FOR OFFICIAL USE ONLY Report No: NCO00006709 INTERNATIONAL DEVELOPMENT ASSOCIATION NOTE ON CANCELLED OPERATION TF – B4456 ON A GRANT IN THE AMOUNT OF US$ 25 MILLION TO THE Republic of the Union of Myanmar FOR Enhancing Community Driven Development Project (P162647) June 27, 2024 Social Sustainability And Inclusion Global Practice East Asia And Pacific Region CURRENCY EQUIVALENTS (Exchange Rate Effective {May 22, 2024}) Myanmar Kyat Currency Unit = (MMK) MMK 2,100 = US$ 1 US$ 1.315 = SDR 1 FISCAL YEAR April 1 – March 31 Regional Vice President: Manuela V. Ferro Country Director: Mariam J. Sherman Regional Director: Anna Wellenstein Practice Manager: Ingo Wiederhofer Task Team Leader: Sean Bradley ABBREVIATIONS AND ACRONYMS CPF Country Partnership Framework DRD Department of Rural Development EAO Ethnic Armed Organization ECDDP Enhancing Community Driven Development Project GHM Feedback and Grievance Handling Mechanism JSDF Japanese Social Development Fund MSDP Myanmar Sustainable Development Plan MSR Multi-Stakeholder Review NCDDP National Community Driven Development Project NLD National League for Democracy WBG World Bank Group TABLE OF CONTENTS DATA SHEET ............................................................................................................................ 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ........................................................ 5 II. KEY FACTORS LEADING TO CANCELLATION ....................................................................... 8 III. BANK PERFORMANCE ....................................................................................................... 8 IV. LESSONS LEARNED AND RECOMMENDATIONS ................................................................. 9 ANNEX 1. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 10 ANNEX 2. SUPPORTING DOCUMENTS .................................................................................... 12 The World Bank Enhancing Community Driven Development Project (P162647) DATA SHEET BASIC INFORMATION Product Information BASIC INFO TBL Project ID Project Name P162647 Enhancing Community Driven Development Project Country Financing Instrument Myanmar Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Organizations Borrower Implementing Agency Department of Rural Development, Ministry of Republic of the Union of Myanmar Agriculture, Livestock and Irrigation Project Development Objective (PDO) Original PDO The development objective is to enable poor rural communities to benefit from improved access to and use of basic infrastructure and services through a people-centered approach. FINANCING Standalone TBL Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Administered Financing TF-B4456 25,000,000 0 0 Total Project Cost 25,000,000 0 0 Page 1 of 12 The World Bank Enhancing Community Driven Development Project (P162647) KEY DATES Project Approval Effectiveness Original Closing Revised Closing P162647 09-Nov-2020 26-Nov-2020 30-Nov-2021 31-Dec-2023 RATING OF BANK PERFORMANCE Satisfactory SECTORS AND THEMES Sectors Major Sector/Sector (%) Agriculture, Fishing and Forestry 20 Irrigation and Drainage 20 Education 15 Other Education 15 Health 15 Health 15 Transportation 30 Rural and Inter-Urban Roads 30 Water, Sanitation and Waste Management 20 Other Water Supply, Sanitation and Waste 20 Management Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Page 2 of 12 The World Bank Enhancing Community Driven Development Project (P162647) Private Sector Development 10 ICT 10 ICT Solutions 10 Social Development and Protection 30 Social Inclusion 30 Indigenous People and Ethnic Minorities 10 Other Excluded Groups 5 Participation and Civic Engagement 15 Fragility, Conflict and Violence 15 Post-conflict reconstruction 15 Human Development and Gender 15 Gender 15 Urban and Rural Development 30 Rural Development 30 Rural Infrastructure and service delivery 30 Environment and Natural Resource Management 15 Climate change 15 Mitigation 5 Adaptation 10 ADM STAFF Role At Approval At NCO Regional Vice President: Victoria Kwakwa Manuela V. Ferro Country Director: Mariam J. Sherman Mariam J. Sherman Director: Benoit Bosquet Anna Wellenstein Practice Manager: Susan S. Shen Ingo Wiederhofer Sean Bradley, Patricia Maria Task Team Leader(s): Sean Bradley, Ingo Wiederhofer Fernandes, Natacha Caroline Lemasle Page 3 of 12 The World Bank Enhancing Community Driven Development Project (P162647) Page 4 of 12 The World Bank Enhancing Community Driven Development Project (P162647) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES Context at Appraisal 1. Myanmar is a diverse country strategically located and endowed with tremendous natural resources. At the time of appraisal about 53 million people lived in the country, divided administratively into seven regions (predominantly inhabited by Bamar, the largest ethnic group), seven states (mostly inhabited by ethnic minorities), and a Union territory that encompasses the capital city of Nay Pyi Taw. Myanmar officially recognizes 135 different ethnic groups, and ethnic minorities constitute approximately 30 percent of the population. At the time of appraisal around 85 percent of the population was Buddhist, with Muslim and Christian minorities and animists making up the balance. The country has an extensive coastline along the Andaman Sea, fertile land, and an abundance of natural resources, including fisheries, forests, natural gas and hydropower potential, and precious stones and minerals. Its geographic location at the intersection of China and India places it in a position to potentially resume its traditional role as a regional trading hub. 2. In 2011, Myanmar began implementing significant political and economic reforms following the country’s first elections in 20 years, leading to increased liberties and economic growth. The newly elected administration accelerated reforms in what became known as the “triple transition”: from an authoritarian military system to democratic governance, from a centrally directed economy to a market-oriented one; and from 60 years of conflict to peace in border areas of the country. The transition included a shift from a top- down structure of governance to a more inclusive, people-centered, bottom-up approach, with a greater focus on development in rural areas, and increased investments in education and health. The Framework for Economic and Social Reforms (2012-2015), which guided the reform efforts, outlined the need for more systematic inputs from townships, districts, regions, and states to planning and budgeting. Following the 2015 national elections, the government led by the National League for Democracy (NLD) continued the commitment to support rural development. 3. The previous governments (of 2011-2015 and 2015-2020) sought to resolve long-running conflicts with Ethnic Armed Organizations (EAOs) through peace negotiations. However, efforts to include all groups in the peace process were hindered by deep-seated distrust between EAOs and the military and challenges persisted with ongoing conflicts particularly in the northeast of the country. Additionally, conflict in Rakhine State resurfaced in 2016, with violence between Buddhist and Muslim communities leading to severe humanitarian crises. This included the forced displacement of over 730,000 people, primarily self-identified Rohingya Muslims. The emergence of the Arakan Army in Rakhine State added to the complexity of the conflict in this area of the country and led to further displacement of people. 4. From 2011, when the country began its ambitious reforms, to 2017 Myanmar experienced strong growth that translated into substantial but uneven poverty reduction. GDP grew 7.3 percent per year on average from 2011 to 2016, helping to almost halve the poverty headcount from 48 percent (in 2005) to 25 percent in 2017. Non-monetary dimensions of welfare also improved between 2010 and 2017 as measured by access to grid electricity, school enrollment rates, and rates of infant mortality and malnutrition. Despite these improvements, about 12 million people were still living in poverty in 2017, and many near-poor were also susceptible to falling back into poverty because of weather, health, or economic shocks. In addition, growth was not as pro-poor and inclusive as it could have been with the poor lagging behind in monetary and non- monetary dimensions. In addition, spatial inequalities and exclusion along geography and identity lines Page 5 of 12 The World Bank Enhancing Community Driven Development Project (P162647) persisted. Between 2005 and 2017, poverty declined faster in urban areas than in rural areas where 87 percent of the poor, or about 10 million people, lived and were more likely to depend on agriculture for their livelihoods and had more limited access to basic infrastructure and services.1 As such, and despite important development gains, at the time of project appraisal Myanmar remained one of Southeast Asia's least developed countries due to prolonged conflict, isolation, and ineffective policies. 5. The National Community-Driven Development Project (NCDDP, P132500), the first operation approved as part of an arrears clearing grant to Government in October 2012, was the World Bank’s first International Development Association investment project in Myanmar after more than 20 years of absence. The NCDDP aimed at operationalizing the government’s vision for people-centered development, marking a fundamental shift in government policy towards rural areas by reversing decades of underfinancing and by enabling communities to participate in the development process. The project was instrumental in enabling communities to participate in the development process and had delivered rapid results since its inception in January 2013. Besides infrastructure and jobs, the NCDDP pioneered the use of innovative tools and approaches to increase citizen engagement and social accountability. These included: (i) strengthening the capacity of communities to serve as agents of local development; (ii) annual bottom-up performance reviews, including social audits to foster adaptive learning and transparency; (iii) a large-scale feedback and grievance handling mechanism; and (iv) confidence building measures between Government and EAOs. 6. The Government of Japan expressed interest in co-financing the NCDDP as part of a US$400 million equivalent Additional Financing credit to the NCDDP in June 2015. This interest led to a US$25 million Japan Social Development Fund (JSDF) grant approved by the Government of Japan in November 2020 to finance the Enhancing Community Driven Development Project (ECDDP, P162647). The ECDDP was designed to complement the NCDDP by expanding coverage to five additional townships in the ethnic minority States of Myanmar. This additional financing would help to fill acute gaps in infrastructure in these townships, and to strengthen community facilitation capabilities in government’s Department of Rural Development (DRD). The ECDDP would also pilot methodologies for conflict mapping and conflict resolution at the community and village tract level, as well as strengthen the capacity of women and other groups at risk of social exclusion at the village level to engage effectively in CDD activities. 7. Government strategies. The project was aligned with the Myanmar Development Assistance Policy of December 2017 and the Myanmar Sustainable Development Plan (MSDP) of February 2018. In particular, the ECDDP responded to four specific strategies of the MSDP, namely: Strategy 1.2. Promoting equitable and conflict-sensitive socio-economic development across all regions and states; Strategy 1.4. Enhancing good governance and institutional performance; Strategy 1.5. Promoting increased engagement of all people and open communication with government; and Strategy 4.5. Protecting the rights and harnessing the productivity of all, including migrant workers. 8. Higher-levels objectives to which the project contributed. The project’s objectives were also aligned with the World Bank Group’s (WBG) Country Partnership Framework (CPF) for Myanmar for the Period FY20-23 (Report No. 147607-MM). The CPF specifically noted the importance of the NCDDP, the parent project of ECDDP, in increasing access to essential services for rural populations in a bottom-up manner as part of the WBG’s engagement in Myanmar to reduce extreme poverty and boost shared prosperity. The project was aligned with to all three CPF Focus Areas - Focus Area 1: Building Human Capital and Fostering Peaceful 1Growth and poverty data as reported in the World Bank Country Partnership Framework for Myanmar (FY20-FY23), April 14, 2020. Page 6 of 12 The World Bank Enhancing Community Driven Development Project (P162647) Communities, Focus Area 2: Fostering responsible private sector-led growth and inclusive opportunities, Focus Area 3: Enhancing climate and disaster resilience and sustainable natural resources and environmental management - as well as the cross-cutting theme of promoting social inclusion, including in conflict-affected areas. Project Development Objective 9. The PDO was to enable poor rural communities to benefit from improved access to and use of basic infrastructure and services through a people-centered approach. Components 10. Component 1: Community Block Grants (original cost: US$18.65 million, actual US$0.00 million). This component was to finance four annual cycles of community block grants in five townships in Kayin, Shan and Rakhine States over a period of four years. The average estimated value of the grants was equivalent of US$34,000 per village tract per year, or about US$13 per capita. Grant allocations would vary depending on the population of a given village tract. The grant funds would be used to finance community-level public infrastructure, including the rehabilitation and construction of transport connectivity (e.g., roads, bridges, jetties, footpaths), water supply systems, schools, rural electrification and rural health centers. 11. Component 2: Facilitation and Capacity Development (original cost: US$3 million, actual US$0.00 million). This component was to finance technical assistance and institutional support at the union and township levels, including the hiring of community and technical facilitators for the purpose of supporting the implementation of community driven activities under component 1 and a grievance redress mechanism. It was to finance capacity development in areas such as participatory processes, project management, gender equality and inclusion, environmental management, and social accountability for local committee members as well as government staff at the township, region/state, and union levels. 12. Component 3: Monitoring and Evaluation, Knowledge and Learning (original cost: US$0.87 million, actual US$0.00 million). This component was to finance a series of bottom-up participatory monitoring and evaluation (M&E) activities that are fully integrated into the annual community planning and sub-project cycle. These included annual social audits of ECDDP activities in each project village and multi-stakeholder reviews (MSRs) at township level to reflect on performance and lessons learned in each of the five beneficiary townships. 13. Component 4: Project Management and Implementation Support (US$2.48 million, actual US$0.00 million). This component was to finance project management by DRD at the Union, State/Region, district, township, village tract and village levels, including financial management, procurement, environmental and social safeguards management, and communications, audits and rehabilitation of DRD offices necessary for project implementation. 14. Intended outcomes and pathways of change. The project’s key outcomes per the Project Appraisal Document were (a) percentage of households in project villages participating in planning, decision-making, and implementation of sub-projects, (b) number of persons having access to and use of project-built infrastructure and services, and (c) percentage of community members satisfied with the project. The logic for achieving these outcomes was as follows: facilitation support and capacity building (component 2) of both community Page 7 of 12 The World Bank Enhancing Community Driven Development Project (P162647) groups and local authorities (primarily the staff and systems of the DRD) would lead to the identification and prioritization of public investments that are most responsive to community needs. These investments would therefore see increased usage by the local population and increase satisfaction. Providing the resources to finance these investments (component 1) would ensure that community priorities are acted on. Component 3 provided a feed-back loop to ensure learning and improvement in project implementation and outcomes, while component 4 financed the marginal additional costs of implementing the project. 15. The project was designed to respond to several drivers of conflict and fragility in the country. Relevant design elements included the specific targeting of conflict-affected areas in the country where ethnic minority groups are in the majority (Kayin, Shan and Rakhine States), efforts to build state-citizen trust through the delivery of basic services long absent in these areas, and broad-based participation of community members including traditionally marginalized groups in a people-centered approach to development. To build trust between government and communities in areas of EAO influence or control, the project also planned to invest in conflict sensitivity training, hire facilitators from local communities, work with “unregistered” villages (generally those under EAO control) and allow EAO-controlled areas to adopt a “wait and see” approach-- initially opting out of participation until sufficient understanding of the process and trust was gained. These strategies were shown to be effective under the NCDDP. II. KEY FACTORS LEADING TO CANCELLATION 16. COVID-19 pandemic. The project was approved on November 9, 2020, and became effective on November 26, 2020, while Myanmar was in the throes of the COVID-19 pandemic. In March 2020, the Government closed its borders, suspended visas on arrival, screened incoming travelers at points of entry, and quarantined and isolated high-risk populations. Pandemic-related inter-township movement restrictions put in place slowed down final project preparation activities and initial implementation significantly. Mobilizing the project’s township technical assistance in-country and capacity building training activities of project staff were delayed or could not implement in all townships. The World Bank was unable to conduct any in-person implementation support mission. 17. Military takeover. More importantly, the military coup of February 1, 2021, had an immediate and negative impact on project start-up and implementation. Project disbursements were immediately paused on all operations in the Bank’s Myanmar portfolio per OP/BP 7.30 - Dealings with De Facto Governments, and have not been restarted. Given that less than three months had passed between project effectiveness and the coup, no funds had been disbursed to the project’s designated account. Therefore, no activities were undertaken by the government or DRD to implement the ECDDP. The US$ 25 million project grant (TF0B4456) was cancelled on April 19, 2023. III. BANK PERFORMANCE Quality at entry: Rating “Substantial” 18. The ECDDP built upon the implementation experiences, evaluations, and lessons learned from the NCDDP. During project preparation, the World Bank conducted technical consultations and reviews with the Page 8 of 12 The World Bank Enhancing Community Driven Development Project (P162647) DRD to improve the project design. Project enhancements included: (i) further strengthening the capacity of facilitators to engage with communities adaptively and with cultural sensitivity, while emphasizing gender and social inclusion, (ii) enhancing community-level conflict mapping and resolution measures, and (iii) reinforcing the project's bottom-up governance and accountability measures, including annual community social audits and Grievance Handling Mechanism. 19. Project preparation also had a strong emphasis on fragility and conflict. The task team undertook an analysis to identify opportunities and risks related to social inclusion and conflict, employing the Myanmar Inclusion and Peace Lens tool. Additionally, the team performed township-level conflict assessments in the areas proposed by DRD for the implementation of the ECDDP. The World Bank supported the DRD in developing an action plan for enhanced training for Community Facilitators, Technical Facilitators, and DRD staff in the targeted townships, aiming to foster and institutionalize culturally sensitive, socially inclusive, and conflict-sensitive approaches. 20. The task team also assisted the DRD in identifying additional methods to enhance gender equality. This included: (i) incorporating gender considerations throughout all stages of the project cycle, (ii) fostering a network of gender focal points at the Union, state/region, and township levels, which involves social media communication groups and quarterly meetings to share project updates and address field inquiries, and (iii) collaborating closely with the Department of Social Welfare at the Union, state, and township levels to promote gender mainstreaming initiatives. In addition, the ECDDP planned to conduct further studies to better understand the barriers to women's participation and leadership in community development activities, and to determine more strategies to support gender equality and women's empowerment within the project. Quality of supervision: Rating “Substantial” 21. The task team undertook a virtual Implementation Support Mission for the NCDDP (Mission No. 21) from January 18 to 28, 2021, less than two months after the ECDDP was effective and immediately prior to the military coup. One of the key objectives of this mission was to evaluate the progress of ECDDP start-up soon after the project became effective (November 9, 2020). This first and only supervision mission reviewed with DRD: (i) the intended townships to be covered by the ECDDP, (ii) the draft Project Operations Manual, and (iii) progress in contracting with the Township Technical Advisors consulting firms. The draft Aide Memoire from the mission in found in the project archives but was not shared with the counterpart due to the coup. IV. LESSONS LEARNED AND RECOMMENDATIONS 22. Given the limited time and scope of project implementation, no substantive lessons or recommendations are identified. . Page 9 of 12 The World Bank Enhancing Community Driven Development Project (P162647) ANNEX 1. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION TASK TEAM MEMBERS Name Role Preparation Ingo Wiederhofer, Sean Bradley Task Team Leader(s) Myat Kay Khine Procurement Specialist Siriphone Vanitsaveth, Kyemon Soe Financial Management Specialist(s) Thiha Ko Ko, Zeynep Durnev Darendeliler Social Specialist(s) Ei Ei Htwe, Nodoka Hasegawa, Social Development Specialist(s) Pamornrat Tansanguanwong, Juliette E. Wilson, Kamakshi Nadisha Mubarak Kay Khine Win Program Assistant Sai Yarzar Htun Conflict Consultant Theingi Min Operations Analyst Wasittee Udchachone, Martin Fodor Environmental Specialist(s) Carmenchu D. Austriaco Senior Regional Team Leader (WFA) Susan Wong M&E Specialist Supervision/NCO Patricia Maria Fernandes, Natacha Lemasle, Sean Bradley Task Team Leader(s) Yin Win Khine, Myat Kay Khine Procurement Specialist(s) Siriphone Vanitsaveth, Kyemon Soe Financial Management Specialist(s) Carmenchu D. Austriaco Senior Regional Team Leader (WFA) Kamakshi Nadisha Mubarak, Juliette E. Wilson, Ei Ei Htwe Social Development Specialist(s) Wasittee Udchachone Environmental Specialist Theingi Min Operations Analyst Sai Yarzar Htun Conflict Consultant Page 10 of 12 The World Bank Enhancing Community Driven Development Project (P162647) Kay Khine Win Program Assistant Thiha Ko Ko, Marcel Robert Frederik Social Specialist(s) Susan Wong M&E Specialist STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY18 0 7,529.82 Total 0.00 7,529.82 Supervision/NCO FY21 1.825 19,248.78 FY22 .200 2,328.00 Total 2.03 21,576.78 Page 11 of 12 The World Bank Enhancing Community Driven Development Project (P162647) ANNEX 2. SUPPORTING DOCUMENTS 1. Draft Aide Memoire; NCDDP Implementation Support Mission #21, January 18-28, 2021. Page 12 of 12