Cambodia - Demobilization and Reintegration Project

Report No. PID10234 Project Name Cambodia-Demobilization and Reintegration Project () Region East Asia and Pacific Region Sector Other Public Sector Management Project ID KHPE71445 Borrower(s) GOVERNMENT OF KINGDOM OF CAMBODIA Implementing Agency Address DEMOBILIZATION SECRETARIAT Council of Ministers (CoM), Council on Demobilization of the Armed Forces (CDAF), General Secretariat (GS) Address: Contact Person: H.E. Sok An, Senior Minister, Minister in charge of the Council of Ministers, CDAF Chair, H.E. Svay Sitha, Under-Secretary of State, CoM, Secretary General, CDAF Tel: 855-23 880 625 Fax: 855-23 880 625 Email: gscvap@bigpond.com.kh Environment Category B Date PID Prepared August 3, 2001 Projected Appraisal Date April 25, 2001 Projected Board Date August 23, 2001 1. Country and Sector Background Priority Objective -- Sustained Growth and Poverty Alleviation. The foremost priority for the Government's development program is to take and implement concrete measures to promote growth and reduce poverty, most specifically in the rural areas. The Royal Government's Platform for 1998-2003 aims to reduce poverty by: (i) safeguarding social stability and security; (ii) building human capacity; (iii) strengthening infrastructure and fostering an environment for private investment; (iv) fully protecting and preserving the natural environment; (v) enhancing national revenues in the context of a fully accountable and transparent fiscal policy; and (vi) encouraging the private sector as an engine of growth, investment, and employment creation. At the same time, it has been recognized that this ambitious reform program must be accompanied by an adequate public sector reform program to enhance the efficiency and effectiveness of public service delivery. Demobilization is an important part of public sector reform. It is also a key element of the PRGF and the SAC as regards fiscal reform, most notably the reallocation of expenditures from the security to the social sectors.Background. The Paris Peace Accord of 1991 entrusted the United Nations Transitional Authority in Cambodia (UNTAC) with supervising the unification of the four fighting factions (the State of Cambodia, FUNCINPEC, the Khmer People's National Liberation Front, and the National Army of Democratic Kampuchea, (NADK)) and the subsequent demobilization of the warring factions with armies consisting of approximately 140,000 soldiers. When the program was completed in May  1993, about 36,000 soldiers had officially been demobilized and only from the cooperating factions. However, each faction started recruiting soldiers again, a situation which led to an increase in the number of soldiers overall. The last program of demobilization updated for the Tokyo Consultative Group (CG) in 1999 was never implemented because of lack of financing and lack of consensus on a number of important issues such as the wider context of the reform of the armed forces within which demobilization should be placed, the need to update the needs and profiles of the soldiers, land ownership issues, program design and the management of its different components. In the end, the donors reached an agreement with the Government to test the various assumptions made in the proposed demobilization program. This has been done through the preparation and implementation of a pilot demobilization project, the results of which have helped in the formulation of the overall demobilization project.Sector issues. Demobilization covers many key issues related to the public sector reform and governance in general. In an environment of weak institutions, inadequate human resources and poor health conditions, more resources need to be allocated to the social sectors to build human resources. Economic and social services sectors are currently crowded out in the utilization of budgetary resources. Demobilization would make a contribution to efforts to increase spending in the social sectors through reallocation of savings to these sectors. The following specific issues have been raised and recognized as critical to any effective demobilization undertaking:Reform/Reprofessionalization of the Security Forces. With the return of peace and stability since the formation of a new government on November 1998, Cambodia is now emerging from three decades of armed conflict that led to the significant depletion of its human and social capital and the destruction of vital physical and productive infrastructure. With the priority now given to social development and poverty reduction, the demobilization project should be considered within the wider context of the reform of the armed forces in an effort to recast their role in a peaceful and democratic society. Number of military personnel. The number of military personnel has been a subject of constant debate. The situation has been made more difficult by the integration of soldiers belonging to different political factions into the army. There have been recurrent reports on the existence of ghost soldiers who contribute to an artificially high military bill. In addition, the Government has prepared and signed a "Letter of Demobilization Program Development" incorporating important principles that will guide the demobilization project.Destruction of small arms and weapons. A key aspect of the demobilization program is the need to disarm soldiers before or at the time of discharge so that the weapons can be destroyed and the soldiers adopt a civilian life style. Ex-soldiers should not become a source of danger and security problems. Ensuring that the discharged soldiers have been disarmed and the surplus arms are appropriately disposed of is therefore a priority. Socio-economic profiling and a needs assessment of soldiers and their families. It is necessary to create the conditions for the veterans' successful full reintegration into society so that they can become economically productive. This requires helping them obtain sustainable means of livelihoods. A first step in this area is to update their socio-economic profiles and to obtain fuller information on the specific needs of the veterans and their families. Reintegration needs. A systematic assessment of the needs of the soldiers to be demobilized and their families is needed to determine what incremental investments is needed to help - 2 -  facilitate full reintegration of veterans into civilian life. Access to land. Security of tenure over sufficient arable land is a major concern for rural dwellers and especially for those veterans who are already farmers or who choose farming as their means of livelihood. Ensuring secured access to land is therefore a key consideration under the project. Specially Vulnerable Families. A more systematic approach is required to identify the Specially Vulnerable Families (SVF). An adequate mechanism is needed to ensure a more accurate and systematic identification of the most vulnerable families and targeting of assistance to them. Criteria for the selection of soldiers to be demobilized. In order to avoid discriminatory practices against specific groups within the army, criteria for the selection of soldiers to be demobilized need to be objective and transparent. 2. Objectives The Demobilization and Reintegration Project (the Project) is a major component of the public sector reform program of the Government. It is an important element of the structural reforms supported by the IMF's Poverty Reduction and Growth Facility (PRGF) and IDA's Structural Adjustment Credit (SAC) consistent with Cambodia's transition from a post-conflict society, in particular the need to reorient public spending priorities from security issues to provision of social services and development of economic opportunities for the poor. The project would build upon the experience of a pilot project financed by a consortium of donors and through trust funds administered by IDA to reduce the size of the military and assist the reintegration of veterans. The overall objectives of the project are: Assist the Government in its effort to demobilize 30,000 soldiers and to promote their successful adaptation to civilian life. Contribute to a reallocation of budgetary resources to the social sectors in order to build human, social and economic assets. Savings achieved from demobilization will help achieve this. 3. Rationale for Bank's Involvement IDA has provided and will continue to provide the following support and assistance: Maintaining a leading position in coordinating donors' actions in the demobilization exercise and in pursuing the partnership approach proposed by the CAS, thereby supplementing (and strengthening) the Government's limited institutional capacity.Support the overall structural reform agenda in close partnership not only with the IMF but with other partners as well. Coordinating technical assistance and the work of all stakeholders, including NGOs.Provide support for overall resource mobilization for the project and the administration of the various grants from donors.Assuring that resources are well utilized and that least cost solutions are adopted through supervision and the use of tested procedures and guidelines as requested by other partners. Help leverage project financing by attracting other donors as well as continue to ensure the support of those that who have indicated that their continued financial support is contingent on the Bank's presence as a lending partner. 4. Description The Government's program to downsize the armed forces has two distinct but closely related phases: demobilization and long term reintegration of soldiers into civilian life. The Project concerns the first phase and has four main components: personnel data management and information system, demobilization, reintegration, and project implementation and technical -3 -  assistance. Personnel data management and information system. The objective of the registration exercise undertaken by the Government in 1999 with assistance from IDA was to establish a reliable military personnel database and to develop a computerized payroll system. It included the following activities: identification and verification of identity, data collection, taking of photographs, issuance of discharge certificate, data processing, and development and maintenance of a personnel data base. Many of these activities have already been implemented before this project. The project will use the results obtained, help evaluate them and make improvements as needed. Soldiers that are not registered would not be able to participate in the program.Demobilization. Demobilization is meant to support the Government efforts to downsize the army. It marks the formal and controlled discharge of soldiers from the army. Demobilization entails four basic sub-components: assembly and disarmament of soldiers before they leave the army and before discharge operations; discharge; the provision of a transitional safety net (TSN); and transportation of veterans to communities. The soldiers are first assembled in the barracks, relinquish their arms, are given preliminary instructions and taken to the discharge centers. Discharge at the centers includes pre-discharge orientation, withdrawal of the military identity card and provision of a civilian one, health screening of soldiers, initial counseling, provision of a TSN package of cash, foodstuff and household kits and transportation to the communities where the veterans live. Reintegration. The objective of reintegration support is to assist the assimilation process of veterans into the mainstream of productive civilian life. Reintegration follows directly from the demobilization phase. Reintegration assistance is intended to facilitate the full reintegration and adaptation of the veterans in the initial phases of their return to full civilian life in local communities. It includes a more detailed assessment of the socio-economic needs of the veterans' families, and the provision of the identified key individual social and economic assets that will help them build long term sustainable livelihoods. The assessment will be conducted prior to the first discharge with a random sample of up to 10 percent of the soldiers to be discharged. The interviews will be conducted at the home of the soldiers to be discharged, with the participation of their family. The composition of the reintegration package will be based on the lessons learned under the pilot project, complemented by the results of the field survey, monitoring and evaluation during implementation, and the analysis of available socio-economic surveys and census data. Reintegration assistance is expected to include (a) health screening, although this is conducted at the discharge center for logistical reasons; (b) provision of information, counseling and referral after arrival of veterans in the communities of settlement, and sensitization of host communities; (c) the provision of the package of assistance reflecting the needs assessed which could include housing, economic assets, mainly agricultural and other assets; and (d) the design and implementation of skills/vocational training programs and job counselling. Every effort will be made to deliver the packages of assistance no later than six months after discharge, subject to the applicable procurement procedures.Project Implementation and Technical Assistance Studies. The project will provide support to the implementing agencies at the central and provincial levels. Technical assistance will also be provided for: (a) the strengthening of the planning and implementation capacities of the GS of CDAF, the PVCs and their Executive Secretariats (ES); (b) the improvement of financial and -4 -  data management including monitoring and evaluation; and (c) the coordination of the provision of long term means of sustainable livelihoods to the veterans, including facilitating linkages to on-going community development programs in communities where veterans have settled.CostsThe project costs are summarized in the table below excluding taxes: (1) Data Management and MIS (2) Demobilization (3) Reintegration (4) Project Implementation, TA & Studies 5. Financing Total ( US$m) Borrower 7.20 IDA 18.40 Government of Japan 10.00 Government of Sweden 2.40 Government of Netherlands 2.00 World Food Program 2.00 Total Project Cost 42.00 6. Implementation The project will be implemented in conformity with the project implementation manual (PIM). The PIM was prepared based on similar documents prepared for the pilot project and updated to reflect the lessons learned and the additional technical requirements associated with IDA financing.At the national level, CDAF is responsible for the design and overall coordination of the demobilization project. CDAF is a civilian body that brings together representatives from all concerned line ministries MEF, MoH, Ministry of Interior (MoI), Ministry of Rural Development (MRD), MSALVY, MWVA, Ministry of Agriculture, Forestry and Fisheries (MAFF), MLMUC, MND, the Prime Minister's Military Advisor and the Council of Ministers (CoM). It is chaired by the Senior Minister in Charge of the CoM.The executing agency for the project is the GS of the CDAF. The GS, as the Project Implementation Unit, will be responsible, as it was under the pilot program, for overall planning, implementation, coordination and monitoring. The GS is represented at the Provincial level by the PVC. The PVC is headed by the Provincial Governor and includes provincial staff of the ministries represented in CDAF. The head of the Provincial Rural Department is Vice-Chair of the PVC and Chief of its ES. The ES is responsible for the detailed planning and coordination of project activities at the provincial level. A key feature of the project is to use existing structures as much as possible and to avoid creating new ones. Various ministries will contribute to specific implementation aspects of the project through their membership in CDAF. NGOs and other interested partners working in the provinces will also contribute to project implementation as required.Many tasks will be outsourced in order to allow the GS to concentrate on the core functions of planning, programming, budgeting and monitoring. Some of the jobs to be outsourced include procurement, financial management and needs assessment for the veterans at the community level. Outsourcing will be carried out in accordance with Bank procurement guidelines.Planning: The project will be implemented on the basis of Annual Work Plans and Budgets (AWPB) to be prepared by the GS and submitted to the donors for review and comment prior to finalization. Disbursements in any given year will be based on - 5 -  the corresponding AWPB, and monitored through quarterly Project Management Reports (PMRs).Financial Management and Procurement: Financial management and procurement will be outsourced to a professional firm with experience and qualifications acceptable to IDA. As part of the contract, this firm will review and update the procedures set out in the Project Implementation Manual and install an adequate project accounting system. Reporting: PMRs will be submitted to IDA on a quarterly basis. The professional firm hired will be responsible for the production of the PMRs. These will be forwarded to IDA within 45 days of the end of each quarter following review and approval by GS. The first PMR will be submitted to IDA at project effectiveness with the withdrawal request for the initial disbursement to the Special Account. The project accounts will be subject to annual audits by independent auditors acceptable to IDA under terms of reference acceptable to IDA. Audit reports will be submitted not later than six months after the end of the calendar year.Monitoring and evaluation: Overall project monitoring and evaluation will be based on indicators agreed by IDA and the RGC as listed in the Development Credit Agreement and as indicated in the provisional logframe. It will be carried out in four components: i) final design of the monitoring and evaluation framework with detailed indicators, means of verification and targets, by an external consultant engaged on terms of reference and qualifications acceptable to IDA; ii) ongoing data collection and reporting by the GS, assisted by a monitoring and evaluation consultant, using IDA's Project Monitoring and Reporting (PMR) system, iii) external monitoring and evaluation reporting at six month intervals by the External Consultant; and iv) an end of project monitoring and evaluation report by the External Consultant. Monitoring of input and output indicators will be done on a continuous basis by the GS and PVCs based on field visits and review of case files. Information management will be assisted by the procurement and financial management firm and the Monitoring and Evaluation Advisor, who will ensure that data is entered into the project MIS so that monitoring reports and PMRs can be generated as needed. Evaluation reports by the External Monitoring Consultant will be provided directly to the GS and IDA as chair of the Donor Working Group on Demobilization, for joint review and discussion. Evaluations will include participatory methodologies as well as review of project reports and documents, field visits and direct observations. Supervision: Field supervision will be performed by the Bank in conjunction with other donor stakeholders as appropriate. In addition, bilateral donors have indicated that they will provide technical assistance to the GS and may also do so for the Donor Working Group on Demobilization to strengthen implementation supervision and reporting. 7. Sustainability By providing a safety net to the ex-soldiers, assisting the most vulnerable groups, and providing a reintegration package, the project helps veterans acquire sustainable means of livelihoods and will improve living conditions in the rural areas. In addition, the promotion of the use of small private sector enterprises in the rural areas will help create jobs. 8. Lessons learned from past operations in the country/sector Key lessons which have been learned from other IDA credits and other activities come from four major sources: (a) the Country Assistance Evaluation executed by IDA's Operation and Evaluation Department in June - 6 -  1999; (b) repatriation and reintegration of refugees starting in 1993; (c) the Country Portfolio Performance Review (CPPR) of May 21, 2000; and (d) the pilot demobilization project. The main lessons drawn include the need to: (a) ensure adequate consultations and coordination with other donors and NGOs so that they can be committed to the project and help with its design, preparation, implementation and evaluation; (b) establish Government leadership early on during the design and preparation of the project; (c) take into account the implementation and management capacity of the Government in the project design. This would help determine the level of complexity and the number of project components; (d) carefully design the technical assistance component to ensure not just an adequate support for effective implementation but also to have adequate training of local staff and know-how transfer; (e) conduct a pilot project and carry out appropriate research and studies to test new ideas fully; (f) focus on poverty alleviation and encourage rural enterprises; (g) broaden the target group to include not only the project beneficiaries but also the communities where they live; (h) initiate the process of full demobilization project only after all the financing has been secured and the funds are ready and available to be disbursed; (i) outsource or contract as many activities as possible to outside experienced organizations; (j) ensure that reintegration activities are implemented as soon as possible after discharge; (k) assess the needs of the veterans and their families in their homes by qualified teams possessing appropriate skills mix; and (1) adopt measures to substantially improve project implementation capacity (particularly procurement, financial management and monitoring and evaluation).The project also includes other measures to internalize various lessons by: (a) strong coordination and consultations with other donors and NGOs in the design, preparation, implementation and evaluation of the pilot project; (b) strong leadership and involvement of the Government which prepared the pilot project and played a key role in its successful implementation; (c) the provision of specific specialized training and technical assistance; (d) specific and selective measures to support the overall institutional framework of the sector; and (e) the preparation of adequate procedures and a set of monitoring indicators. 9. Program of Targeted Intervention (PTI) Y 10. Environment Aspects (including any public consultation) Issues : The project is considered to be a Category B as the assistance package to soldiers includes help with housing which could include assistance with access to land. The implications of this component on land and environmental issues is not clear yet because of lack of information on where the soldiers are located, the number who may choose to move to a new area, their status on the land, and the need for new land and housing. However, this number has been assessed by earlier studies to be relatively small.The Government has provided an undertaking in the Letter of Program Development that it will ensure that land provided to veterans will be free from litigation or controversy, and that resettlement and land acquisition, if required, will be subject to IDA's policies and guidelines. Additionally, the Government has agreed to the establishment of a policy framework to deal with possible impacts on Indigenous Peoples (IP). 11. Contact Point: -7-  Task Manager Bonaventure Mbida-Essama The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: 855-23-213-538 Fax: 855-23-210-504 12. For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. - 8 -