to give a better appreciation of the economic structure and mechanisms of these regions and of the impacts of changes in behavior on the part of public and private investors. An improved knowledge of economic activities is required to implement the ECOLOC model, hence the need to establish Regional Economic Accounts. Since the ECOLOC model will be built upon the most reliable data made available by the project, it will lead to improved public investment decisions, allowing for an evaluation of the impact of public investment on private investment, employment creation and living conditions in the regions. The ECOLOC model will be set up at the central level with the support of an international expert for a few weeks. National staff will be trained to continue the implementation of the model following this support during its installation and initial use. Finally, the ECOLOC model will be implemented in each RDC over a several month period by national staff trained for that purpose. Other elements The project will also provide sufficient resources to cover: (i) completion of studies, services and related activities as needed; (ii) management fees of the Contract Manager, to be hired under this component, who will be in charge of responding to RDCs requests for expert support in the preparation of RDFs and regional PIPs; and - 28 -  (iii) RDCs expenditures related to activities under this component. IV - Component Implementation The component will be implemented by a Contract Manager. The Contract Manager will be in charge, on behalf of the RDCs, of administrating funds made available by the Borrower and managing contracts approved under this component. The Contract Manager will work in close consultation with the RDCs to design an annual program of activities aimed at attaining the outputs indicated under (II) above including a procurement plan and an implementation schedule. The Contract Manager will draft the appropriate terms of reference for short-term consultant assignments and technical assistance, identify and select qualified consultants, manage related contracts and control quality and timely delivery of outputs. The Menabe/Morondava RDF was set up two years ago; it will be revised and updated in six months. The Anosy/Tolognaro RDF will have to be completed within the coming 12 months, namely during the first year of project implementation. Since the Mangoro RDC has not been created to date - yet it shall be set up before RDF activities start - the Mangoro/Moramanga RDF will be completed 18 months after project effectiveness. All three regional PIPs will have to be ready by the end of year 3 project execution at the latest. Presentation of regional PIPs and donors roundtables will be organized in the regions around the end of the third year and the beginning of the fourth year of project implementation. V - Implementation Calendar Menabe and Anosy RDFs are expected to be completed six months after the project starts. Menabe and Anosy PIPs will be completed before the third year of projects implementation begins. A preliminary version of the Regional Economic Accounts (REAs) as well as establishment of Regional Data Units (RDUs) can be available during the course of the second year of the project. Pilot Public Information Centers (PICs) can be established at the beginning of the fourth year of project implementation. - 29 -  VI - Base Costs Estimates Sub-components IDA National and Total (US$'000) Regional (US$S'000) counterpart (US$'000). a. Capacity building for RDCs and RDCs' 410 410 expenditures related to the component activities b. Preparation and completion of the Regional 540 54 594 Development Frameworks (RDFs) c. Preparation of Regional Public Investment 180 18 198 Programs (PIPs) d. Setting up of Regional Data Units (RDUs) 183 183 e. Setting up of Public Information Centers (PICs) 63 63 f. Setting up of Regional Economic Accounts 240 36 276 (REAs) Sub-total #1 1,616 108 1,724 Provision for studies/services/related activities 713 713 Sub-total #2 2,329 108 2,437 Contract Manager fees 195 195 Sub-total #3 2,524 108 2,632 Unexpected costs and quantities 315 13 328 TOTAL 2,839 121 2,960 Note l:National and Regional Counterparts correspond to amounts already inscribed in the national budget and do not lead to an increase in this budget. Note 2: The input of RDC members who are not civil servants have not been taken into account in the cost estimates. If they were to be included, they would amount to more than the figures given here for government's national and regional counterpart. Project Component 2 - US$0.78 million Regional Information and Knowledge Management I - Objectives The objective of this component is to put together a package of institutional arrangements, approaches, methodologies and tools to improve regional development knowledge, that could be applied throughout the country (the "Public-Private Partnership and Information Management" package) . To design, refine and finalize this toolkit for use in other economic regions, lessons will be drawn from the ongoing monitoring and evaluation of the experiments carried out m the three pilot regions under component A. II - Expected Outputs The following outputs are expected at project completion: (a) Methodologies will have been established for setting up RDCs, preparing RDFs and regional - 30 -  PIPs, establishing and developing a sustainable regional information system (RIS) with key regional data (including regional economic activity) accessible to public and private investors. (b) Pilot applications of these methodologies and tools in the three selected regions have will been monitored and evaluated. (c) Minimum national standards for regional cartography and statistical data management have been established. (d) Guidelines, users' manuals and other relevant documentation are ready for dissemination in other regions of Madagascar. (e) MATV staff (Regional and Country Planning Unit) are familiar with the new methodologies and tools and prepared to disseminate them in other regions. III - Detailed Description Activities included under this component are: a) Design of methodologies to prepare RDFs and regional PIPs Within the framework of component A (see above), RDCs, through the Contract Manager, will need to hire experienced consultants to help formulate RDFs and regional PIPs. Consultants' terms of reference will need to specify the methodologies that they are to use for these assignments, covering analysis and diagnosis at the regional level, strategic planning, and adopting investment priorities. The design of the methodologies required will be responsibility of MATV, with the support of an expert who will propose methodologies and draft consultants' terms of reference. The expert will also train MATV staff and RDCs. b) Desing of a Regional Information System (RIS) The regional information system, involving the central level and the regions, will be the starting point of RDUs within the regions (see component A above). Under this activity, the regions will receive technical support to use the RIS and the mechanisms through which the regions and the central level will interact in the use of the RIS will be defined. Designing of the Regional Information System will involve the following phases: (i) assessment of the existing available data and flow of information on key regional features such as population, natural resources and the environment, education and health, regional economy, infrastructure; and so forth; (ii) creation of a digitized administrative base maps (most likely to be at the community or Fokontany level, ) as a common reference for data providers and users; (iii) in cooperation with regional planning experts (hired under component A), identification of geographic and thematic information of interest for regional development and specification of its source; (iv) assessment of relevant geographical data and relevant themes, at the regional and local level, - 31 -  for RDF and PIP preparation, and selection of baseline indicators on key regional issues and variables such as migration, deforestation, infrastructure, employment and activities, economic growth, urbanization, municipal finance, and so forth; (v) evaluation of options to organize and finance maintenance (collection, clearing, analysis and regular dissemination of GIS-based data) and updating of specific data; and (vi) definition of institutional responsibilities for specifying geographical and statistical standards and for monitoring their application. The RIS will be capable of producing timely automated or customized reports on regional development for the use of the RDCs, and communal reports for the use of local officials. A senior consultant experienced in information system design will be responsible for creating the RIS, and will be required to monitor the implementation in the three pilot regions. The consultant will prepare tools, including a methodology and manuals to collect, standardize and enter the selected data into the system. He/she will also prepare a business plan to ensure financial sustainability of the RIS after completion of the project. A consultant specialized in survey design will, in cooperation with the planner (consultants hired under Component A) and the system design consultant, prepare a survey instrument with adequate manuals to be self administered by communes in the regions. This survey will be implemented at regular intervals to update the database with information not available from other sources. The following types of data could be included (indicative, not exhaustive list): Communes * Population Local community budgets:- Revenue: transfers from central government, tax revenue (real estate and business taxes), other revenue (fines, levies) * Expenditure: overhead (administrative costs), operating costs, investments Fokontany * Main crops * Main economic activities * Natural vegetation Roads * Surface condition * Permanent or seasonal Bridges * Condition * Materials Water towers * Type * Condition Public standpipes * Type * Condition - 32-  Rainwater collection tanks * Type * Condition Markets * Type * Destination Slaughterhouses * Type * Condition Administrative buildings: city hall, * Type prefecture, post offices, prisons * Condition Public lighting * Type * Condition Social infrastructure: schools, hospitals, * Type clinics, health centers * Ownership/Management * Condition * Information on service users and/or providers Refuse dumps * Legal * Illegal c) Establishment of a Regional Economic Accounting System The ECOLOC model has been customized and adopted in recognition of the importance of keeping regional economic accounts. Implementation of the ECOLOC model will require (i) adaptation and reformatting of the model by an economist proficient in using the model, a task requiring a few months, and (ii) training of national staff to continue implementation beyond the initial installation and startup of the model's use by the economist, or with the economist's help. d) Follow-up and ex-post evaluation of preparatory methodologies of RDFs and regional PIPs, and preparation of reference methodologies The pilot implementation (under component A) of the RDFs and regional PIPs in the three selected regions will be periodically assessed and adjusted during the project. This will mainly involve: (i) short-term missions (on a quarterly basis) in each pilot regions by a team of experts, including a senior economist, a planner, and an information system specialist; and (ii) an ex-post evaluation of experience in the pilot regions during the first two years of the project, in preparation for a mid-term review. e) Follow-up and ex-post evaluation of use of RDUs and finalization of the RIS -33-  A similar follow-up will be carried out for the RIS and RDUs, and the systems will be finalized before extending the concept of regional information system and data units to the rest of the country. f) Follow-up and ex-post evaluation of establishment and use of REAs A similar follow-up will also be carried out for REAs, and the systems will be finalized before extending the concept of regional economic accounts to the rest of the country. The scope of activities d) through f) will encompass both the pilot regions and the country's other regions. In the pilot regions, evaluation will focus mainly on the impact of activities supported by the project on regional economic development. In the other regions, evaluation will ascertain the regions' interest in and commitment to adopting the new systems tested under this project. A comprehensive ex-post evaluation report will be prepared by a consultant. g) Design and production of information material Support tools will be required to extend the new operational approaches to regional planning and preparation of regional PIPs to other regions. Such support tools will include at least the following: * a toolkit for setting up and launching a Regional Development Committee; * a toolkit for developing a Regional Development Framework in a participatory manner; * a toolkit for preparing a regional PIP and prioritizing investments; * a user guide for the RIS; and * a toolkit for regional economic accounts (set up and update) Brochures, prospects, press ads, video recording and TV clips will also be prepared, and a Website will be launched. The audience for these tools and materials will be the providers and users of regional information, in particular, the mayors of the communes and the technical commissions of the RDCs, who will be interested in information relevant at the municipal level, and private investors, who will be interested as regards region's economy and business potential. h) Information and communication on regional planning methodologies Seminars on regional planning will be organized to present most frequently used approaches and methodologies in order to give the RDCs the essence of widespread practices (cutting edge experiences on regional planning). It will also explain the links with the regional model ECOLOC and the use of the ECOLOC methodology for the regional planning approach. Other elements The project will include fnancial resources to cover: (i) completion of studies, services and related activities as needed; (ii) incremental operating costs of RDCs. - 34-  IV - Component Implementation The component will be implemented by the RCP Unit to be set up within MATV. For the duration of the project and under this component, the RCP Unit will make its in-house capacity available to the pilot regions. It will act as the development and knowledge management center, providing data clearing and technical assistance for the regions. It will provide the methodological guidance to consultants, facilitators and task forces involved in the execution of component A and be responsible, in particular, with the production of regional base maps and regional data included in the Regional Information System. The RCP Unit will manage consultant and short-term technical assistance contracts that are necessary for the execution of activities under component B. This will involve identifying appropriate experts, drafting terms of reference, selecting firms and individuals according to methods described in the Development Credit Agreement, and ensuring quality control and overall performance evaluation of the contractors. V- Implementation Calendar The implementation schedule for this component will be detennined and updated by the RCP Unit as a function of the schedule and progress of component A. The program of activities for component B will include a procurement plan submitted for IDA approval. In the interests of efficient procurement, the procurement plan set up by the RCP Unit may combine some of the tasks included in this component in a single contract, if a qualified consultant for each task is identified. FTM, INSTAT and the Contract Manager will support the RCP Unit as needed. - 35 -  Vl- Base Costs Estimates Sub-components IDA National and Total (US$'000) Regional (USS'000) counterpart (US$'0O0) Phase # I a. Design of methodologies to prepare RDFs 60 12 72 and regional PIPs b. Design of a Regional Information System 40 7 47 (RIS) c. Establishment of a Regional Economic 20 4 24 Accounting Syrstem ; Phase # 2 d. Follow-up and ex-post evaluation of 50 6 56 preparatory methodologies of RDFs and regional PIPs; preparation of reference methodologies e. Follow-up and ex-post evaluation of use 92 4 96 of RDUs and finalization of the RIS f. Follow-up and ex-post evaluation of 20 4 24 establishnment and use of REAs g. Design and production of information 119 119 material h. Information and communication on 125 20 145 regional plaming methodologies Sub-total # 1 526 57 583 Provision for additional activities 52 6 58 Sub-total # 2 578 63 641 Incremental operating costs for MATV 51 51 Sub-total # 3 629 63 692 Provisions for unexpected costs and 88 4 92 quantities TOTAL 717 67 784 Project Component 3 - US$ 1.35 million Dissemination of the model to other regions I - Objectives 1. The main objective of this component is to start disseminating the regional model designed under component B and tested under component A to other economic regions in Madagascar. II - Expected Outputs The following outputs are expected at project completion: (a) The RCP Unit within the MATV will be fully equipped and operational for its technical support missions to the regions and will have a clear understanding of the missions and responsibilities and how to carry them out during and beyond project execution. - 36-  (b) Each of the 23 other economic regions will have been informed of the newly-developed regional development model and at least 13 economic regions will have expressed interest in adopting a similar approach to strategic regional planning and regional investment programming. (c) Regions interested in developing the regional development model will have drafted an action plan and submitted a request for technical assistance to carry it out; at least three of them will have set up an RDC. (d) An ex-post evaluation of activities carried out under components A and B and financial audit of the whole project will have been conducted. III - Detailed Description (a) Support to the establishment of the RCP Unit Support in establishing the RCP Unit will be provided through (i) the acquisition of equipment for this unit, both hardware (computers, printers, copy machines, etc.) and software (presentation/slides software, word processing, worksheets, graphics); and (ii) provision of services to support the RCP Unit and train its staff. (b) Development of communication skills of the RCP Unit MATV staff belonging to the RCP Unit will learn (i) the themes central to the project's success, especially regional economic development, (ii) the use of equipment, and (iii) how to present and discuss the regional model and tooLkits to regional officials and stakeholders. This training will be provided by communication specialist. (c) Dissemination of regional pilot experiences to other regions A seminar and workshops will be held in each of the 25 regions not covered by the pilot. A presentation seminar will be organized for all regional stakeholders who may be involved in regional development and dissemination of technical documentation or public information material (see component B). A local consultant with the required communications skills will be hired to facilitate and moderate the seminar and workshops. The project will also finance incremental costs involved in carrying out information sessions in other economic regions, including transportation, accommodation and meals for (i) the staff of the Regional and Country Planning Unit in charge of the seminars and workshops; (ii) seminars and workshop participants in the other regions, including a few members of pilot RDCs if necessary. d) Support to the establishment of RDCs in other regions Other interested economic regions will receive support to commission studies focussed on key regional stakeholders who would be willing to set up an RDC once the studies are completed. Support to the RCP Unit will be provided during the initial phase of the project. Activities related to regional model dissemination (RDF, regional PIP, RDU, PIC) to other regions will begin from the second year. The remaining activities of the component will be implemented during the last two years of the project. - 37 -  Other elements The project will also provide sufficient resources for: (i) completion of studies, services and related activities as needed; (ii) an audit every six months of project activities implemented by the RCP Unit and the Contract Manager whose performance will be evaluated with regard to contract management. Required financial audits will also be completed. IV- Component Implementation This component will be implemented by the RCP Unit of MATV. This unit will be in charge of procurement of goods and consulting services according to methods detailed in the Development Credit Agreement. V - Implementation Calendar This component will begin during the second year of the project and last until project completion. VI - Base Costs Estimates Sub-components IDA National and Total (US$'000) Regional (US$'000) Counterpart* (US$'0OO) a. Support to the establishment of the RCP 375 230 605 unit b. Development of communication skills of 104 104 the RCP Umt c. Dissemination of regional pilot experiences 250 30 280 in other regions d. Support to the establishment of RDCs in 100 100 other regions Sub-total # 1 829 260 1,089 Provision for additional activities 67 20 87 Audit 40 40 Sub-total # 2 936 280 1216 Provision for unexpected quantities and costs 100 34 134 TOTAL _ 1,036 314 _ 1,350 * National and Regional Counterpart contributions correspond to amounts already inscribed in the national budget and do not lead to an increase in this budget. - 38 -  AAx2 - Omit ti_ Annmeits for Project Excuiik eknl Cmniatcatee MIisby if Tom IDA ArdCuixiyPbm*g CatmA CaTmnrqaC Rp*nd D adWrmt T(nn arid CaCry Caim ~ ~~~~~~~~~~~~~f u W ani A a II C4mkmtsmices CamitCGLt stNis Catactdmnu~t ________ Fuit1kinilhikis _____ ~Flow cffiial Deh%y of siwm- aigaxo& - 39 -  Annex 3: Estimated Project Costs MADAGASCAR: Public-Private Partnership and Information Management for Regional Development Project . . ............ U $nilio U $ Wi Component A: 0.29 2.67 2.96 Pilot Public-Private Partnership for Regional Planning and Investment Programming Component B: 0.16 0.62 0.78 Regional Information and Knowledge Management Component C: 0.40 0.95 1.35 Dissemination of the model to other regions Total Baseline Cost 0.85 4.24 5.09 Physical Contingencies 0.00 0.00 0.00 Price Contingencies 0.00 0.00 0.00 Total Project Costs 0.85 4.24 5.09 Total Financing Required 0.85 4.24 5.09 - 40 -  Annex 4: Cost Benefit Analysis Summary MADAGASCAR: Public-Private Partnership and Information Management for Regional Development Project As a result of better and more efficient public expenditure, significant private sector-led economic growth is expected to occur in the three pilot regions. Regional growth will be measured through the regional economic accounting system to be set up under the project in each region. It is also expected that more local business tax revenues will be collected by the communes and the pace of private investment will pickup in these regions, contributing to the growth of regional GDP. The economic benefits of the sub-projects of the regional PIPs will be increased due to more rigorous and consistent selection and prioritization of sub-projects as a result of integration into a regional framework. Finally, some substantial economic benefits (to be measured under the project) might also derive from knowledge management and information sharing by the regional and local stakeholders through the setting up of a RIS. The cost of maintaining and updating such systems will be justified by lower costs of data collection and investment preparation, due to the availability of new tools (geographical data, maps, and a variety of regional statistics). Summary of Benefits and Costs: N/A Main Assumptions: N/A Sensitivity analysis / Switching values of critical items: N/A - 41 -  Annex 5: Financial Summary MADAGASCAR: Public-Private Partnership and Information Management for Regional Development Project IMPLEMENTATION PERIOD _ Year 1i Year 2 Year3 Year4 Year5| Total Total Financing Required / . Project Costs - Investment Costs 1.6 0.8 0.8 0.6 0.3 4.1 Recurrent Costs 0.2 0.2 0.2 | 0.2 | 0.2 1.0 Total 1.8 1.0 1.0 | 0.8 0.5 | 5.1 Financing IBRD/IDA 1.69 0.87 1 0.87 0.70 0.47 4.60 Government 0.11 0.13 0.13 0.10 | 0.03 | 0.50 Central 0.10 0.10 0.10 0.08 1 0.02 ' 0.40 Regions (RDCs) 0.02 0.02 0.02 0.02 i 0.02 | 0.10 Total 1.8 11.0 1 1.0 0.8 0.5 1 5.1 -42 -  Annex 6: Procurement and Disbursement Arrangements MADAGASCAR: Public-Private Partnership and Information Management for Regional Development Project Procurement 1. No civil works are included in the project. Goods financed by IDA will be procured in accordance with Bank's Guidelines under IBRD Loans and IDA Credits (January 1995 revised in January and August 1996, September 1997, and January 1999). Goods will be procured through National Competitive Bidding (NCB) advertised locally and would be carried out in accordance with Madagascar's procurement laws and regulations, acceptable to IDA provided that they assure economy, efficiency, transparency, and broad consistency with key objectives of the Bank Guidelines. 2. Consultant Services contracts financed by IDA will be procured in accordance with the Bank's Guidelines for the Selection of Consultants by World Bank Borrowers (January 1997 revised in September 1997, and January 1999). The standard Request for Proposal, as developed by the Bank, will be used for appointment of consultants. Simplified contracts will be used for short-term assignments, i.e. those not exceeding six months, carried out by firms or individual consultants. The Government was briefed during appraisal and negotiations about the features of the new Consultants Guidelines, in particular with regards to advertisement and bid opening. Procurement Responsibilities Component A 3. Procurement responsibilities for component A of the project will be delegated to a Contract Manager (see chart in Annex 2) whose main missions will be: (i) to manage project resources allocated by the Borrower to the RDCs under that component, and (ii) to manage the procurement of goods and the selection of consultants required for carrying the activities included in component A. This will involve, in particular, quality control and reporting obligations on the use of funds and progress of activities. This arrangement was designed to meet the necessity for the RDCs to have a decentralized, flexible and responsive implementation mechanism that would timely meet their requests in terms of expertise and training sessions to implement the activities included in component A. 4. A contractual arrangement (Convention) to be signed between MATV and the Contract Manager, acceptable to IDA, will specify the respective obligations of the parties and the reporting and accounting systems to be used. Procurement procedures will also be described in this agreement and it will be specified that IDA procurement procedures and selection methods described in the Development Credit Agreement will be the only ones to apply. Management fees for the Contract Manager will have to be in the limit of 10% of the value of the contract actually managed and be mostly justified against the full-time staffing of a coordinator, a procurement specialist, and an accountant-- all of which will be maintained for the duration of the project and will be acceptable to IDA. Components B and C 5. Procurement responsibilities for components B and C will be carried by the Regional Country Planning (RCP) Unit to be created and staffed by the Ministry of Town and Country Planning. Consultants will be hired for the duration of the project (Coordinator, accountant, and procurement specialist) to - 43 -  strengthen the financial and procurement capacities of the RCP Unit. Incremental operating costs of the Ministry under these Components implementation will be covered by the IDA credit. Assessment of Procurement Capacity 6. The capacity of the Contract Manager which is to be selected under component A will be assessed, as part of his selection process, in particular when the short list would be reviewed. 7. An assessment of the RCP Unit responsible for the procurement under components B & C will be carried out before the credit is approved. An action plan will be developed to address any deficiencies in the implementation agency's capacity to administer procurement in an efficient and transparent way. Procurement Methods (Table A) Goods and Equipment (US$0.2 million) 8. Contracts for Goods financed by IDA relate to small items of office equipment, supplies and furniture, and certain equipment necessary for the setting up of the RCP Unit and regional data units (RDUs) costing more than US$20,000 per contract, which correspond to goods available locally at economical prices would be procured through National Competitive Bidding (NCB). Small items which cannot be grouped into contracts of US$20,000 equivalent per contract, up to an aggregate of US$0.05 million, might be procured through prudent local shopping, on the basis of quotations obtained in writing from at least three reputable suppliers. 9. Under NCB, the procedures should ensure that: (i) methods used in evaluation of bids and the award of contracts are made known to all bidders and not be applied arbitrarily; (ii) any bidder is given adequate response time (four weeks) for preparation and submission of bids; (iii) bid evaluation and bidder qualification are clearly specified in bidding documents; (iv) no preference margin is granted to domestic manufacturers; (v) eligible firms are not precluded from participation; (vi) award will be made to the lowest evaluated bidder in accordance with pre-determined and transparent methods; (vii) bid evaluation reports will clearly state the reasons to reject any non-responsive bid; and (viii) prior to issuing the first call for bids, draft standard bidding documents are submitted to IDA and found acceptable. Consultant Services (US$3 million) 10. Consulting services financed by IDA would be for (i) specific studies at critical stages of the pilot regional planning and progranuning process to be carried out under component A, (ii) technical assistance and training activities and, (iii) selection of the Contract Manager for component A. Consultants financed by IDA, would be hired in accordance with the Bank's Guidelines for the Selection and Employment of Consultants (January 1997 revised in September 1997, and January 1999). Selection would be based on competition among qualified short-listed firms through Quality-and Cost-Based Selection (QCBS) by evaluating the quality of the proposals before combining quality and cost evaluation by weighting and adding the quality and cost scores. The executing agencies would ensure widely publicized procurement notice to get candidacy from consultants. Based on agreed upon criteria, the executing agencies will maintain and update a list of consultants which will be used to establish short-lists. 11. Other methods would also apply. For the selection of the Contract Manager, selection under a Fixed Budget (FB) will be used. For audits and other services of a standard nature, up to an aggregate amount of US$0.1 million, the Least-Cost Selection (LCS) would be the most appropriate method, the firm - 44 -  with the lowest price being selected provided its technical proposal received the minimum qualifying mark. Consultants services for small and simple services (estimated to cost less than US$20,000 per contract and up to an aggregate amount of US$200,000) would be based on Consultants'Qualifications (CQ), based on the consultants' experience and competence relevant to the assignment. 12. Short-lists of consultants for contracts estimated under US$50,000 may be comprised entirely of national consultants, if a sufficient number of qualified firms (at least three) are locally available at competitive costs. However, if foreign firms have expressed interest for those contracts, they will not be excluded from consideration. Prior Reviews Thresholds (Table B) Goods 13. Contracts financed by IDA above the threshold value of US$50,000 equivalent for goods will be subject to IDA's prior review procedures. The review process would cover about 25% of the contract amounts for goods -- see Table B below. Selective post-review of contracts awarded below the threshold level will apply to about one in three contracts and will be carried out by Bank staff -- using audits, and other consultants, as necessary. Services 14. Bank staff will also review the selection process for the hiring of consultants proposed by the Borrower. Prior IDA review for the selection of consultants will include the review of budgets, short-lists, selection procedures, requests for proposals, evaluation reports, contract awards, and negotiated contracts. Prior IDA review will not apply to contracts for the recruitment of consulting firms and individuals estimated to cost less than US$50,000 and US$20,000 equivalent, respectively. However, the exception to prior IDA review will not apply to the Terms of Reference of such contracts, regardless of their value, to single-source hiring, to assignments of a critical nature as determined by IDA, or to amendments of contracts raising the contract value above the above-mentioned prior review thresholds. For all consultant contracts subject to prior review, opening the financial envelopes will not take place prior to receiving the Bank's no-objection to the technical evaluation. Documents related to procurement below the prior review thresholds will be maintained by the borrowers for ex-post review by auditors and by IDA supervision missions. Selection Planning 15. Prior to the issuance to consultants of any requests for proposals, the proposed plan for the selection of consultants under the Project shall be furnished to the Bank for its review and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the Consultant Guidelines. Selection of all consultants' services shall be undertaken in accordance with such selection plan as shall have been approved by the Bank, and with the provisions of said paragraph. 16. For component A, procurement plans for consultants and goods will be worked out by the Contract Manager as part of semi-annual work-programs to be prepared and updated by the Contract Manager with the RDCs for carrying out the activities included in that component. Semi-annual work programs, including their procurement plan, will be subject to IDA's prior review and approval. Work programs corresponding to the execution of component A and will be prepared in close consultation with the RDCs. The format of semi annual work-programs and corresponding procurement plans will be specified in the - 45 -  project implementation manual. - 46 -  Procurement methods (Table A) Table A: Project Costs by Procurement Arrangements (US$ million equivalent) 1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.00 0.14 0.06 0.00 0.20 (0.00) (0. 1) (0.05) (0.00) (0.16) 3. Services 0.00 0.00 3.99 0.00 3.99 (0.00) (0.00) (3.99) (0.00) (3.99) 4. Training 0.00 0.00 0.45 0.00 0.45 (0.00) (0.00) (0.45) (0.00) (0.45) Total 0.00 0.14 4.50 0.00 4.64 .___________________ (0.00) (0. 1 1) (4.49) (0.00) (4.60) DFigures in parenthesis are the amounts to be financed by the IDA Credit. All costs include contingencies 2Includes goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. -47-  Prior review thresholds (Table B) Table B: Thresholds for Procurement Methods and Prior Review 1. Works 2. Goods Above $ 50,000 NCB Prior review Above $ 20,000 NCB Post Review Below $ 20,000 National Shopping Post Review 3. Services Consulting firms Above $ 50,000 QCBS Prior Review Contract manager N/A Fixed Budget Prior Review Financial Audits N/A LCS Prior Review Individual consultants Above $ 20,000 Comparison of at least 3 Prior Review CYs Below $ 20,000 Comparison of at least 3 Post Review (except for CVs TORs) Total value of contracts subject to prior review: $ 1.5 million Overall Procurement Risk Assessment Average Frequency of procurement supervision missions proposed: One every 6 months (includes special procurement supervision for post-review/audits) IThresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. - 48 -  Disbursement Allocation of credit proceeds (Table C) 1. The proceeds of the IDA credit would be disbursed against: (a) 100 % of expenditures on Consultants contracts, i.e. US$ 3.99 million. (b) 80% of expenditures on operating costs, i.e. US$ 0.15 million. (c) 80% of expenditures on goods, i.e. US$ 0.16 million. (Taxes are taken into account to obtain these percentages) 2. As projected by Bank's standard disbursement profiles, disbursement would be completed by four months after project closure. Disbursements would be made against standard IBRD documentation. Table C: Allocation of Credit Proceeds 1. Equipment, materials and furniture 0.16 80% 2. Consultants' services (a) under component A 2.35 100% (b) under components B and C 1.64 100% 3. Operating costs 0.15 80% 4. Unallocated 0.30 Total Project Costs 4.60 Total 4.60 Use of statements of expenditures (SOEs): C Consulting firms contracts of less than US$ 50,000 3 Individual consultants contracts of less than US$ 20,000 All supporting documents for SOEs will be retained for review by periodic Bank supervision and external auditors. Special account: In order to ensure the timely provision of funds available to finance the costs of the project, it is proposed that two special accounts are established, one for the execution of component A another for the execution of components B and C. The former will be administered by the contracts manager; the latter be managed by the RCP Unit of MATV. It is proposed that the special account A for component A of the project be opened in the amount of US$ 300,000; it is proposed that the special account B for the execution of components B and C of the project be opened in the amount of US$ 100,000. The amounts to be withdrawn from the Credit Account and deposited to the special accounts shall be limited to US$ 150,000 in the case of special account A and US$ 50,000 in the case of special account B until the aggregate amount disbursed is equal or exceeds the equivalent of SDR 1,500,000. Funds in those Special Accounts would be available to finance only eligible expenditures under the Project. During negotiations, agreement will be reached regarding the arrangements for establishing and operating the Special Accounts. - 49-  Annex 7: Project Processing Schedule MADAGASCAR: Public-Private Partnership and Information Management for Regional Development Project Pr>,ec,s S,w.,.,@.u V Time taken to prepare the project (months) 7 11 First Bank mission (identification) 03/01/99 03/01/99 Appraisal mission departure 09/30/99 12/01/99 Negotiations 09/30/99 12/15/99 Planned Date of Effectiveness 01/31/2000 Prepared by: Ministry of Town and Country Planning Preparation assistance: PHRD Japanese Trust Fund (TF27008) Bank staff who worked on the project included: Patrick Canel Task Team Leader Denise Vaudaine Municipal Finance Specialist Noel Carrere Economist and Planner, Consultant Gervais Rakotorimanana Financial Analyst Pierre Romand-Heuyer Information System Specialist, Consultant T. Mpoy-Kamulayi Counsel David Freese Disbursement Officer Luc Lapointe Procurement Specialist Sylvain Rambeloson Procurement Specialist Connie Kok Shun Program Assistant/Team Assistant - 50 -  Annex 8: Documents in the Project File* MADAGASCAR: Public-Private Partnership and Infonnation Management for Regional Development Project A. Project Implementation Plan To be prepared as part of the Project Implementation Manual. B. Bank Staff Assessments 1. Country Assistance Strategy of the World Bank Group for the Republic of Madagascar (Report no. 16249-MAG) (January 17, 1997) 2. Decentralization and Local Govermnent Reform (Report No. 13011 -MAG) (November 30, 1994) 3. La D6centralisation a Madagascar: Une strategie pour le succes de son execution (Juin 1998) 4. Financial Management System of the Project and LACI (including action plan). C. Other 1. Projet Ilmenite et developpement r6gional (janvier 1999) 2. Cadre de Reference de Developpement Regional Integre de la region Anosy (Consultant Amade, fevrier 1999) (financed under PHRD Grant No. 27008) 3. Le catalogue de la base de donn6es geographiques de CGDIS/QMM'98 (janvier 1999). 4. Regions and Development (Regional Programmes and Local Projects): Comprehensive Report (May 1991) 5. Regions et Developpement - Faritany: Antananarivo (mai 1991) - Ministere de l'Economie et du Plan/PNUD. 6. Regions et D6veloppement - Faritany: Mahajanga (mai 1991) - Ministere de I'Economie et du Plan/PNUD. 7. Regions et Developpement - Faritany: Antsiranana (mai 1991) - Ministere de l'Economie et du Plan/PNUD. 8. Regions et Developpement - Faritany: Fianarantsoa (mai 1991) - Ministere de l'Economie et du Plan/PNUD. 9. Regions et D6veloppement - Faritany: Toamasina (mai 1991) - Ministere de 1'Economie et du Plan/PNUD. 10. Regions et D6veloppement - Faritany: Toliara (mai 1991) - Ministere de 1'Economie et du Plan/PNUD. 11. Regions et Developpement (Programmes Regionaux et Projets Locaux): Fiches-projets volume I - Ministere de 1 'Economie et du Plan/PNUD (mai 1991) 12. Regions et Developpement (Programmes Regionaux et Projets Locaux): Fiches-projets volume II - Ministere de I 'Economie et du Plan/PNUD (mai 1991) 13. Tableaux de bord regionaux (Ministere de 1'Economie et du Plan) (mars 1995) 14. Mission d'assistance technique sur I 'evaluation environnementale strategique, fetude d'impact environnemental et la planification regionale (version provisoire) - ONE/DPED/USAID (juin 1999) 15. Referentiel Regional, Menabe - Materiel et m6thodes (juin 1998). 16. Elements de la nouvelle politique nationale d'information geographique de base - Atelier du 25 au 26 novembre 1998 (Ministere de I'Amenagement du Territoire et de la Ville). 17. Image Rdgionale de rEconomie Malgache - Secretariat dEtat a 1 'Economie et au Plan/Direction Generale du Plan/Direction de la Planification Regionale (juin 1996). 18. Comite Regional de Developpement du Menabe: Proces-verbal de la reunion de 1'Assembl6e - 51 -  Generale du CRD-Menabe tenue a Morondava les 14 et 15 octobre 1998. 19. Faisabilite Institutionnelle de 1 'elaboration concertee d 'un schema de developpement et d amenagement de la region de l'Anosy Tolagnaro - Rapport definitif (F. Brunet/B. Seheno - juin 1999) (financed under PHRD Grant No. 27008) 20. Determination des limites des communes de Madagascar - Etude prealable (FTM) (mars 1999) 21. Partnership Agreement between the World Bank and QIT Madagascar Minerals (QMM)/Rio Tinto on collaboration in Madagascar (January 7, 1999). 22. Comite Regional de Developpement de fAnosy (Fort Dauphin et Amboasary): Proces-verbal de l'Assemblee Generale Constitutive. 23. Recueil des textes officiels sur la structure, le fonctionnement et les attributions des collectivites territoriales decentralisees - Ministere des Finances et du Plan: Direction des Appuis aux Structures Decentralizees (Octobre 1995) (voir Loi no. 94-001 du 26 avril 1995, fixant le nombre, la delimitation, la denomination et les chefs-lieux des collectivites territoriales avec amendements: Expose des motifs, para. 1 - Les r6gions). *Including electronic files - 52 -  Annex 9: Statement of Loans and Credits MADAGASCAR: Public-Private Partnership and Information Management for Regional Development Project Differenoe between expected and actual Original Amount in US$ Millions disbursements' Project ID FY Borrover Purpose IBRD IDA Cancel. Undisb. Orig Fmn Rev'd MG-PE-52186 1999 GOVERNMENT MICRO FINANCE 0.00 16.40 0.00 16.19 0.00 0.00 MG-PE-57378 1999 GOVERNMENT SAC II 0.00 100.00 0.00 98.36 0.00 0.00 MG-PE-64305 1999 GOVERNMENT SOCAL FUND 9II 0.00 15.00 0.00 14.32 0.00 0.00 MG-PE-1559 1998 GOVT OF MADAGASCAR EDUCATION SECTOR DEV 0.00 65.00 0.00 61.58 9.97 0.00 MG-PE-1564 1998 GOVERNMENT RURAL WATERSEC.PILO 0.00 17.30 0.00 15.71 8.90 0.00 MG-PE-1568 1998 GOVERNMENT NUTRITION II 0.00 27.60 0.00 25.96 2.56 0.00 MG-PE-5647 1998 REPUBLIC OF MADAGASCAR MINING PROJECT 0.00 5.00 0.00 4.60 1,09 0.00 MG-PE-1537 1997 REPUBLIC OF MADAGASCAR ENVIRON. II 0.00 30.00 0.00 16.45 -1.70 0.00 MG-PE-1555 1997 GOVERNMENT PRIV SECT DEV&C.B. 0.00 23.80 0.00 15.91 16.62 0.00 MG-PE-40019 1997 GOVERNMENT CAPACITY BUILDING 0.00 13.83 0.00 4.50 1,88 0.00 MG-PE-48697 1997 GOVERNMENT OF URBAN INFRASTRUCTURE 0.00 35.00 0.00 29.99 9.76 0.00 MG-PE-1533 1996 MADAGASCAR ENERGYSECTOR DEV PR 0.00 4600 0.00 32.85 16.99 0.00 MG-PE-35669 1996 GOVT OF MADAGASCAR SOCIAL FUND 2 0.00 40.00 0.00 2.97 -5.15 0.00 MG-PE-1522 1995 SCAR IRRIGATION II 0.00 21.20 0.00 8.68 4.23 0.00 MG-PE-1563 1995 GOVT MADAGAS/FOND AG.EXTENSION PROJECT 0.00 25.20 0.00 6.56 4.16 0.00 MG-PE-15t0 1993 D'INTER FINANCIAL INSTITUTIO 0.00 6.30 0.00 1.84 1.78 1.30 MG-PEt1520 1991 GOVT. OF MADAGASCAR NAT HEALTH SECTOR 0.00 31.00 0.00 4.04 2.45 -2.13 MG-PE-1512 1990 GOVERNMENT TANA PLAIN DEV 0.00 30.50 6.63 5.50 10.96 0.00 GOVT OF MADAGASCAR GOVERNMENT GOV.OF MADAGASCAR Total: 0.00 549.13 6.63 366.01 84.50 -0.83 - 53 -  MADAGASCAR STATEMENT OF IFC's Held and Disbursed Portfolio 31-Jul-1999 In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1983/89 Nossi-Be 0.71 0.00 0.24 0.00 0.71 0.00 0.24 0.00 1985189 COTONA 0.10 0.00 0.00 0.00 0.10 0.00 0.00 0.00 1990/91 AEF FLARO 0.00 0.00 0.47 0.00 0.00 0.00 0.47 0.00 1991 BNI 0.00 0.00 2.61 0.00 0.00 0.00 2.61 0.00 1992/93/95 AQUALMA 3.47 0.00 0.61 0.00 3.47 0.00 0.61 0.00 1995 AEF Karibotel 0.27 0.00 0.00 0.00 0.27 0.00 0.00 0.00 Total Portfolio: 4.55 0.00 3.93 0.00 4.55 0.00 3.93 0.00 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic Total Pending Commitment: 0.00 0.00 0.00 0.00 - 54 -  Annex 10: Country at a Glance MADAGASCAR: Public-Private Partnership and Information Management for Regional Development Project Sub- 9122/99 POVERTY and SOCIAL Saharan Low- Madaaascar Africa Income Development dlamond 1998 PoDulation. mid-vear (millions) 14 6 628 3 515 Life expectancy GNP npr canits (Atlas method USSI 78n 480 52e GNP (Atlas method. USS billions) 3.8 304 1844 Averaoe annual arowth. 1992-98 Pooulation (%) 2.9 26 1.7 Laborforce f% 28 2.6 19 GNP Gross per primary Most recent estimate llatest vear available. 1992-981 capita /nrnllmAnt Povertv (% of DoDulation below national oovertv line) Urban Dooulation (% of total oooulation) 28 33 31 l ife P.enrectanrv at birth (vears) 58 61 R3 Infant mortalitv (oer 1.000 live births) 94 91 69 Child malnutrition (% of children under 5) 34 Access to safe water Access to safe water /% of.ooDulation) 16 47 74 Illiteracv (/ of Dooulation aOe 15+) 46 42 32 Gross crimarv enrollment (% of school-aae noDulalionl 72 77 108 Madagascar Male 73 84 113 - Low-income group Femalp 70 69 103 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1977 1987 1997 1998 Economic ratios GDP (USSbillions) 2.4 26 35 3.7 Gross domestic investment/GDP 8.1 10.1 11 8 13 8 Exoorts of ooods and services/GOP 16 4 16.6 21 8 21.2 Trade Gross domestic savinos/GDP 45 52 3 3 5.3 Gross national savinos/GDP 4.4 4 4 59 57 Current account balance/GDP -2 7 -5 7 -5.6 -7 5 /mt Interest oavmentslGODP 02 4.1 1 3 1 2 Savmesti Investment Total debt/GDP 12.4 143.5 115.9 108.2 Savngs Total debt service/exoorts 12 2 50.7 22.0 23 0 Present valtpe nf debtiGnP A? n Present value of debtlexDorts 324.6 Indebtedness 197747 1988-98 1997 1998 199943 (averaae annual arowth) G DP n01 1 1 3 7 39 5 9 Madagascar GNP ner caoita -3 5 -1.2 1 5 1 6 2.8 Low-income group Eynorts of coods and services -5.0 34 -3.8 -4 5 6.6 STRUCTURE of the ECONOMY 1977 1987 1997 1998 Growth rates of output and Investment (%) (% of GDP) - AnrislIturr 32 8 36? 31 5 3n 6 Industrv 17 0 13.7 13.4 13.6 *0 Manufacturina 114 11.1 20- Services 50 2 50.1 55,0 55.8 o_ 0 Private consumotion 84 5 85 7 89.0 87 2 -20 3 96 97 s9 General aovernment consumotion 11.0 9.1 7 6 7.5 GDl -CGDP ImDorts of ooods and services 20.0 21.5 30 3 29 7 (averace annual crowth) 1977487 1988-98 1997 1998 Growth rates of exports and Imports (%) laveraae annual orowth) Aariculture 1 7 1.7 1 9 21 20 Indistrv -7 1 1 47 5 S M.anufacturina 0.1 1 7 Services -0.8 1.2 4.6 5 1 5, Privatp r"nsrtmntion .n 9 1 S 57 6 n V General oovernment consumotion 1 7 -1 7 14.8 -4 0 -a 9 go )tts Gross domestic investment -1 6 -1 0 -0.6 9 0 to Imoorts of aoods and services -6 2 36 7.6 4 9 Exports - mports Gross national oroduct -0.8 1 5 4.7 4.9 Note: 1998 data are preliminary estimates, The diamonds show four kev indicators in the countrv (in bold) comoared with its inoome-orouD averaoe If data are missino. the diamond will hb innomnleate - 55 -  Mada-aascar PRICES and GOVERNMENT FINANCE Domnestic prices 1977 1987 1997 1998 Inflation (%) (% change) s0 Consumer prces .. 18.9 4.5 6.2 40 Implicit GDP deflator 8.6 23.0 7.5 8.6 20 Government finance (% of GDP, includes current gfants) o _ _ __ __ __ __ Current revenue .. 15.3 11.8 10.9 93 94 95 95 97 95 Current budget balance .. 3.6 0.9 0.6 GDP deflator -CPl Overall surplus/deficit .. -3.4 -5.6 -7.2 TRADE (US$ millions) 177 1987 1997 1998 Export and Import levels (US$ millions) Total exports (fob) -, 332 504 519 ,aooo Coffee ,. 93 33 41 Otherfood ,. 89 10 16 750 . Manufactures ,. 69 342 403 ml Total imports (cif) .. 409 802 791 solMI* Food .. 52 49 56 250 Fuel and energy .. 55 117 105 Capital goods .. 102 146 153 0 92 93 94 95 99 97 98 Exoort orice index (1995=100) 94 81 89 ImDort onrice index (1995=100) 79 92 87 m Exports *Imports Terms nftracle (1995=100) 119 as 103 BALANCE of PAYMENTS (USS millions 1977 1987 1997 1998 Current account balance to GDP ratio Exports of goods and services 385 425 772 801 a Imports of goods and services 447 552 1,063 1,098 .2 Resource balance -62 -127 -290 -297 Net income -1 -175 -103 -85 Net current transfers 0 154 195 101 .. Current account balance -83 -147 -198 -281 .s Financing items (net) 77 216 253 163 10 Changes in net reserves -14 -69 -55 118 2 Memo: Reserves includina oold fUSS millions) 0 25 286 170 Conversion rate fDEC. local/USS) 245.7 1,069.2 5,093.4 5,441.4 EXTERNAL DEBT and RESOURCE FLOWS 1977 1987 1997 1998 fUSS millionsl Compositlon of total debt, 1998 (US$ mililons) Total debt outstanding and disbursed 293 3,680 4,105 4,056 IBRD 26 36 3 1 IDA 77 550 1,212 1,329 Total debt service 47 247 229 233 B1329 IBRD 2 4 4 2 G: 1.525 IDA 1 6 19 25 Composition of net resource flows Official grants 22 102 193 117 Official creditors 17 269 113 Private creditors 20 -16 -3 -2 | | Foreign direct investment -3 .. 14 16 F. S - 6 Portfolio equity 0 E: a75 World Bank program Commitments 0 138 159 98 A-IBRO E-Bilateral Disbursements 9 93 130 101 B-IDA D-Othermultilateral F -Private Principal repayments 0 3 13 2 ' Netflows 9 90 117 99 Interest payments 2 7 9 15 Net transfers 6 83 108 84 Development Economics 9/22199 - 56-  MAP SECTION   IBRD 30536 42