Document of The World Bank Report No. ICR00003548 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-8414-BR) ON A LOAN IN THE AMOUNT OF US$400 MILLION TO THE STATE OF BAHIA FOR A BAHIA STRENGTHENING FISCAL MANAGEMENT AND PROMOTING BETTER AND MORE INCLUSIVE SERVICE DELIVERY DEVELOPMENT POLICY LOAN January 25, 2016 Macroeconomics and Fiscal Management Global Practice Central America Country Management Unit Latin America and the Caribbean Region CURRENCY EQUIVALENTS Exchange Rate Effective as of December 2, 2016 Currency Unit = Brazilian Real (R$) US$ 1.00 = R$3.47 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS CEDETER Territorial Development Council Conselho Estadual de Desenvolvimento Territorial CODETER Territorial Collegiate for Sustainable Colegiado de Desenvolvimento Development Sustentável CPS Country Partnership Strategy Estratégia de Parceria com o País DPL Development Policy Loan Empréstimo de Políticas de Desenvolvimento DPF Development Policy Financing FUNCEP State Fund for Combating and Fundo Estadual de Combate e Erradicação Erradicating Poverty à Pobreza GBV Gender Based Violence Violência Baseada em Gênero GoBA Government of the State of Bahia Governo do Estado da Bahia JV National Plan to fight Violence Juventude Viva Against Black Youth LGBT Lesbian Gay Bisexual and Lésbicas, Gays, Bisexuais e Transgender Transgêneros M&E Monitoring and Evaluation PAF Program of Fiscal Adjustments Programa de Ajuste Fiscal PDO Program Development Objectives PENM State Policy for Entrepreneurship Política Estadual de Fomento ao among Afro-descendants and Empreendedorismo de Negors, Negras e Women Mulheres PNDTR National Program for Rural Programa Nacional de Documentação de Worker’s Documentation Trabalhadoras Rurais PPA-P Participative Multi-annual Plan Plano Plurianual Participativo RMS Metropolitan Region of Salvador Região Metropolitana de Salvador RPPS Civil Service Pension Scheme Regime Próprio de Previdência Social SAEB Secretariat of Public Administration Secretaria da Administração do Estado da Bahia SCD Sickle Cell Disease Anemia Falciforme SEAGRI Department of Agriculture SEATS Secretariat of Social Development SE Secretariat of Education Secretaria de Educação SEDES Secretariat of Socio Economic Secretaria de Desenvolvimento ii Development Econômico SEFAZ State Secretariat of Finance Secretaria da Fazenda SEPLAN State Secretariat of Planning Secretaria do Planejamento SEPROMI State Secretariat for the Promotion Secretaria de Promoção da Igualdade of Race Equality Racial SESAB Secretariat of Health Secretaria de Saúde SETRE Secretariat of Labor, Employment, Secretaria do Trabalho, Emprego e Income and Sports Renda SPM Secretary for Women Policies Secretaria de Políticas para as Mulheres SPREV Violence Prevention Superintendência de Prevenção à Superintendence Violência SSP State Secretariat of Public Security Secretaria de Segurança Pública SUPREV Social Security Superintendence Superintendência de Previdência TA Technical Assistance TCE State Courts of Accounts Tribunal de Contados do Estado Vice President: Jorge Familiar Country Director: Martin Raiser Global Practice Senior Director: Carlos Felipe Jaramillo Practice Manager: Pablo Saavedra Task Team Leaders: Antonio Nucifora ICR Task Team Leader: Rong Qian ICR Primary Author Rong Qian iii BRAZIL BAHIA STRENGTHENING FISCAL MANAGEMENT AND PROMOTING BETTER AND MORE INCLUSIVE SERVICE DELIVERY DEVELOPMENT POLICY LOAN CONTENTS Data Sheet A. Basic Information .................................................................................................................... i B. Key Dates ................................................................................................................................ i C. Ratings Summary .................................................................................................................... i D. Sector and Theme Codes........................................................................................................ ii E. Bank Staff .............................................................................................................................. iii F. Results Framework Analysis ................................................................................................. iii G. Ratings of Program Performance in ISRs ............................................................................ vii H. Restructuring (if any) ........................................................................................................... vii 1. Program Context, Development Objectives and Design ........................................................ 1 2. Key Factors Affecting Implementation and Outcomes .......................................................... 7 3. Assessment of Outcomes ...................................................................................................... 11 4. Assessment of Risk to Development Outcome ..................................................................... 22 5. Assessment of Bank and Borrower Performance ................................................................. 23 6. Lessons Learned.................................................................................................................... 25 7. Comments on Issues Raised by the Borrower/Implementing Agencies/Partners................. 26 Annex 1. Policy and Results Matrix ......................................................................................... 28 Annex 2. Bank Lending and Implementation Support/Supervision Processes......................... 33 Annex 3. Beneficiary Survey Results ....................................................................................... 35 Annex 4. Stakeholder Workshop Report and Results (if any) .................................................. 36 Annex 5. Summary of Borrower's ICR and/or Comments on Draft ICR ................................. 37 Annex 6. Comments of Cofinanciers and Other Partners/Stakeholders ................................... 38 Annex 7. List of Supporting Documents .................................................................................. 39 MAP .......................................................................................................................................... 40 ii A. Basic Information Bahia Strengthening Fiscal Management and Country Brazil Program Name Promoting Better and More Inclusive Service Delivery DPL Program ID P147984 L/C/TF Number(s) IBRD-8414-BR ICR Date 1/25/2017 ICR Type Core ICR State Government of Lending Instrument DPL Borrower Bahia Original Total USD 400.00M Disbursed Amount USD 400.00M Commitment Implementing Agencies: State Secretariat of Planning (SEPLAN) Co-financiers and Other External Partners: Not Applicable B. Key Dates Development Policy Loan - P147984 Revised / Actual Process Date Process Original Date Date(s) Concept Review: 04/10/2014 Effectiveness: 08/29/2014 08/29/2014 Appraisal: 06/02/2014 Restructuring(s): Approval: 07/30/2014 Mid-term Review: 03/16/2015 03/16/2015 Closing: 01/31/2016 01/31/2016 C. Ratings Summary C.1 Performance Rating by ICR Overall Program Rating Outcomes Moderately Satisfactory Risk to Development Outcome Moderate Bank Performance Satisfactory Borrower Performance Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Overall Program Rating Bank Ratings Borrower Ratings Quality at Entry Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Moderately Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Moderately Satisfactory Performance Performance: i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating: Performance (if any) Potential Problem Quality at Entry Program at any time No None (QEA): (Yes/No): Problem Program at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Major Sector/Sector Public Administration Sub-National Government 10 10 Central Government (Central Agencies) 20 20 Education Other Education 10 10 (Historic)Health and other social services Other social services 40 40 Health 20 20 Major Theme/Theme/Sub Theme Economic Policy Fiscal Policy 5 5 Tax policy 5 5 Human Development and Gender Gender 25 25 Public Sector Management Public Administration 10 10 Transparency, Accountability and Good 10 10 Governance Public Finance Management 10 10 Domestic Revenue Administration 5 5 Public Expenditure Management 10 10 ii Social Development and Protection Fragility, Conflict and Violence 3 3 Forced Displacement 3 3 Social Inclusion 23 23 Indigenous People and Ethnic Minorities 20 20 Other Excluded Groups 23 23 E. Bank Staff Positions At ICR At Approval Vice President: Jorge Familiar Calderon Jorge Familiar Calderon Country Director: Martin Raiser Deborah L. Wetzel Practice Pablo Saavedra Auguste Tano Kouame Manager/Manager: Program Team Leaders: Antonio Nucifora Fernando Blanco Cossio ICR Team Leader: Rong Qian ICR Primary Author: Rong Qian F. Results Framework Analysis Program Development Objectives (from Program Document) The objective of the proposed operation is to improve fiscal management and territorial planning and tailor selected public services to the needs of women, afro-descendants and minorities. Indicator(s) Original Target Formally Actual Value Baseline Values (from Revised Achieved at Indicator Value approval Target Completion or documents) Values Target Years Tax Revenues: Revenue collected from tax payments in arrears at Indicator 1 : administrative phases (in R$ mln) Value (quantitative or 280 320 363 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Achieved achievement) iii Pension Expenditures: Savings generated by corrective measures detected by Indicator 2 : audits to the pensioners’ payroll (in R$ mln) Value (quantitative or 0 30 23.8 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Mostly Achieved achievement) Indicator 3 : Territorial Planning: Number of CODETERs fully operational Value (quantitative or 0 15 16 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Achieved achievement) Territorial Planning: Number of Territorios de identidade with strategic Indicator 4 : plans Value (quantitative or 0 10 15 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Achieved achievement) Equal Opportunities: Number of municipalities with more than 10,000 Indicator 5 : inhabitants joining the State System for the Promotion of Racial Equality Value (quantitative or 14 20 91 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Achieved achievement) Equal Opportunities: Number of social public programs in the multi-annual Indicator 6 : plan 2016-19 with race-disaggregated indicators Value (quantitative or 0 5 6 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Achieved achievement) iv Education: Percentage of indigenous schools with certified indigenous Indicator 7 : teachers Value (quantitative or 0 80 17 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Partially Achieved achievement) Education: Percentage of indigenous and Quilombolas schools adopting the Indicator 8 : new curriculum Value (quantitative or 0 50 100 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Achieved achievement) Health: Number of hospitals that received training to ensure equal treatment Indicator 9 : in health services for afro-descendant populations Value (quantitative or 0 25 24 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Mostly Achieved achievement) Health: Percentage of newborn children who received the neonatal heel prick Indicator 10 : test in Bahia Value (quantitative or 82 90 86.5 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Mostly Achieved achievement) Health: Effectiveness index of maternal and neonatal services provision in 25 Indicator 11 : reference maternity hospitals Value (quantitative or 65 80 83 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments Achieved (incl. % v achievement) Health: Mass media campaign to selected audiences on youth pregnancy Indicator 12 : prevention Value (quantitative or 0 2 1 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Partially Achieved achievement) Public Security: Percentage of the police force working with vulnerable Indicator 13 : groups training in the use of the protocols for specialized services to vulnerable groups Value (quantitative or 0 50 52 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Achieved achievement) Public Security: Percentage of municipalities in the metropolitan area of Indicator 14 : Salvador joining the JV program Value (quantitative or 0 50 62 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Achieved achievement) Public Security: Percentage of municipalities in rural areas served by mobile Indicator 15 : units providing services and raising awareness on GBV under the rural women forum framework Value (quantitative or 0 50 21.5 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Partially Achieved achievement) vi Production Inclusion: Number of women and afro-descendants producers Indicator 16 : organizations receiving TA to support entrepreneurship Value (quantitative or 0 800 1034 Qualitative) Date achieved 12/31/2013 12/31/2015 12/31/2015 Comments (incl. % Achieved achievement) G. Ratings of Program Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 07/16/2015 Satisfactory Satisfactory 400.00 H. Restructuring (if any) vii 1. Program Context, Development Objectives and Design The Bahia Strengthening Fiscal Management and Promoting Better and More Inclusive Service Delivery Development Policy Loan aimed to support the Government of the State of Bahia (GoBA) in Brazil to (i) improve fiscal management and territorial planning; and (ii) tailor selected public services to the needs of women, afro-descendants and minorities. This Development Policy Loan (DPL) of US$400 million was approved by the World Bank's Board of Directors on July 30, 2014, became effective on August 29, 2014, and closed on January 31, 2016. 1.1 Context at Appraisal 1. This operation was designed to support the implementation of the State of Bahia’s Participatory Multi-Annual Plan (PPA-P) for 2012-2015 focused on inclusiveness. The multiannual plan placed emphasis on inclusiveness through the broadening of access to social service delivery to vulnerable groups and minorities, enhancing affirmative policies, strengthening economic opportunities for women and afro-descendants, and reducing national disparities. This strategy is reflected around three strategic pillars: (i) social inclusion and affirmation of rights; (ii) democratic management of the state, and (iii) sustainable development and infrastructure for development. This operation was designed to support selected aspects of the first two pillars. 2. The operation represented a continuation of the first Development Policy Loan (DPL) to the State of Bahia, the Bahia Socio-Economic Development for Inclusive Growth (P126351). The focus of the first DPL was to support the overall improvements in the quality of service delivery. This operation takes the next step by supporting policies to ensure equal treatment and more tailored service delivery to vulnerable groups. In addition, this operation supports improvements in specific areas of fiscal management such as tax arrears recovery and pension expenses while the first DPL assisted the Government in implementing reforms in cross-cutting areas of public financial management. 3. The operation was fully aligned with the objectives of the 2012-2015 Banks’ Country Partnership Strategy (CPS) for Brazil. The CPS emphasized efficiency of public investments, provision of public services for low income households, promoting regional economic development and improving sustainable natural resource management and climate resilience. This operation was designed to contribute to macroeconomic stability by supporting improvements in fiscal management and to more inclusive growth by assisting the Government to provide tailored service delivery for afro-descendants, women and minorities. 4. The Bank incorporated lessons from the first DPL to the State of Bahia by focusing on a selection of ongoing policy actions and by providing timely technical assistance (TA) for their implementation. During the implementation of the first DPL, public sector capacity constraints presented a considerable challenge. Therefore, this operation supported policy actions that had already started and were feasible to be completed in the short term. To ensure adequate and continuous TA during the implementation of the policy program, this operation was supported by TA operations including the Bahia Sustainable Rural Development Project (P147157) and the Bahia Integrated Health and Water Management Project SWAP (P095171). 1 5. An extensive consultation process with the civil society was instrumental to ensure the implementation and sustainability of the DPL program. Civil society had numerous channels to participate in the design of the programs, which contributed to the wide acceptance of the affected groups. In education, the working group that designed the curriculum framework on indigenous people basic education had as member indigenous teachers. In public security, through the demand of civil society, additional vulnerable groups are being included in the protocol to be used by the police force to treat vulnerable groups. 6. By the time this operation was appraised in early 2014, Brazil had adequate macroeconomic framework and Bahia had a comfortable fiscal position. It is important to highlight at the outset that Bahia has today one the lowest fiscal risks among states in Brazil. Although inflation pressures and deterioration of fiscal stance had raised concerns at that time, authorities at the federal level were committed to inflation control, better revenue performance, reduction in subsidies, and reduced pressures for salary increases. In addition, flexible exchange rate and relatively large foreign reserves served as buffer for unexpected shocks. With respect to Bahia, the Government of Bahia (GoBA) complied with the Fiscal Responsibility Law (FRL) requirements and performed well on the Program of Fiscal Adjustments (PAFs). Furthermore, a Debt Sustainability Analysis found that GoBA’s debt was low and sustainable, even under the most adverse conditions. Bahia fiscal position and debt remains sustainable. 1.2 Original Program Development Objectives (PDO) and Key Indicators (as approved) 7. The PDO of this operation was to improve fiscal management and territorial planning and tailor selected public services to the needs of women, afro-descendants and minorities. The operation was structured in two pillars: (i) fiscal management and territorial planning and (ii) service delivery. The first pillar intended to increase the fiscal space and improve resource allocation needed for better service delivery. The second pillar was aimed at improving access to vulnerable groups and minorities, typically excluded from programs and opportunities. 8. The Key Results Indicators were the following: Tax Revenues: i. Revenue collected from tax payments in arrears at administrative phase (increase from R$280 mln in 2013 to R$320 mln in 2015). Pension Expenditures ii. Savings generated by corrective measures detected by audits to the pensioners’ payment (increase from 0 in 2013 to R$30 mln in 2015). Territorial Planning iii. Number of Territorial Collegiate Bodies for Sustainable Development (Colegiados Territoriais para o Desenvolvimento Sustentavel – CODETERs) fully operation (increase from 0 in 2013 to 15 in 2015). iv. Number of Territorios de identidade with strategic plans (increase from 0 in 2013 to 10 in 2015). 2 Equal Opportunities v. Number of municipalities with more than 10,000 inhabitants joining the State System for the Promotion of Racial Equality (increase from 14 in 2013 to 20 in 2015). vi. Number of social public programs in the multi-annual plan 2016-2019 with race- disaggregated indicators (increase from 0 in 2013 to 5 in 2015). Education vii. Percentage of indigenous schools with certified indigenous teachers (increase from 0 in 2013 to 80 in 2015). viii. Percentage of indigenous and Quilombolas schools adopting the new curriculum (increase from 0 in 2013 to 50 in 2015). Health ix. Number of hospitals that received training to ensure equal treatment in health services for afro-descendant populations (increase from 0 in 2013 to 25 in 2015). x. Percentage of newborn children who received the neonatal heel prick test in Bahia (increase from 82 in 2013 to 90 in 2015). xi. Effectiveness index of maternal and neonatal services provision in 25 reference maternity hospital (increase from 65 in 2013 to 80 in 2015). xii. Mass media campaign to selected audiences on youth pregnancy prevention (increase from 0 in 2013 to 2 in 2015). Public Security xiii. Percentage of the policy force working with vulnerable groups trained in the use of the protocols for specialized services to vulnerable groups (increase from 0 in 2013 to 50 in 2015). xiv. Percentage of municipalities in the metropolitan area of Salvador joining the JV program (increase from 0 in 2013 to 50 in 2015). xv. Percentage of municipalities in rural areas served by mobile units providing services and raising awareness of Gender Based Violence (GBV) (increase from 0 in 2013 to 50 in 2015). Productive Inclusion` xvi. Number of women and afro-descendants producers receiving TA to support entrepreneurship (increase from 0 in 2013 to 800 in 2015). 1.3 Revised Policy Areas (if applicable) The policy areas remained unchanged throughout the program. 1.4 Original Policy Areas (as approved): 3 Pillar 1: Fiscal Management and Territorial Planning 9. This pillar supports policy actions aimed to increase fiscal space by increasing tax revenues, by tightening controls over pension expenses, and improving the design and implementation of territorial planning. 10. Tax Revenues: as part of the continuous effort of GoBA to modernize its tax administration, the GoBA took several measures to expedite the collection of tax arrears. The judicial system was slow in processing tax arrears, an important reason for the large accumulation of tax arrears, estimated at R$10.2 billion or 55 percent of tax revenue in December 2013. In addition, inefficiencies in the administrative phase of tax arrears recovery also contributed to the large stock. To increase tax arrears recovery, the GoBA’s implemented the Tax Credit Recovery Program (Programa de Recuperação de Creditos Tributarios) with three components. The first component aimed at improving the incentives for taxpayers’ early payments by providing more flexible arrangements for payment and reduced penalties in the administrative phases. The second component was designed to reduce incentives for deferring tax payments by imposing firmer actions against systematic tax avoidance and harsher penalties for defaulters. The third component aimed to reduce the number of tax arrears processes and time for resolution in the courts by adopting a differentiated treatment depending the value of the tax arrears and the circumstances of taxpayers. This operation supported the first two components. 11. Pension Expenditures: to correct fiscal disequilibrium and risks, the GoBA took actions to reduce deficits of the civil service pension scheme (the Regime Próprio de Previdência Social, RPPS). Deficits of the RPPS reached 6 percent of the State’s net current revenues and the implicit pension debt was estimated at 108 percent of the State Gross Domestic Product. Since basic parameters of the system were established in federal laws, GoBA took administrative measures and wage policies to affect pension related revenues and expenditures. This operation supported the GoBA in adopting internal audits on the payment of benefits in a systematic manner enabling tighter controls on the payroll for retired civil servants and pensioners as a first step for a pension system reform. 12. Territorial Planning: to reduce administrative fragmentation and improve coordination among different levels of government, the GoBA was developing territorial planning arrangements. Given that the State is highly decentralized into 417 municipalities, most of them with less than 30,000 inhabitants, the financial, institutional and technical capacities of local government were unevenly distributed. As a result, sector policies were implemented in an uncoordinated way, different levels of government’s strategies were not integrated, and public resources were fragmented, which affected the efficiency of service delivery at the local level. To tackle these issues, the GoBA had been progressively establishing territorial and governance arrangements including the establishment of the CODETERs in 2011, and having the State’s PPA- P, the main planning instrument, designed and monitored on a territorial basis for the first time in 2012. This operation supported the GoBA in strengthening the existing institutional framework for the governance of territorial policies. 4 Pillar 2: Service Delivery 13. This pillar supports policy actions aimed at improving the quality of public services provided to afro-descendants, women, and other minorities. 14. Equal Opportunities: to ensure equal access to public services for afro-descents, and other monitories, the GoBA created a legal framework to promote racial equality at state and municipal levels. Afro-descendants in Bahia are poorer, have lower level of human capital, have less access to basic services relative to whites, and their culture was not recognized by the education and health systems. This operation supported the GoBA in creating the legal framework for the Statute for Racial Equality and Combating Religious Intolerance (Estatuto da Igualdade Racial e de Combate à Intolerância Religiosa na Bahia) that would facilitate the formulation, implementation, financing, and monitoring of policies and programs to encourage racial equality. 15. Education: to promote education inclusion the GoBA adopted a new regulatory framework and guideline for indigenous and Quilombolas education, supported by this operation. Despite recent progress Bahia achieved in education (higher schooling years, declined illiteracy rate, and increased attendance rate in secondary education), indigenous populations and Quilombolas communities benefited less from progress in education service delivery. There was a gap in terms of access and performance for indigenous and Quilombolas students relative to State average. The new framework and guideline defined the operational guidelines for indigenous and Quilombolas’ basic education to adapt national curriculum to meet the needs of indigenous and Quilombolas schools and to implement a model of differential, specific, and intercultural education built on the shared experiences with indigenous and Quilombolas communities. 16. In addition, the GoBA instituted a personnel category for indigenous teachers as part of the State civil servant staff of the Secretary of Education (SE) to attract and retain indigenous teachers. Poor quality, limited numbers, and high turnover rate of indigenous teachers were a key challenge for the indigenous education system. The selection process was not systematic, career prospects were limited, and they had no access to professional development. In 2013, the SE launched an official competition to recruit indigenous teachers, supported by this operation. Those selected would be civil servant and have access to professional development. 17. Health: to promote, protect, and improve the health of afro-descendants, the GoBA had approved the State Policy for Health Service to the Afro-descendant population. Access to health services was a challenge for afro-descendant population, contributing to coverage gap compared to the rest of the population. The newly created policy, supported by this operation, would strengthen the treatment of afro-descendants including racial training to public health care providers, improving quality of care of diseases that affected afro-descendants more (Sickle Cell Disease SCD), and increasing the coverage of neonatal testing for early detection and treatment of SCD. 18. The GoBA took actions to reduce maternal and neo-natal mortality rates as they were one of the most serious health challenges in Bahia. Bahia’s maternal mortality ratio has worsen from 50.3 per 100,000 live births in 2000 to 69.5 in 2012. In addition, the neonatal mortality rate also increased due to low weight at birth. High youth pregnancy contributed to both maternal and 5 infant death. To reduce both mortality rates, the GoBA had created a multi-sector coordination mechanism for the State Secretariat of Planning (SEPLAN), Secretariat of Health (SESAB), and SE to implement an action plan to prevent adolescent pregnancy related risks. It also included improved monitoring and accountability with the involvement of civil society. 19. Public Security: to improve the Government’s capacity to prevent and control crime and violence against vulnerable groups, the GoBA created a multi-sectoral group to assess, design, and train for the services needed by these groups. Within the State Secretariat of Public Security (SSP), Violence Prevention Superintendence (Superintendência de Prevenção à Violência, SPREV) was tasked with the development of specific protocols for officers to treat specific vulnerable groups. SPREV created a multi-sectoral working group for the design, implementation, and training activities for specialized crime prevention against black youth, women, lesbian gay bisexual and transgender population (Lésbicas, Gays, Bisexuais e ransgêneros, LGBT), and the elderly, supported by this operation. 20. Furthermore, the GoBA joined the National Prevention Plan on Violence against Afro-descendants Youth – Juventude Viva (JV). The plan laid out preventive actions to reduce youth vulnerability to violence by creating opportunities for social inclusion and autonomy in areas with high levels of homicide. The GoBA created a management committee to coordinate among different government levels and agencies activities to be developed following JV, supported by this operation. 21. To improve the network of services for women in situation of violence in rural areas in Bahia, the GoBA created the Permanent Forum to Combat GBV in Rural and Forest Areas (Fórum Estadual Permanent de Enfrentamento à Violência contra as Mulheres do Campo e da Floresta da Bahia). Women in rural areas are particularly vulnerable to GBV but the existing network of services, largely concentrated in urban areas, may not be adequately addressing their needs. Women in rural communities in Brazil may be unable to use the services due to lower anonymity in rural communities as well as the fact that longer distances and lack of transportation to the services may make them simply inaccessible in a timely manner. To improve the provision of services to rural women, the GoBA created a network of government and civil society representatives to coordinate mobile units to provide assistance to the victims in all territories, supported by this operation. 22. Productive Inclusion: to promote entrepreneurship among women and afro- descendants, the GoBA created an institutional framework to expand and catalyze initiatives supporting entrepreneurship to better serve these groups. Women and afro-descendants were not only the poorest in Bahia, but also faced additional challenges as entrepreneurs. They tended to be smaller, more informal, were mainly in less productive sectors, had less access to labor, consumer, and credit markets. The GoBA recognized the special needs of these groups and submitted the State Policy for Entrepreneurship among Afro-descendants and Women (Política Estadual de Empreendedorismo Negro e de Mulheres – PENM), a draft law, supported by this operation. The policy established tailored guidelines and mechanisms for gender and race focused socio-productive inclusion interventions, and its governance structure. 6 1.5 Revised Components NA 1.6 Other significant changes NA 2. Key Factors Affecting Implementation and Outcomes 2.1 Program Performance 23. The Bahia Strengthening Fiscal Management and Promoting Better and More Inclusive Service Delivery DPL was a single tranche stand-alone operation that was approved on July 30, 2014. It became effective on August 29, 2014. All of the policy actions were met as planned before Board approval and the funds were released on September 10, 2014. Implementation Status and Results Reports were prepared on July 16, 2015 and December 10, 2016. The loan closed on January 31, 2016. 24. Overall, the program’s implementation was moderately satisfactory, the development objectives were achieved as evidenced by the results indicator targets. Most results targets were met (and in some the results vastly exceed the original targets) and few came very close to being met and are likely to be met over the next months. Fiscal management was improved through higher tax arrears recovery and reducing pension inefficiencies; territorial planning was strengthened by having institutional arrangements for territorial planning in place; and selected tailored public services to vulnerable groups were created in health, education, public security and productive inclusion. The DPL supported areas that needed visibility, gender and race in particular, and served as a convening platform to bring together areas that needed multi-sectoral approach. Performance of result indicators will be detailed in section 3.2. Prior Action Status 1. The Borrower has adopted administrative procedures to enable (a) the Completed taxpayers to pay their respective tax arrears in instalments, and (b) the Borrower to place a lien on assets and rights of Selected Taxpayers to cover the amount of those taxpayers’ liabilities. 2. The Borrower has strengthened control of its pensioners’ payroll by: Completed (a) carrying out an internal audit of the Borrower’s integrated human resources system, with particular focus on the Borrower’s pension benefits administered by SUPREV, and implementing measures to address the audit’s findings; and accessing Mirante to facilitate SUPREV’s auditing of the payment of pension benefits. 3. The Borrower has submitted to its Legislative Assembly, for approval Completed thereby, a draft law, in form and substance satisfactory to the Bank, to establish the legal framework for the Política de Desenvolvimiento Territorial do Estado da Bahia. 4. The Borrower has established the legal framework for the Estatuto da Completed Igualdade Racial e de Combate à Intolerância Religiosa do Estado da Bahia. 7 5. The Borrower, through SE, has: Completed (a) adopted new curriculum guidelines for Quilombolas and indigenous people’s schools in the Borrower’s territory; and (b) carried out public selection and recruitment of indigenous people teachers. 6. The Borrower has adopted the Política Estadual de Atenção Integral à Completed Saúde da População Negra. 7. The Borrower, through SEPLAN, SESAB and SE, has institutionalized Completed multi-sector efforts in implementing a statewide action plan in the Borrower’s territory to prevent teenage pregnancy and to provide childbirth care in case of teenage pregnancies by assigning these secretariats the joint responsibility for planning and promoting the actions necessary to implement said action plan, including the carrying out of joint meetings, the preparation of an annual report, and the fostering of dialogue among the relevant expert and technical teams working to implement the action plan. 8. The Borrower has: Completed (a) established a multi-sectoral group within Secretaria da Segurança Pública to assess the service needs of selected vulnerable groups, and to design preventive procedures, training for professionals, and skilled interventions aimed at benefiting selected vulnerable groups; and (b) established a management committee responsible for coordinating activities to be developed under Juventude Viva-JV. 9. The Borrower has established the Fórum Estadual Permanente de Completed Enfrentamento à Violência contra as Mulheres do Campo e da Floresta da Bahia. 10. The Borrower has submitted to its Legislative Assembly, for approval Completed thereby, a draft law, in form and substance satisfactory to the Bank, to establish the legal framework for the Política Estadual de Fomento ao Empreendedorismo de Negros e Mulheres – PENM. 2.2 Major Factors Affecting Implementation 25. Several factors played a deciding role in achieving the outcomes. Among those that were common to most of the components were: (i) Government commitment and support; (ii) strong ownership of the program; (iii) extensive consultation with civil society; and (iv) Bank’s continuous TA. Factors that delayed the achievement of targets were mostly sector specific. One challenge was the increasingly difficult economic situation, which affected all states’ fiscal position, affecting financing of some programs. In the case of Bahia, the fiscal measures taken early, including those supported by this program, helped to partly mitigate these pressures. 26. Government commitment and support. The fact that the Government included a sector’s reform agenda as part of the DPL gave visibility to the program. It not only gave the sector credibility but also facilitated coordination with other agencies, and provided resources to implement the program. With increased access to resources, the implementing agency was able to 8 fund the program and to increase implementing agency’s personnel and technical capacity. For instance, in the health sector, an agreement on funding with the Government to implement the policy reflects an explicit state priority to reduce the existing gap in term of access to health services of the afro-descendant population in Bahia. Similarly, the GoBA increased the priority of the racial equality agenda and provided resources to the pro inclusion agenda, which financed a significant portion of the Secretary for the Promotion of Racial Equality (SEPROMI)’s budget. The GoBA also helped to sustain efforts to engage municipalities to join JV despite the uncertainties at the federal level. SPREV, Secretary for Women Policies (Secretaria de Políticas para as Mulheres, SPM) and SEPROMI mentioned that the inclusion of indicators in the DPL linked to their activities contributed to strengthen their ‘political capital’ within the State Government, giving more visibility to their work. 27. Strong ownership of the program. The importance of ownership among implementing agencies and civil society was evident in many areas. In pension, the auditing group in Social Security Superintendence (Superintendência de Previdência, SUPREV) kept looking at other ways to reduce inefficiency when they realized that Sistema Mirante was not as effective as expected. They not only performed the conventional cross-checking of databases, evaluations of the IT systems, but also less conventional mechanisms such as receiving tips from individuals regarding pension benefits being received by third parties, which allow them to come close to achieving the target. In health, the motivation of the group of technical staff in SESAB was instrumental to the successful implementation of the program. They have been studying the issue of racial discrimination in the health system and afro-descents’ specific diseases for a long time. Hence, when the issue was elevated to the policy agenda of the Government, they received the support and the resources to implement the program. In education, the strong ownership of the program by SE and indigenous communities translates into unanimous acceptance among state and municipal schools on the final curriculum framework on indigenous education. 28. Extensive consultation with civil society. Since the preparation of the reform programs, consultation with civil society through various channels were conducted, which facilitated the implementation process. In the case of race equality, the close links held by SPM and SEPROMI with social movements ensured a bottom-up approach to policy elaboration, and in turn, generated political pressure for transparency and accountability. Similarly, the strong relationship of SPREV with civil society groups was critical to ensure SSP to continue to invest in strengthening the engagement with vulnerable groups that would otherwise be neglected. Furthermore, through the consultation process with civil society, two new protocols are being studied to be included in the unified action protocol for specialized police stations (racism and religious intolerance). In education, to ensure that the curriculum framework and guideline for indigenous and Quilombolas education truly reflect their cultural specificities, it was fundamental to include indigenous and Quilombolas communities in the design. As a result, these communities felt more inclusive in the process and in the education system. In health, the State’s technical committee of health of afro- descendent population was restructured by expanding social participation in the theme (through colegiados de gestion, co-management, and scientific society, among others) which allowed for greater demand for improvements in service delivery. 29. The Bank’s TA in some sectors played an important role in advancing reform programs. At the time of preparing this operation, there was strategic thinking in building on 9 ongoing initiatives supported by other Bank operations to ensure timely support during the implementation process. This was the case of health and territorial planning components. With the Bahia SWAP project, initiated in 2011, the Bank provided TA and financial resources to the health reform program supported by the DPL, which was highly appreciated by the GoBA and the implementing agency. As a result, progress in achieving the goals was steady, in most of the cases targets were met or close to the target by the end of 2015. Furthermore, the scope of the reform program was expanded and new projects were being designed to continue improving health access of afro-descendant population and maternal and neonatal care of young women. In the case of territorial planning and productive inclusion, the Bahia Sustainable Rural Development (P147157), prepared in coordination with the DPL, provided financial and TA to build capacity in territorial councils and socio-productive inclusion interventions contributing to the achievement of outcomes, all indicators surpassed the targets. 30. Few factors limited the speed and scope of implementing agencies in achieving their goals. Given the economic crisis and its effect on the State’s revenue, fiscal space has been greatly reduced since 2014. Unlike some states (Rio de Janeiro, Minas Gerais, Rio Grande do Sul), Bahia is not facing imminent insolvency, thanks to the relatively prudent fiscal stance taken even before the current crisis. However the revenue crunch has limited the resources available to some priority areas. Resource constraints played a role in education and public security. For instance, the launch of a second official competition to fill vacancies for indigenous education teachers is still on hold due to resource constraints, which is exogenous to the implementing agency SE. In public security, it was reported that lack of financial resources to organize meetings more frequently limited the Forum to Combat GBV in Rural and Forest Areas from discussing and elaborating policies for rural women more broadly. Similarly, lack of financial and human resources capacity at SPREV limited them to further improve its work. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 31. The PDO of the DPL was clear, focused and narrowly-defined, directly supported by prior actions, reflected well the results envisaged, and were aligned with GoBA’s development strategy PPA-P for 2012-2015. Moreover, the M&E framework designed to assess progress in the different policy areas relied heavily on the M&E system that supported the implementation of the PPA-P 2012-2015. Annual reports on the PPA-P were published and available online since 2012 facilitating the M&E of this operation. The result indicators captured key policy dimensions being assessed. Results indicators identified baseline and target values in line with the expected program results. The indicators were largely based on data that were collected by the implementing agencies. For data that were not easily accessible before, such as progress on the implementation of the State System for the Promotion of Racial Equality, a committee to monitor and evaluate the progress was created in 2014. Although overall, the 16 indicators comprising the M&E framework were relatively easy to measure, aligned with the PDOs, and attributable directly to the prior actions, there was one indicator that was not clearly defined, the result indicator #15 of prior action 9. This is because there is not a clear definition of which municipalities would be considered as municipalities in rural areas, therefore assumptions had to be made to evaluate the progress at the preparation of the ICR. 10 32. SEPLAN led M&E implementation and coordinated with all the involved agencies, including Secretariat of Finance (SEFAZ), the Secretariat of Public Administration (SAEB), SESAB, SE, the Secretariat of Socio Economic Development (SEDES), SSP, SEPROMI, SUPREV, SPM, and SSP. These institutions collected the data necessary to monitor and evaluate the implementation and achievement of all results indicators. Furthermore, the counterparts provided additional information on their sectors including details of new reforms during supervision missions. 2.4 Expected Next Phase/Follow-up Operation 33. The World Bank continues to support the GoBA in some of the areas supported by this operation. Projects under execution include the Sustainable Rural Development Project (P147157) that continues to provide TA for the capacity building of territorial councils and the Bahia Integrated Health and Water Management Project SWAP (P095171), which was designated to assist the GoBA in addressing maternal and infant mortality through combined water, sanitation, and health sector interventions. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation (a) Relevance of Objectives: High 34. The objectives of the DPL were and remain relevant to the State of Bahia. The Program Development Objective of this operation was to improve fiscal management and territorial planning and tailor selected public services to the needs of women, afro-descendants and minorities, which were relevant at the preparation of the DPL. It was fully aligned with GoBA’s Strategic Vision as PPA-P 2012-2015 which placed great emphasis on broadening access to social services to vulnerable and minority groups, strengthening economic opportunities for women and afro-descendants, and reducing regional disparities. These issues remain relevant today as more effort is needed to expand the coverage of the services to reach more affected groups. Furthermore, fiscal pressure is likely to increase given Brazil’s economic and political situation, therefore the measures taken in the fiscal area were critical and the fiscal agenda remains central to the states. In this context, the ongoing dialogue with the State on pensions is particularly relevant. Bank support in the area of pensions is expected to help the State contain growing pension expenditures and take advantage of a national pension reform which is currently under consideration. (b) Relevance of Design: High 35. The design of the operation builds on lessons learned from the previous DPL to the State of Bahia, the Bahia Socio-Economic Development for Inclusive Growth (P126351). The previous DPL supported overall improvement in the quality of service delivery. While it gave a broader backing in the inclusion agenda, it was limited in terms of depth of the reform due to limited public sector capacity. Hence this operation focused on ongoing policy actions that were feasible to be implemented in relatively short term that emphasized institution strengthening for 11 sustainable progress. Furthermore, the DPL built also on other Bank ongoing operations to ensure that adequate TA was provided. (c) Relevance of Implementation: High 36. Implementation arrangements were and continue to be relevant. SEFAZ was the executing agency in collecting tax arrears and in territorial development plans. SUPREV continues to perform internal audit in pension payments. SE remains as lead in organizing continuing education meetings in state and municipal schools to use the curriculum guidelines. SESAB will continue the effort to improve access to health of afro-descendants population and coordinate with other agencies to enhance quality of maternal and neonatal services. SPREV stay as lead in finalizing the integrated unified action protocol to treat vulnerable groups. Multi-sectoral technical commissions together with SPM and SEPROMI are in charge of promoting the Statute for the Promotion of Racial Equality, the JV program and the PENM. The mobile units for servicing GBV in rural areas are managed by a Forum composed of government representatives from several sectors and also members of civil society. 3.2 Achievement of Program Development Objectives Pillar 1: Fiscal Management and Territorial Planning Rating: Substantial Tax revenues 37. The GoBA’s adoption of administrative procedures to increase the collection of tax arrears in the administrative phases and to avoid judiciary processes was successful, contributing to the improvement of fiscal management. The state increased revenue collected from tax payment in arrears at administrative phase to R$363 million in 2015, surpassing the target of R$280 million. As result, revenues from recovery of tax arrears increased. This amount does not include the tax amnesty program (REFIS) that took place that year. The establishment of arrangements enabling automatic installment payment (parcelamento de creditos tributarios) for tax arrears in early stages contributed to the success. As of October 2016, the stock of tax arrears in the administrative phase covered by the automatic installment payment amounted to R$ 410 million, compared to R$309 million in January 2014. 38. Another contributing factor in achieving and surpassing the target was the use of “arrolamento” (placing a lien on assets of tax debtors). This action aimed at reducing incentives for deferring tax payments and the judicialization of tax arrears recovery by imposing harsher penalties for defaulters. The government adopted a mechanism to obtain liens on a tax debtor’s assets (“arrolamento de bens”) to ensure the settlement of tax arrears when the final judicial decision is taken. This action applies only to non-compliant taxpayers whose tax debt exceeds thirty percent of their liquid assets, and amounts to at least R$500,000. When applied, the “arrolamento” has resulted in successful payment negotiations and recovery of tax debt. However, its implementation faced unforeseen challenges, resulting in the process only being used effectively in a relatively few cases. Two main challenges were: (i) the information on liquid assets 12 not being readily available to the state, creating a barrier for the identification of taxpayers that actually qualify for “arrolamento”; and (ii) the process of “arrolamento” relies on public notaries and their response rate has been low as circa 800 processes were sent to public notaries, with only about 30 triggering a response and resulting in “arrolamento”. 39. The State is working to address these issues and expand the use of “arrolamento” to further improve tax arrears collection. The GoBA is preparing a decree to use total income instead of liquid assets in the identification phase of taxpayers since the data on income is readily available to the Government (SEFAZ). The low response rate of public notaries is a more challenging matter. The usage of non-digital systems in most public notaries is perhaps the main reason behind it. Nonetheless, the focus on this specific group of taxpayers allows for a more targeted approach. SEFAZ staff actually visited public notaries in the metropolitan region of Salvador to ensure that processes would get a response. Most of these taxpayers are also concentrated in the largest urban centers of Bahia. Overall, the “arrolamento” still has promise to become an effective measure to assure the payment of tax arrears and the State will carry on with its efforts to expand it. Pension expenditure 40. The GoBA has strengthened the control of its pensioners’ payroll and made substantial progress in increasing savings to improve fiscal disequilibrium. Since 2014 the working group at SUPREV carried out an internal audit of the Government’s integrated human resources system with particular attention to the Government’s pension benefits administrated by SUPREV. As a result, savings generated reached $R25,851,126 by the end of 2015 since the creation of the audit unit, close to the target of $R30 million. The audit unit has identified several cases of miscalculation of benefits; incompatibility of benefits; benefits that beneficiaries were no longer eligible (for example due to age or changes in marital status); and benefits above the ceiling. As result, number of irregular social security benefits granted by RPPS was reduced. They have relied on several mechanisms, including crosschecking of databases, evaluations of the IT systems that were conducive to recalculation of benefits (in the case of the military police); and some less conventional mechanisms, such as receiving tips from individuals regarding pension benefits being received by third parties. In fact, approximately 1/6 of the savings have been reached through these less conventional mechanisms. They have also implemented mechanisms for recovery of the overpayments. 41. The access to the Public Accounts Observer System (Sistema Mirante) did not delivered expected improvement in SUPREV’s auditing of the payment of pension benefits. SUPREV adopted the State Courts of Accounts’ (Tribunal de Contados do Estado – TCE) audit system, called the public Accounts Observer System (Sistema Mirante) to improve SUPREV’s audit capacities by enabling more systematic and effective audits of pensioner’s payroll. While SUPREV has continued using the Sistema Mirante as a tool for conducting internal audits of the RPPS payroll, the system has been less effective than initially envisaged. Since cross checks of databases conducted by the Sistema Mirante are related to older information and it is run by TCE, hence SUPREV has not used Sistema Mirante as a primary tool for conducting audits, limiting the expected amount of saving through the system. Only $R63,000 in savings were attributed to the use of Sistema Mirante. 13 42. Although the target was not fully met, SUPREV has continued looking for tools to reduce over-expenditure in the pension roll. Recently, the SUPREV started to conduct database cross checks with municipalities to potentially identify disability pensioners that may have remunerated jobs in municipalities. While SUPREV has been able to identify 46 cases of incompatible benefits, in most of the cases the Procuradoria Geral do Estado has ruled in favor of maintaining the pension benefits. In addition, there is an ongoing external audit of the pension’s payroll conducted by Deloitte requested by the State government, which SUPREV may bring an additional perspective in the auditing of the payroll. It is worth mentioning that previous actions such as crossing databases with the Federal Government and ensuring that individuals receiving the benefits are alive, are still part of the regular internal control process and generate significant savings.1 Territorial planning 43. The Government has successfully established institutional arrangements for territorial planning. The Law that created the Territorial Development Policy in the State of Bahia (Politica de Desenvolvimiento Territorial do Estado da Bahia) was approved on December 2014 (N◦ 13.2014 / 2014). The law formulates the principles, guidelines and objectives of the Territorial Development Policy, creates the State Council of Territorial Development –CEDETER and the Terrotorial Collegiates of Sustainable Development –CODETERs. By end of 2015, 16 CODETERs were fully operation, surpassing the target of 15. Furthermore, 15 Territorios de identidade had strategic plans, surpassing the target of 10. 44. In addition, institutional arrangements for territorial planning has been strengthened. SEPLAN and other Departments had conducted an evaluation of the process and mechanisms of consultation during the preparation and implementation of the PPA-P 2008-2011 and 2012-2015. As a result of this review, various changes were introduced: (i) setting up maximum number of proposals to be prioritized by territory; (ii) establishing linkage to State’s financial and budget management systems; (iii) monitoring of its implementation; (iv) inclusion of productive sector’s representation; and (v) getting feedback from territories on PPA-P 2016- 2019 no later than 90 days after sending the draft law for approval. Pillar 2. Service Delivery Rating: Modest Equal Opportunities 45. There have been major advances in the regulation and implementation of the State System for the Promotion of Racial Equality (Sistema Estadual de Promoção da Igualdade Racial) since its approval. The Statute creates an institutional framework to facilitate the formulation, implementation, financing and monitoring of policies and programs promoting racial equality at state and municipal levels. The number of municipalities with over 10.000 inhabitants 1 Since these actions were implemented before 2013, they do not account for the saving target of the DPL. 14 that joined the system surpassed by far the target of 20 by end of 2015, reaching 91 in 2015, and 92 in 2016. Additional progress included (i) the formulation of regulations for the State System for the Promotion of Racial Equality and System for Financing Policies Promoting Racial Equality (Sistema de Financiamento das Políticas de Promoção da Igualdade Racial); (ii) the creation of a 30 percent quota for afro-descendants in government personnel recruitment processes; (iii) the creation of a committee to monitor and evaluate the implementation of the Statute for Racial Equality with with resources from the State fund for Combinating and Erradication Poverty (Fundo Estadual de Combate e Erradicação à Pobreza, FUNCEP); (iv) the strengthening of the Center for Combatting Racism Nelson Mandela; (v) the creation of the unit for corporate education of SEPROMI for the training of public officials linked to the Corporate University of public service (Universidade Coorporativa do Serviço Público); (vi) drafting an action plan for the implementation of the International Decade of Afro-descendants for 2024; and (vii) the creation of the law for the promotion of afro-descendant and women entrepreneurs. As result, institutional and financial framework for promoting racial equality was set in place. 46. Moreover, SEPROMI demonstrated its convening power, leading to the inclusion of additional social public programs in the multi-annual plan 2016-19 with race disaggregated indicators. SEPROMI not only connected with other departments, but also with municipal entities actively participating in the formulation of multi-annual plan PPA-P. As result, the number of social public programs included in the PPA-P reached 6, exceeding the target of 5 by the end of 2015. Education 47. The GoBA took important actions to strengthen indigenous education and the inclusion of indigenous young people in education. The SE organized the first official competition (concurso publico) in 2014 to fill 390 vacancies for indigenous education teachers. 136 teachers were approved, of which only 100 were indigenous and could be hired. The process was contracted to a private firm and was not adequately handled. As a result, there were not enough applicants that met the requirement. The SE prepared a new competition in 2015 for 260 vacancies of indigenous teachers to be hired to achieve the goal of 50 percent of teachers in State indigenous schools. This time, they prepared the selection, competition and hiring processes. However, due to resource constraints as a consequence of economic distress, the GoBA has yet to authorize the launch of the official competition. Today 608 teachers are working in indigenous schools, 100 (16.4 percent) were hired through the official competition partially achieving the target of 80 percent and 508 others are contracted to the Special Regime for Administrative Rights with a two- year renewable contracts. 48. The introduction of curriculum framework on indigenous education was an important factor for improving social inclusion by adapting education services to the needs of indigenous minorities. The framework facilitates indigenous students to receive a contextualized education with their intercultural and bilingual identities. It also helps to rescue the identity and self-esteem of indigenous students. The curriculum framework for indigenous education was developed in 2014 and implemented in all state indigenous schools (26 schools and 49 annexes) with 8,468 students, exceeding the target of 80 percent of state schools. It is important to emphasize that the framework complements national curriculum common base and contributes 15 to enhance indigenous cultures and the affirmation and maintenance of its ethnic diversity. For example, indigenous schools complement subjects such as language arts and sciences to meet the specificities of indigenous communities to help to contextualize the subjects of the curriculum. Since its introduction, several trainings were held (3 or 4 per year at a duration of a week each meeting) in order to train teachers and managers of indigenous schools in the use of the framework. These continuing education meetings are led by teachers and researchers from the University of the State of Bahia with the participation of specialists from the Department of Education Bahia and inputs from indigenous teachers. 49. The Government also introduced curriculum guidelines in all Quilombolas state schools. The curriculum guidelines were developed in 2014, and gradually distributed to all state and municipal schools in Bahia in 27 territories. Conversely to a curriculum framework, the guidelines are more open and serve to guide the education systems and schools to develop educational proposals in line with quilombolas in line with their stories, experiences, culture and traditions. The SE is following and monitoring the implementation of the guidelines in 100 percent of state Quilombolas schools (20 in total), exceeding the target of 50 percent. The SE also signed a cooperation agreements with some municipalities to facilitate the introduction and use of the guidelines since SE can only help but is not responsible for municipal schools. The SE follows the implementation of the guidelines in 454 municipal Quilombolas schools and 2 private schools through regional education centers. Furthermore the SE organized and facilitated several continuing education meetings to help state and municipal schools to develop educational proposals using the guidelines. Health 50. Following the approval of the State Policy for Health Services to the Afro-descendant Population, the GoBA supported the training of health care professionals to improve access of afro-descendants to health services. The action taken by GoBA is instrumental in improving quality of care for diseases that disproportionally affect afro-descents by changing the culture on institutional racisms. SESAB implemented the State Policy and trained 24 state hospitals by the end of 2015, almost reaching the target of 25. Two more hospitals were trained in 2016. As result, awareness to combat institutional racism was increased. 51. Progress continued in 2016 including a new strategy focused on work with municipalities and a series of additional actions were carried out toward institutional strengthening. The original plan was to implement the Plan in state hospitals. Due to success in implementation in state hospitals, the new Plan is to implement the Plan and give training also in municipal hospitals. Furthermore, a series of actions were carried out: (i) training 60 managers and professionals in the region of Algoinhas on combating institutional racism on health of the afro- descendant population, and on sickle cell disease; (ii) restructuring of State technical committee on health of afro-descendant population by expanding social participation; (iii) institutional strengthening of 10 municipal health centers and one municipal hospitals in 2015 on the implementation of the State Policy on afro-descendant population. In 2016, 21 additional health centers in municipalities were trained, that is 159 managers and professionals; (iv) institutional support in implementing the policy to regulate referral system which gives priority to patients with SCD by training primary care health centers in four municipalities (Ilheus, Itabuna, Barriers and 16 Savior); and (v) coordination among SE, SEPROMI, SPM and SEAP to focus on racial perspective for the female population in jail. All these additional actions contribute largely to the inclusion of afro-descendants in accessing specialized health care they need. 52. Progress on increasing the coverage of neonatal testing was positive and is expected to reach the target by early 2017. The test for early detection and treatment of SCD, which mostly affect afro-descendant population, required accessing babies in the first 15 days of birth. Due to low health team force in some health centers in municipalities and difficulties in accessing isolated rural areas, the target of 90 percent of newborn children to receive neonatal heel prick test in Bahia was not achieved by less than 5 percent. However, the State of Bahia continued its effort to reach the goal by increasing permanent collection centers (from 3,550 in 2014 to 3,681 in 2016). Until September 2016, the coverage reached 85.9 percent with tendency to surpass 90 percent by early 2017. As result, number of early diagnosis of SCD was increased. 53. Through the creation of a multi-sector coordination arrangement among SEPLAN, SESAB and SE, the GoBA was able to improve the quality of maternal and neonatal services. Advances were positive on the composite indicator of efficiency (index of hospital effectiveness - BAREMA), consisting of 10 indicators that capture the availability of services such as breast milk banks, intensive units for neonates and mothers. There was positive trend with all the measured indicators and the planned target of 80 percent was exceeded in 2014 with 81.5 percent. In 2015 the value reached 83 percent. 54. As part of effort to raise awareness and prevention of teenage pregnancies, the multi- sector group launched a first campaign. The target was to have two mass media campaigns, the first held by the SE, the second by SESAB. SE’s campaign was made with parents and students in schools participating in the school health program. The second campaign by SESAB has not been carried yet due to an ongoing effort that provides postpartum counseling to adolescent pregnant women on sexual and reproductive health. This one-to-one counseling system seems to be an effective way to inform young girls on future pregnancy prevention. The coverage has already reached 80 percent and it is increasing. SESAB is currently evaluating the need and the form of the second mass campaign to complement the postpartum counseling program. Overall, the first mass campaign and the postpartum counseling program increased the awareness of teenage pregnancy. In addition, a new joint effort among Health, Education and Finance to study socio- emotional skills to reduce teenage pregnancies and improve sexual and reproductive health is under preparation and will be launched in November 2016.2 2 An impact evaluation study as part of the SWAP project is currently at design stage. The objective is to change habits in schools. There are three group of schools. The control group received current sexual and reproductive education. The first treatment group receives the current sexual and reproductive education reinforced by socio-emotional behavioral changes. The second treatment group receives the same treatment as first treatment group with champions. That is to select few students and give them regular training and incentives who will be in charge of influencing other students. 17 Public Security 55. The creation of the Superintendence for SPREV at SSP was a key step to improve GoBA’s capacity to prevent and control crime and violence against vulnerable groups (elderly, children and adolescents, women, and LGBT population). SSP through the creation of a multi-sectoral working group developed protocols and trained officers to treat vulnerable groups using the protocols. The target was to reach 50 percent of police force specialized in working with vulnerable groups by the end of 2015. The authorities were able to surpass the target reaching 52 percent, which is 213 of a total workforce of 412 by March 2015. Although the number of specialized police trained did not increase further since March 2015, SPREV highlighted the training provided to about 900 new police in the initial training course of the civil police in 2015, which had almost 40 hours of training in the area of human rights, including awareness of the special attention to vulnerable groups. 56. Additionally, a review of the new protocols was conducted and new demands emerged. In December 2015, SPREV conducted a review of service protocols to vulnerable groups and produced the "Report on the manual for the protocol for specialized and integrated qualified service to vulnerable groups”. It suggested changes in cases registration system of cases that are taken to specialized police stations, which as of today, the system does not require a complete characterization of the victim's profile and the aggressor or specificities of the event (place, time, circumstances) that enable analysis and evaluation of the work done by specialized police stations. In addition, the review resulted in new demands from civil society that are part of the various councils and groups in which the SPREV participates (eg. Council LGBT Fight Network Racism and Religious Intolerance). Specifically, it demanded that issues of racism and religious intolerance were also included in the protocols. 57. In response to new demands, a new multi-sector working group led by SPREV was institutionalized. The new working group’s main objectives were: (i) review and evaluate the developed protocols for specialized police stations, (ii) develop an integrated and cross-action Protocol for the "specialized care for vulnerable groups under the SSP", and (iii) develop the guidelines based on the protocol. Apart from the need to integrate the issue of racism and religious intolerance in the integrated protocol, the review of the previous protocols led to other recommendations. These include the need for a unified protocol to standardize treatment; extend training to agents for all stations (including territorial stations since victims might go to the closest station instead of the specialized stations); and that the protocols contain specific guidance on skills to treat different vulnerable groups. The final version of the Integrated Unified Action Protocol is expected to be finalized by the end of November 2016. 58. Furthermore, outcomes of this new working group will serve as input for a new multi- sectoral working group for the care of vulnerable populations. A multi-agency integrated group for Attention to Qualified Racial Prejudice Victims of Religious Intolerance and Population LGBT is being created between SSP and other agencies that deal with these vulnerable groups to facilitate the treatment. Its creation responds to the need of SPREV for partnerships, given its limited financial and human resources to the growing demand in working with vulnerable groups. This group will serve as a reference point for these issues, providing advice, centralizing data on the victims, and integrating different actors linked to care for vulnerable groups. This work will 18 follow the example being used by the Program Ronda Maria da Penha that already work in network with other agencies that provide services to women. According to SPREV, the Center will be institutionalized by decree in early 2017. 59. The GoBA established a management committee responsible for coordinating activities to be developed under the National Prevention Plan on Violence against Afro- descendant Youth –JV. In 2015, three municipalities - São Francisco do Conde, Days Davilas, Candeias – out of eight metropolitan region of Salvador (RMS) formally joined the JV program. Since then, the program was interrupted due to political crisis in Brazil, and the federal government stopped accepting subscriptions. However, SEPROMI continued to work with the 20 municipalities with high homicide rates prioritized by the Plan, seven of which were in RMS. As result, two additional municipalities in the RMS - Freitas and Camaçari Lauro - created Management Committees for the JV program, which is the first step for the federal government to recognize the council's membership. Therefore, even if the formal accession has not been completed due to the program being currently stalled at federal level, the State Government continued mobilization actions in the municipalities toward the target of having 50 percent of municipalities in RMS (4 out of 8) joining the JV program. Thus, it can be said that the target has been reached and surpassed, reaching 62 percent, equivalent to 5 municipalities. Among the programs executed by SEPROMI in the municipalities prioritized by JV program, it is worth highlighting the program “Caravan of Equality”, in partnership with the SE, which led technical visits to alert civil servants in 27 territories to discuss, among others, issues related to institutional racism. 60. In addition, SEPROMI and SPREV developed a guidebook for the police focusing on institutional abuse and violence against afro-descendant youth. Together with the military police, SEPROMI and SPREV prepared a unified attendance protocol through a working group that resulted in six discussions and hearings with important members of the military. The military police’s operation managers in RMS signed a commitment letter assuming the responsibility for disseminating this guidebook in their respective areas. Although this action is not part of the indicators or prior actions supported by the DPL, it is one of the consequences of the process of strengthening institutional capacity of SPREV and SEPROMI, and consequently, the agenda focused on improving customer service and relationship between public security forces at the State and vulnerable groups. SEPROMI also stressed the importance of pro-inclusion in the institutional strengthening of the Department in cooperation with other departments, and in the provision of budgetary resources to implement their programs. 61. GoBA created GBV to improve the provision of services to rural women who are particularly vulnerable to gender based violence. The mobile units began service in June 2014. By August 2016, more than 5,000 women were assisted in 67 municipalities in rural areas. 67 municipalities represent 21.5 percent of total number of municipalities in rural areas (312 in total)3, therefore although a large number of women were assisted, the target was achieved only partially. The main reason for not achieving the target is that the program suffered two initial setbacks. First, 3 There is no official definition of municipalities in rural areas. To calculate the result indicator, municipalities with less than 30 percent of urban population were considered municipality in rural area. 19 initially the SPM planned bus visits jointly with the mobile units of the National Program for Rural Worker’s Documentation (Programa Nacional de Documentação de Trabalhadoras Rurais, PNDTR4) aiming to attract more women when two buses visited. PNDTR is funded by the federal government which received funding erratically. As a result, the PNDTR bus often canceled the planned trip, which led to the cancelling of trip for both teams, delaying the progress in expanding the coverage for the GBV bus. SPM now runs its bus alone. Second, there were difficulties in monitoring the activities of the bus operator in the beginning because the contracted bus was operated independently. As result, SPM had little control over quality and methodology of the operation. SPM quickly reformulated the agreement with the bus organization. Currently there are technical cooperation agreements between SPM and the bus organization on monitoring methodology, strategy, and results. This lead to greater efficiency, coordination and quality of services. 62. Despite not achieving the target, quantitative and qualitative improvement in the performance of mobile units was recorded. This can be attributed to some changes implemented by SPM. First, while the mobile unit is an instrument of direct care to rural women, it is now used as strengthening mechanism for the forums and local service networks. In addition, the SPM changed the training methodology used by the teams that work on the bus and implemented a participatory management model of the unit with the operator. As a consequence of these changes, efficiency to service rural women increased. The successful experience observed in Bahia is currently considered as “best practice” in the implementation of the program Women Living Without Violence (Mulher Viver Sem Violência) by the federal government. Productive Inclusion 63. The law establishing the PENM, which was submitted for its approval at the preparation of the DPL, was approved in December 2014. In 2015, the Management Committee of PENM, composed of several departments of State was established, including SEPROMI, SPM, SEPLAN, the Department of Agriculture (SEAGRI), the Department of Labor and Employment (SETRE), the Secretariat of Social Development (SEATS), among others. The Commission's objective was to create a space for the articulation and building intersectoral partnerships. 64. Since 2015, there has been significant progress in the implementation of PENM. In all, 1,034 women and afro-descendant producers have benefited from technical and entrepreneurship training, and in some cases, the donation of production equipment, surpassing the original target of 800. It worth mentioning that the result indicator in the program document refers to producers’ organizations, it was a misunderstanding between the Bank team and counterparts at the time of the DPL preparation. At supervision missions the Bank team and the counterparts agreed that it refers to women and afro-descendants individuals, therefore the target is considered met. The programs coordinated by the SPM and the SEPROMI included the following: "Lavadeiras Broadening Horizons," "Seafood with Pride, Quilombolas Forever," "Furniture Flour Houses," "Baianas the Acarajé," "Entrepreneurs of Afoxé," and "Traditional 4 A program run by the federal government in which mobile units go to rural areas and issues IDs and other documentation to rural workers. 20 Peoples of Entrepreneurship Agreste Coast" among others. The progress not only reflected the institutional strengthening of SPM and SEPROMI as secretariats, but also as coordinating bodies given that most of the programs were carried out in partnership with other government agencies. 3.3 Efficiency NA 3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory 65. Relevance: The relevance of the objectives, design, and implementation was satisfactory. The policy objectives and measures supported under the program, as well as its results indicators, were chosen on the basis of State strategic priorities and realism of the policy reform. In addition, the DPL supported the creation and strengthening of institutions, and promoted ownership of the reform programs for sustainable progress beyond the lifetime of the operation. 66. Achievement of Objectives. The overall program PDO of improving fiscal management and territorial planning and tailored selected public services to the needs of women, afro- descendants and minorities was successfully achieved. Substantial progress has been achieved in providing specific public services to women, afro-descendants and minorities. The inclusion agenda is tailored to the situation of Bahia with a large diversity of cultures, making the reform program truly inclusive. The success of this operation rests not only in achieving most of the targets, but most importantly to put the inclusion agenda among the top priories of the State. The rating of moderately satisfactory is due to delay in achieving the targets in some of the indicators in education, pension, and public security. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 67. The program supported by the DPL is expected to have had positive effects on poverty, gender and social development. In particular, the reforms supported by the DPL contributed to the social inclusion of the marginalized groups. Reforms in health focusing on afro- descendants’ access to the health system affected directly the afro-descendants population with specific diseases and who were suffering institutional discrimination. Similarly, by developing the curriculum framework and guidelines for indigenous and Quilombolas communities contributed to the inclusion of these communities in the education system, and might even facilitated their learning experiences. Likewise the productive inclusion initiative for afro-descendant and women producers not only opened doors for these groups financially contributing to poverty reduction, but most importantly empowered them to discuss more freely their demands. Also, in public security, designing protocols for the police force to treat vulnerable groups contributed to improve the quality of service delivered to these marginalized groups in Bahia. 21 (b) Institutional Change/Strengthening 68. The DPL supported efforts aimed at creating and strengthening institutions across sectors of the operation. In pension, the DPL supported the establishment of an internal audit process for tax arrears recovery contributing to increase fiscal space of the State Government. In territorial planning new institutional arrangements took place strengthening territorial focus of GoBA’s main planning instrument PPA-P. In racial equality, the DPL supported the creation of the legal framework for the functioning of the institutional and financial systems for the promotion of racial equality. In education, the DPL supported the creation of new processes for indigenous and Quilombolas schools to adapt the National Curriculum for their culture, as well as the process of recruiting for indigenous teachers, both contributing to increase social inclusion. In health, the DPL supported the creation of the legal framework for health services to the afro-descendants to improve service delivery. In public security, through the support provided to SPREV, the DPL contributed to further institutionalize violence prevention and the protection of vulnerable groups, at higher risk of victimization, as a priority for the State public security agenda. It also supported the development of new procedures for the police in regards to the provision of services to vulnerable groups. In addition, the DPL contributed to improve coordination between different sectors, including SSP, SEPROMI and SPM, and between the Government and civil society organizations. (c) Other Unintended Outcomes and Impacts 69. Bank staff from various sectors emphasized that the operation raised the visibility of the policy in their sectors, increasing commitment and financial predictability of their agencies. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops There were no beneficiary survey and/or stakeholder workshop. 4. Assessment of Risk to Development Outcome Overall Rating: Moderate The risk of either policy reversals or not maintaining the outcomes in the areas supported by the DPL is Moderate. 70. The fiscal risk of the State Government due to Brazil’s overall macroeconomic condition might affect financial resources to sustain programs in some sectors, but mitigating measures are in place. Moreover, the state of Bahia has one of the better fiscal position indicators compared to other Brazilian states. As of end of 2015, Bahia has not breached any indicator of FRL. Its net consolidated debt as share of net current revenue was 59.4 percent, below the States’ average of 75.1 percent. In the tax component, in the current environment of economic recession, more tax payers might default and delay payments, leading to increased stocks of arrears and lower recovery rate. However, given the State’s fiscal challenges, there is even greater need for measures such as the ones supported by the DPL that help the State in generating revenue. This reduced the risk of policy changes or abandonment of the new measures. In education, although financial 22 distress of the State Government could delay the launch of a second official recruitment for indigenous teachers, it is unlikely that existing teachers get affected. In race equality, the financial distress of Federal and State government may compromise SEPROMI’s access to resources and hence its capacity to implement social programs. However, funds from FUNCEP are secured reducing risks of policy reversal of SEPROMI. In the case of SPM, the operation of mobile unit could be affected by State’s financial distress as they rely on State funds. SPM is currently looking to diversify partnerships with federal and state actors as well as with NGOs and international organizations in order to secure their future funding. In health, some of the programs are currently financed by SWAP project. Hence, the risk rests on the uncertainty of whether the Government will provide the funding to the programs when the project ends. 71. Change in political priorities could affect the continuity of programs in some sectors, but government and population ownership is strong. In public security, the JV State Plan is subject to uncertainties related to the continuity of the program at the federal level. Although the new administration at the National Secretary of Youth has announced the restructuring – but not closing – of the program, concrete measures are yet to be seen. Political differences between the State and Federal governments could also serve as a disincentive for the continuity of cooperation in this area. However, as it was demonstrated in the progress achieved in creating Management Committees for the JV programs despite suspension at the federal level, GoBA is committed in moving forward with this reform agenda. In health, it was reported that the greatest risks to sustainability in policy on the afro-descendant population are operational, coordination between different levels of Government (between federal, state and municipal government), and the turnover of mayor that could change priority due to social pressure. The Bank team with the SWAP project is assisting the Government in improving the operational coordination and strengthening the institutional arrangement, which will mitigate risks for policy reversal. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory 72. The Bank’s performance during the identification and preparation of the operations was moderately satisfactory. The Bank worked very closely with the GoBA during the preparation of the loan resulting in strong Government ownership of the reform program. Areas supported by the DPL were identified based on lessons learned from the previous DPL and on analytical work. Program areas were identified jointly with the GoBA and fully aligned with State’s priorities which also gave ownership of the reform program to the GoBA and ensured commitment of the GoBA in achieving the outcomes. Coordination within the Bank’s multi- sectoral team across the DPL thematic areas (macro-fiscal policy, health, education, public security, gender, finance, and social development) was superior. Results framework established a clear path from PDO to prior actions to results indicators, with one minor exception (result indicator #15). While there was not a clear cut definition of which municipalities would be considered as municipalities in rural areas, the program assisted over 5,000 women, a substantial achievement that is not fully reflected with the result indicator. 23 (b) Quality of Supervision Ratings: Satisfactory 73. The Bank’s performance in the supervision of the operation was satisfactory. Supervision of the operation was adequate. The Bank conducted two large multi-sectoral supervision missions in 2015 and 2016 to accompany the progress in the implementation of the reform programs. In each supervision mission, the team discussed thoroughly the progress in the reform program, challenges, risks, and the Bank’s team provided guidance when needed. In addition, sectoral dialogue was carried out by the Bank’s team, as part of ongoing investment operations and TA in the area of health and territorial planning. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory 74. Overall, the Bank’s performance was commendable for its engagement with the GoBA in the preparation and implementation of the program supported. Bank’s support in all covered sectors were appreciated by the corresponding agency, particularly regarding the visibility and impetus the DPL gave to their reform agenda. They also esteemed highly the knowledge exchange and TA provided by the Bank team in developing and adjusting their programs during the implementation. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory 75. The Government’s performance is praised for its strong ownership and continued efforts to achieve the committed results. The primary responsibility of the program preparation and coordination of the monitoring process was SEPLAN. Their performance from identification, preparation, negotiation was superior. They coordinated the activities with finance, health, education, public security, social services to design a coherent program that was align with GoBA’s priorities. The Government showed commitment to achieve the results despite exogenous factors that could have delay the progress. For instance, in the public security component, progress of the JV program in the State could have fallen below the target due to the decision of the federal government to stop accepting subscriptions. However, SEPROMI continued the mobilization actions in the municipalities surpassing the target. (b) Implementing Agency Performance Rating: Moderately Satisfactory 76. The overall performance of implementation agencies was good. In all sectors, there was a strong commitment of the implementing agencies to achieve the targets agreed in the DPL. Furthermore, the scope of the reforms was widen during the implementation process in many 24 sectors. For example, in health, the training of the State Policy on health of the afro-descendant population was expanded to municipal health centers after the Department of Health reached the target at the State level in 2016. In public security, SPREV is currently working in including two more groups into the protocol. Nonetheless, there was room for improvement in some sectors. For instance, in education when SE launched the first official recruitment for indigenous teachers, the planning and process could have been studied more carefully together with the contractor as it failed to attract enough applicants to fill the positions. As result, the target was not reached and needed a second recruitment. In public security, SPM suffered two setbacks at the beginning of the mobile units operation to assist rural women, delaying the progress of the program. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory 77. Overall, the performance of the borrower was moderately satisfactory. The Government showed strong commitment toward the reform program. Most of the targets were reached or surpassed, few were close to reach the target, and the rest were partially reached and showed good progress. Furthermore, in most of sectors, the Government continued its reform program by either expanding the coverage or the scope of the existing programs, demonstrating that the Government has given priority to these areas going forward. In some sectors, agencies could benefit from improving the implementing capacities to avoid delay in the reform progress and to increase the efficiency of the programs. 6. Lessons Learned 78. A strong Government and civil society ownership of the reform agenda was instrumental to ensure the implementation and sustainability of the DPL program. The Government’s commitment to continue working in areas supported by the DPL is clear. In pension, the auditing group is working to include additional databases to perform cross checking. In health, the Department of Health is expanding the training to hospitals in municipalities to ensure equal treatment to afro-descendant populations for health services; strengthening institutional support in the implementing policy to regulate the referral system to give priority for SCD patients; and increasing permanent collection sites for newborn neonatal heel prick test to ensure sustainability of this policy. The fact that civil society has numerous channels to participate in the design of the programs contributed to the wide acceptance of the affected groups. This also happened in education as indigenous and Quilombolas communities actively participated in the formulation of the curriculum guidelines leading to zero resistance when they started to be implemented in schools. Likewise, in public security, SPREV is working on a unified protocol to be used in police stations for the expanded vulnerable groups after receiving demands from the civil society to include two additional groups. 79. The design of the reform program based on lessons learned from previous operations supported an adequate pace of the reform implementation. The previous DPL covered a broader set of sectors that faced constraints in the implementation capacity to achieve the goals. Therefore, when designing this operation, the focus was placed in sectors with ongoing reform that were aligned with the Government’s strategy and supported by other Bank operations, making it 25 possible to achieve the envisioned outcomes in the short term. Moreover, this DPL focused on service delivery to vulnerable groups while the previous operation supported quality of service delivery, showing the Bank’s continuous support on each of the steps during the reform process of priority areas of the Government. In addition, lessons from the previous operation on the constraints in implementation capacity and resources led to include sectors that had ongoing investment projects and TA. This was the case of the health sector with Bahia Integrated Health and Water Management Project SWAP (P095171) and the territorial planning with Bahia Sustainable Rural Development (P147157). 80. Institutional building was instrumental to ensure continuous progress toward development objectives. The DPL shows the importance of fostering new institutional arrangements in order to design, implement and review the progress of the reform plan in a sustainable manner. At the preparation of the DPL, new institutions or processes were created giving the reform program a legal basis and a designated agency to implement and monitor the reform process. In most sectors, the new institutional arrangement gave visibility to the sector’s reform agenda and facilitated coordination with other sectors. Once the institutions and their mandates are in place, progress toward reaching development objectives would go beyond the life of this operation reducing risks of policy reversal. 81. Reforms aiming to change social norms is a long term process that goes beyond the life cycle of policies supported by the DPF. Racial discrimination in health, ethnic disadvantage of indigenous and quilombolas communities in education, and unfavorable conditions faced by LBTG and women in public security and production, all have deep cultural roots. Thus, programs supported by the DPF can address policy impediments and are the first steps in the process of change. Consequently, policies reforms implemented cannot be expected to translate overnight into ultimate outcomes. This is partly the nature of DPF operations and partly nature of the policy reforms. Nonetheless, this DPF with its streamline process gave an enormous impetus to start this reform agenda from the policy angle. If the goal is to monitor and follow up the progress on a longer time-frame, then a long term TA or IL would be good complements to DPF. 7. Comments on Issues Raised by the Borrower/Implementing Agencies/Partners (a) Borrower/Implementing Agencies 82. No issues were raised. The Government of Bahia agreed with the assessment and the ratings. (b) Co-financiers Not applicable. (c) Other partners and stakeholders Not applicable. 83. The ICR team would like to thank and acknowledge the GoBA for their remarks specified in Annex 5 of this ICR. The ICR team does not have any comments on the issues raised by the authorities. 26 (b) Co-financiers Not applicable. (c) Other partners and stakeholders Not applicable. 27 Annex 1. Policy and Results Matrix Component Prior Actions Expected Results 2013 2016 Status Outcomes Indicators Baseline Target as end of 2015 Pillar 1: Fiscal Management and Territorial Planning 11. The Borrower has adopted administrative Increased Revenue collected 280 320 363 procedures to enable (a) the taxpayers to pay revenues from tax payments their respective tax arrears in instalments, and (b) from in arrears at the Borrower to place a lien on assets and rights recovery of administrative of Selected Taxpayers to cover the amount of tax arrears phases (in R$ mln) those taxpayers’ liabilities. 12. The Borrower has strengthened control of Reduced Savings generated 0 30 23.8 its pensioners’ payroll by: number and by corrective (b) carrying out an internal audit of the value of measures detected Borrower’s integrated human resources irregular by audits to the system, with particular focus on the social pensioners’ payroll security (in R$ mln) Borrower’s pension benefits administered benefits by SUPREV, and implementing measures granted by to address the audit’s findings; and RPPS (c) accessing Mirante to facilitate SUPREV’s auditing of the payment of pension benefits. 13. The Borrower has submitted to its Institutional Number of 0 15 16 Legislative Assembly, for approval thereby, a arragements CODETERs fully draft law, in form and substance satisfactory to for territorial operational the Bank, to establish the legal framework for the planning in Política de Desenvolvimiento Territorial do place. Estado da Bahia. 28 Component Prior Actions Expected Results 2013 2016 Status Outcomes Indicators Baseline Target as end of 2015 Forthcoming Number of 0 10 15 PPA-P Territorios de informed by identidade with territorial strategic plans strategic plans. Pillar 2: Service Delivery 14. The Borrower has established the legal Institutional Number of 14 20 91 framework for the Estatuto da Igualdade Racial and financial municipalities with e de Combate à Intolerância Religiosa do Estado frameworks more than 10,000 da Bahia. for inhabitants joining promoting the State System racial for the Promotion equality in of Racial Equality place Number of social public programs in the multi-annual plan 2016-19 with 0 5 6 race- disaggregated indicators Education 15. The Borrower, through SE, has: Educational Percentage of 0 80 16 (c) adopted new curriculum guidelines for services indigenous schools Quilombolas and indigenous people’s adapted to with certified schools in the Borrower’s territory; and the needs of indigenous indigenous teachers 29 Component Prior Actions Expected Results 2013 2016 Status Outcomes Indicators Baseline Target as end of 2015 carried out public selection and and Percentage of (d) indigenous and recruitment of indigenous people quilombolas minorities quilombolas 0 50 100 teachers. schools adopting the new curriculums The Borrower has adopted the Política Increased Number of Health 16. 0 25 24 Estadual de Atenção Integral à Saúde da awareness to hospitals that População Negra. combat received training to ensure equal institutional racism. treatment in health services for afro- descendant populations Increased Percentage of number of newborn children early who received the diagnosis of 82 90 86.5 neonatal heel prick SCD test in Bahia 17. The Borrower, through SEPLAN, Strengthened Effectiveness 65 80 83 SESAB and SE, has institutionalized multi- quality of index on the sector efforts in implementing a statewide action care in 25 provision of plan in the Borrower’s territory to prevent selected state maternal and teenage pregnancy and to provide childbirth care maternities neonatal services in case of teenage pregnancies by assigning these in 25 reference secretariats the joint responsibility for planning State maternity and promoting the actions necessary to implement said action plan, including the 30 Component Prior Actions Expected Results 2013 2016 Status Outcomes Indicators Baseline Target as end of 2015 carrying out of joint meetings, the preparation of hospitals.5 an annual report, and the fostering of dialogue Mass media among the relevant expert and technical teams campaign to working to implement the action plan. 2 1 selected audiences Increased on youth 0 awareness on pregnancy teenage prevention pregnancy Public 18. The Borrower has: Strengthened Percentage of the 0 50 52 Security institutional police force capacity for working with (e) established a multi-sectoral group within prevention of vulnerable groups Secretaria da Segurança Pública to assess violence trained in the use the service needs of selected vulnerable against of the protocols for groups, and to design preventive vulnerable specialized procedures, training for professionals, and groups services to skilled interventions aimed at benefiting vulnerable groups selected vulnerable groups; and Percentage of (f) established a management committee municipalities in responsible for coordinating activities to the metropolitan 0 50 62 be developed under Juventude Viva-JV. area of Salvador joining the JV program 5 The effectiveness index is composed of 10 indicators that capture the availability of services such as breast milk banks and intensive care units for neonates and mothers. These services are especially relevant to the comprehensive care of pregnant adolescent given the increased risk associated with these pregnancies. In addition, the effectiveness index will be tailored to include indicators that directly capture the provision of health care services to pregnant adolescents. 31 Component Prior Actions Expected Results 2013 2016 Status Outcomes Indicators Baseline Target as end of 2015 19. The Borrower has established the Fórum Improved Percentage of 0 50 21.5 Estadual Permanente de Enfrentamento à service municipalities in Violência contra as Mulheres do Campo e da coverage to rural areas served Floresta da Bahia. victims of by mobile units gender based providing services violence in and raising rural and awareness on remote areas GBV under the of the state rural women of Bahia forum framework Productive 20. The Borrower has submitted to its Increased Number of women 0 800 1034 Inclusion Legislative Assembly, for approval thereby, a outreach of and afro- draft law, in form and substance satisfactory to financing descendants the Bank, to establish the legal framework for the and TA producers Política Estadual de Fomento ao programs for organizations Empreendedorismo de Negros e Mulheres – businesses receiving tailored PENM. led by TA to support women entrepreneurship and/or afro- descendants 32 Annex 2. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Lending Fernando Andres Blanco Cossio Lead Economist GMF04 (TTL) Alberto Costa Senior Social Development Specialist GSU04 Ana Luiza Machado Consultant GMF04 Angela Nieves Marques Porto Consultant GGO16 Aude-Sophie Rodella Senior Economist GWAGP Cornelius Fleischhaker Young Professional GMF04 Elaine Tinsley Private Sector Specialist GTCIE Ezau Pontes Senior Health Specialist GHN04 Fabio Sola Bittar Research Analyst LCC5C Fernando Lavadenz Senior Health Specialist GHN04 Flavia Fonseca Carbonari de Almeida Consultant GMF04 Heinz P. Rudolph Lead Financial Sector Economist GFM04 Javier Baez Senior Economist GPV01 Joseph Kizito Lead Financial Management Specialist GGO22 Lais Miachon Silva Consultant GHN04 Leandro Oliveira Costa Economist GED04 Luciano Wuerzius Senior Procurement Specialist GGO04 Maria de Fatima de Sousa Amazonas Senior Rural Development Specialist GFA04 Michael Drabble Senior Education Specialist GED04 Miguel Santiago Oliveira Senior Financial Management Specialist GGO22 Miriam Muller Social Scientist GPV04 Monica Moura Porcidonio Silva Program Assistant LCC5C Susana Amaral Senior Financial Management Specialist GGO22 Susana M. Sanchez Senior Economist GMFDR Supervision Fernando Andres Blanco Cossio Lead Economist GMF04 Antonio Nucifora (TTL) Lead Economist GMF04 Ana Luiza Machado Consultant GMF04 Aude-Sophie Rodella Senior Economist GWAGP Cornelius Fleischhaker Young Professional GMF04 Fabio Sola Bittar Research Analyst LCC5C Fernando Lavadenz Senior Health Specialist GHN04 Flavia Fonseca Carbonari de Almeida Consultant GMF04 Heinz P. Rudolph Lead Financial Sector Economist GFM04 33 Maria de Fatima de Sousa Amazonas Senior Rural Development Specialist GFA04 Michael Drabble Senior Education Specialist GED04 Miguel Santiago Oliveira Senior Financial Management Specialist GGO22 Monica Moura Porcidonio Silva Program Assistant LCC5C Rong Qian Economist GMF04 Susana Amaral Senior Financial Management Specialist GGO22 Susana M. Sanchez Senior Economist GMFDR (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY14 59.76 398.45 FY15 7.35 40.79 Total: 67.11 439.24 Supervision FY15 7.32 76.46 FY16 16.93 109.96 Total: 24.25 186.42 34 Annex 3. Beneficiary Survey Results NA 35 Annex 4. Stakeholder Workshop Report and Results (if any) NA 36 Annex 5. Summary of Borrower's ICR and/or Comments on Draft ICR The Government of Bahia had no objections to the report. They consider satisfactory assessment and/or moderately satisfactory represents well the evolution (often slow) resulting from the effort that the State undertaking to its policies. The analysis contained in paragraph 30, portrays with objectivity, the panorama/positioning of the State of Bahia, on the national scene. Satisfactory assessment for pillar I-Fiscal Management and Territorial Planning demonstrates that the objective which was established for the DPL was the main driver of the actions in the areas supported by the operation. 37 Annex 6. Comments of Cofinanciers and Other Partners/Stakeholders NA 38 Annex 7. List of Supporting Documents 1. Program Document, June 2014 2. ISR 2015 and Aide Memoires of July 2015 and November 2016. 39 MAP 40