PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB7178 Project Name Emergency Social Safety Nets Project Region AFRICA Sector Other social services (100%) Project ID P127328 Borrower(s) GOVERNMENT OF MALI Implementing Agency MINISTRY OF ECONOMY AND FINANCE Environment Category [ ] A [ ] B [X] C [ ] FI [ ] TBD (to be determined) Date PID Prepared November 19, 2012 Estimated Date of December 3, 2012 Appraisal Authorization Estimated Date of Board April 11, 2013 Approval 1. Key development issues and rationale for Bank involvement I. Introduction and Context Introduction This Project Information Document is an update to the one published on December 22, 2011. Given the existing political and security crisis, the proposed project design has been changed. Originally, the operation was intended to start setting up the building blocks of a social safety nets system and finance two programs: cash transfers, and cash for work. In the existing context in the country, it was decided to process the proposed operation as an “Emergency Recovery Loan� operation and not as a regular “Specific Investment Loan. In this context, given the complexity and time it would take to prepare such an operation, and the slow implementation start up that it would involve, it was decided to simplify the scope and focus the emergency operation on financing cash transfer programs, with a small component consisting mostly of technical assistance to build the basis necessary to expand the social safety nets system in Mali in the medium to long term, and introduce other safety net programs such as cash for work. Country Context Mali is a landlocked country with narrow natural resource base, rapidly population growth, high levels of poverty (43.6% in 2010), and highly vulnerable to different types of shocks (environmental, social, political and economic). It is estimated that more than 20-25% of the population is in chronic food insecurity, and around 1.7 million of people are at risk of hunger. This vulnerability has been exacerbated by the recent political and military crisis, which had isolated the North of the country. Particularly the military coup of last march has aggravated the existing food crisis across the country, and pushed large number of the population to the country’s interior that are areas with high levels of chronic food insecurity, as well as to neighboring countries. As a result, Malian households’ wellbeing is squeezed in terms of household welfare and caloric intakes. If this situation continues, Malian population can see a deterioration of their wellbeing and an exacerbation of chronic malnutrition, which later can be translated into a long term negative impact in future human capital and productivity. Although Mali had made some progress towards poverty reduction in the past years, poverty remains high and widespread across the country. The pace of poverty reduction has slowed down from an annual average of 1.6 percent in 2001-2006 to 1 percent in 2006-2010, reaching 43% (or 22% extreme poor). Household surveys (such as ELIM) show clear regional variations, mainly between urban and rural areas, and across regions. Since Mali is a rural country (78% of population living in those areas), national poverty is driven by rural poverty, where poverty dropped from 65 in 2001 to 51 percent in 2010. At same time, poverty headcount rates are above 50% in four regions (Sikasso, Segou, Mopti, Koulikoro), which account for 4.6 million of the total poor population (around 6 million people). In the past decade, Mali had seen a good track record in macroeconomic management but such mild growth was not pro-poor and it did not generate large impacts on poverty. Given the current political situation and some shocks, 2012 real GDP is projected to be negative (-3.1 percent). In other words, the Malian economy is suffering the dramatic consequences of the political turmoil. In this context, given the high vulnerability of the population in both rural and urban areas to a variety of shocks and the already high levels of chronically food insecure/poor), Malians can experience of an exacerbation of food insecurity and as a consequence a nutrition crisis in the upcoming months. Without immediate support, this could lead the country to a fragility trap that could take decades to get out of, and would be very costly to redress. Therefore, the current situation requires substantial food reserves, puts particular pressures on basic service delivery, and increases the already strong demand for social safety nets (SSN) programs. The latter is expected to play an important role in protecting human capital from depletion, providing temporary income-generating activities, and helping smooth consumption during times of crisis and shocks. Sectoral and Institutional Context The current Government priority envisages a reduction of chronic poverty and food insecurity levels, and improvement of the living conditions of the poorest population. This objective was already agreed as the previous Government prepared the third generation of Growth and Poverty Reduction Strategy Framework (GPRSF III) (2012-2017), and now after the political crisis and expected shocks, it became a more immediate goal. Under the GPRSF III Mali prioritizes three strategic areas: (i) promotion of accelerated, diversified and sustainable growth, and creation of jobs and activities that generate income, (ii) strengthening of the foundations for long-term development and equitable access to quality social services, and (iii) supporting institutional development and governance. Under the long term development strategy (ii), since the existing safety nets mechanisms are inadequate and limited, Government also foresaw the improvement of current safety nets through the development of integrated programs that shares good and efficient tools and procedures under an effective safety nets system. Relationship to CAS The proposed emergency project is consistent with the Bank’s Country Assistance Strategy (CAS) as noted in the CAS Progress Report (CASPR) discussed at the Board in April 2011. Particularly it is aligned with the CAS Objectives 2 (strengthen public sector performance) to improve delivery of basic services and protection of the vulnerable. The CASPR suggests a two- stage approach towards social protection: assisting in the short term the poorest and most vulnerable population groups to cope with shocks, while moving towards developing an efficient safety net system in the medium to longer term. In addition, the proposed emergency project, which is designed to reduce vulnerability and build resilience, is fully consistent with the new Africa Strategy. By supporting the poverty reduction policy strategy, the project is helping to design an effective safety nets program and support implementation/development of a safety nets system by providing technical assistance on the implementation of the basic administrative elements to develop, design and set up the safety nets system, and the basic institutional framework required to administer this system. Key Results The PDO indicators would include the following:  Number of households (beneficiaries) under Cash Transfer (CT) program (disaggregated by gender of the head and geographical location);  Number of children (beneficiaries) under CT program (disaggregated by gender and geographical location);  Number of direct total project beneficiaries under the CT program (disaggregated by gender and geographical location);  Number of Beneficiaries (percentage) of cash transfer program who are extreme poor or food insecure;  Development of a registry (database with information about potential beneficiaries) for the poor population to participate in safety net program;  Development of a simple, direct and transparent mechanism to select beneficiaries for the cash transfer program. 2. Proposed objective(s) The proposed project development objective would be to provide cash transfer programs to poor and food insecure households and lay the ground to establish a safety net system. 3. Preliminary description The project would be implemented as a US$70.0 million Emergency Recovery Loan (ERL), financed from an IDA Grant, for a period of 4 (four) years. In principle, the proposed emergency project would aim to increase income and consumption levels of poor families, and improve their ability to cope with shocks. At same time, the proposed project expects to enhance and protect the human capital accumulation of their children. In order to achieve such goals, an effective system will be developed to help management and achievement of these goals. Thus the proposed emergency operation would consist of the following three components: i) a cash transfer program to smooth and increase household welfare, and protect human capital of children; (ii) institutional support to set up key elements of a SSN system and build capacities (e.g. management information system, targeting and payment systems, monitoring and evaluation, management support, etc..); and (iii) project management support. It is proposed that a Project Implementation Unit be put in place in order to ensure quick emergency response, and to reduce the risk of political capture. At the same time, support will be provided to strengthen existing Government institutions. Component 1: Cash transfer program (Preliminary estimated costs: US$62.0 million) The cash transfer (CT) component of the proposed project would be implemented to support the poorest households in the short run but with a long term vision. The objective of this component is to provide targeted and regular CT to increase food consumption of the poorest households in most affected areas. The proposed CT program would be accompanied with actions (workshops, information campaigns) to provide information to households around good practices on nutrition and hygiene measures to support households to improve/protect human capital of children. The CT program would last for a period of 36 months for the selected families and then a recertification process can determine continuity of benefits for then. The adequate program parameter design and features - such as targeting, benefit size, frequency of payment, and accompanied measures design - are yet to be determined and they will be discussed during the preparation mission. Component 2: Institution Capacity - setting-up building blocks of a safety nets system (Preliminary estimated costs: US$6.0 million) To improve institutional capacity within Malian Government officials, the proposed project would support the development of the institutional framework and arrangements needed to establish a long term safety nets system in the country, which is aligned with the National Social Protection Framework that was approved in 2011. Therefore the proposed project would support the broad Malian Poverty Reduction policy by providing technical support on both the design of programs and the administrative elements needed to develop a safety nets system for Mali. Thus this component would support: (a) at the program level, exchange of information/good practices, and tools and procedures needed to implement CT program for poor households, and promote capacity building activities; and (b) at the administrative level, elements needed to set an efficient safety nets system. In this context, the proposed component would finance the following modules: (a) Designing and implementing a Unified Registry of Potential Beneficiaries (UR), that is, the database with information about the Potential Beneficiaries of the social safety net interventions to be used by the program or other donors programs; (b) Designing and implementing a well performing Management Information System (MIS), that is, the mechanism that transform data in useful information for policies. The project would support the development of a basic MIS to support program management and evaluation that includes targeting, enrolment, payment, grievance and monitoring; (c) Designing and implementing a monitoring and evaluation System (M&E), to carry out a set of assessments and evaluations to track project progress, calibrate its processes, follow-up on beneficiary perception and feedback, and measure outcomes and results. Particularly given the innovative character of this kind of intervention in Mali, the project would support development of regular monitoring and evaluation procedures, such as: (i) a rigorous impact evaluation of the CT intervention; (ii) regular process evaluations, (iii) beneficiary assessments; (iv) qualitative assessments; and (v) Social audits; (d) Designing and implementing accompanying measures as soft conditions attached to the payment of cash transfers in Component 1; (e) Preparing a feasibility assessment for introducing national cash for work program, to build the basis necessary for a potential expansion of the social safety nets system in Mali in the medium term. Component 3: Project Management (Preliminary estimated costs: US$2.0 million including contingencies) The objective of this sub-component is to support the Government in carrying out the required operational reform to effectively implement the social safety net programs. The proposed component would ensure that the unit implementing the project is operational, and that it successfully and efficiently implements the project in conformity with key project documents including the Financing Agreement, the procurement plan, and the project implementation manual. This component will finance: consulting services directly related to the management of the project, training of personnel, vehicles, office furniture and equipment, non-civil servant support staff salaries, and other operating costs. 4. Safeguard policies that might apply [Guideline: Refer to section 5 of the PCN. Which safeguard policies might apply to the project and in what ways? What actions might be needed during project preparation to assess safeguard issues and prepare to mitigate them?] Safeguard Policies Triggered by the Project Yes No TBD Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X As the project is focused on cash transfers, information and other management systems, and capacity-building, and does not involve civil works or activities with environmental and social impacts, it does not trigger the Bank safeguards policies. 5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 0 International Development Association (IDA) 70 Total 70 6. Contact points Contact: Setareh Razmara Title: Lead Social Protection Specialist Tel: (202) 473-2352 Email: Srazmara@worldbank.org Contact: Celine Gavach Title: Senior Operations Officer Tel: (202) 473-5541 Email: Cgavach@worldbank.org