Colombia - Magdalena Medio Regional Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 22452 IMPLEMENTATION COMPLETION REPORT (SCL-43710; PPFB-P3130) ONA LEARNING AND INNOVATION LOAN IN THE AMOUNT OF US$5.0 MILLION TO THE REPUBLIC OF COLOMBIA FOR A MAGDALENA MEDIO REGIONAL DEVELOPMENT PROJECT June 27, 2001 Environmentally and Socially Sustainable Development Sector Management Unit Colombia, Mexico and Venezuela Country Management Unit Latin America and the Caribbean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective December 2000) Currency Unit = Peso 2184 = US$ 1.00 US$ 1.0 = 0.000458 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CDPMM Consortium for Development and Peace Magdalena Medio CINEP Center for Research and Popular Education (Centro de Investigacion y Educacion Popular) CMDR Municipal Council for Rural Development (Consejo Municipal de Desarrollo Rural) CMP Municipal Planning Council (Consejo Municipal de Planeacion) DNP National Planning Department (Departamento Nacional de Planeacion) ECOPETROL National Oil Company (Empresa Colombiana de Petroleo) ELN National Liberation Army (Ejercito Nacional de Liberacion) ICR Implementation Completion Report LIL Learning and Innovation Loan M&E Monitoring and Evaluation NDP National Development Plan NGO Non-Governmental Organization PAD Project Appraisal Document PDPMM Program for Development and Peace of the Magdalena Medio Region (Programa de Desarrollo y Paz para el Magdalena Medio) PNR National Rehabilitation Program (Program Nacional de Rehabilitacion) PPF Project Preparation Facility TA Technical Assistance U JNDP United Nations Development Program IJNPF United Nations Population Fund (Q)AG Quality Assurance Group Vice President: David de Ferranti Country Director: Olivier Lafourcade Sector Director: John Redwood Sector Manager: Shelton Davis Sector Leader: Adolfo Brizzi Task Team Leader: Elsie Garfield  FOR OFFICIAL USE ONLY COLOMBIA MAGDALENA MEDIO REGIONAL DEVELOPMENT PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting hnplementation and Outcome 9 6. Sustainability 11 7. Bank and Borrower Performance 12 8. Lessons Learned 14 9. Partner Comments 17 10. Additional Information 18 Annex 1. Key Performance Indicators/Log Frame Matrix 19 Annex 2. Project Costs and Financing 24 Annex 3. Economic Costs and Benefits 26 Annex 4. Bank Inputs 27 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 30 Annex 6. Ratings of Bank and Borrower Performance 31 Annex 7. List of Supporting Documents 32 Annex 8. Borrower's Contribution to the ICR 33 Annex 9. ECOPETROL's Contribution to the ICR 39 Map IBRD 29517 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   Project ID: P046031 Project Name: MAGDALENA MEDIO REGIONAL DEVELOPMENT PROJECT _ Team Leader: Elsie B. Garfield TL Unit: LCSER ICR Type: Core ICR Report Date: June27, 2001 1. Project Data Name: MAGDALENA MEDIO REGIONAL L/C/ITFNumber: SCL-43710; DEVELOPMENT PROJECT PPFB-P3130 CountryIDepartment: COLOMBIA Region: Latin America and Caribbean Region Sector/subsector: MC - Community Action Program; MY - Non-Sector Specific KEY DATES Original Revised/Actual PCD: 03/10/98 Effective: 10/13/98 10/09/98 Appraisal: 03/10/98 MTR: Approval: 06/30/98 Closing: 12/31/2000 12/31/2000 Borrower/ImplementingAgency: REPUBLIC OF COLOMBLA/NATIONAL PLANNING DEPARTMENT/CONSORTIUM FOR DEVELOPMENT AND PEACE MAGDALENA MEDIO Other Partners: ECOPETROL, UNDP STAFF Current At Appraisal __ Vice President: David De Ferranti Shahid Javed Burki Country Manager: Olivier Lafourcade Andres Solimano Sector Manager: John Redwood Maritta Koch-Weser Team Leader at ICR: Elsie Garfield Elsie Garfield ICR Primary Author: Elsie B. Garfield; Natalia Gomez; Jairo A. Arboleda 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HTJN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: HS Sustainability: L Institutional Development Impact: SU Bank Performance: HS Borrower Performance: HS QAG (if available) ICR Quality at Entry: S HS Project at Risk at Any Time: No  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The Program for Development and Peace of the Magdalena Medio Region (PDPMM) was initiated in 1995 by the Consortium for Development and Peace Magdalena Medio (CDPMM) with support from the national petroleum company (ECOPETROL) and the Catholic church. The Magdalena Medio region does not correspond to a single political-administrative unit. It is composed of 29 municipalities located in 4 Departments (Antioquia, Santander, Bolivar and Cesar) which share the following characteristics: proximity to the Magdalena River and its culture, influence of the petroleum industry and importance of ECOPETROL, recent settlement (major influx in the 1950s), inattention (at least until recently) of the Departments in which the municipalities are located, and a high level of armed conflict and violence. A majority of the population of around 810,724 live in rural areas or secondary towns, while 36% of the people live in two cities, Barrancabermeja and Aguachica. The project development objective of this Learning and Innovation Loan is to develop the operational capacity of the Consortium, citizen's network and other partners to work together towards collectively defined objectives to reduce poverty and increase peaceful coexistence in the Magdalena Medio region. The two-year LIL would thus establish a solid basis for the detailed design and implementation of an ambitious ten-year community-led, multi-sectoral development program. The project's development objective was clear. The objective focused on learning and capacity building which was realistic given the pioneering nature of the project for both the Bank and the Government of Colombia: promotion of a community-based participatory approach to development and peace in one of the most conflictive regions of the country. The associated learning objectives were well defined, as well as the monitoring and evaluating system for ensuring a continuous learning mode and assessment of results. This project was of critical importance to Colombia. It was one of the first lending operations in the new area of Bank assistance to Colombia, peace and development, identified by government authorities and civil society representatives as Colombia's number one development priority and incorporated as such in the Country Assistance Strategy (CAS) presented to the Board in late 1997 (Rpt. 17107-CO). As noted in the CAS Progress Report presented to the Board two years later (R99-201, November 1999), the importance of this project and Bank assistance in this area increased when a new presidential administration took office in August 1998 with peace as its central objective. Its National Development Plan (NDP) for 1998-2002, established a two track approach to the peace process: (i) at the national level, negotiations for peace with various armed groups; and (ii) at the regional and local level, promotion of initiatives to build social capital and address the root causes of violence. The PDPMM had defined a community development approach, being tested under the project, which was the key source of the new government's thinking about how to promote development in conflictive regions. The LIL was chosen as the appropriate lending instrument and the project objective was shaped to reflect the need to build capacity and test the feasibility of the participatory approach and promotion of a long-term development program in the complex conditions of the Magdalena Medio region. In this respect, the objective was appropriate to the situation. 3.2 Revised Objective: Objectives not revised. -2 -  3.3 Original Components: The project had two components which are described below: Component 1. Capacity Building for Program Management (US$3.12 excluding PPF refinancing). The objective of this component is to build the capacity of the Consortium and Citizen's Network to implement the PDPMM. Sub-Component 1.1: Consortium as Change Agent and Program manager. The objective of this sub-component is to develop the Consortium's capacity to move from a participatory planning mode to an operational mode characterized by: (i) acting as a catalyst (promoter, intermediary, advisor and financier) among relevant beneficiaries and stakeholders; (ii) translating local initiatives into viable action plans and investments; (iii) promoting the establishment of effective partnerships with other organizations to support development initiatives; and (iv) dealing effectively with the diverse interests of key stakeholders in the region. Sub-Component 1.2: Citizen's Network The objective of this sub-component is to strengthen the Citizen's Network so that it is capable of influencing public affairs and implementing development projects based on local initiatives. The network is a voluntary association of citizens and organizations which has its base in a nucleo in each municipality, representatives of each nucleo in the nodo at the subregional level and representatives of each nodo at the regional level. It has a central role in program implementation and is considered by the Consortium as a vehicle for building social capital in the region. Component 2. Sub-Projects (US$2.75 million). The objective of this component is to develop, test and document approaches which bring together community processes and resources around specific development initiatives agreed upon by citizens and authorities of selected municipalities or sub-regions of Magdalena Medio. Strategies and sub-projects are at various stages of development in the following areas identified as priorities by communities: education, health, environment, economic development, peaceful coexistence and institutional development. Sub-Component 2.1: Technical Assistance for Sub-Proiect Preparation. Technical support (technical advice, feasibility and design studies, building of management capacity and establishing links with potential partners and financiers) will be provided to a community to develop a specific development initiative or sub-project. Sub-Component 2.2: Sub-Projects. The project will finance a proportion of the costs of specific sub-projects which are expected to cost less than US$50,000. This sub-component will have a phased approach (a LIL within a LIL): financing would begin in strategic areas such as education, health and environment which are well defined, and new areas would be phased in based on two criteria i.e. the strategy is ready and the implementation capacity of the Consortium and communities is judged sufficient to expand the component's scope. The project components were well designed, with clear results linked coherently to the project's development objective and a well-designed monitoring and evaluation system for assessing impact and results. Capacity building through a "learning by doing" approach was an explicit objective of the project's two components in order to pave the way to realize the long-term regional development program. Thus, the project design explicitly took capacity into account with some special efforts related to increasing the administrative and financial management capacities of the Consortium, and during this process to rely on UNDP to support certain project management functions. - 3 -  This project drew on lessons from various sources. The Bank team brought to the project design lessons from: (i) the Bank's evolving approach for integrating concern for conflict into development operations; (ii) the positive experiences in promoting rural development in Brazil; as well as (iii) the Bank's experiences in Colombia particularly with the Rural Development Investment Program (ICR Report No. 16721, June 1997) which it supported for 20 years. By far, the most important lessons which shaped the approach to be tested under the LIL were brought to the project design by the Consortium team in particular those who had worked in CINEP (one of the founding members of the Consortium) which had a long history of carrying out participatory-action research, and promoting informal education. CINEP had also worked in conflictive areas under Colombia's National Rehabilitation Program (PNR) which promoted community development and participation in conflictive regions from 1984-1994. In addition, a member of the Consortium team participated in a Bank-sponsored study tour of Social Funds in Latin America which allowed the CDPMM to draw on relevant aspects of this experience for design of the project's second component. 3.4 Revised Components: Components were not revised. 3.5 Quality at Entry: The QAG FY99 Quality at Entry review rated the operation satisfactory. The in-depth assessment panel indicated that the project was a high priority for the Government and CAS; that in its narrow formulation, the objective of the LIL is clear and realistic; that it considered the LIL the most appropriate instrument for Bank support; that there is sufficient clarity in the project's design regarding what is to be learned and the indicators to measure the learning experience are well developed; and that there was a high level of borrower and partner commitment. The panel raised some concerns about financial management; readiness for implementation since the operational manual for the sub-projects had not yet been approved; and broader concerns about the feasibility and risks of scaling up after the LIL to carry out the ambitious objectives of the PDPMM. The ICR assessment of quality of entry is highly satisfactory which is consistent with the project's results on the ground, the findings of the QAG, and the fact that the QAG's specific concerns were effectively dealt with during implementation. The project's financial management was adequate as indicated by the external auditors, and it was completed on time. The project is regarded by some in the Bank as an exemplary use of the LIL instrument in terms of the design and manner in which it was carried out; it has been examined and highlighted as an appropriate example of a LIL in the two reviews of adaptable lending. The project was highly consistent with the CAS and Government priorities. Bank safeguard policies were adequately treated. The project squarely addressed the main risk factor which was external to the project, the evolution of the armed conflict in the region and Colombia. One of the fundamental purposes of undertaking the LIL was to explore the potential and limitations of a strongly participatory, community development approach within a context of conflict. The situation of armed conflict and insecurity in the region worsened during the course of the project, due mainly to factors related to the national peace process (see section 5.1). The ability of the Consortium to successfully work in this environment, and the effectiveness of its approach to promoting development in the midst of conflict were demonstrated. The mechanisms for carrying out the project (semi-annual plans, operating manual, quarterly M&E reports) worked well in this difficult and quickly changing environment, and proved effective as learning tools though they were difficult for the Consortium to master initially. Thus, the project design achieved the right balance between planning and flexibility. -4 -  4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The project's outcome is highly satisfactory despite worsening security conditions in parts of the region due to external factors during the two and a half year implementation period. The participatory, community oriented methodology for promoting development in the midst of conflict piloted under this project has proven effective at creating a longer term vision of a better future for the region, strengthening the region's human and social capital, mobilizing resources and attention for the region, and starting a community-led process of improving basic services and investment which can be scaled up as the PDPMM progresses. The project's development objective of increasing the operational capacity of the Consortium, citizen's network and other partners to work towards collectively defined objectives was achieved. There is ample evidence in the two external evaluations (carried out by a reputable university research institute), the project's quarterly monitoring and evaluation reports, and other reports prepared for the ICR (Annex 7) of a positive assessment of all 4 of the key impact indicators (Annex 1 of this report). The two external evaluations which relied on significant field work in a sample of five municipalities provided strong evidence of the perception at various levels that the PDPMM has made a positive and important contribution. The second external evaluation completed in late November 2000 reinforced the first evaluation's conclusions that: the program's philosophy and objectives have been internalized by the participants, that involvement in the program has increased self-esteem of both individuals and groups, and that capacities have been increased. Thus, the most striking achievement is the increase in human and social capital: the citizens network now includes 23 nucleos and 147 organizations involving 8,625 persons who have internalized the vision and goals of the program. The capacity of the Consortium has been substantially increased, as evidenced by its ability to operate in the increasingly complex situation in the region, to mobilize and effectively use US$7.0 million (amount directly managed by CDPMM) during the period of the LIL, and to assist communities with 67 sub-projects with tangible results in terms of increased capacity of the organizations promoting them. The project's impact goes beyond its development objective and achievements in the Magdalena Medio region. It has contributed to: (i) the Government's thinking and strategic approach to development in conflictive regions, including the concept of delegating implementation to a respected third party (see Annex 8); (ii) Colombia's image and the ability to raise funds to support the peace process (the PDPMM's achievements have been showcased in international forums such as the World Economic Forum in Davos, Switzerland in January 2001, and in donors meetings in London, Madrid and Bogota); (iii) inspire and provide technical support for the initiation of regional development programs based on similar principles in 9 other regions of Colombia; and (iv) a new way of working for the Bank, Government, and other key participants including communities characterized by a learning mode and partnerships which could serve as an example for other projects in Colombia. 4.2 Outputs by components: As indicated in Section 3.3, the design of the project components was appropriate for achieving the defined outputs, and a combination of qualitative and quantitative performance indicators were defined in the PAD and assessed during implementation (see Annex 1 of ICR). Component 1. Capacity Building for Program Management (US$3.12 million PAD, US$4.81 actual). Sub-Component 1.1: Consortium as Change Agent and Program Manager (US$2.62 million PAD, US$4.11 actual). The performance under this sub-component is rated highly satisfactory. The Consortium achieved recognition in the region as a serious entity, operating in a transparent manner, efficient in the management and use of resources, and respectful of citizens' initiatives. The perceptions of direct beneficiaries, partners - 5 -  (such as municipal authorities), the general public as well as national authorities were positive about the PDPMM, and the Consortium's contributions were recognized. The Consortium's capacity to work with diverse stakeholders within the complex and deteriorating security situation in the region was also demonstrated. During the project, the Consortium consolidated its operating and administrative structure which had previously been located in Bogota and quite informal. It subsequently took steps in 2000 to adjust this structure, and to initiate a further decentralization in response to concerns of participants and its staff who indicated the need for a more integrated operating structure closer to beneficiaries with more differentiation in accord with the conditions in the 8 sub-regions. The Consortium progressively improved the content and implementation of each of the five semi-annual plans. It completed the two and a half year project on time with the total loan and counterpart fund amount fully disbursed by the closing date. It proved highly effective in promoting partnerships with other organizations and bringing new actors into the region to support priority development initiatives, as well as in raising additional funds. After some problems in the first year of the project, the Consortium developed effective methods for assisting organizations and their members to develop the capacity and knowledge to prepare sub-projects. It creatively adapted the methodology of "rapid results initiatives" (see articles cited in Annex 7) to develop initiatives in a phased process whereby a community organization defines a series of short term results/goals which build capacity and knowledge in an iterative fashion as it prepares an initiative for the investment phase. While putting in place the monitoring, evaluation and learning system proved more challenging and time-consuming than expected, the M&E unit provided important feedback and analysis which served as a basis for making adjustments in concepts, methodologies and operations. Critical outputs of the M&E work included: eight quarterly M&E reports; a preliminary set of baseline data for the PDPMM; checklists used by Consortium managers and staff to evaluate progress under the semi-annual plans; key methodologies, instruments and training tools for formative evaluation to be carried out by members of the nucleos and organizations managing initiatives; initial training on formative evaluation; two external evaluation reports; and special reports on the results of the LIL. Sub-Component 1.2: Citizen's Network (US$0.50 million PAD, US$0.70 actual). The performance under this component is rated highly satisfactory, even though there are variations across municipalities. The Consortium conceived of the citizen's network as a vehicle for building social capital in the region. Under the LIL, the Consortium promoted, tested and refined a participatory methodology (focused on the nucleo) for arriving at agreement among key stakeholders in each municipality around long-term development priorities (municipal proposal) and specific activities and investments to begin to address long-term priorities (initiatives and sub-projects). The LIL supported the work of the nucleos in developing the municipal proposals through grant funding of six month plans of action; 24 nucleos carried out at least one plan. In many cases, the nucleo members became increasingly involved in municipal decisions including in some cases formal or informal involvement in the legally mandated mechanisms for community involvement in planning (CMDR, CMP); in addition, the project supported the strengthening of these mechanisms. The 23 regularly operating nucleos are at various stages in developing the municipal proposals. In at least two cases, the municipal proposals developed by the nucleo influenced the development programs of mayors newly elected in October 2000. Another important achievement was the establishment, with support from the National Planning Council (a civilian body mandated by the 1991 Constitution to oversee the national development plan) of a Regional Participatory Planning System for Magdalena Medio which brought together members of the nucleos, municipal planning authorities, and participatory planning bodies. The actions of the PDPMM through the participatory methodology developed by Consortium, created a set of relations between people and communities that established a sense of common purpose and identification with the program's philosophy and objectives-with guiding principles of respect for life, sustainability - 6 -  and inclusion. A considerable number of citizens incorporated in their manner of thinking and acting the principles and methodology of the program. The methodology proved effective, as confirmed by the second external evaluation, in: increasing the capacity of persons to participate in managing their own development through nucleos and organizations, creating and strengthening social values (such as tolerance, civic-mindedness) and trust, developing a consensus on the role of nucleos, and maintaining the willingness of people to continue to work together on a collective vision of development for their municipality and the region. The concept of the citizen's network evolved during the course of the project. The original concept was of a network with a pyramidal, somewhat fixed structure. With time and the dynamic of the project's implementation, the concept became more flexible and horizontal: the network consists of a series of networks of organizations and persons who join together to pursue common interests and objectives; the members of these networks have a common set of principles, values and participatory work methodologies transferred to them by the PDPMM. There are currently 10 such networks operating including community radio stations, youth, and producer associations for fishermen, palm oil and cacao. This process has expanded the social base of program. Component 2. Sub-Projects (US$2.75 million PAD, US$6.67 actual). Performance under this component is rated satisfactory relative to initial expectations which proved overly ambitious, and highly satisfactory in terms of overall achievements. Certain aspects of the component were adjusted during implementation. Stemming from the Bank's concerns to avoid over-stretching the Consortium's capacity, the concept of this component in the PAD was to phase in financing of specific strategic areas (defined in sectoral terms) when a well-defined strategy and sufficient capacity of the Consortium and communities existed. This proved unworkable as the Consortium faced pent-up demand for investment funding, and it proved hard for them to severely limit the geographic coverage of the initiatives. In addition, the demand was particularly strong for productive projects though this was the area in which they were least experienced. Fortunately, as part of LIL preparation, they had prepared strategies for each of the sectoral areas which provided sufficient direction. The Operating Manual provided a basic decision making framework and guidance for the preparation and implementation of sub-projects, representing a big step forward for the Consortium which had handled these matters in a more subjective and informal way previously. During the LIL, the PDPMM promoted and supported the identification, preparation and start-up of 67 initiatives or sub-projects, led and implemented by community and producer/social organizations with support from the Consortium. This was a larger number than expected and the dynamic of the participatory process led to a majority of initiatives supported being productive: of the 67 initiatives supported 60 were of a productive character (20 classified as rural production including agro-industrial projects, 8 as marketing, 14 as urban production, and 18 related to fishing and the environment). The remainder were classified as education (2) and institutional development and peace/conflict resolution (5). In addition, with financing from the Ministry of Health and the United Nations Population Fund (UNPF), an ambitious program for the health sector was carried out. Based on the Consortium's assessment at the end of the LIL, 51 of these initiatives (76%) accounting for 94% of the total funding for sub-projects either have good prospects and are worth pursuing (33), or should be considered for continuation if certain conditions are met (18). Thus, the project successfully contributed to identifying and developing productive initiatives with good potential to improve the incomes and living standards of beneficiaries. While most productive initiatives never fully entered the investment phase during the LIL, a solid basis for investment was established and will be supported in the next phase of the PDPMM. In addition, the education projects and program in the health sector have demonstrated good results (see Annex 1, Table 3). The specific lessons learned in each strategic area are discussed in the documents cited in Annex 7. - 7 -  During implementation of this component, the Consortium recognized that the process of helping communities to transform initiatives into investment projects in a way that is empowering was more time-consuming and difficult than expected. During the first year of the project, the Consortium worked to identify effective processes for helping organizations develop productive initiatives into investment projects; it realized in early 1999 that it had focused efforts mostly on the capacity building aspects (referred to as endogenous factors) with insufficient attention to the other aspects of a project's feasibility (technology, financing, marketing etc., referred to as exogenous factors). It also recognized that a different skill mix in the Consortium team and more specialized technical support from outside were required. The CDPMM was able to take these lessons into account and make notable achievements. By the end of the project, the Consortium decided to move to a more decentralized structure which would put technical staff in the sub-regions as part of integrated teams so that they could provide support and follow-up to communities on a regular basis; this would be combined with greater reliance on specialized technical assistance for specific tasks. Another important development during the project was the Consortium's decision to move toward supporting larger, somewhat more complex productive projects covering more than one municipality (referred to as "meso" projects) which they believed would have a greater regional development impact and also serve to bring several organizations together thus reinforcing the process of creating and strengthening social capital in the region. This increased the challenges as these projects tended to be more risky due to their higher investment cost and complexity. The approach to productive projects gradually became more programmatic like the approaches in the health, and to a lesser extent, education sectors. By the end of the project, the Consortium had developed effective methods for assisting organizations and their members to develop capacity and knowledge. An important result of the project, to some extent attributable to trial and error, was that the Consortium became more aware of what knowledge and experience it was unable to provide directly to support initiatives, and it developed a format for provision of external technical assistance that empowered and improved the capacity of organizations and producers. It used several innovative methods and tools to support the development of productive projects including benchmarking ("referencia competitiva") and analysis of economic circuits. The benchmarking methodology compared the production processes of individual producers/firms with each other, with other regions in Magdalena Medio, and with other parts of Colombia, and in some cases internationally. This helped producers to: (i) better understand the context in which their initiative was being developed (production chain, accounting and competitiveness issues at local, regional, national and international level), and the technical options, profitability, sustainability and competitiveness of alternative development approaches. To identify productive opportunities in urban areas, analyses of economic circuits (economic transactions in a particular locality, backward and forward linkages of each economic activity, production costs and efficiency of each activity) were undertaken. 4.3 Net Present Value/Economic rate of return: Not applicable for this LIL, though during the project NPV and financial rate of return were calculated as part of the feasibility studies for some of the larger productive projects such as cacao and palm oil. 4.4 Financial rate of return: Not applicable for this LIL; see point 4.3. 4.5 Institutional development impact: The PDPMM promotes partnerships based on shared goals between communities and their organizations, and public and private institutions. The institutional development impact of this project is considered to be substantial in the following respects: -8 -  * it pioneered a new arrangement provided for in the 1991 Constitution, whereby the Government can delegate to an NGO or third party responsibility for carrying out actions on its behalf. As indicated in its assessment of the project in Annex 8, DNP became convinced that this could be an efficient and effective way for the government to support development in difficult areas of the country; * the Consortium was strengthened and refined its role as the program moved into the operational phase. It demonstrated in practice a new way of working, as a facilitator of alliances and partnerships, mediator, and strong promoter of community development. During the course of the project, it became more selective about what it needed to do directly and which funds it should manage directly. Its credibility was critical for bringing other actors into the region and for working with the communities and organizations; * under the project, an approach to building more responsive local institutions was tested which focused on increasing citizen and community knowledge and capacity--building informed demand--to create a constituency for better government and local institutions; this contrasts with the usual approach of focusing on the institutions themselves and providing training and other resources with the assumption that they want to be more responsive but simply lack the means. Simultaneously, the Consortium worked with local governments and institutions which showed motivation to develop in ways consistent with the program's objectives. Notable accomplishments are: the strengthening of participatory planning bodies at the municipal level, creation of the Regional Planning System, and the translation into practice of reforms in the education and health sectors (see Annex 1, Table 3). 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: The key factor outside the control of the government and implementing agency which partially affected the project outcome was the evolution of the armed conflict and deterioration of the security situation in parts of the region. This was due largely to external factors related to the Pastrana Government's attempts to negotiate peace starting in mid-1998, and the military and political strategies of the various armed actors vis-a-vis this process. A series of key events made the situation complex: v in October 1998, the conquering by the paramilitaries of municipalities in the south of the Bolivar department which had for many years been controlled by the National Liberation Army (ELN) and the resulting exodus of 20,000 peasant farmers to occupy schools and other public buildings in Barrancabermeja for 3 months; * the drawn out and still inconclusive attempt to initiate peace talks with the ELN through the creation of a meeting zone ('zona de encuentro") in two municipalities in the south of Bolivar department in the areas which the paramilitaries now dominate, and the reaction of the civilian population and paramilitaries against this proposal resulting in a road blockade for more than a month and disruptions throughout much of 2000; and * the launching of a military campaign by the paramilitaries at the end of 2000 to control the poorer neighborhoods in Barrancabermeja which had been dominated for many years by various guerrilla movements. In addition, the Government's announcement of Plan Colombia generated negative reactions from diverse sources including the guerrilla groups, politicians, UN officials, and leaders of civil society organizations especially those concerned with human rights. This also affected the environment in which the project was carried out. The armed conflict was recognized as a key factor going into the project, and the Consortium was able to -9-  manage these risks effectively and successfully in order to achieve the project's objectives. However, the project could have achieved a lot more if it had not had to deal with a situation which became much more complex than imagined: requiring a lot of time and attention to manage, resulting in the Consortium being asked to take on new roles by the Government and others, resulting in fear and intimidation of citizens which presented obstacles in certain parts of the region at certain times to the participatory approach, and resulting in setbacks and loss of positive achievements in some cases. Another key factor affecting implementation which was acknowledged in the PAD, but whose operational implications were not fully understood is the heterogeneity of the region. The diversity of conditions in the region (geo-logistical, political, economic, and particularly human and social capital endowments) combined with the dynamic of the armed conflict resulted in great variation in the rhythm, timetable and costs of development activities among municipalities, sub-regions, and organizations. During the course of the project, the Consortium adjusted its methodologies and expectations for developing municipal proposals and initiatives to make them more flexible to take into account these differences. In addition, it realized that the expectations for the accomplishments under the second component of the LIL were too ambitious. 5.2 Factors generally subject to government control: The main factor affecting implementation which was subject to the government control but had a minor impact on project outcome was a rupture of project funding in the second quarter of 2000. An unfortunate combination of inattention by the Consortium which led to submitting a disbursement application late when funds in the UNDP project account were low, and the lack of mastery in DNP and the Ministry of Finance of a new integrated computer system for managing public finances (the project was the first World Bank financed project to have a disbursement application processed through the new system) led to a several month delay in processing the application and a period when the Consortium had no money. This disrupted the flow of funds for nucleo plans and sub-projects, but fortunately the Consortium's credibility was sufficiently high that it did not cause serious damage to the PDPMM or the project. 5.3 Factors generally subject to implementing agency control: Throughout the implementation period, there was a frank dialogue between the Bank and Consortium about what was perceived to be working and not working well. While there were a number of factors subject to the Consortium's control which arose, none had a major impact on the project's outcome. However, more timely and decisive action to hire an experienced financial and administrative manager would have substantially improved implementation. This delay was costly in terms of getting in place effective management systems, and in the time spent by other staff (without the requisite level of experience) temporarily assigned responsibility for these functions at the cost of their technical work. When this problem was resolved in late 1999, a rapid and remarkable improvement was achieved which was maintained for the remainder of the project. The participatory planning process of the PDPMM prior to the LIL generated high expectations among many organizations which had identified initiatives some of which were already receiving support from the Consortium. Unfortunately, the Consortium's lack of a clear definition of entry and exit criteria for supporting initiatives (the screening criteria in the Operating Manual were very general), and of the type and limits of the Consortium's support led to: (i) frustration when initiatives were not supported, and (ii) support by the Consortium of initiatives which did not necessarily have good prospects. The need for clear and transparent criteria was one of the project's lessons which will be addressed in the follow-up project. 5.4 Costs andfinancing: The cost estimates in the PAD were approximate given the iterative nature of project implementation through the use of semi-annual operating plans, and uncertainties about additional funding (not quantified - 1 0 -  at appraisal) which the Consortium and community organizations would raise from other sources during the course of the project. They were successful in fund-raising which resulted in more activities being undertaken and greater achievements being realized. No significant disbursement or implementation delays occurred. 6. Sustainability 6.1 Rationale for sustainability rating: Normally not applicable for a LIL. Since there is much skepticism about whether it would be possible to make progress toward sustainable development in the difficult circumstances of the Magdalena Medio region, it seems important to address this matter. Any achievements in the midst of the current circumstances in the region are fragile, and the ability to achieve the ambitious objectives of the PDPMM are subject ultimately to the broader process towards peace and security in Colombia. However, the Government believes that the project has contributed to this broader process. The ICR assessment is that the lessons of the project about an effective community development methodology for a conflictive region, and the capacities that the PDPMM has helped develop in the people and organizations of Magdalena Medio will live on and be put to good use in the region or elsewhere, irrespective of the reversals which may be experienced due to a worsening of the armed conflict. The PDPMM was conceived as a long-term development program which has a high degree of commitment and ownership within and outside the region; therefore, the process is unlikely to be deterred by short-term reversals. This type of project does not resolve the armed conflict, but it creates conditions to facilitate dialogue among contending parties, it sets in motion a process for addressing some of the underlying reasons for the conflict, and it prepares the way for a post-conflict intervention. 6.2 Transition arrangement to regular operations: The Government has consistently indicated to the Bank the importance it places on continuing support to the PDPMM which is central to its peace and development agenda. In July 2000, the Bank agreed to the Government's request to initiate preparation of a follow-up project as part of continued Bank support for the program; the other key partners (ECOPETROL and UNDP) also indicated their continued support. In order for the Consortium to continue its work after the loan funding was exhausted, the Government provided interim funding of roughly US$500,000 from its 2000 investment budget and ECOPETROL's Board agreed to provide US$1.3 million (to start disbursing in early 2001) as counterpart funding for the new project. The proposed follow-up project will be a second LIL which builds on the lessons and successes of the first project, and extends the learning into challenging new areas: * develop and test new organizational and operational mechanisms for managing the PDPMM which increase the role of community organizations, take into account the diverse conditions in the region particularly the armed conflict, and gradually decrease dependence on the Consortium; * further develop and test approaches for strengthening local institutions, both private and public, to make them more responsive to citizens needs and priorities, and capable of resolving conflicts peacefully; and * test approaches for implementing productive projects which increase the probability of their success (for example, methodologies to help small producers and the poor develop sound market approaches for an array of enterprises) and contribution to the economic and social development of the region. The second project will focus on the three new learning areas within the larger set of objectives, activities and funding defined in the Consortium's three-year plan (2001-2003) of support for the next phase of the - I 1 -  Program of Development and Peace for Magdalena Medio. It will pave the way for a subsequent phase of the PDPMM which will be more ambitious in terms of the poverty and peace objectives, amount of funding, and the leadership role of communities. 7. Bank and Borrower Performance Bank 7.1 Lending: The Bank's performance in identification, preparation and appraisal of the project are considered highly satisfactory. The Bank was approached by the Government and Consortium in April 1996, and asked if it was interested in joining the PDPMM as a partner. Convinced that this was an excellent opportunity to put in practice its desire to work more closely with civil society, and improve the poverty impact of Bank lending through an integrated approach in a region, Bank management was courageous in agreeing to prepare an innovative project in a challenging region of Colombia. The Bank team worked closely with the Consortium team to prepare a regular investment project, and then shifted to a LIL when this option became available in mid-1997. The degree of Bank team involvement in preparation was high and the quality of inputs was good, though at times there was frustration on both sides as it took time for the two teams to develop a common vocabulary, concept of development, and understanding of the practical steps required to get the project approved. The Bank team remained flexible and open to new ideas, and made a significant contribution to the design in the following respects: encouraging the Consortium to adjust its focus from individual sub-projects to a more strategic approach, defining the learning areas and incorporating them into the design of the M&E system, and bringing practicality and realism in terms of what could be achieved in a short time in the complex conditions of the region. As indicated in section 3.3, the ICR assessment is that the resulting design was good, the lending instrument was appropriate, and an effective partnership was built. Some concerns were raised by the QAG about the time and money spent on preparation considering the operation was a LIL. This stenmmed from several factors: (i) the LIL was not an option until September 1997, thus time and money were spent trying to comply with requirements of a regular loan which was not really suitable for this operation; (ii) the newness of the LIL meant that start-up costs were incurred while the team clarified what was required; (iii) the innovative nature of the project and the way it was to be carried out; and (iv) the time required to build a partnership. As indicated by the QAG panel's assessment of client commitment and the quality of the participatory process, the investment of staff time and money led to a very high degree of ownership, trust and partnership with both the Consortium and the Government. The ICR assessment is that this was a worthwhile investment. 7.2 Supervision: One of the main concerns of management in approving this project was whether the Bank would be able to adequately supervise the project due to the difficult security conditions in the project area. Despite worsening conditions in various parts of the region throughout the life of the project, good supervision was possible and a "continuous" supervision mode was adopted. The measures defined in the PAD for ensuring adequate supervision were effective: (i) working with a highly reputable NGO, fully responsible for carrying out the project, which has shown the capacity to manage the difficult conditions in the region; (ii) regular feedback in the form of the semi-annual plans and quarterly M&E reports; and (iii) independent, professional assessments of the project's implementation and results/impact by Colombian experts (annual financial audits including field visits, and two external evaluations). Fortunately, it was also possible for Bank staff to go the region for short visits and a major supervision mission in March 2000. The ICR rating of the Bank's supervision effort is highly satisfactory which is consistent with the QAG - 12 -  assessment that supervision in FY00 was at the high end of satisfactory with a highly satisfactory rating for adequacy of supervision inputs and processes. The QAG noted: the proactive style of supervision in a challenging environment; quick response to issues as they arise; attention to social dimensions and community participation as well as M&E; excellent team composition and continuity; and close management interest and oversight. The Bank team was persistent in getting problems solved, while respectful of the Consortium's autonomy. It provided on-going support with a high level of technical inputs for the proposed palm oil projects, and the monitoring and evaluation system; it also shared new tools such as the Rapid Results Framework which came out of the Bank's staff training program. The only area where a bit more attention was warranted was procurement, although only minor issues have been identified. 7.3 Overall Bank performance: The Bank's overall performance is rated highly satisfactory. The Bank was courageous to support this operation, and provided the project team the resources and support they needed. The team adopted a constructive and open-minded attitude which helped build an effective partnership with the Government, Consortium, ECOPETROL and UTNDP, and provided technical support which contributed to the project's successful outcome. One area identified by the Government and Consortium where the Bank needs to devote more thought is whether further flexibility is warranted in the application of its policies and procedures to LILs to ensure consistency with the rationale for this lending instrument and to reduce transaction costs. Borrower 7.4 Preparation: The ICR's rating of the Borrower's performance in preparation is satisfactory. The Government and ECOPETROL (as the original sponsor of the PDPMM and provider of counterpart funds for the LIL) were courageous in supporting the PDPMM, and in being willing to try an innovative institutional arrangement which delegated project implementation responsibility to an independent NGO. During the preparation process, the National Planning Department adopted a low profile and relied on the Consortium to work directly with the Bank to define the project's design. While their trust in the Consortium was laudable, in hindsight it would have been useful if they had been more involved in preparation as a means of building the partnership with the Consortium and Bank, and acquiring a more in-depth understanding of the PDPMM and project. However, this did not have any important negative consequences, and DNP carried out satisfactorily its responsibility for overseeing the project's design and approval. An important positive factor which sped up project processing was the Government's approval of streamlined procedures for approving LILs. 7.5 Government implementation performance: The ICR rates the Government's implementation performance as highly satisfactory. DNP exercised its oversight responsibilities and managed the National Technical Committee effectively; it provided adequate guidance while according the Consortium the independence and flexibility required for it to effectively carry out the PDPMM in the complex conditions of the region. DNP's involvement and knowledge of the PDPMM increased substantially during implementation when they assigned a person full-time to supervise the project including regular field visits. While there were certain weaknesses in terms of administrative procedures, mainly processing of disbursement applications in 2000, DNP and the Ministry of Finance worked actively to solve the problems. Various Government agencies worked closely with the Consortium and provided support for the PDPMM, including the Ministries of Health, Education, and Agriculture. The Government also played an active role in identifying additional funding sources for the PDPMM. DNP and ECOPETROL participated actively in the ICR process to distill the lessons learned during the LIL and share them more widely in Colombia. - 13-  7.6 Implementing Agency: The ICR rates the Consortium's performance as highly satisfactory. A key project objective was to strengthen the Consortium's capacity, and during implementation it became clear that its strengths and weaknesses had been accurately identified. The Consortium proved itself to be a learning organization, willing to evaluate and improve its own performance, and to have an open dialogue with others (e.g. communities, external evaluator and donors) about its strengths and areas for improvement. Its major strengths demonstrated during project implementation include: the high level of integrity, commitment and professionalism of the staff; ingenuity in adapting new tools and developing new approaches for work in the region; effective communication of the fundamental principles of the PDPMM and ability to mobilize support; ability to design and implement a participatory community development strategy; and ability to manage the risks related to the conflictive environment in which the project was carried out. Concerning the areas where initial capacity was weak, the Consortium made outstanding progress during the course of the project. Major improvements were made in the financial and administrative area particularly in the last year of the project, including capacity building and oversight of the 8 sub-regional offices, nucleos and organizations carrying out initiatives. The Consortium was able to learn and adequately handle the difficult and at times unclear aspects of managing public funds and a loan from the World Bank, although Bank procurement norms were not fully mastered. The quality of M&E is considered highly satisfactory and concerns raised in the first external evaluation about slow implementation of the formative evaluation methodology to be used by beneficiaries was addressed in the remaining 9 months of the project. Midway through the project, the Consortium recognized that the effort to convert initiatives into sub-projects, particularly for agro-industrial projects involving more than one municipality, was much more complicated than originally foreseen, requiring a different skill mix in the Consortium team and more specialized technical support from outside. In particular, it took awhile for it to recognize the need for a thorough preparation process for more complex, regional projects. Bank support concentrated on this area, and the Consortium was eventually able to make notable achievements. After concern was raised that the procedures for environmental screening of initiatives included in the Operating Manual had not been fully internalized and applied early enough in the project cycle, the Consortium team made a considerable effort in 2000 to review each initiative's environmental aspects and to handle these matters in a more timely and effective way. In conclusion, the Consortium brought to the project strong capacity in critical areas and improved its performance substantially in areas where weaknesses were identified during the course of the project. 7.7 Overall Borrower performance: The overall Borrower performance is rated highly satisfactory, with particular recognition for the Consortium's dedication, commitment and contributions in the face of many difficulties. The Government of Colombia demonstrated a very high level of commitment to this project and the PDPMM. It was proactive in seeking Bank and other support for a follow-up project, and obtaining "bridge financing" to ensure continuation of the PDPMM until new loan funds are available. During project implementation, DNP was active in recognizing and resolving problems, and made important contributions to the ICR process. The Government was respectful of the Consortium's autonomy and point of view, and they managed to work well together despite different views on certain Government policies. 8. Lessons Learned An ICR workshop was held on December 6, 2000 with active participation of the project's key stakeholders including the World Bank, National Planning Department, UNDP, ECOPETROL and some community representatives to assess what had been learned during the LIL. The methodology and results of the workshop are presented in the "Memorias del Taller" (attached to the ICR mission's aide memoire - 14 -  which is in the project file). The principal lessons identified in the workshop and by the ICR team's analysis are described below. Operational model for community-based, participatory approach to development in a conilictive region of Colombia. The participatory, operational model for promoting development piloted under the project functioned well in the complex, conflictive environment of the region. The model is characterized by the following basic elements: * it is sustained by a change agent (the Consortium) which enjoys high credibility among all the stakeholders; * it is based on community and individual participation in the making of decisions about the community's development, and establishes specific mechanisms for this participation (e.g. the nucleos of the citizen's network, municipal proposals, and project initiatives); * it is based on a methodology that takes into account the capacity and 'initial state' of the citizens, and from this base initiates the learning and capacity building of community organizations so that they are able to take charge of their own development. Further, it recognizes and supports existing organizations and previous experiences in these communities; * it encourages communities to define a long-term development strategy for their community, municipality and region, while supporting "learning by doing" around more concrete and immediate goals and actions; * the change agent (Consortium) operates in a decentralized manner; v the change agent's staff (Consortium) act consistently in accord with defined values of respect, transparency, autonomy, and defense of the public interest. This operational model is not a cookie-cutter approach that can simply be copied elsewhere. There are a number of critical ingredients in the way the project and larger program of which it is a part are carried out such as the commitment and dedication of the Consortium's staff which are not easy to reproduce. This does not reduce the project or program's importance and impact in the Magdalena Medio region, nor in Colombia as a whole. Requirements: flexibility and continuous learning. The project demonstrated the need for flexibility and continuous learning when promoting a participatory approach in such a complex environment, and to expect a substantial variation in the rate of implementation and development depending on the varied conditions in different parts of the region. A continuous monitoring and analysis of the evolution of the socio-political situation at the local, sub-regional, regional and national level is an absolute requirement for working in the complex and quickly changing environment of conflictive regions in Colombia. Scaling up. One of the lessons in applying the approach described above was that increasing the capacity of individuals and communities to take charge of their own development takes more time than originally expected, particularly to develop their ability to prepare and implement productive investment projects which translate into increased incomes and better standards of living. Consequently, the original idea that it would be possible to move directly from the first LIL to a detailed definition and implementation of the full ten-year investment program (with funding from a traditional loan or adjustable program loan) proved overly optimistic and ambitious. It should be noted that this is also due to the evolution of the armed conflict at the regional and national levels which has increased the complexity and risks of scaling up the program rapidly. Tensions between the participatory process and technical requirements of preparing and implementing investment projects. The first external evaluation identified a tension and lack of sufficient - 15 -  integration between the Consortium's efforts to promote the participatory process of developing a long-term vision of development led by the nucleos, and the development of investment sub-projects by specific organizations. While this is likely to remain a continuing tension in a program of this nature, the Consortium decided to modify its structure to combine in one structure, at the regional and sub-regional level, the functions of promoting participation/community development and developing specific investment projects. In this way, these tensions will be recognized and addressed more directly. Provision of technical assistance in a way that empowers organizations and producers. The Consortium learned that provision of technical assistance by external experts was effective in building capacity and empowering organizations when through the process of developing an initiative the organizations themselves: identified what assistance was required, participated in formulating the terms of reference for the TA, and were involved in all stages of the study as the counterpart of the entity providing the technical assistance. The organization and its members thus became the owner of the process and fully appropriated the results. A good example is the feasibility study for the improvement of cacao production and marketing which was carried out with producer organizations in 3 municipalities. The Consortium's role in this process was to identify TA providers with the right capacity and a willingness to work in this manner, and to accompany the process with its staff. It learned to apply a similar process when it was providing technical assistance directly. In addition, it developed and used some innovative methods and tools which proved effective in this regard: the rapid results framework, benchmarking of productive pTocesses ("referencia competitiva"), and analysis of economic circuits (see Section 4.2). Productive projects: need for greater rigor and more up-front analysis for more complex projects. Initially, it was expected that the project would support relatively small and simple investment projects, with a focus on the social sectors. When the Consortium decided to support the development of more complex agro-industrial projects which involved producers in more than one municipality, it did not initially recognize that the development of such projects required a somewhat different process and level of attention than the smaller projects. However, the Consortium learned that more complex productive projects such as palm oil, with higher technical requirements, investment cost and risk, required in-depth and complete feasibility studies prior to embarking on the investment phase. In addition, the Consortium needed to establish clearer criteria for deciding which projects merit its support in the feasibility stage, and for determining its role in supporting those projects at the investment stage. Monitoring and Evaluation in support of continuous learning and empowerment of communities. The project experience gave a preliminary indication of the appropriateness of the basic concept of the monitoring, evaluation and learning system for a program like the PDPMM which aims at building social capital and is being carried out in a highly uncertain environment. However, it proved more challenging and time consuming than expected to implement the system due to tensions between the "technical" aspects of the work (quarterly M&E reporting, development of baseline, design of questionnaires etc.) and the "pedagogical" aspects of the work related to promoting participatory M&E by communities. In hindsight, to operationalize a M&E system of this kind it is critical to: * ensure that the M&E and learning system is the responsibility of the entire organization (Consortium in this case) and woven into the regular business, by defining clearly the M&E responsibilities and roles of each unit/group in the organizational structure; * ensure that the design of the system is understood and endorsed by various units and staff in the organization and that there is agreement on basic concepts and tools to be used; and * monitoring, evaluation and learning should have been made an integral part of the PDPMM's participatory methodology for developing municipal proposals and initiatives as it is a key tool for building social capital and empowerment. - 16-  Project evaluation by a reputable external entity is useful in a conflictive and insecure environment. The two external evaluations made a useful contribution to this project. While much of what the evaluator concluded built on or validated observations and findings of the Consortium's M&E unit and team, the external evaluation was extremely useful particularly because of the strains on the Consortium team due to their heavy work load and stressful conditions in the region. The external evaluations provided a more objective perspective; offered a structured moment for the Consortium team, communities and donors to reflect on and assess how things were going; and provided donors and the Government with an independent evaluation of progress and achievements. Sharing of lessons. The Consortium has not been able to fully document and disseminate the wealth of accomplishments and lessons of the PDPMM, due to the enormous pressures of every day work and constant crises in the region, and the desire to move the PDPMM forward to generate more benefits. It is important for the Bank, DNP and the Consortium to explore more deeply, systematize and disseminate the lessons of this project which are valuable for others in Colombia and the development community at large. Non-written forms of documenting and communicating these lessons might capture more effectively the richness of the experience as the most notable achievements relate to the development of human and social capital. Resources for these activities should be included in the follow-up project. Partnership: a new way of working. Each of the key financier's of the project--the Bank, DNP, ECOPETROL, and UNDP--indicated that they have learned to work in a different way both in terms of their respective institution, and in the relationship of their institution and team with the other partners in the project. This new way of working was characterized by a shared objective (the PDPMM's long-term goals and vision), complementarity of contributions, sharing of risks, and recognition and respect for the different perspectives and objectives of each partner (including dimensions of each partner's work outside the partnership). The result of the open attitude of each team and investment of time to build this partnership was a high degree of commitment and ownership of the project. 9. Partner Comments (a) Borrower/implementing agency: A translated version of the Borrower's contribution is contained in Annex 8. The National Planning Department indicated its letter of June 26, 2001 that it agrees with the report. The implementing agency prepared a series of write-ups on various aspects of the project and lessons learned which are listed in Annex 7. In his letter of June 25, 2001, the Director of the CDPMM provided the following comments on the ICR report (translation): "After having carefully analyzed the ICR, we would like to express to the World Bank our agreement with the content of the report. We are pleased that the evaluation of implementation, in particular the performance ratings, is very positive. We consider that this is the result of serious team work of the citizens of the region, staff of the CDPMM, staff of DNP, Ecopetrol and UNDP, in which all learned and in which we had the support of an excellent group of professionals from the World Bank. To complement the report, I would like to emphasize the following points: * the importance of the project which in function of the lessons learned has motivated the initiation of other experiences. In effect, with the support of several of the partners of this project (DNP and UNDP) and inspired by the methodologies of the PDPMM, 9 projects have been started in other parts of Colombia (Meta, Northeast Antioquia, Southwest Antioquia, North Santander, Cauca Valley, Cauca, Sierra Nevada de Santa Marta, Montes de Maria, and Uraba); * the constitution of a highly valued team (CDPMM) with a great level of commitment, engagement, professionalism, and a willingness to assume the risks of working in the midst of the on-going conflict - 17 -  in the region while taking great care not to put at risk the lives of others involved in the program or the social sustainability of the process; * the synergy achieved by the program in which diverse actors are participating, by overcoming traditional obstacles for these kinds of actions. That is to say, the methodological approach facilitated the development of working arrangements at the local, regional and national levels which involved discussion, consultation and implementation of projects that resolve in practice problems linked to markets, central planning, political and cultural differences etc. The ICR report is written in the spirit of the LIL, learning and innovation, and carefully reflects the rich experiences, increased capacities, achievements and weaknesses. The ICR is not simply a document for completing the project, it serves as a contribution to the new tasks we must undertake in the near future as we embark on a new stage of this continuous learning process. (b) Cofinanciers: The project's key cofinanciers and partners are: (i) UJNDP which in addition to administering the project funds under a Cost-Sharing Project also provided parallel financing for the project; and (ii) ECOPETROL the original sponsor of the PDPMM which provided the counterpart funding for the LIL on behalf of the Government of Colombia. Both prepared written inputs and participated in the ICR Workshop. UNDP indicated on June 22, 2001 that it did not have any comments on the report. The Director of External Relations of ECOPETROL in her letter of June 26, 2001 indicates that (translation): "We have analyzed the content of the document and the evaluation by the Bank team of the components of the PDPMM, in the context of the first LIL, and we are very satisfied with the report's scope, content and assessment of the project. We would like to give special emphasis to two points raised in the document: (i) the issue of the project's sustainability in the face of the armed conflict (last sentence of section 6.1 of ICR); and (ii) the focus of the project on paving the way for the next phase of the PDPMM." Annex 9 includes ECOPETROL's contribution to the ICR. (c) Other partners (NGOs/private sector): While other partnerships were formed during the project's implementation, the new partners' comments on the ICR report have not been requested as their involvement was less direct than those cited above. 10. Additional Information -18 -  Annex 1. Key Performance Indicators/Log Frame Matrix Table 1. Outcome/Impact Indicators INDICATOR ASSESSMENT SOURCE Perception of Strong confirmation in second external Two External Evaluation Reports (Feb. 28, beneficiaries and evaluation: perception of beneficiaries, and 2000; November 2000), CIDER, stakeholders that the others interested in and external to Universidad de los Andes. Five program, of which LIL PDPMIM is that it is functioning well and municipalities selected for intensive study is second phase, is producing results; citizens and authorities based on criterion of diversity.* operating satisfactorily have high level recognition, satisfaction and that benefits are and acceptance of PDPMM. being realized. No. of partnerships 42 agreements signed with other private Balance S&E LIL.** established and and public entities to develop and finance resources contributed. initiatives, resulting in cofinancing of approximately US$4.1 million. Financial and human * Total of approximately US$6.7 million Balance S&E LIL. resources contributed during LIL to develop and implement by municipalities and initiatives/sub-projects, 38% was financed others to support by the Consortium and 62% was subprojects. cofmanced by other private and public entities. * Cofinancing sources (by % of total financing for initiatives) were: 23% by producer associations/communities, 18% by public sector institutions (decentralized), 3% by municipalities, 1% by UNDP, and 9% by others including several private companies, and NGOs. In addition, producers obtained credit to finance the palm oil projects. Social organization Far exceeded this goal. Two External Evaluation Reports. increased and * Extemal Evaluation documents (5 Balance S&E LIL. strengthened in a least municipalities studied) important though 5 of the 29 varied achievements in each. municipalities * Creation of new organizations and strengthening of others particularly noteworthy in 4 of 8 sub-regions. * See results below for citizens network. * The methodological approach included quantitative and qualitative methods of data gathering such as questionnaires, group and individual interviews with key informants involved in, related to, or affected by the project, and a thorough review of key documents. **The Consortium's M&E of the semi-annual plans included a system of self-evaluation by the unit chiefs and field staff; and independent assessments in the quarterly M&E reports of the project's evolution in 10 municipalities and for specific initiatives. - 19-  Table 2. Output Indicators COMPONENT/ INDICATOR ASSESSMENT SOURCE OUTPUT Component 1.1 Budget implementation * Completion of project on Balance S&E LIL. Consortium Change rate vs. planned time. 5 Semi-Annual Plans. Agent * Progressive improvement for each Plan, with increase in expenditures from around US$235,000 (abbreviated 1st plan), US$815,440 (2nd plan) to US$1.7 million (5th plan). Perception of Consortium Consortium staff and donors External Evaluation staff and donors. recognize significant increase in Reports. Consortium's capacity, and its Quarterly M&E reports. translation of learning into actions. Results of ICR Workshop. Perception of beneficiaries, See impact indicators. Second External partners (particularly * External Evaluations provide strong Evaluation Report. municipal authorities), and evidence of positive perceptions and Balance S&E LIL. general public in the results. region: knowledge and * Given socio-political realities of the opinion about program, region, the relations with and program's image, and perception of municipal authorities examples of successes are varied. and/or failures. Component 1.2 Size/composition of the * Network includes 23 nucleos Balance S&E LIL. Citizen's Network network. (operating), 1 organization similar to Second External a nucleo, 146 organizations and a Evaluation. total of 8,625 persons involved and 8th Quarterly M&E benefiting from PDPMM. Report. * 60% of the most influential social organizations in the municipality are represented in the nucleo; nearly all such organizations have cooperative relations with nucleo (Ext. Eval.). * Rapid expansion of network in 4 of the 5 municipalities (Ext.Eval.). * 10 networks of organizations with common interests formed of which 7 are considered strong including: * network of community radios (14 organizations in 14 municipalities, 350 persons), * regional fisherman council (43 organizations, 14 municipalities, 87 representatives), and * cacao producers (3 organizations, 5 municipalities, 100 members). - 20 -  Representation of network * In 22 municipalities, these Second External members in formal citizens participatory forums reactivated and Evaluation. forums (such as Municipal operating more effectively with Balance S&E LIL. Councils for Rural support of PDPMM. Mejoras Practicas. Development, Municipal * 16 of the 78 members of the Planning Councils). Municipal Planning Councils in 5 municipalities studied are members of nucleo; however, in one municipality there are none (Ext. Eval.). * Establishment of Regional Planning System involving 25 municipalities (later expanded to 33 due to interest of other municipalities outside PDPMM) with a board and operating rules established; first Congress in May 2000; and participation in National Planning Conference June 2000. * Consortium's assessment is that very significant gains in at least 2 municipalities in terms of impact on _municipal plans and policy. Nucleos established and . 23 of the 29 municipalities have Balance S&E LIL. functioning in majority of nucleos formed and operating municipalities (number of regularly with core membership of nucleos regularly operating 541 persons. with a nucleo plan). * all 24 nucleos (one later dissolved) carried out at least one 6 month plan, 9 carried out 2 plans, and 8 have done 3; level of satisfaction with achievements under plans is correlated with no. carried out. * 23 monographs on municipal proposals prepared. * advances in formulating municipal proposals qualified as: 0 are very advanced stage (content converted into projects in municipal development plan); 7 municipalities are advanced (projects have been defined in plan); 13 are somewhat advanced (monograph prepared); and 6 are not advanced (no monograph prepared). Documented lessons on See table below. Quarterly M&E reports. how to strengthen Mejoras practicas. community capacity in a Results of ICR Workshop. context of intense conflict. - 21 -  Component 2. % of sub-projects Total of 67 initiatives financed: Balance S&E LIL. Subprojects implemented with positive * 33 (49%) judged to have good Reports project unit. results. prospects and be worth pursuing at end of LIL; account for 63% of total funding for subprojects (42% of Consortium funding for subprojects). a 18 (27%) should be considered for continuation if certain conditions met (build capacity, identify funding, demonstrate feasability and sustainability, more TA, armed conflict); account for 31% of total funding for subprojects (47% of Consortium funding for subprojects). * 16 (24%) with poor prospects for various reasons (poor technical viability, conflicts in organization, armed conflict, or no longer a priority) of which 2 were cancelled; accounting for 5% of total funding for subprojects (11% of Consortium funding for subprojects.) Findings concerning Documented in reports cited; see Mejoras praticas. effectiveness of strategies table below. and approaches in various areas such as primary health and basic education _____________________ tested under the LIL. _ _ - 22 -  Table 3. Effectiveness of Strategies and Approaches in Health and Education Sectors Sector Quantitative Indicators Qualitative Assessment Health . Establishment of 17 user associations. In the context of a major reform in sector * Formulation with community which had not been translated into action in During the period participation of 21 Basic Health Plans the region, the strategy focused on creating September 1998- (PAB) in 21 municipalities. an informed demand by citizens and November 1999, the * Identification and training of 61 communities for services, and a response by Ministry of Health community groups. service providers which increases coverage financed this sector * Creation of quality improvement teams and quality. strategy; during 2000, in hospitals in 21 municipalities. it was financed by the * Formulation of institutional Important achievements realized in areas: LIL. In addition at the development plans for 15 local social control over public health (PAB, local end of 1998, the hospitals. health plans), and health promotion and UNPF approved a * Training in tools to improve disease prevention initiatives. Efforts less project for management of 23 public health dynamic for hospital user associations and reproductive and providers (IPS). oversight of development plans. sexual health in the * Vision health program served 14,000 region which was children reaching 80/ of the region's Building on achievements and practical managed by the targt I experience during first year, as well as Consortium. taget population.fouestde t.n