Document of The World Bank Report No: 22359 JM PROJECT APPRAISAL DOCUMENT ONA PROPOSED LOAN IN THE AMOUNT OF US$40 MILLION TO JAMAICA FOR A SOCIAL SAFETY NET PROJECT August 9, 2001 Sector Management Unit for Human Development Caribbean Country Management Unit Latin America and the Caribbean Region CURRENCY EQUIVALENTS (Exchange Rate Effective June 6, 2001) Currency Unit = Jamaican Dollar (JMD) 1JMD = US$.022 US$1 = JMD 45.45 FISCAL YEAR April 1 -- March 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy NGOs Non-Goverinmental Organizations CFAA Country Financial Accountability NIS National Insurance Scheme Assessment DFID Department for International OPM Office of the Prime Minister Development ECD Early Childhood Devlopment PIOJ Planning Institute of Jamaica FMIS Financial Management Information PMR Project Management Report System GOJ Governnent of Jamaica ROSE II Jamaica Reform of Secondary Education Project IRC Human Resource Council SA Special Account IBRD Intemational Bank for Reconstruction SIF Social Investment Fund and Development (World Bank) ICB Intemational Competitive Bidding SLC Survey of Living Conditions IDB Inter-American Development Bank SMP Staff Monitored Program IMF Intemational Monetary Fund SOE Statement of Expenditures JSIF Jamaica Social Investment Fund SPAD Social Protection and Development KMA Kingston Metropolitan Area SSN Social Safety Net LAC Latin America and the Caribbean TA Technical Assistance Region LACI Loan Administration Change TC Technical Cooperation Initiative MIS Management Information System TCT Targeted Conditional Transfer MLGCD Ministry of Local Government, Youth TOR Terms of Reference and Community Development MLSS Ministry of Labour and Social UBP Unified Benefit Program Security NCB National Competitive Bidding USAID United States Agency for International Development Vice President: David de Ferranti Country Manager/Director: Orsalia Kalantzopoulos Sector Manager/Director: Xavier Coll Task Team Leader/Task Manager: Andrea Vennehren JAMAICA SOCIAL SAFETY NET PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 4 2. Main sector issues and Government strategy 4 3. Sector issues to be addressed by the project and strategic choices 8 C. Project Description Summary 1. Project components 10 2. Key policy and institutional reforms supported by the project 12 3. Benefits and target population 13 4. Institutional and implementation arrangements 14 D. Project Rationale 1. Project alternatives considered and reasons for rejection 16 2. Major related projects financed by the Bank and other development agencies 18 3. Lessons learned and reflected in the project design 18 4. Indications of borrower commitment and ownership 19 5. Value added of Bank support in this project 20 E. Summary Project Analysis 1. Economic 20 2. Financial 21 3. Technical 22 4. Institutional 23 5. Environmental 24 6. Social 24 7. Safeguard Policies 26 F. Sustainability and Risks 1. Sustainability 26 2. Critical risks 27 3. Possible controversial aspects 28 G. Main Loan Conditions 1. Effectiveness Condition 28 2. Other 29 H. Readiness for Implementation 29 I. Compliance with Bank Policies 29 Annexes Annex 1: Project Design Summary 30 Annex 2: Detailed Project Description 35 Annex 3: Estimated Project Costs 39 Annex 4: Cost Benefit Analysis Summary 41 Annex 5: Financial Summary 43 Annex 6: Procurement and Disbursement Arrangements 44 Annex 7: Project Processing Schedule 53 Annex 8: Documents in the Project File 55 Annex 9: Statement of Loans and Credits 56 Annex 10: Country at a Glance 58 Annex 11: Overview of current Social Safety Net 60 Annex 12: Social Assessment 63 Annex 13: Institutional Arrangements: Responsibilities of the SPAD Division 65 Annex 14: Organization Chart: Ministry of Labour and Social Security 67 Annex 15: Proxy Means Test in Jamaica 68 Annex 16: Letter of Development Policy 69 MAP(S) Map of Jamaica JAMAICA Social Safety Net Project Project Appraisal Document Latin America and Caribbean Region LCSHS Date: August 9, 2001 Team Leader: Andrea Vermehren Country Manager/Director: Orsalia Kalantzopoulos Sector Manager/Director: Xavier E. Coll Project ID: P067774 Sector(s): SA - Social Assistance Lending Instrument: Specific Investment Loan (SIL) Theme(s): Social Protection Poverty Targeted Intervention: Y Program Financing Data [X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ Other: For Loans/Credits/Others: Amount (US$m): $ 40.00 Proposed Terms (IBRD): Fixed-Spread Loan (FSL) Years to maturity: 17.5 Front end fee on Bank loan: 1.00% Financing Plan (US$m): Source Local Foreign Total BORROWER 37.50 0.00 37.50 IBRD 35.37 4.63 40.00 Total: 72.87 4.63 Borrower: JAMAICA Responsible agency: MINISTRY OF LABOUR AND SOCIAL SECURITY Address: 14 National Heroes Circle Kingston 4 Jamaica Contact Person: Mr. Alvin McIntosh, Permanent Secretary Tel: (876) 922-4207 Fax: (876) 924-9639 Email: mlss@netcom-jm.com Estimated disbursements ( Bank FY/US$m): FY 2002 2003 2004 2005 Annual 4.94 11.55 11.02 12.49 Cumulative 4.94 16.49 27.51 40.00 Project implementation period: 4 years Expected effectiveness date: 01/02/2002 Expected closing date: 12/31/2005 ,OCS PAD Fans Rw~ Mach. YOO A. Project Development Objective 1. Project development objective: (see Annex 1) The proposed project will support the Government's efforts to transform the Social Safety Net (SSN) into a fiscally sound and more efficient system of social assistance for the poor and vulnerable. Specifically, the project seeks to provide better and more cost-effective social assistance to the extreme poor. To this end, the project will: (a) consolidate major income transfer programs into a Unified Benefit Program (UBP) that ensures (i) a meaningful level of benefits, (ii) cost-efficient and accessible delivery system, (iii) access to benefits linked to desirable behavioral changes for promoting investment in the human capital development of the poor, especially children, and (iv) effective targeting of social assistance to special groups; and (b) strengthen institutional capacity to (i) operate the program effectively and efficiently, and (ii) implement overall social safety net reform elements, including a transparent targeting mechanism. Jamaica has a long tradition of public provision of welfare programs, dating back to the 19th century. The Government of Jamaica (GOJ) currently operates a large number of social assistance programs aimed at the delivery of cash and in-kind benefits and social services to individuals and families who are poor and to individuals with specific needs. In 1999/2000, the GOJ, with support from the World Bank, conducted various studies on the SSN which pointed to the need for reform to reduce fragmentation and duplication of services, improve targeting of benefits and increase coverage of persons who are poor. In addition, more cost effective provision of meaningful benefits was needed and links of welfare benefits to human capital investment, especially through school attendance and preventive health care, were deemed desirable. Based on these studies and a series of consultative workshops with a broad range of government agencies, academics and civil society, an inter-institutional task force led by the Planning Institute of Jamaica (PIOJ) developed a Policy Matrix for the Reform of the SSN of Jamaica. The SSN reform proposal was approved by Cabinet in October 2000 and provides the basis for the proposed project. T'his loan is part of a coordinated package of financial and technical assistance requested by the Government of Jamaica from the donor community to support the reform. The Inter-American Development Bank (IDB) is preparing a complementary US$40 million SSN sector loan to (a) protect social sector and safety net spending during a period of strong fiscal adjustment, and (b) facilitate the restructuring and better targeting of several important safety net programs, including the school feeding program. The IDB loan is linked to progress in the implementation of the new Unified Benefit Program and the targeting mechanism. An IDB Technical Cooperation (TC) operation of US$1.2 rmillion will also support the analysis/restructuring of other safety net programs closely related to IDB's health and education sector operations. Finally, British DFID is supporting the GOJ with Technical Assistance to improve Social Policy coherence and evaluation capacity. 2. Key performance indicators: (see Annex 1) The program will begin with an eight month pilot in the Parish of St. Catherine that will be accompanied by a process evaluation to assess bottlenecks and aid program design before the program is scaled up to full national coverage. During this time, the following data collection instruments that are further described in Annex I will form the basis of the Monitoring and Evaluation system: * Household Surveys. The household surveys will take advantage of the Jamaica Survey of Living Conditions (SLC) to oversample program beneficiaries. This oversampling combined with the data available from the SLC will allow for program evaluation and an assessment of poverty targeting. * Monitoring Indicators. The program's Management Information System (MIS) will generate - 2 - monitoring indicators to track program performance and efficiency. * Qualitative Beneficiary Assessment. A series beneficiary assessment will be conducted with a sub-sample of beneficiaries selected from the quantitative sample to assess beneficiary satisfaction. The impact and outputs of the Unified Benefit Program will be assessed by the following measurable indicators: a) Outcome Indicators The following indicators will be measured: (i) Education grants Change in school attendance - primary and secondary school Change of enrollnent for secondary school (ii) Health grants Change in the percentage of children brought to health centers for preventive care Change in children age 0-6 and not enrolled in school with on-time, complete immunization scheme (iii) Adult Assistance grants Change in poor pregnant, and lactating mothers visiting health centers for timely check ups Change in poor elderly, disabled and other beneficiaries visiting health centers (iv) Beneficiary satisfaction with the UBP (will be assessed through beneficiary consultations) (v) Percentage of overall SSN expenditure channeled through the Unified Benefit Program (target > 19.5 percent). b) Output indicators (i) Number of beneficiaries (target > 217,000 total in Year 3 of project) (ii) Approximate monthly benefit under the program (target: Year 1: US$6, Year 2: US $6, Year 3 US$7.5, Year 4 and thereafter US$9 per person/month). (Benefits will be gradually increased to replace the existing transfer programs). (iii) School attendance rate by children (primary and secondary students eligible under the UBP to attend at least 85 percent of school sessions). (iv) Health care utilization by children 0-6 and not enrolled in school (target: Number of visits according to national standards, see annex 2). (v) Percentage of grant recipients below the poverty line (target > 70 percent). (vi) Percentage of eligible poor not receiving grant (target < 30 percent). (vii) Administrative costs below 15 percent (Year 3 of project). The targets will be reviewed based on the experience of the pilot phase. - 3 - B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: SecM2000-680 Date of latest CAS discussion: November 30, 2000 The Jamaica Country Assistance Strategy (CAS) for 2001/02 builds on the Government's development agenda which rests on four pillars: (i) restoring economic growth; (ii) ensuring that growth is inclusive and that the poor are adequately protected; (iii) improving governance, efficiency and effectiveness in the public sector; and (iv) ensuring sustainable development. Based on this agenda, and given the context of the fiscal, economic, social and environmental challenges, the Bank's program with Jamaica aims to help prevent a reversal of the recent gains in poverty reduction and create the foundation for sustained growth. The CAS lays out a highly focused program, based on three principles: (i) a focus on the Bank's core mandate of poverty reduction; (ii) a focus on areas where the Bank has a comparative advantage; and (iii) a focus on complementarity with other development partners. Under the base case scenario, the Bank's lending program includes fast-disbursing support to restructure the financial sector, and, closely linked to the above, support for a social sector program consisting of the proposed Social Safety Net operation and a Secondary Education project (ROSE II). The proposed Social Safety Net project speaks directly to the CAS goal of "protecting the poor and ensuring inclusion" by enhancing the efficiency and effectiveness of the social safety net, focusing particularly on improving assistance to the poorest. First, the project will improve efficiency of service delivery by consolidating the existing social assistance programs into a Unified Benefit Program. Strong technical assistance and training will be provided to strengthen institutional capacities at central and local/parish levels. Second, it will introduce an objective and transparent targeting mechanism that will be used for selecting beneficiaries of the UBP as well as other poverty alleviation programs later on (school feeding, etc.). Third, by linking benefits to school attendance and health clinic visits for children and pregnant mothers, the project will improve the long-term accumulation of human capital of poor children and their ability to break out of the inter-generational cycle of poverty. And fourth, the project will improve targeting of transfers to special target groups (e.g. disabled) and improve their health care by linking benefits to health clinic visits as well. This investment project is an integral part of the Government of Jamaica's strategy in meeting the CAS goals. 2. Main sector issues and Government strategy: Declining Growth: Threat to Recent Improvements in Poverty Jamaica has been experiencing a difficult phase of low or negative economic growth, caused mainly by external shocks, the impact of a tight monetary policy adopted in 1995, and a continuing financial sector crisis. Although inflation has been reduced significantly from around 80 percent in 1991 to about 8 percent in 1999, GDP declined in real terms about 4 percent per year between FY 94/95 and FY 98/99. Accompanying this decline, Jamaica has experienced large fiscal deficits over the last five years due to a long term accumulation of outstanding debt, and more recently, the Government's bail out of large indebted banks during a financial crisis in 1997. These deficits averaged around 6 percent of GDP in the latter half of the 1990s and declined to 4 percent in FYI 999/2000. At present, 62 percent of central government's budget is spent on interest and redemption payments. In order to balance the budget and curb the adverse debt dynarnics fueled by the deficit, the government has committed itself to a firther reduction in the fiscal deficit. As a signal of its commitment to this policy, the GOJ agreed on a Staff Monitored Program (SMP) with the IMF, one component of which is the strengthening of the SSN in order to protect the poor during this transition period. -4 - Despite negative growth during most of the period since 1995, many of the country's social indicators are still good and recent trends indicate declining poverty. In 1991, 44 percent of the population was poor (as defined by the poverty line) as compared to 17 percent in 1999. The forces which have worked to lower poverty during a period of sustained recession remain poorly understood and in need of rigorous investigation, but are attributed in part to the effects of migration, remittances from abroad, and informal sector activities. However, these factors were also present prior to 1991, underscoring the importance of further research into the causes of the decline of poverty in the 1 990s. Even though poverty did decline, the decline tapered off in 1997/1998 and in 1999/2000 poverty increased slightly. The challenge for the Government now lies in maintaining the achievements in poverty reduction. In addition, there are serious concems relating to income and non-income dimensions of poverty and inequality. In Jamaica, the poor have disproportionately low access to quality educational opportunities, and are more exposed to violence. Perhaps more significantly, their age distribution -- almost half of the poor are under 18 and a further 10 percent are over 65 -- limits household strategies, making the need for effective and well-targeted social assistance programs critical. Poverty is overwhelmingly rural in character, with nearly 80 percent of the poor living in rural areas and less than 10 percent in the Kingston Metropolitan area. However, there are heavy concentrations of poor households in the violence torn inner city areas of Kingston. Although women head only 44 percent of Jamaican households, 66 percent of poor households are female-headed. Poor households are large, with 40 percent of poor families having six or more members and nearly one-fifth with 8 or more members. Sound health and education policies together with a well designed, targeted safety net are urgently needed to alleviate living conditions particularly for the poorest and most vulnerable groups. I. Main Sector Issues Jamaica's Social Safety Net: Need for Reform Expenditures on the social safety net. Jamaica has made a continuing commitment to the social sectors and, despite increasing resource constraints, real allocations to health and education have increased in recent years. The Government invested 6.2 percent of GDP in education and 2.5 percent in health (FY 2000/01), a considerable allocation compared to other middle-income countries in the region. However, expenditures on the social safety net programs - defined broadly to include programs that provide income support and access to basic services to the poor and vulnerable and/or those needing assistance after economic downturns, natural disasters, or household-specific adverse events that lower income - accounted for only 2.6 percent of GDP in FY2000/01 or approximately US$78.4 million per year. This is well below the average in the Latin America and the Caribbean (LAC) region where expenditures on SSN range from a high of almost 9 percent in Chile to a low of 0.7 percent in Haiti. Array of programs and lack of coordination. In addition to the comparatively low budget allocations to the social safety net, the modest amount is spent on an array of programs. The Government operates over twenty social safety net programs targeted to persons who are poor and/or vulnerable. At present, there are three income support programs, four education based transfer programs, two pharmaceutical programs, two feeding programs, three housing programs, three community-based safety net programs including a social fund, a variety of community based training programs and other (minor) programs. An overview of the main SSN programs, their beneficiaries and budgets for 2000/01 is provided in annex 1 1. Duplication of administrative systems and a lack of coordination increases both the direct costs of programs and the indirect costs to beneficiaries. -5 - Insufficient targeting and coverage. A recent assessment of Jamaica's social safety net revealed that it is not well targeted to the poor. Means testing criteria and procedures differ for the different programs despite the fact that many of them seek to reach the same population. Some programs are not targeted to the poor. Despite a large number of programs, the existing safety net has a low coverage of the poor. Formal social insurance systems like the national pension system is limited to those with formal sector employment who have made contributions, excluding the majority of the elderly who do not have a contribution history. The biggest safety net program in Jamaica, the Food Stamp Program, provides benefits to approximately 170,000 individuals, but only reaches 15 percent of the poorest quintile, and 9 percent of the second poorest quintile. The Poor Relief Program reaches between 5 and 7 percent of households in the poorest quintile. While these programs are progressive in the distribution of benefits (largely due to the low level of benefits), there is still significant leakage. In the Food Stamp Program, for example, approximately one third of beneficiaries come from the three richest per capita household consumption quintiles. A high proportion of the poor appear to be unaware of the range of benefits available or unable to afford the direct and indirect costs (travel, time, etc.) to obtain benefits. Low level of benefits. Finally, Jamaica's social safety net programs provide beneficiaries with a very low level of benefits that does not adequately protect the poor. The Food Stamp prograrn pays approximately US$ 1 88 per child per month - only 1.2 percent of the basic food basket. The average monthly Poor Relief and Public Assistance benefits - mainly targeted towards elderly and disabled persons are slightly higher at US$4 per person, but benefits are strictly rationed, coverage is low and eligibility criteria are not employed rigorously. The per capita value of all three transfers combined adds up to about 10 percent of the overall poverty line in Jamaica. The low level of benefits contributes to the high proportion of poor not applying for the benefit. Education and Health: Disadvantages of the Poor Favorable Social Indicators. Jamaica has made impressive progress in providing universal coverage in primary school enrollment and near universal coverage in junior secondary education (grades 7-9). Gender equity in access to education has been achieved. Furthermore, Jamaica was a pioneer in the development of primary health care. As a result, its social indicators are favorable compared to most countries at similar income levels in the region as reflected in the low infant mortality, high school enrollment rates, and long life expectancy. Persistent low school attendance. The social indicators mask a significant lack of access to education for the poor. Although they are enrolled, children (and particularly poor children) do not attend school regularly. In 1999, 35 percent of children from families of the poorest quintile attended school less than 15 days per month. The main reason given by poor families for school absence was "money problems". A primary coping strategy among families that are poor is to keep children home from school when money is short. Poor educational quality and low school attendance, particularly in schools in inner-cities and rural areas, combine for poor results-approximately 30 percent of 6th grade students are functionally illiterate. In addition, enrollment corresponds to economic status in upper secondary (grades 10 and 11) and tertiary education. At ages 15-16, enrollment rates among children from the poorest quintile fall to 67 percent, against a national average of 83 percent and 94 percent of the children from the wealthiest quintile. This gap between poor and non-poor widens further with age. Only 21 percent of children aged 17-19 from the poorest quintile are enrolled in school, as compared to 87 percent of the wealthiest quintile. The IDB and USAID are supporting primary education programs to improve the quality of primary education. The World Bank is providing funding, through its Reform of Secondary Education Project, for initiatives to improve access to and quality of secondary education. - 6 - Declining health indicators. There are increasing problems in maintaining health indicators. Immunization rates among infants from birth to eleven months are down from 93 percent in 1993 to 85 percent in 1999. Although most children are eventually immunized by the time they start primary school at age 6, the late receipt of vaccinations increases the risk of preventable illnesses. Increasing problems with prenatal care parallels the decline in on-time immunizations. Only 25 percent of mothers have their first prenatal visit during the first four months of pregnancy. Anemia in pregnancy affects approximately 50 percent of all pregnant women and is a contributing factor to the persistent incidence (10 percent) of low birth weight babies. The elderly have the highest rates of self-reported illness, of being ill for a longer duration of time and of decreased ability to carry out activities of daily living. At the same time, the elderly - and especially the elderly poor - are less likely than the general population to be covered by health insurance and more likely to need medical care. Changing family structure and increased migration have augmented the risk of social isolation and loss of or abandonment by relatives. Almost 10 percent of the poor are elderly. The 1991 Census data reported that approximately 5 percent of the population is disabled. Although not all disabled persons are poor, inequities in access to education, training and employment increase the risk of poverty among the disabled. II. Government StrateLy Jamaica's most recent Poverty Eradication Strategy is summarized in Ministry Paper #13, signed by the Prime Minister in 1997, which sets broad guidelines for programming in this area. Key features of the strategy include a focus on more development oriented programs that especially target families with small children and youth, better overall targeting of programs, and rationalization to increase cost effectiveness where possible. In recognition of the serious weaknesses in the social safety net, Cabinet asked the Planning Institute of Jamaica (PIOJ) and the Office of the Prime Minister (OPM) in 1998 to take the lead in developing a comprehensive reform proposal for the social safety net including a suitable process to address the Government's concern about the SSN shortcomings. The objective of the reform proposal was defined as "developing a well-crafted integrated safety net program aimed at empowering the poor and vulnerable to achieve and maintain a satisfactory living standard. Such a prograrn should be effective, efficient and participatory." The complexity of the assignment to improve both the effectiveness and efficiency of the SSN prompted the PIOJ to invite the World Bank and the IDB to engage in a collaborative process to develop a SSN reform proposal (for more detail on the reform process supported by the Bank, see section D4). Five objectives for the SSN reform were defined a priori: (i) to tailor programs more specifically to risks and conditions associated with poverty and vulnerability and to develop an associated targeting mechanism; (ii) to integrate programs in order to reduce delivery costs; (iii) to ensure a comprehensive range of benefits to address different conditions (including age-specific factors) associated with poverty and vulnerability; (iv) to introduce flexibility in programs (for up- or down-scaling as needed); and (v) to ensure efficiency and fiscal sustainability of programs, notably by maximizing complementarity and partnerships with Non-Governmental Organizations (NGOs). Government has identified the following as target groups of the overall reform: children in poverty, youth at risk, the elderly poor, the disabled, poor single-parent households; large poor (rural) families; the long-term unemployed, and victims of social or natural disaster or HIV/AIDS. Special priority is to be given to children and youth. As a result of the collaborative process, Government developed a sector-wide approach for the SSN - 7 - reform, encompassing all existing programs targeted to the poor. The proposal, approved by Cabinet, addresses institutional, administrative, managerial and programmatic changes. Among the key reforn measures proposed is the development and implementation of a universal targeting system based on a proxy means test. The system is to be used by the main safety net programs in order to increase transparency in the selection of beneficiaries, reduce the administrative costs associated with having each program carry out its own assessment of eligibility, and improve targeting. The proposal also calls for the unification of the three cash/in-kind transfer programs into one unified benefit, thereby reducing fragmentation and duplication. Cost-savings are to be translated into a higher benefit level, in order to improve the impact of the program on poverty levels. In addition to restructuring the income support programs, the proposal also aims at reforming the various school-based and other programs, improving their targeting, efficiency and impact. Finally, the reform places emphasis on the development of monitoring and evaluation systems for the various programs, building on existing instruments, such as the yearly Survey of Living Conditions. The GOJ's strategy to reform the social safety net, its implementation plan and the respective targets will be detailed in a Policy Letter, which is attached as an Annex to this PAD (See Annex 16). 3. Sector issues to be addressed by the project and strategic choices: The above mentioned assessment of the Social Safety Net carried out in 1999/2000 pointed to the need for reform of the social safety net to reduce fragmentation and duplication of services, to improve targeting to the poor and to increase the level of benefits. The Social Safety Net project would reduce vulnerability to income swings among the poor and foster long-run investments in human capital by linking benefits to behavioral change (e.g. school attendance, health check ups). Furthermore, it would strengthen the capacity of Government to establish a targeting mechanism that can be applied to all poverty programs, and a monitoring and evaluation system for the income transfer scheme. The following sector issues will be addressed by the project: 1. Sector Issues Poverty. As noted previously, Jamaica has managed significant poverty reduction in spite of weak economic performance. However, further gains in poverty reduction are unlikely without the resumption of growth, and even with the reduction in poverty observed over the 1990s, there is still a group of Jamaicans who have remained poor--some 17 percent in 1999. This program is designed to help lift some of the chronic poor out of poverty (poor elderly, disabled, large rural families), and to ensure that the inter-generational cycle of poverty is not repeated, by investing in the human capital of poor children. The program is targeted towards the most vulnerable groups, including poor children and pregnant women, and in the Jamaican counterpart financing, the elderly and persons with disabilities. Organizational fragmentation. The SSN system in Jamaica is marked by a lack of coordination and little integration between programs. Duplication of administrative systems increases the direct costs of the program and also increases indirect costs to recipients (in terns of time and travel costs). In the face of fiscal constraints, it has become increasingly important to establish a fiscally sound social safety net that targets Jamaica's scarce resource to the most vulnerable but that also provides programs that are responsive to the varied needs of clients and that enhance the productivity and dignity of the individual. Therefore, GOJ decided to merge the three income transfer programs into a new Unified Benefit Program along the lines of a new generation of conditional transfer programs developed in Mexico, Colombia and elsewhere. Among the many social assistance programs in Jamaica there are a number of small programs whose benefits are limited and therefore impossible to measure. The Government of Jamaica decided to terminate some of these and redirected their resources to the new Unified Benefit Program to improve program - 8 - impact. Targeting. A more effective and efficient targeting system is required. Means testing criteria and procedures differ for the various programs despite the fact that many programs target the same general populations. Social workers make home visits to certify eligibility for some programs, but the criteria used are not uniformly applied. Guidance counselors and principals certify eligibility for school based welfare programs. Eligibility criteria may similarly not be uniformly applied by school personnel. The World Bank funded assessment of the Social Safety Net noted that Jamaica's income transfer and education based programs perforn only moderately well in comparison to other countries and that it should be possible to improve targeting. Preliminary work with the Survey of Living Conditions data has produced a scoring formula with low errors of exclusion (type I, around 10 percent) and even lower leakage (type II errors, around 3 percent). This scoring formula will be used to target the new unified benefit and other social transfers (see annex 15). High administrative costs. Duplication and proliferation of SSN programs in Jamaica has lead to unnecessary overlap and expenditures on administrative costs. Additionally, the Poor Relief Program has extremely high administrative overheads (up to 50%), firther limiting services provided. H. Strategic choices The following strategic choices have been made in the design of the Social Safety Net operation: 1. Institutional Reform A strategic choice was made to strive for a new institutional framework to implement the new transfer program. Up-scaling existing programs is not a feasible option for the reasons mentioned above (duplication, high overhead costs and poor management and implementation capacity with some of the existing agencies in the field). In order to provide more effective and efficient service, reduce fragmentation and duplication and lower the cost to benefit ratio, the Food and Kerosene Stamp, Poor Relief and Economic Support Programs will be consolidated in the Unified Benefit Program of the MLSS. 2. Conditional benefits A strategic choice was made to eliminate the current unconditional, supply based income support programs, and to replace them by a new system of conditional, demand based transfers. The aim is to use the benefit system to build human capital, improve health care and increase empowerment of the poor. To ensure that the benefits go to children who most need them, it is expected that major education and health based transfers including school lunches as well as school and exam fees will be targeted through the unified beneficiary targeting system. Receipt of social assistance benefits will be linked to school attendance and health clinic check ups. As a result, incentives associated with school based programs will encourage children and youth to stay in school and to attend school regularly. Incentives to receive health check-ups will encourage families to utilize health care services on time. Provision of integrated welfare and casework services will foster human capital development among children who are poor. Improved identification of children in need, provision of relevant health and education services, parenting education, and linking of welfare benefits to school attendance and health check-ups are an important part of the reform strategy that will transform social assistance expenditures into investments in human capital development. 3. Targeted to the very poor A strategic choice was made that the reformed safety net programs were to be distinctly pro-poor. This will be achieved by designing and tailoring programs to specifically address risks and conditions associated with poverty and vulnerability and by developing and using an appropriate targeting mechanism. A proxy -9- means-tested system will be used to identify beneficiaries for all programs targeted to the poor, including income transfer programs, school feeding programs, school fee assistance programs, school welfare programs, grants for tertiary education, fee waivers at public hospitals, and other programs. The system will apply uniform and objective criteria, screening instruments and procedures for approval so that people in all parts of the country are measured with the same standard and criteria. The household will be the main unit of intervention under the new system. The poverty and eligibility status of the household will be determined by a scoring fornula. Under the Unified Benefit Program, this system would be applied to all beneficiaries. 4. Size of Transfers The Government of Jamnaica faced a strategic choice on the level of the conditional transfer to be provided. The Cabinet considered its overall available fiscal envelope, and has approved the following amounts for the unified benefit, which would not be differentiated among beneficiaries: CY 2002 J $ 250 CY 2003 J $ 375 CY 2004 J $ 500 These amounts have some reference to poverty standards. The ending level for the benefit, approximately US$9 per beneficiary per month, is close to 30 percent of the World Bank's absolute poverty line of US$1 per person per day. The starting level for the benefit, approxirnately US$6 per month, compares to what households in 1999 spent monthly per person on average on education, US$7, and on health care and medicines, US$4.50. Spending on secondary school fees was higher, ranging from US$16 per month in Kingston to US$9 per month in rural areas. The possibility of setting the conditional transfer for secondary school students higher than that of primary students, which would reflect the higher cost of older children in terms of clothing, school materials, books etc., was discussed with the GOJ at appraisal. It was decided that it would be more advantageous to have a higher number of children covered under the program than to have higher benefits for some (older) children. Therefore, the possibility of differentiating the level of benefits was ruled out at this point. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): (1) Child Assistance Grants component. The first component (US$ 4 7 . 8 7 million) will fnance conditional grants for poor children age 0-17 eligible under the program (see table 1). These grants will finance direct costs to keep poor children in school and healthy. The receipt of benefits will be conditioned on regular health clinic visits for children age 0-6 not enrolled in school, as well as on school attendance for children age 6-17 (see details on conditions in Annex 2). Eligible and registered beneficiaries will receive the grants for as long as they comply with the agreed requirements. The benefit will be paid to the family representative which in general would be the mother; in case the mother is not available, the person taking care of the child would be determined as the family representative. Payments will be made bimonthly with health and educational conditionality compliance checked at least three times a year. Based on the Government's decision to phase increases, the average monthly benefit per person will be J$250 (approx. US$6) in the first year, J$375 (approx. US$7.5) in the second, and J$500 (approx. US$9) during and after the third year of program implementation. - 10- Table 1: Projected number of children receiving transfers Beneficiaries of Child Assistance Transfers Children 0-6 (not enrolled in school), 53,300 for health clinic visits; Children 6-11, for primary school attendance 55,600 Children 12-14, for lower secondary school 27,400 attendance Children 15-17, for upper secondary school 23,700 attendance Total 160,000 (2) Social Assistance grants to Adults component. The second component (US$ 16 . 94 million) will finance conditional grants to poor pregnant/lactating mothers, elderly poor over 65, poor disabled and destitute adults under 65 eligible under the program. The receipt of benefits will be conditioned on regular health clinic visits for the adult beneficiaries. This component will be financed entirely with Borrower's counterpart funds as expressed in the project's cost table (see below). The average monthly benefit per person will be the same as for the child assistance transfer and increase accordingly over time. Table 2: Projected number of adults receiving transfer Beneficiaries of Adult Assistance Transfers __ Pregnant and lactating women 9,000 Elderly poor over 65 26,700 Poor disabled 15,300 Adults under 65 poorest 6,000 Total 57,000 The selection of grant beneficiaries and the verification of compliance with requirements of their receipt will be done in accordance with procedures and criteria described in the Operations Manual. (3) Institutional strengthening component. The third component (US$ 11. 92 million) will strengthen the institutional capacity of the MILSS and others involved to operate a streamlined and efficient social safety net in Jamaica. To this end, it will provide support for: * Targeting mechanism and enrollnent. (US$ 1. 3 9 million). The bulk of this component will be spent on the enrollment mechanism, including the necessary information technology equipment and software, and to cover the cost of temporary employees hired for data processing of applications. Additionally, this component includes a small amount of technical assistance on the scoring formula. A preliminary scoring formula based on data of the Survey of Living Conditions has been developed for the targeting mechanism. However, during the early years of program implementation, the scoring formula will require periodic review and refinement. The project will provide for local and intemational consultants and technical assistance for periodic review of the targeting mechanism. * Information System (US$ 1. 2 8 million). Appropriate infornation technology (hardware/software) will be introduced to support efficient management of the program. The envisioned system will require - 11 - computer workstations in the parish offices, the ministry offices and in the Computer Services Department. Appropriate training in handling the system will be ensured. * Training and Promotion (US$ 3 .01 million). This will help to strengthen technical, administrative (e.g. procurement and financial management), and social work capacity in the MLSS to implement the new Unified Program. MLSS staff directly involved in the management and implementation of the Program, and beneficiaries will receive training to ensure that they fully understand their role, requirements and procedures defined for the new program. Education and health staff will be trained in the rationale, requirements and procedures of program implementation. In addition, a public information campaign will be carried out aimed at creating awareness of the Social Safety Net reform, among the general public, potential beneficiaries, and other stakeholders (staff in the agencies involved), focusing on the advantages expected from the unified benefit program. The campaign is expected to last approximately 6-9 months. Activities will be carried out through television, radio, and print media (newspapers as well as posters, brochures, billboards, etc.). * Project Management (US$ 5 . 58 million), to finance the design and implementation of the Unified Benefit Program. This includes financing of incremental professional staff (at MLSS central office and 13 parish offices), vehicles, and administration cost of the Implementation Unit. The component costs furthermore include service fees, estimated to be US$ 1. 61 million or 2 . 5% of the total amount of transfers, charged by financial institutions in Jamaica to deliver the transfers to poor families. * Monitoring & Evaluation System (US$ 0. 66 million) to measure the outcomes and impact of the program. This will include a baseline survey, regular beneficiary consultations, periodic operational audits, an MIS system as well as an extenal evaluation of program outcomes (for details, see annex 1). Indicative Bank- % of :Coponent Sector Costs % of financing 8ank- __________________________ _ :( US$M) Total PUS$M) financing I.Child Assistance grants Social Assistance 50.67 65.4 28.73 71.8 2. Adult Assistance grants Social Assistance 14.14 18.2 0.00 0.0 3. Institutional strengthening Institutional 11.92 15.4 10.50 26.2 Development - Unallocated - 0.37 0.5 0.37 0.9 Total Project Costs 77.10 99.5 39.60 99.0 Front-end fee 0.40 0.5 0.40 1.0 Total Financing Required 77.50 100.0 40.00 100.0 2. Key policy and institutional reforms supported by the project: This project seeks to support the Government of Jamaica in implementing the proposed SSN reform. Based on preparatory analytical work on the existing social safety net, the following decisions and concrete steps were undertaken by GOJ: * On October 31, 2000, Cabinet decided to unify the three transfer programs (for description of programs, see annex 11) into a Unified Benefit Program (UBP) under the MLSS, link benefits to behavioral change where possible, and introduce a targeting mechanism that would be adopted by the main safety net programs; - 12- * On February 24, 2001, Cabinet decided on the categories of beneficiaries eligible under the UBP and on the level of benefits; * In early April, 2001, Parliament approved an incremental allocation of J$69 million (approximately US$1.5 million) for the UBP in the FY 2001/02 budget. With these decisions, the GOJ has shown its readiness to move ahead with implementing the proposed SSN reform, and concretely has paved the way to introduce the new Unified Benefit Program and a universal targeting mechanism, to be supported by the project. In addition, GOJ has decided to undertake evaluations of other safety net programs such as the school feeding, school assistance, Lift Up Jamaica programs to identify strengths and shortcommgs and introduce improvements. This initiative will be supported by the social safety net loan of the IDB. In October 2000, Government decided to consolidate the existing income transfer programs into the UBP under the leadership of the Ministry of Labour and Social Security. As a first step in the consolidation process, the Ministry of Local Government and Commnunity Development has agreed to delegate the payment of Outdoor Poor Relief benefits to the MLSS. Furthermore, Government has commissioned a study to a management consulting firm that will determine the optimal institutional arrangements for the "core" (e.g. transfer programs) and "non-core" (in-house care and other social work) social assistance programs. This study will include reconmmendations on required changes in the legal and institutional framework of the social assistance system. Cabinet Office in the Office of the Prime Minister is leading this broad process due to its implications for public sector management. Further details are described in the Policy Letter (Annex 16). During project implementation, the following reform steps will be supported: * Identification and implementation of the institutional arrangements that need to be made to unify the existing transfer programs now being merged under the UBP; * Identification of the institutional arrangements for "non-core SSN services" (including indoor poor relief, rehabilitation grants, compassionate grants and some casework services); * Linking the targeting mechanism to other social safety net programs (school feeding, generic drug programs etc). Other elements of the SSN reform, as outlined in the Policy Letter (Annex 16), will be addressed through the Bank's policy dialogue on Social Protection issues. This dialogue will be continued in coordination with the IDB and other involved donors during the implementation of the project. 3. Benefits and target population: Overall, approximately 17 percent of the Jamaican population is poor. The UBP will focus on these poor within certain categories (children aged 0-17, pregnant and lactating women, elderly over 65 years and older, persons with disabilities and destitute adults). The child assistance grants target poor children age 0-17 (160,000 beneficiaries) who comply with preset conditions (school attendance, "well-baby visits"). The adult assistance grants target poor adults that are not able to help themselves due to physical or mental limitations. The receipt of adult assistance grants is conditioned on regular, bi-annual health clinic visits. The project would generate the following benefits: (i) raise the health status and immunization rate among children age 0-6, and (ii) increase school attendance and learning outcomes among poor school age children 6-17. In the long term, these improvements are expected to have a direct impact on poverty rates among the beneficiary population by contributing to raising beneficiary children's human capital earnings capacity. - 13 - In addition, GOJ contributions will target grants to poor pregnant and lactating mothers to protect the unborn and new born child and the mother from birth related insufficiencies, to poor elderly, persons with disabilities and other poor persons. The receipt of grants for adults is conditioned on regular, bi-annual health clinic visits which will particularly improve preventive health care for the recipients. In all cases, beneficiaries must be members of families categorized as poor and they must comply with the respective conditions. Benefits will be paid out in cash. The benefit level will be the same for all beneficiaries, regardless of age, sex, or depth of poverty. 4. Institutional and implementation arrangements: a) Institutional Arrangements The Ministry of the Labour and Social Security (MLSS) has been tasked with general responsibility for social welfare in Jamaica. The MLSS will be the executing agency for the UBP. The Director of the Social Protection and Development (SPAD) Division in the MLSS will be responsible for ensuring that program implementation proceeds according to project objectives and design (see organizational chart in annex 14). They will be responsible for ensuring that the activities of the UBP are fully integrated into the permanent operation of the MLSS, and implemented according to the terms and agreed timetable, including the appropriate synchronization of pilot activities and other complementary changes resulting from the study on Institutional Arrangements for the Welfare System in Jamaica. Financial Management, Management Information System, Procurement and Public Relations and Education functions within the MLSS will support program implementation. In the context of the Unified Program/Project, the MLSS will liaise closely with: v Planning Institute of Jamaica (PIOJ). The development of the scoring formula for the targeting mechanism of the UBP will be housed in the PIOJ, because it will eventually be used for targeting of other welfare programs. The MLSS will interface with PIOJ to review and refine the formula as needed. The PIOJ will also be responsible for advancing the social safety net reform program. * Office of the Prime Minister (OPM). The OPM will be responsible for ensuring that lessons learned from the UBP, especially as they relate to other GOJ welfare programs, are brought to the Human Resources Council of Cabinet. The OPM will be responsible for institutional reform as outlined in the Policy Letter (Annex 16). * Ministry of Education. Youth and Culture and Ministry of Health. The conditional transfer program will require close coordination with the Ministries of Education and Health to obtain the information necessary to validate school attendance and health system checkups. Both Health and Education Ministries welcomed the decision to link transfers to behavior and have cooperated in the elaboration of procedures to link school and clinic attendance to the receipt of benefits (see annex 2). The MLSS has signed inter-institutional agreements with both ministries on respective responsibilities and procedures. * Civil society. Conmnunity groups and NGOs may identify potential beneficiaries and refer them to the UBP. Civil society groups will also participate in the appeals process (see also paragraph on Appeals Committee below). Adequate coordination of these important actors during project implementation will be ensured through the Project's Steering Committee which is chaired by the MLSS. - 14 - b) Implementation Arrangements Ministry of Labour and Social Securitv central level. lmplementation of the Unified Benefit Program will be carried out by the Social Protection and Development (SPAD) Division within the MLSS, which is a permanent division within the MLSS, not a temporary project unit. This approach was chosen to ensure institutional sustainability of this important program. The proposed structure rests on two principles: (a) small dynamic division composed of experienced and high-quality staff; and (b) technical, administrative and management functions kept within the division to facilitate program implementation and take timely management actions. The SPAD division will include the following core staff: Director/ Project Manager * Program Coordinator * Information and Training Coordinator * Monitoring and Evaluation Officer * Senior Social Worker * Financial Management Specialist Procurement Officer * Administrative Staff Clerical Staff Responsibilities of the SPAD division are described in annex 13. The organizational chart of the MLSS including the SPAD is shown in annex 14. Management and staff would be strengthened by technical assistance. Specific training and other resources will be provided by the project as needed. Parish Offices. The MLSS has 13 local (parish) offices throughout the country. Each Parish Office is headed by a Parish Manager and staffed by two administrators (one for Welfare Services and one for National Insurance), social work and clerical staff (on average 12 persons). The project will strengthen the technical, administrative and social work capacity at the Parish Office staff in order to implement the program at this level. Parish Managers will report to the Director of Social Security and will be responsible for ensuring program irnplementation at this level. Program design. The Governnent of Jamaica has presented a draft program design which was jointly reviewed during appraisal. Based on the program design, a draft Operational Manual (OM) for the UBP has been developed. A final version, satisfactory to the Bank, is a condition of effectiveness. Program testing and exMansion. The program will be implemented in stages. Implementation starts in January 2002 with an initial pilot phase, estimated to last about 8 months, in St Catherine. This parish was selected for the pilot phase because it was felt that it was typical for the island's poverty characteristics, it includes rural and urban areas and because of its capable and motivated management team at the parish office. The pilot is intended to generate the experience, capacity, and information necessary to make adjustments on the project design and expansion plan and will be accompanied by a process evaluation (see annex 1). The pilot will be used to test, inter alia, the operational procedures, the scoring formula, and the functioning of the appeals mechanism. Based on the experience of the initial phase the program will be expanded to the other parishes. The MLSS plans to expand the program to all 13 parishes during 2002. Case Management. A system for case management was designed in collaboration with social workers from the three existing income support programs. The components of case management include intake, assessment, enrollment, monitoring of behavioral outcomes, re-certification, referral to other agencies in cases of special need (for exarnple, Child Guidance Clinics, Children's Services, Family Court) and - 15 - graduation/termination. Record keeping is an integral part of case management and the MIS will be central to effective case management. The project will provide training for improving the qualification of social workers in accordance with the training needs assessment canied out during project preparation. Appeals mechanism. An appeal process will be established to address the concerns of beneficiaries and civil society who are (i) dissatisfied with termination from the program, (ii) concerned about exclusion of needy person, and (iii) concerned about inclusion of persons who are not needy. To this end, a Local Committee of Social Welfare will be established at the parish level with members selected from relevant stakeholders, such as Conmnunity Health Aides, Guidance Counsellors or Teachers, Ministers of Religion, Parish Councillors, representatives from NGOs, and community representatives. Workshops would be held to educate and train committee members. The Committee will meet regularly as required at the outset of the program and then once monthly when the program is fully functional. Limnits on the number of additional households added to the program will be devised centrally, with local decision making for prioritization of new households. Further details of this mechanism are described in the Operational Manual. Annual Reviews. An annual review will be conducted at the end of each project year. The purpose of the reviews would be to examine the impact of welfare policies and the progress of program/project implementation at the local and national level, and to suggest refinements for program implementation as needed. The MLSS will be responsible for ensuring that a broad cross section of representatives from the public sector, academia and civil society are invited. The Bank will participate as much as possible in the annual review process. c) Financial Management Arrangements The flow of funds from the Bank to the UBP and from the UBP to the beneficiaries, financial management arrangements for the project, the results of the FM assessment carried out by the Bank, and the Action Plan to be completed prior to loan effectiveness, are detailed in Annex 6. Payment method. Five possible modes of payment have been analyzed: food stamps, cash transfers, cheques, banks/automated credit transfers, and vouchers. According to this assessment, the least cost option and the one offering most convenience to the recipients is the use of direct transfers either using the banking system combined with debit cards or utilizing a bill payment company such as Paymaster or Telepost. The bill payment companies are fairly new and are in the process of expanding their coverage on the island. The MLSS is presently carrying out a detailed analysis of the different service providers. The Terms of Reference for the selection of the pay agency, satisfactory to the Bank, have been developed. The selection of a Payment Agency will go through a bidding process. The option/agency chosen will be dependent on who can meet the requirements of the UBP at the most efficient cost. Financial Management. Project financial management will be carried out within the Finance and Accounts unit of MLSS. A financial management specialist has been recruited to have primary responsibility for project financial management, and will report to the Ministry's Principal Finance Officer while also having functional responsibilities to the Director of the SPAD division. D. Project Rationale 1. Project alternatives considered and reasons for rejection: Project alternatives considered include different approaches to reform of the social safety net and the provision of assistance to the poor. Experience under other projects financed by both the Bank and the IDB - 16- was taken into account in designing the new income transfer mechanism, as well as the existing capacity in the institution that would be responsible for project implementation. Maintaining three transfer programs but increasing the value of transfers. Based on the Social Safety Net Assessment, this alternative was judged to be unacceptable. The current unreformed safety net is a jumble of programs, many of which are not targeted to the poorest, and administration is spread across several ministries. Merely increasing the Poor Relief and Food Stamp payments without requiring behavioral change among recipients (such as keeping children in school) perpetuates a system of handouts that fosters a culture of dependency and does not ensure adequate human capital investment. Reforming other SSN programs. The school lunch program in Jamaica is relatively costly, does not cover many poor households, and is not well-targeted to the poor. Intemational experience indicates that school lunch has little impact on school performance since it is served too late in the day to combat fatigue, inattention or short-term memory loss from short-term hunger. The cost of school lunches are high compared with the average per student cost of education and with other forms of incentives for school attendance. Direct income transfers linked to school attendance have proven to be more cost-effective and simpler to administer. Under a separate project, the IDB has agreed to evaluate the existing school feeding program and has offered Technical Assistance (TA) to reform the program as part of the SSN reform. Furthermore, the IDB is considering offering TA also for reforming the drug for the elderly programs administered by the Ministry of Health. Focusing on Youth at Risk as a major concern of Government and society. In the consultation process with Govenmuent, academia and civil society, all parties expressed their serious concerns about young people in Jamaica. A recent Youth at Risk study conducted by the Bank revealed how urgent action is needed on this matter. The proposed project will only focus on youth at risk insofar as the income transfer covers the age cohort 6-17 that stay in school ("in school youth at risk"). However, it does not cover youth that have dropped out of school and are not employed. The IDB is considering a project to address 'out of school' youth at risk, under a separate operation, which is expected to start next fiscal year. Strengthening the SSN through the Jamaica Social Investment Fund. The Jamaican Social Investment Fund (JSIF) has performed satisfactorily as a project, although has not matured and reached the scope and intensity of other Social Investment Funds (SIFs) in the region. In addition, SIFs can only have a limited impact on the poorest as they focus on improving access to basic infrastructure services. Considering the nature of the activities under the proposed project, the JSIF is not well-suited to deliver income transfers directly. Public works. In 1999, Jamaica started an 18-month public works program, Lift-Up Jamnaica. This program has not yet been evaluated, however public works by definition exclude key vulnerable groups of the poor, particularly children and the elderly. Income transfers paid out directly to elderly, disabled and to the mother would more accurately target these vulnerable groups and deliver income support more directly. - 17 - 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). 1 1 ~~~~~~~atest Supervision Sector Issue Project (PSR)ARatings _________________ :__._._:_:_ (Bank-financed projects only) Implementation Development Bank-financed Progress (IP) Objective (DO) Lack of adequate social and economic Jamaica Social Investment S S infrastructure & services Fund Project Inadequate quality of secondary Jamaica Reform of Secondary S S education Education Project Tax admninistration and govemance Jamaica Public Sector S S weaknesses Modernization Project Other development agencies Insufficient social policy coordination DFID Social Policy Project Primary education inadequate IDB Primary Education Projects I & II Health system insufficient IDB Health Project Urban violence IDB Citizens Security and Justice Project Deficient educational quality USAID, Primary education assistance projects High teenage pregnancy rates USAID, Health and family planning Lack of adequate social and economic IDB, CDB and EU, Social infrastructure & services Investment Fund Deficient Social Safety Net IDB, Social Safety Net Program Social conflict and inappropriate justice CIDA, Social Conflict and system Legal Reform I____ ____ ____ ____ ____ ____ ____ ____ ____ ____ _____ ____ ____ ____ ____ ____ __ _ ____ ____ ____ ____ _____ ____ ____ ____ ____ ____ ____ ____ ___ ____ ____ _____ ____ ____ ____ j _ __I_ ____ ____ ____ ____ ___I IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: The lessons leamed and incorporated into project design were drawn from experience with similar projects financed by the Bank in Latin America and other regions. This experience demonstrates that successful projects in providing incentives for human capital investment will include the following key elements: (a) a targeting mechanism that will identify the poorest; (b) a management information system to monitor program pay-out and eligibility status; (c) linkage of benefit receipt to changed behavior; (d) consultation with beneficiaries and local civil society (see annex 12). Similar programs in the region have had positive results. The PROGRESA program in Mexico has been determrined to have a positive impact on school enrollment, promotion and attendance rates. A preliminary evaluation found that the overall lower-secondary education enrollment rate increased by 4.9 percent, but for PROGRESA households, this rate increased by 19 percent. Brazil has a school stipend program (Bolsa Escola) that also had these positive results, while in Honduras, the Beca program demonstrated a primary school enrollment rate increase of 12 percent in participating areas, as opposed to an annual increase of 3 - 18 - percent. School performance improved by nearly 12 percent and repetition rates declined by an average of 3 percent. PROGRESA was also found to have significant positive health impacts in Mexico, where utilization of public health clinics for preventive care increased by 60 percent among PROGRESA families. These preventive visits enabled the PROGRESA beneficiaries to reduce the number of inpatient hospitalizations by more than half among children and adults, suggesting that PROGRESA lowered the incidence of severe illness. At the same time, there was no reduction in the utilization of private providers, indicating that the increased utilization at public clinics did not substitute public care for private care. Finally, PROGRESA children had a 14 percent lower incidence of illness and adults had a 12 percent reduction in the number of days unable to perform daily activities due to illness. In a recent World Bank survey about Targeted Conditional Transfer Programs (TCT Programs) in several Latin American countries, preliminary evidence suggests that the programns have been reasonably successful in targeting, though some aspects need attention. Evidence from Brazil and Mexico on program targeting (based on comparisons of beneficiary and control populations) suggests that these programs target well. Leakage rates (i.e., the non-deserving benefiting from the program) have been low. However, under-coverage rates (the deserving populations that are missed by the program) have been high. In decentralized programs such as Bolsa Escola, this is partly due to a lack of finances; some municipalities have had to ration coverage within the qualifying group to the poorest. The Jamaican program therefore wishes to target the very poor, i.e. approximately the poorest 15 percent of the population, to guarantee adequate financing. On the other hand, surveys show that excessively stringent criteria for selection of families can lead to exclusion of the needy. In Brasilia for example, because some of the programs explicitly focus on poor families with children in school age, poor families with only pre-school and adolescent children are excluded. The Jamaican program will use a scoring formula that is based on a targeting mechanism to identify persons with the lowest consumption level. In this way an effort is made to prevent unintended exclusion of some groups. Another important conclusion from the study is that perhaps the biggest hindrance to the successful implementation and growth of decentralized programs is their fiscal affordabilitv. Not only are some of the programs in other countries implemented at the municipal level, but their financing also has to come from local sources. This has created a particularly perverse problem in that the poorest municipalities are the ones that need these programs the most (since they have a high incidence of poverty) but are unable to afford them (since they also have low local revenues). The problem is avoided in the Jamaican program as it will be financed from the national government's general revenues by reallocation of funds from other, inefficient safety net programs or from the social expenditure budget. 4. Indications of borrower commitment and ownership: In 1998, the Government of Jamaica asked the Bank to provide support in assessing the existing social safety net (SSN) in Jamaica and advise on how to improve efficiency and effectiveness of the safety net. Based on this request, Government and the Bank agreed on the following process in order to prepare a SSN reform proposal built on national consensus: 1. A comprehensive package of analytical work was agreed upon by the PIOJ and the World Bank that included an assessment of the Social Safety Net programs, a Social Sector Expenditure review, a Labour Market Study, a study on the present pension system of Jamaica as well as a study on the - 19 - profile of the poor and the effect of macroeconomic shocks on the poor. 2. A Jamaican Task Force was appointed to develop a reform proposal with concrete suggestions for S SN reform. 3. A series of workshops and stakeholder consultations were held with government agencies, academia, donors and civil society to discuss the results of the studies and sharpen the focus of the reform proposal. 4. Based on the discussions and studies, a social safety net policy matrix was presented by the PIOJ to the Human Resource Council (HRC). The HRC approved the basic directions of the SSN reform proposal. 5. On October 30, 2000, Cabinet approved the SSN reform proposal and the National Action Program. 6. On February 24, 2001, Cabinet decided on the level of benefit, eligible beneficiaries and other issues related to the introduction of the Unified Benefit Program. 7. In April 2001, the Ministry of Finance presented the budget for FY 2001/02 which included an initial allocation for the UBP of J$69 million. Based on this process, the World Bank and the IDB began preparation of their respective operations to support the safety net reform. 5. Value added of Bank support in this project: This project is part of an overarching reform plan for the social safety net in Jamaica. The World Bank's value added consists of: * Transferring the experience from similar projects (Mexico, Honduras, Colombia, Brazil, Armenia, Russia) in project design and implementation; * Technical Assistance (through Japanese Grant funding) on the content and process of the SSN reform and its implementation; * Technical assistance on the targeting mechanism and scoring formula; * Monitoring and Evaluation and necessary adjustments in the delivery mechanism; * Coordination with other donors (particularly IDB, DFID, EU and CIDA). E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): * Cost benefit NPV=US$406 million; ERR = 16 % (see Annex 4) O Cost effectiveness O Other (specify) Preliminary results suggest that the benefit from providing conditional cash transfers can be substantial. Three scenarios were calculated. In terms of the education grant, the analysis shows that Option 1 ( 236,000 beneficiaries with a cap or limit of three children per household) has a Net Present Value of $406 million at a discount rate of 10 percent and an intemal rate of return of 16 percent. This option was based on information about the number of the poorest in the mentioned vulnerable groups. Option 2 (272,000 beneficiaries) has a net present value of $2.027 billion and an internal rate of return of 35 percent. With Option 2, the incremental expenditure is 5.8 percent more than Option 1, while Option 2 would benefit 15.3 percent more children than Option 1. Option 2 has more beneficiaries because it does not include a cap on the number of beneficiaries per household as does Option 1. Option 1 was favored by the Government of Jamaica because of its lower overall cost. Assumptions were made about the number of children that - 20 - would likely fail to comply with the conditions, so the final figure of the GOJ is about 217,000 beneficiaries. It should be noted that there are several benefits to the project which were not quantified in the cost benefit analysis. In particular, it was not possible to estimate the benefits accruing to the health portion of the program, due to a lack of data. Additionally, there are important social benefits expected from the program such as reduced violence and youth-at-risk by keeping children in school, and better social cohesion. These important benefits, while beyond the scope of the cost benefit analysis, would help demonstrate the viability of the program if they could be included. Efficiency gains of consolidating the existing transfer program into one Unified Program can not be estimated at this time. However, the in-depth study on the present and future institutional arrangements mentioned in E 4. below will give some indication of these gains. 2. Financial (see Annex 4 and Annex 5): NPV=US$ 406 million; FRR = 16 % (see Annex 4) Financial Management Assessment. Ministry of Labour and Social Security will be responsible for maintaining project financial management arrangements acceptable to the Bank. In accordance with Bank's policy OP/BP 10.02, the LCR Financial Management Unit (LCOAA) reviewed MLSS' financial management arrangements relating to the project. The review focused on the assessment of the internal control, planning, budgeting, accounting, and financial reporting system, and audit arrangements. The review concluded that the MLSS has well-established financial procedures for the Ministry's existing programs, particularly the Food Aid (food stamp) program, which most closely mirrors the design of the proposed project. However, the cash or quasi-cash nature of the program, the fact that improved monitoring is a key part of the program, and the need to ensure that certain Bank requirements are met, all necessitate that actions be taken prior to loan effectiveness to enhance the Ministry's financial management capacity. These actions, as well as key aspects of the project financial management arrangements, are explained in more detail in Annex 6. Annexes 4 and 5 detail the cost-benefit analysis conducted for the program and the financial summary. Fiscal Impact: It is expected that at the end of the project, GOJ will be in a position to finance the entire UBP with its own resources. The IBRD loan will help finance the Program during the transition process. Over the 4 year implementation period, the Unified Benefit Program including the new targeting mechanism, M&E system etc. requires GOJ counterpart funding of approximately US$37.5 million. The counterpart resources would stem from (i) the unification of the existing programs, (ii) the re-allocation of other social safety net programs that will either be scaled down or terminated, and in the long term (iii) reduction in debt servicing costs, an increase in revenue inflows as a result of improved administration and collection strategies, and an increase in long term growth of GDP. GOJ has already started this process, which is the core of the SSN reform, in its budget for the Jamaican FY 2001/02. One of the objectives of this exercise is to ensure that the program does not increase the fiscal burden of Jamaica. The GOJ and the WB will finance a constant share of the child assistance grants, but the Bank will finance a declining share of the institutional strenghthening component (see table below). -21 - Figures are In LIS$ Jaalcan FY200 r) Jamaican FY2003M Jarriaican FY20D405 Jarnlci FY200596 Total 1.0* Assi,ce TasWer 739,565 493D43 7,870,474 5246,933 9,619,468 6,412,979 10,493,965 6,995,977 28,723472 19,148,982 2. SauftAssistanze Transer . 436,043 . 4,640,382 . 5,671 ,578 6187176 196,91,78 3 ImlituIion~ SrESering 3,801,561 409544 3677203 518,012 1,401,889 236278 1i621,447 263,006 1Q502,100 1,415,839 1Aoed - - 374,430 - 374,430 - rt-d Fe 4D0,000400,60 40906 - TOTAL 4,941,12 1,33,630 11,547,67 10,405,76 11 ,02i,357 1Z319,634 12,489,843 i3,436,15,8 40,000,002 37,499,998 T'Ndes ( Irdde 2rd wneer dr Jaicn FY2001ll2 (Ocbe 2001-al 3 2002) 3. Technical: The Goverunent of Jamaica has presented a draft operational manual for the program. It includes chapters on eligible beneficiaries, the program cycle from registration to payments, as well as procurement arrangements and mechanism for the flow of funds from the Bank to the program and from the program to the beneficiaries. The final version of the Operational Manual, satisfactory to the Bank, is a condition of effectiveness. The new targeting mechanism based on a proxy means test is a key element of the project. In coordination with the PIOJ and the IDB, the Bank has developed a scoring forrnula from the Jamaican Survey of Living Conditions (SLC) data base (see annex 15). The scoring formula will be used to rank all the households in the SLC database from lowest score to highest score, and the sample will be "blown up" (expanded) by using statistical sampling weights to generate a distribution of the possible beneficiaries. The overall budget envelope for transfers under the UBP agreed between the Bank and the GOJ will be divided by the benefit levels established by Cabinet to set the desired number of beneficiaries. A cut-offpoint will be set to correspond to a target 20 percent lower than the desired number of beneficiaries, to leave scope for cases brought to the attention of the appeals committees and to allow for unexpected contingencies. To the extent that the scoring formula is a good fit (which is the case, as leakage errors are less than 3 percent), there should be no problem with more applicants qualifying for the benefit than there are funds available, but in any case the 20 percent margin should be sufficient to ensure this. Careful monitoring during the application stage of how many applicants qualify is necessary to make sure that costs do not over-run the available funds. If during the pilot phase, such an over-run should appear likely, a new lower cut-off point will be established for reducing eligibility. Careful monitoring is also necessary to improve the scoring formula. The scoring formula will be revised based on the initial experience in the field during the pilot phase. The proposed project will continue to provide technical assistance to refine the targeting mechanism for the safety net programs in Jamaica. The World Bank will work closely with the GOJ to provide the necessary technical expertise on setting the cut-off point and imnproving the scoring formnula. In addition, Technical Assistance will be provided to facilitate the institutional changes needed to consolidate the existing programs. - 22 - 4. Institutional: The Government of Jamaica as part of the Medium Term Economic and Social Policy Framework, is committed to reform Jamaica's safety net to improve targeting for the poor, relevance and effectiveness of welfare, and related programs and efficiency in the delivery of services. The proposed reform will involve, primarily, the Ministries of Labour and Social Security, Local Government and Community Development, Health, and Education. During project preparation, an institutional assessment was carried out to identify pending issues related to the consolidation of the existing transfer programs. Based on this assessment, under the leadership of the Office of the Prime Minister, a Management Consulting firm has been contracted to determine the institutional arrangements to deliver the welfare benefits to the needy, and to make recommendations on the most effective and efficient manner to deliver social assistance, including an analysis of the legal implications of the proposed safety net reform. The study will include an action plan and a time table to implement the proposed changes. As part of the implementation strategy of the SSN reform, the government has decided to establish a Unified Benefit Program, under the MLSS, to replace three existing income transfer programs. The MLSS has had a long standing experience in the implementation of similar programs (for example Food Stamp Program), and is currently adjusting its institutional structure and management arrangements, to implement the new program. A management study will be undertaken during the first year of implementation of the UBP to develop the optimal organizational structure for program implementation. The management study will assess administrative, policy and planning capacity of the MLSS and identify required adjustments to strengthen service delivery. The organizational structure in the MLSS will be adjusted in accordance with the results of this management study. At the Bank's request, the Government of Jamaica, through the Attomey General's office, provided a legal opinion stating that there are no legal impediments to giving recipients a single cash payment under the three existing transfer programs. 4.1 Executing agencies: Ministry of Labour and Social Security (MLSS) and its 13 parish offices at the local level (see annex 14), which are equipped and motivated to initiate the program. 4.2 Project management: Overall responsibility for project management lies with the Director of the Social Protection and Development (SPAD) division supported by the Financial Management and MIS Divisions within the MLSS, for program financial and procurement matters respectively. 4.3 Procurement issues: Only a small percentage of the loan would be used for procurement of goods and services. Nevertheless, a procurement capacity assessment was carried out during project preparation. According to the assessment, the MLSS is not yet well enough equipped to carry out project procurement activities but, based on this assessment, the Government agreed on a plan of actions to strengthen its implementation capacity and has already taken important actions, namely: (i) selected personnel with adequate capacity to carry out procurement activities, and (ii) prepared a draft Procurement Manual. The Bank will ensure that (i) training on Bank procurement methods and procedures is provided, and (ii) technical assistance is provided for major procurement activities (informnation technology, contract with consulting firms etc.). In addition, regular procurement reviews will be carried out as outlined in Annex 6. 4.4 Financial management issues: During project preparation, the Bank finalized its Country Financial Accountability Assessment (CFAA) of - 23 - Jamaica. This assessment, which concluded that the country's financial management framework was generally sound, was taken into consideration when designing the FM arrangements for the project. Based on the CFAA findings, and in response to Borrower's desires, an effort was made to utilize existing government financial management mechanisms whenever such mechanisms would not require significant strengthening during the project's life. For example, it has been decided by GOJ and accepted by the Bank that the Auditor General will carry out the annual financial audits of the program. Project financial management in Jamaica has been generally adequate, and has seen improvements in recent years. Compliance with audit covenants has sometimes not been achieved (reports being received in some cases many months after the deadline), and disbursement applications have sometimes not been sent on a regular and/or timely basis. These risks will be mitigated by significant efforts to establish and build FM capacity prior to the launching of the project. Still, regular (twice annual) financial management reviews by Bank staff are considered necessary until such time as the project has established a good record of financial/disbursements reporting. 5. Environmental: Environmental Category: C (Not Required) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. None 5.2 What are the main features of the EMP and are they adequate? Not applicable 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: Not applicable Not applicable 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? Not applicable 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? Not applicable 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. One of the major challenges to Jamaica's social development is the low level of social cohesiveness. This is manifested by the high level of violence in the inner-city, which has reached crisis proportions. In these neighborhoods, children are sometimes prevented from going to school by ongoing gun battles between rival gangs, and virtually everyone has a close relative or friend who has died a violent death. Poverty and exclusion are among the main causes of violence. Dropping out of school is often how the vicious circle starts. Drop-out boys will quickly reject the few options they might have for low-paying jobs and turn instead to fast and easy ways to make money through illegal means (mainly the sale of drugs). Drop-out girls will soon find themselves pregnant, but without the psychological or material means to take care of their offspring. The next generation will then grow up in a climate marked by violence, emotional instability and material deprivation. In inner-city neighborhoods there is a deep feeling of alienation from the Government. Within this context, finding ways to promote social inclusion is crucial, as inclusion is -24 - one of the building blocks for reduced violence and greater social cohesiveness. The most significant social development outcomes of the program will be: (a) a more equitable and transparent system of delivering social care services, and (b) positive behavioral changes among the extremely poor. Both outcomes, in turn, should result in greater inclusion for the poor, and therefore in reduced poverty and vulnerability. In particular, poor children's opportunity for human capital development should be greatly increased as the conditional transfer system will facilitate their access to educational and health services while promoting a more positive and proactive attitude in their parents. The ongoing participatory process envisaged by the program throughout implementation (see section below) will not only help make the program more responsive to its clients' needs, but also encourage their involvement in the definition of policies and interventions that affect their lives, ultimately resulting in their empowerment. The equitability and transparency openly sought by the program should also inspire greater trust in the government, thus contributing to develop social capital. Overall, the proposed reform should play an important role in strengthening social cohesion, a most important social development outcome for a society threatened by high levels of violence and social fragmentation. 6.2 Participatory Approach: How are key stakeholders participating in the project? Government. Consensus has been built at the working level of the Govemment through a series of working group meetings conducted with a professional facilitator. An Inter-Agency Steering Committee comprised of GOJ senior technical staff was constituted to outline a policy matrix for the broader reform of the social safety net. Social workers from the programs to be merged have participated in meetings to inform the design of the new program. The Govenmuent's public information campaign will include community meetings and meetings with NGOs. Beneficiaries. In order to design the new program as closely to the needs of the poor as possible, a beneficiary consultation process was carried out during project preparation. Potential beneficiaries were interviewed about their perceptions with regard to (i) the means to identify the poor and the poorest (this was taken up to define the criteria used in the scoring formula), (ii) the strengths and weaknesses of the existing social assistance programs, and (iii) recommendations for specific design features of the new UBP such as payment method, level of benefits, and frequency of payments (Annex 12 summarizes the answers given by beneficiaries and stakeholders). The design of the UBP is based on the results of this consultation process. In addition, the program design includes an appeals process whereby complaints can be registered and individuals can ask for their case to be reconsidered. Civil society organizations. See 6.3 below. General public. With support from the Bank, the Govermment is presently designing a vigorous public infornation campaign to explain the new system's rationale to the public, stakeholders and beneficiaries. The importance of linking the benefit to behavioral change to promote human capital development among children who are poor and of targeting programs only to those who are most needy should illustrate to the public the significant advantages that will be incurred for the country as a whole. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? Once the SSN reforn proposal was drafted, Govemment conducted a series of workshops with civil society in Kingston and throughout the country to discuss the proposal with these important stakeholders. The representatives of civil society welcomed the SSN reform proposal enthusiastically and urged the - 25 - Government to implement the suggested changes. Government plans to continue this process and intensify it as the social safety net reform evolves. The project will provide the means to support this process. In particular, it is proposed that the new institutional structure for the UBP include a Local Committee for Social Welfare to monitor and assess the local impact of welfare policies. This Local Committee should be a vehicle for local NGOs, churches and other civil society organizations to discuss the impact of the various programs on the needs and aspirations of the local community (see section C4 b on Appeals Mechanism). The Committee, one in each parish, should be able to raise issues and concerns to the national level. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? Given that the aim of the project is measured in terms of social development outcomes, the institutional arrangements to accomplish the project objectives - as presented in Section 4, above and in annex 13 - describe clearly how the project would ensure attainment of social development outcomes. 6.5 How will the project monitor performance in terms of social development outcomes? Because the program outcomes are social development outcomes, the M&E system of the program, which is described in Annex 1, will pay special attention to the monitoring of social development outcomes. In particular, regular beneficiary consultations and the appeal mechanism envisaged will make it possible to assess client satisfaction and whether the program is succeeding in fostering a greater integration of the very poor into mainstreamn society. The project MIS will provide quantitative data to complement this information. 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the project? Policy Applicability Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) 0 Yes * No -Natural habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes * No Forestry (OP 4.36, GP 4.36) 0 Yes 0 No Pest Management (OP 4.09) 0 Yes 0 No Cultural Property (OPN 11.03) 0 Yes 0 No Indigenous Peoples (OD 4.20) 0 Yes 0 No Involuntary Resettlement (OD 4.30) 0 Yes 0 No Safety of Dams (OP 4.37, BP 4.37) 0 Yes 0 No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes 0 No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60) 0 Yes 0 No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. n/a F. Sustainability and Risks 1. Sustainability: The sustainability of this project has to be analyzed from various angles: (i) financial sustainability; (ii) sustainability of behavioral changes; and (iii) sustainability of institutional strengthening. (i) The proposed project is intended to protect the human capital of the poor. During the four-year project - 26 - period, the World Bank will finance approximately one-half of the costs of the safety net reform program, which includes not only the new benefits, but also the institutional strengthening and development. Already during the project years, the Government will have to increase the budget allocations to the UBP. These allocations are expected to be provided inter alia through reallocation of funds from other, less effective or efficient SSN programs. The contributions of the Government and World Bank are shown in the table on fiscal impact in Section E.2. Furthermore, the IDB is planning to support the implementation of the SSN reform through a sector loan conditional to the successful introduction of the UBP, which would provide additional funds to the Government of Jamaica. The total amount of counterpart funding necessary during project implementation is US$ 37.5 million. After project completion, the Government will take on the full responsibility for financing the transfers. It is expected that by then, growth rates would recover and debt service would decrease due to the financial sector reform supported by IDB, CDB, EU and World Bank. Therefore, additional funding should be available to cover the full cost of the new income transfer program. In 1998, the Government of Jamaica spent J$616 million (US$15.4 million) on the three income transfer programs combined. By the third year of the UBP, it is envisioned to cover 217,000 beneficiaries with a monthly benefit level of US$9. To sustain the program, Jamaica would need to spend about US $8 million more on the unified benefit program than was paid out in 1998. This amount should be re-allocated from less targeted or efficient SSN programs. (ii) Experience with cash benefits linked to school attendance indicates that behavioral changes encouraged through participation in the program will continue even if the transfer is discontinued, as children will have formed the habit of attending. Furthermore, successful implementation of the proposed project would provide Jamaica with a suitable mechanism to provide the needed assistance to the poor that could be scaled up or down, depending on economic conditions. (iii) The project includes a significant component of institutional development to implement the safety net reform, including consolidation of cash transfer programs, the establishment of a targeting mechanism, and the establishment of a management informnation system and a monitoring and evaluation system. This significant increase in capacity of Jamaica's social safety net will continue beyond the life of the project. 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk Risk Rating Risk Mitigation Measure From Outputs to Objective Education and health services are not N Inter-Institutional agreements between MLSS adequate to meet increased demand, and Ministries of Education and Health about access becomes more difficult. responsibilities and services to be provided to UBP beneficiaries. Continuous donor support to improve access to and quality of primary and secondary education (see section D.2) Government commitment to irnplement the M Clear agreements on responsibilities and social safety net reforms weakens due to counterpart funding. Maintain a participatory change in priorities. process throughout project implementation. Commitment as expressed in Policy Letter (Annex 16). - 27 - Fiscal situation does not allow for an S Provisions for flexibility in loan agreement. increase in level of benefits as planned. Consolidation of programs is hampered by M Public information campaign. Provisions in employees and/or unions. project implementation to encourage change. Gradual introduction of necessary changes based on thorough institutional analysis. Displacement of current beneficiaries not M Public information campaign; appeals elegible under the UBP mobilize mechanism. opposition to the new program. From Components to Outputs Level of transfers proves insufficient to M Constant monitoring of compliance with stimulate desired behaviors. conditions; regular beneficiary consultations; linking UBP to other safety net programs Implementation of UBP is delayed. S Technical Assistance is included in the project to support a quick and efficient implementation process. Technical expertise, organizational S Technical assistance included in the project structure and management capacity are strengthens institutional capacity of MLSS. Key not conducive to effective program staff is hired in consultation with Bank. implementation. Management study carried out during first year of program implementation. Grants do not reach eligible beneficiaries S Regular review of cut-off line for targeting due to limitation of scoring formula, mechanism will prevent overdemand or ineffeciencies and/or delays. underutilization. Training for social workers to adequately employ targeting mechanism. Periodic operational audits and consequent adjustments of system. Selected payment agency does not deliver S Evaluation of experience with payment agency transfers adequately. after pilot phase. Safeguards in contract with payment agencies. Overall Risk Rating S Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: Not applicable G. Main Loan Conditions 1. Effectiveness Condition * Adoption of an Operations Manual for the Unified Benefit Program, including financial management and procurement arrangements, satisfactory to the Bank. - 28 - * Appointment of the financial auditors, in accordance with terms of reference acceptable to the Bank. * Establishment of a financial management system, satisfactory to the Bank. 2. Other [classify according to covenant types used in the Legal Agreements.] Condition of Disbursement Prior to the presentation of each withdrawal request of Loan proceeds for grants, the borrower shall furnish to the Bank evidence to the effect that independent operational auditors have audited the list of eligible poor children and the list of eligible Family Representatives. H. Readiness for Implementation 0 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 1 1. b) Not applicable. OI 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. 1 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. []1 4. The following items are lacking and are discussed under loan conditions (Section G): 1. Compliance with Bank Policies 2 1. This project complies with all applicable Bank policies. IL1 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. Andrea Vermehren avier E. Coll Kalantzoqulos Team Leader Sector Manager/Director Country Manager/Director - 29 - Annex 1: Project Design Summary JAMAICA: Social Safety Net Project Hierarchyo Obj o c:v Indit Monitoring & Evaluation Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Protecting the Poor and * Percentage of Survey of Living Conditions * The economy does not Ensuring Inclusion Govemment spending on annual report decline safety net (2.6% of GDP) * The Government remains * Decrease in number of committed to a poverty poor below poverty line reduction strategy * Poor can be targeted effectively Project Development Outcome / Impact Project reports: (from Objective to Goal) Objective: Indicators: Support the Govemment of Increase in health care Ministry of Health reports, Quality of education and Jamaica's efforts to reform its utilization by very poor extemal project evaluation health services does not social safety net in order to children 0-6 decline, access remains provide better and more Increase in complete, on time adequate cost-effective social assistance immunization rates for very to the extreme poor poor children 0-6 MOEYC and MOH comply with inter-institutional agreements Increase in school attendance Ministry of Education reports, Widespread support and by poor children and youth extemal project evaluation political commitment to (85% of the time) reform continue Ministry of Education reports, Increase in enrollment rates extemal project evaluation for upper secondary schools Percentage of overall SSN Annual Govemment budget Government re-allocates expenditure channeled sufficient funds from other through the UBP SSN programs to UBP Beneficiary satisfaction with Reports from beneficiary Level of benefits are increased new program consultations as planned Percentage of eligible poor not Survey of Living Conditions receiving grant - 30 - Key Performance Hierarchy of Ob1ectives Indicators Monitori & Evaluation Critical Assumpbons Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: 1. Eligible children have Number of children receiving Program MIS Transfers are big enough to regularly received grants. the transfers regularly every provide an incentive for two months (estimated target: families to comply with 160,000) conditions for transfers 2. Eligible adults have Number of adults receiving Program MIS Fiscal situation allows regularly received grants. transfers regularly every two sufficient budget to satisfy months (estimated target: demand for transfers to 57,000) eligible beneficiaries 3. Targeting mechanism is Percentage of program Program MIS, program yearly UBP division posseses needed operational and UBP works beneficiaries below the evaluations expertise and promptly seeks efficiently poverty line (target > 30%), assistance when needed and UBP administrative costs do not exceed 15% by Year 3. -31 - Hieacy * Oclv Indkatora Monitorin * Ev lato C _ tia Asw :'; - Project Components I Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) 1. Child Assistance Grants USS 47.87 million* Quarterly progress reports, * Beneficiaries willing and component: program MIS able to comply with * health (0-6 year olds), not requirements. enrolled in school; * The grants would actually * education (6-17 year reach eligible olds) beneficiaries with little leakage, inefficiencies and/or delay. * The adopted scoring formula provides an adequate targeting mechanism. 2. Social Assistance grants to USS 16. 94 million* Quarterly progress reports, * The grant distribution/ Adults component program MIS payment mechanism functions well. * The outreach campaign reaches beneficiaries effectively. * There is capacity to establish an adequate MIS. * Appeals mechanism functions effectively. 3. Institutional strengthening USS 11.92 millions Quarterly progress reports, * MLSS remains in charge component: program MIS of implementing the * Targeting & Enrollment UBP. * Information system * Organizational structure * Training and promotion of MLSS conducive to * Project Management effective program * M&E system implementation. * Low overturn of personnel. * The amounts do not add up to USS 77.5 million because Unallocated and Front-end Fee is not taken into account in the matrix. -32 - Monitoring and Evaluation System A Monitoring and Evaluation (M&E) system will be implemented to assess the Program's success in achieving the desired outcomes. The M&E system will produce the indicators specified in the logical framework through the implementation of five principal components: (i) a process evaluation of the initial phase of the Unified Benefit Program; (ii) a management information system (MIS); (iii) a beneficiary consultation and appeal committee; (iv) operational audits; and (v) an extemal evaluation. In addition to these, there will be annual financial audits. Process Evaluation of the Initial Phase. The initial phase being carried out in the Parish of St. Catherine will be evaluated through a process evaluation in order to make recommendations conceming needed adjustments to the program design. The process evaluation will include a consideration of each of the Program's components, with particular attention to: (a) the targeting mechanisms (especially the functioning of the scoring fornula); (b) program cycle arrangements - division of labor between local offices and central administration; (c) linkages with Ministries of Health and Education; and (d) functioning of the appeals mechanism. Management Information System. A networked management information system (MIS) will be developed to track the Program's physical and financial progress during implementation. The MIS will collect data to monitor poverty targeting, compliance with grant eligibility criteria, the timely delivery of grants, administrative efficiency, financial flows etc. In order to allow for future expansions or modifications of the program, the MIS will be developed with a modular approach, using a relational database. Beneficiary Consultation and Appeals Committee. Regular consultation with beneficiaries on service delivery, targeting and procedures will form an integral part of the M&E system. This system will have two components -- (i) Appeal Committees will be conformed by local officials and members of civil society at the parish level to channel complaints, suggestions, and assessments from beneficiaries to program administrators. A system will be established to ensure that key elements from the Appeals Committees will be fed into the Program's MIS; (ii) Beneficiary Consultations will be carried out as part of the Extemal Impact Evaluation with a sub-sample of beneficiaries selected from the survey. Operational audits. Reviews of Program operations will be conducted on a sample basis by an extemal firm every four months. These will be used to validate the accuracy of data being collected for the Program, regarding eligibility of beneficiaries and their compliance with conditions for benefits and the efficiency of the Program's operational systems. These extemal reviews will serve as a cross-check for the monitoring data collected through the Program's MIS. External Evaluation. An external evaluation will be conducted to assess whether the goals of the Program are being met, particularly with respect to children's health and education outcomes. The evaluation will be based primarily on the use of household surveys to assess the Program's targeting and outcome, using as a reference the measures listed in the Logframe. The evaluation will harmonize its data collection efforts with the existing system of household surveys and the estabhshed poverty measures in Jamaica in order to evaluate the Program's success in poverty targeting, and to support and improve upon the existing system of household surveys. As mentioned above, the evaluation will also include a qualitative assessment of the program in a sample of beneficiaries to complement the findings produced by the household survey data. Two committees will support the quality of the M&E system, ensure its relevance in providing inputs for policy decisions in Jamaica, and build M&E capacity. First, a Technical Committee established in the - 33 - MLSS will work directly with the staff contracted for the various components of the M&E system and with the PIOJ to ensure the relevant and timely production of needed information and its relevance to overall policy decisions. In addition, the Program Steering Committee consisting of high level representatives of relevant ministries, academics and representatives from civil society will liaise with the Technical Committee to guide, inter alia, the implementation of the program, including the design, analysis and use of the M&E system, and, in particular, the extemal evaluation. - 34 - Annex 2: Detailed Project Description JAMAICA: Social Safety Net Project By Component: Project Component I - US$47.87 million Child Assistance Grants. This component would finance conditional Health and Education grants for poor children age 0-17 eligible under the program. These grants will finance direct costs to keep poor children in school and healthy, they will not finance lost opportunity costs. * Education Grants. Receipt of educational grants would be conditioned on school attendance of poor children 6-17 enrolled in school. A child must attend 85 percent of sessions to remain eligible for benefits. Eligible and registered beneficiaries would receive the grants for as long as they comply with the agreed requirements. The benefit would be paid to the family representative which in general would be the mother; in case the mother is not available, the person taking care of the child would be assigned as the family representative. At the beginning of each school year, the Ministry of Education, Youth and Culture (MOEYC) will report to the MLSS on the number of sessions in each of the three terms in that school year. The family representative will be responsible for ensuring that compliance forns are brought to the schools for completion. Principals will be responsible for completing compliance forms. The family representatives will deliver the compliance forms to the MLSS during the designated delivery period. Furthermore, the family representative will be responsible for reporting changes of school to the old school and to MLSS to ensure that benefits are not terminated. The reporting schedule is once per school term (three times per year). The Regional Community Relations Officer will liaise with the MLSS parish office and assist with community relations as they relate to the education requirements of the Unified Benefit Program. It is envisaged that officials from the schools will have input into any appeal of termination of benefits. * Health Grants. Receipt of health grants would be conditioned on health clinic visits for children 0-6 (not enrolled in school) in accordance with an established plan. The Health Center Nurse will establish a clinic visit schedule for each beneficiary child with the number of required visits dependent on the age of the child (see details in table below). If a visit is missed, the appointment must be rescheduled for within 30 working days of the missed appointrnent. If not, the household will be marked as non-compliant. The family representative will report to the MLSS on whether or not a child was brought for a scheduled visit. Health Center Nurses will be responsible for certifying attendance and affixing a sticker to the compliance forns. The Public Health Nurse in charge of the health center will be responsible for ensuring that nurses sign and affix stickers to compliance forms. The famnily representative (in principle the mother, see above) will ensure that compliance forms are completed at each visit and will be responsible for keeping the compliance forms between visits. Furthermore, the famnily representative is responsible for delivering the compliance forms to the MLSS during the designated submission period. The reporting schedule will be every four months (three times per year) with dates to synchronize with reporting dates for Education Grants. The Parish Health Managers will liaise with the MLSS parish office and assist with community relations as they relate to the health requirements of the Unified Benefit Program. - 35 - Required Number Of Health Beneficiary Required Care Visits group Birth to ll Immunization (BCG x 1; OPV x 3; DPT x months 3; MMR); Nutritional Screening, Health 5 Education for Household Head 12 to 23 Booster; Nutritional Screening, Health months Education for Household Head 2 24 to 35 Booster; Nutritional Screening, Health months Education for Household Head 2 36 to 47 Booster; Nutritional Screening, Health months Education for Household Head 2 48 to 59 Booster; Nutritional Screening, Health months Education for Household Head 2 In both Education and Health Grants, the average monthly benefit per child would be US$6 in the first year, US$7.5 in the second, and US$9 during and after the third year of program implementation, the gradual increase has been established for budgetary reasons. It is assumed that starting in April 1, 2004 (fourth year), the level of benefit will retain its real value. In case of higher than presently expected inflation, the benefit level would be adjusted accordingly. The education benefit basically covers the out of pocket expenditures of families for children going to school. The health grant would enable and motivate beneficiary mothers of 0-6 year old children to give them the nutrition and health care they need during this critical period of growth and development. Signed inter-institutional agreements between MLSS, MOEYC and MOH on the responsibilities and procedures will ensure adequate supply response for the beneficiaries. It will not be necessary to report on immunizations and care provided as the MOH has agreed through this accord to provide all required care (immunization, nutritional screening and health education) when the child is brought for the scheduled " well-baby" visit. This component includes the direct costs charged by financial institutions in Jamaica to deliver the grants to poor families. Project Component 2 - US$16.94 million Social Assistance Grants for Adults. The second component will finance conditional grants to especially vulnerable groups of poor adults, including pregnant and lactating mothers, elderly over 65, and disabled and destitute adults under 65 eligible under the program. The grants will be conditioned on regular health clinic visits (see details in table below). This component will be financed entirely with Borrowers counterpart funds. It will ensure that the program is able to reach out to all poor persons belonging to the poorest quintile, and therefore increase coverage of social assistance - one important objective of the program. In addition, it will support the GOYs efforts to provide appropriate pre- and postnatal care to poor women and general health care to poor adults eligible under the program. The estimated number of benefiting adults under this component (50,700) is considerably lower than for the children (165,900). In general, the beneficiary will be the person receiving the benefit directly. In case the beneficiary is not able to receive the benefit, a representative would be assigned. The average monthly benefit per adult would be - 36 - US$6 in the first year and increase over time as for the child assistance transfer. The selection of beeficiaries and the verification of compliance with conditions will be done through the program's targeting mechanism and in accordance with procedures and criteria established in the Operations Manual. This component also includes the direct costs charged by financial institutions to deliver the grants. Beneficiary group Required Care Required Number Of Health Visits Pregnant Prenatal care and immunizations, 4 visits (or pro rata depending on nutritional screening when in the pregnancy the woman applies for benefits) Lactating Postnatal care, health/parenting At 6 weeks and between 3 to 4 education months post delivery Elderly over 65, disabled, destitute Regular health check-ups, 2 visits per year under 65 counseling Project Component 3 - US$ 11.92 million Institutional strengthening component. This component will strengthen the institutional capacity of the MLSS to operate a streamlined and efficient social safety net in Jamaica. To this end, it will provide support for * Targeting mechanism and Enrollment (US$ 1.39 million). The bulk of this component will be spent on the enrollment mechanism, including the necessary information technology equipment and software, and to cover the cost of temporary employees hired for data processing of applications. Additionally, this component includes a small amount of technical assistance on the scoring formula. A preliminary scoring formula based on data of the Survey of Living Conditions has been developed for the targeting mechanism. However, during the early years of program inplementation, the scoring formula will require periodic review and refinement. The project will provide for local and international consultants and technical assistance for periodic review of the targeting mechanism. - Information System (US$ 1.28 million). Appropriate infornation technology (hardware/software) will be introduced to support efficient management of the program. The envisioned system will require computer workstations in the parish offices, the MLSS offices and in the Computer Services Department. Approximately 90 workstations, 50 printers and 30 laptops will be required for the users and developers to implement the program. These costs will be covered by IBRD. There are four categories of training that will be necessary for implementing the Unified Benefit Program.: 1. Introduction to Computers for Users for new users of the computer equipment who have little or no experience working with computers. 2. Unified Benefits System Training for Users to learn about the Unified Benefit software system for the employees of the parish offices and of the ministry headquarters who will be working with the applications software. 3. User Technical Support Training to cover the system support functions that will be necessary in each parish office and in the ministry user offices. 4. Advanced Technical Training for some of the employees in the Computer Services Department to learn advanced computer technology. * Training and Promotion (US$ 3 . 01 million), to strengthen technical, administrative (e.g. - 37 - procurement and financial management), and social work capacity in the MLSS to implement the new Unified Benefit Program. MLSS staff directly involved in the management and implementation of the Program, education and health staff and beneficiaries will receive training to ensure that they fully understand their role, requirements and procedures defined for the new program. Other stakeholders (for example members of appeals committees) will be trained in the rationale, requirements and procedures of program implementation. In addition, a public information campaign will be carried out aimed at creating awareness of the Social Safety Net refonn, among the general public, potential beneficiaries, and stakeholders, focusing on the advantages expected from the UBP. The campaign is expected to last approximately 6-9 months. Activities will be carried out through television, radio, and print media (newspapers as well as posters, brochures, billboards, etc.). A consultant is presently designing the campaign which will also include the costing for the proposed activities. A consulting firm will be hired to carry out these activities during project implementation. The campaign will be integrated in the MLSS's overall public education programme. * Project Management (US$ 5. 5 8 million), to finance the design and implementation of the Unified Benefit Program. This includes financing of incremental professional staff (at MNLSS central office and 13 parish offices), vehicles, and administration cost of the Implementation Unit. The program will be administered by the SPAD division and the 13 parish offices of the MLSS. A management study will be undertaken during year 1 of program implementation. The purpose of the management study is to assess the administrative, policy and planning capacity of the MISS and to identify required changes to strengthen service delivery. The UBP personnel working for this program will initially consist of 39 staff, including a director and six office managers including for planning and evaluation, information systems, operations, procurement, financial management and training. Each of the 13 parish offices will be staffed with approximately 12 persons (total of 156 staff), depending on the parish characteristics (number of beneficiaries, accessibility etc.). This will include one parish office manager and approximately 6 professionals (inter alia, social workers). Additional staff needed to initiate the program (approximately one third of the technical and administrative staff) would be financed under the loan. It is expected that by the end of 2003, contract officers would be decreased to about 30 at central levels and 9 each at the parish level, with the effect that toward the end of the project, IBRD funding for this item can be reduced significantly. In addition, this item includes Technical Assistance to strengthen the MLSS implementation capacity, particularly in the areas of procurement and financial management. Furthermore, administrative costs for office supplies, office equipment (copiers, faxes etc.), and vehicles will be covered. * M&E system (US$ 0. 66 million) to measure the outcomes and impact of the program. This will include beneficiary consultations, regular operational audits (three per year), an MIS system as well as a baseline survey and an evaluation of program outcomes (for details, see annex 1). Additionally, the intemal auditors of the MILSS as well as management will carry out regular supervision of compliance with program procedures as described in the Operational Manual. Financial provisions under the programn are made for external audits, the development of the MIS system, the beneficiary consultations, the baseline survey and the final evaluation. - 38 - Annex 3: Estimated Project Costs JAMAICA: Social Safety Net Project Local Foreign Total Project Cost by Component US$ million US$ million US$ million Child Assistance Transfer 47.87 47.87 Health Grants 16.69 16.69 Education Grants 31.18 31.18 Adult Assistance Transfer 16.94 - 16.94 Pregnancy Grants 2.80 - 2.80 Poverty Grants 1.24 - 1.24 Elderly Grants 8.18 - 8.18 Disability Grants 4.71 - 4.71 INSTITUTIONAL STRENGTHENING 7.88 4.04 11.92 Project Management 5.02 0.55 5.58 Targeting & Enrollment Costs 0.77 0.63 1.39 Information System 0.26 1.02 1.28 Training & Promotion 1.50 1.50 3.01 Monitoring and Evaluation 0.33 0.33 0.66 Total Baseline Cost 72.69 4.04 76.73 Physical Contingencies 0.09 0.09 0.19 Price contingencies 0.09 0.09 0.19 TOTAL PROJECT COST 72.87 4.23 77.10 Front-end fee - 0.40 0.40 Total Financing Required 72.87 4.63 77.50 Local Foreign Total Project Cost by Category US$ million US$ million US$ million Goods 1.84 2.89 4.74 Grants 64.81 - 64.81 Services 6.03 1.15 7.18 Total Baseline Cost 72.68 4.04 76.73 Physical Contingencies 0.09 0.09 0.19 Price contingencies 0.09 0.09 0.19 TOTAL PROJECT COST 72.87 4.23 77.10 Front-end fee - 0.40 0.40 Total Financing Required 72.87 4.63 77.50 - 39 - Local Foreign Total Project Cost by Category US$ million US$ million U S$ million Goods 1.84 2.89 4.74 - Vehicles and equipment - 0.52 0.52 - UBP materials 0.05 0.02 0.06 - Parish materials 0.24 0.11 0.35 - Enrolment materials 0.05 0.02 0.07 - Payment forms 0.31 0.15 0.46 - Training and promotion materials 0.48 0.31 0.80 - System information hardware & software - 1.04 1.04 - Mobilization 0.72 0.72 1.43 Grants 64.81 - 64.81 Services 6.03 1.15 7.18 - UBP consultants 0.67 - 0.67 - Parish consultants 1.89 - 1.89 - Monitoring and evaluation 0.42 024 0.66 - System maintenance 0.17 0.07 0.23 - Training senrices 0.35 0.19 0.53 - Workshops 0.17 0.07 0.24 - Targeting 0.40 0.40 0.80 - Enrollment seNces 0.35 0.18 0.53 - Financial Institution Transactions 1.61 - 1.61 Total Baseline Cost 72.68 4.04 76.73 Physical Contingencies 0.09 0.09 0.19 Price contingencies 0.09 0.09 0.19 TOTAL PROJECT COST 72.87 4.23 77.10 Front-end fee - 0.40 0.40 Total Financing Required 72.87 4.63 77.50 NOTE: totals may not be exact due to rounding - 40 - Annex 4: Cost Benefit Analysis Summary JAMAICA: Social Safety Net Project Summary of Benefits and Costs: A cost benefit analysis was performed on three options presented to the Government. Option 1 provides benefits to 236,000 persons and places a ceiling on the number of beneficiaries per household at a maximum of three children and four persons overall. This option is based on information about the number of the poorest in Jamaica by type of vulnerability. Option 2 provides benefits for 272,000 persons and prescribes no ceiling per household, however, it stipulates that only a portion of the benefits would be payable for children in excess of the maximum of 3 children per household. Option 2 is the more expensive option, however, it also targets more beneficiaries. Option 3 is based on a number of 217,000 beneficiaries, reflecting the reality that if the Government targets 236,000 beneficiaries, a certain percentage of the eligible will either fail to apply or a percentage of those who apply will fail to meet the conditions. The benefits of the project are calculated from the incremental hourly wage earned from staying at school longer based on the incremental income that a person can earn from staying in school for a longer period of time. The incremental income per hour for completing each cycle was established and this was divided by the total number of attendee days to obtain the incremental income per hour per attendee day. This was calculated at 0.021985. The incremental income per year per attendee day was calculated at 45.73. This provided an annual stream of benefits that was discounted. These benefits were compared with the projected annual costs for the project to determine the net present values and internal rates of return. The discount rate used is 10% and this is the discount rate suggested by Dr. John Weiss of the University of Bradford who calculated the national economic parameters for Jamaica. The costs of the program are calculated as the number of beneficiaries for each option multiplied by the benefits intended by the Government (J$250, 375 and 500 respectively for the first three years of the program and J$500 for each subsequent year). The results of the cost benefit analysis shows that Option 1 had a Net Present Value of $406 million at a discount rate of 10 percent and an internal rate of return of 16 percent. Option 2 had a net present value of $2.027 billion and an internal rate of return of 35 percent. This is to be expected since with Option 2, the incremental expenditure is 5.8 percent more than Option 1, while Option 2 would benefit 15.3 percent more children than Option 1. Lack of data on the health status of children and the link between improved health status and earnings meant that the cost benefit analysis could only be done for the education-related benefits. Actual benefits of the program would therefore be higher than those calculated here. Main Assumptions: The repetition rate and hence reduction of repetition days is assumed to represent a benefit to the Government. The assumption is made that the enrollment rate will move from 92.6 percent to 96 -41 - percent over a five year period, and the attendance rate will move from 75.1 percent to 78 percent. These figures have been conservatively assumed. The main assumption made is that attendee days will increase as a result of implementing the project. For instance, in year 1, with the implementation of the project, it is assumed that the enrollment rate will increase from 92.6 percent to 93.0 percent and the attendance rate will increase from 75.1 percent to 75.5 percent. Sensitivity analysis / Switching values of critical items: A sensitivity analysis was performed on the three options by determining the extent to which costs could be increased without making the project non-viable (zero net present value). In this analysis, costs were increased without increasing the level or value of benefits. For Option 1, costs could be increased by only 4.2 percent before the net present value became negative. On the other hand, Option 2 showed that costs could be increased by 19.9 percent before the project became non-viable. -42 - Annex 5: Financial Summary JAMAICA: Social Safety Net Project IMPLEMENTATION PERIOD (US$ million) Year 1 Year 2 Year 3 Year 4 Total Financing Required Project Costs Investment Costs 3.01 18.37 21.35 21.34 Recurrent Costs 2.87 3.59 1.99 4.59 Total Project Costs 5.88 21.95 23.34 25.93 Front-end Fee 0.40 _ . Total Financing 6.28 21.95 23.34 25.93 Financing IBRD 4.94 11.55 11.02 12.49 Govemment 1.34 10.41 12.32 13.44 User Fees/Beneficiaries - - - - Others _ _ _ _ Total Project Financing 6.28 21.95 23.34 25.93 Time period spans October 2001 - September 2005. Numbers may not add exactly due to rounding - 43 - Annex 6: Procurement and Disbursement Arrangements JAMAICA. Social Safety Net Project Procurement Procurement Arrangements Procurement for the proposed project would be carried out in accordance with World Bank "Guidelines: Procurement Under IBRD Loans and IDA Credits", published in January 1995 (revised January/August 1996, September 1997 and January 1999); and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" published in January 1997 (revised in September 1999 and January 1999), and the provisions stipulated in the Credit Agreement. Procurement methods: The methods to be used for the procurement described below, and the estimated amounts for each method, are summarized in Table A. The threshold contract values for the use of each method are detailed in Table B. Procurement of Goods Goods procured under the Loan are estimnated to cost US$ 4. 48 million and would include: vehicles, computer hardware, and office equipment. To the extent possible, contracts for these goods will be grouped into bidding packages of more than US$150,000 equivalent and procured following International Competitive Bidding (ICB) procedures, using Bank-issued SBDs. Contracts with estimated values below this threshold per contract and up to an aggregate amount of USS 2 .42 million may be procured using National Competitive Bidding (NCB) procedures, using previously agreed SBDs. Contracts with estimated value below US$25,000 and up to an aggregate amount of US$ 0 .49 million may be procured using shopping (National /Intemational) procedures based on a model request for quotations satisfactory to the Bank. Assessment of the agency's capacity to implement procurement The Procurement Officer under the Permanent Secretary of the MLSS will carry out procurement activities in close coordination with the Principal Finance Director who will administer project funds. An assessment of the capacity (PCA) of the MLSS to implement procurement actions for the project was carried out and cleared by the Regional Procurement Advisor (RPA) on June 13, 2001. The risks identified in the assessment include: (i) MLSS' lack of qualified procurement staff and of institutional structure and experience in procurement; and (ii) lack of adequate procurement procedures, as defined by Bank guidelines. The following plan to address these risks is included in the PCA report and was agreed upon during appraisal: (i) MLSS to appoint a Procurement Officer with a degree in Engineering or Business Administration and experience in competitive bidding processes (done); (ii) MLSS to define its organization for project implementation, including procurement (done); (iii) MLSS to formally approve and implement a procurement procedure manual, acceptable to the Bank, to be used for project operations (draft manual done); (iv) MLSS to prepare an Operation Manual that includes standards and procedures and documents the delegation of authority and responsibility and guidelines and procedures for procurement record filing (in progress); (v) use of Bank SBDs for the procurement of goods under ICB modality, Bank standard RFPs for the - 44 - procurement of consultant services, and standard, Bank approved, bidding documents for the procurement of goods under NCB and Shopping modalities; and (vi) a training program for the Procurement Officer in regards to specific Bank procurement guidelines and procedures. Procurement Plan The MLSS has submitted (as condition of negotiations) a Procurement Plan for project implementation that provides the basis for the aggregate amounts for the procurement methods (per Table A). At June 15 and December 15 of each calendar year, the MLSS will update the Procurement Plan with a detailed procurement schedule for the coming six months. -45 - Procurement methods (Table A) Table A: Project Costs by Procurement Arrangements (US$ million equivalent) ______________ ____ProcurementMethod (*1) | _ Procurement Category ICB NCB Other (*2) NBF (*3) Total 1. Goods 1.56 2.42 0.49 - 4.47 (1.33) (2.06) (0.42) (3.81) 2. Consultants(*4) - 7.44 7.44 - - (6.69) (6.69) 3. No Procurement(*5) - 48.25 16.94 65.19 - - (29.10) - (29.10) 4. Front-end Fee - 0.40 0.40 ........ .- (0.40) - (0.40) Total 1.56 2.42 56.58 16.94 77.50 (1.33) (2.06) (36.61) - (40.00) (*1) Figures in parentheses are amounts to be financed by the Bank loan. All costs include contingencies (*2) Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local govemment units. (*3) Not Bank-financed (*4) Details in Table Al (*5) Child and Adult Assistance Grants Selection of Consultants Consulting services would be contracted in the following areas of expertise: development of software, monitoring and evaluation, collection of field data, and training. The services to be procured under the Loan are estimated to cost US $ 7 .44 million equivalent and would be procured using the Bank's Standard Request for Proposals. Finns All contracts for firms would be procured using QCBS, except for small and simple contracts estimated to cost US$100,000 equivalent or less that would be procured using CQ, up to an aggregate amount of US$ 0. 82 million equivalent. Individuals Specialized advisory services would be provided by individual consultants selected by comparison of qualifications of three candidates and hired in accordance with the provisions of paragraphs 5.1 through 5.3 of the Consultant Guidelines, up to an aggregate amount of US$ 0. 5 0 rnillion. - 46 - Operational Costs: The Loan would not finance operational costs. Table Al: Consultant Selection Arrangements (US$ million equivalent, including contingencies) Selection Methods Type of Consultant QCBS l BS SFB LCS CQ Other _NBF Total 1. Firms 6.12 0.82 . 6.94 (5.50) (0.74) - - (6.24) 2. Individuals 0.50 - 0.50 ... : - - (0.45) - (0.45) Total 6.12 0.82 0.50 - 7.44 (5.50) - - (0.74) (0.45) - (6.69) Note: Figures in parentheses are amounts to be financed by the Bank loan. All costs include contingencies QCBS: Quality and Cost Based Selection CQ: Selection Based on Consultants' Qualifications QBS: Quality Based Selection Other: Selection of individual consultants (per Section V of SFB: Selection under a Fixed Budget Consultants Guidelines), Commercial Practices, etc. LCS: Least Cost Selection NBF: Not Bank-financed -47 - Prior review thresholds (Table 8) The proposed thresholds for prior review are based on the procurement capacity assessment of the MLSS and are summarized in Table B. Table B: Thresholds for Procurement Methods and Prior Review Contract Value Contracs Sublct to Threshld Procurement Pi ir Reiew 0 Expenditure Ctgory (US$ thousands) Method (US$ millions) 1. Works 2. Goods >150 ICB All <150 NCB First three contracts: bid evaluation and technical specifications <25 National or International None ____________________ ~ ~ ~ ~ ~ ~ .Shopping 3. Services 4. Consulting Firms >100 QCBS All <100 CQ None 5. Consulting According to IDA Guide Individual Consultants All > $50,000 (TOR, Individuals contract, CV) Nothing <$50,000 Total value of contracts subject to prior review: Overall Procurement Risk Assessment High Frequency of procurement supervision missions proposed: One every 12 months (includes special procurement supervision for post-review/audits) In addition to the prior review supervision, the capacity assessment of the MLSS suggests one full supervision mission every twelve months to carry out a post review of procurement actions. Based on the overall risk assessment (HIGH), the post-review analysis should cover a sample of not less than 10 percent of the signed contracts. Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. - 48 - Disbursement Allocation of loan proceeds (Table C) The proposed loan would be disbursed over a period of four years, and the loan is expected to close by December 31, 2005. Disbursements would be made in accordance with the guidelines set out in the Bank's Disbursement Handbook. Disbursements would be made against categories of expenditure presented in Table C below. Funds Flow from the World Bank to the Program (SOEs/PMRs). Disbursements will initially be made via traditional Bank procedures, under which an agreed-upon advance is first made to the Special Account, and subsequently this account is replenished via withdrawal applications supported by full documentation or Statements of Expenditures (SOEs), as required (see below). During the first year of the project, when disbursements are expected to be relatively low, the project will begin to produce regular Project Management Reports (PMRs). Once these reports are being produced quarterly, a decision can be made between the government and the Bank as to whether disbursements will be made via PMRs rather than traditional disbursements. A transition to PMR-based disbursements would allow the MLSS to place more of its energies into management reporting, instead of merely tracking transactions. Additionally, under PMR-based disbursements the Bank would perrnit a larger amount to be advanced to the Special Account than is allowed under traditional disbursements. Retroactive Financing. Up to 10% of categories 1 and 2 of the loan amount would be eligible for retroactive financing. Expenditures made between appraisal and loan effectiveness, for all disbursement categories except Grants, would be eligible for retroactive financing. Table C: Allocation of Loan Proceeds (US$ million equivalent) Amount in Disbursement Category US$ million Financing Percentage 1) Goods 3.81 85% 2) Consultant Services and Audits 6.48 90% 3) Training 0.22 90% 4) Grants 28.72 75% of amounts disbursed to Family Representatives of Eligible Children Total Allocation for Project Costs 39.23 Unallocated 0.37 Front-end Fee 0.40 Total Amount of IBRD Financing 40.00 Use of statements of expenditures (SOEs): Disbursements would be made on the basis of full documentation for all expenditures made under contracts requiring prior review by the Bank, as indicated in Table B; and contracts whose value would be raised above the prior review limits, as a result of amendments. Prior to the presentation of each withdrawal request of Loan proceeds for grants, the borrower shall fumish to the Bank evidence to the effect that independent operational auditors have audited the list of eligible poor children and the list of eligible Family Representatives (condition of disbursement). - 49 - For all other expenditures, disbursements would be granted against SOEs for which supporting documents would be maintained by MLSS, and be available to the Bank and external auditors for review. Special account: A special account will be established by the GOJ for the project, with an authorized allocation of up to $4 mnillion and an initial deposit of $1 million. Further details of the operation of the Special Account with regard to project funds flow is discussed below. Financial Manauement Financial Management Assessment. The Bank carried out a Financial Management Assessment of the project, which was followed up with a second visit, prior to appraisal. The results of the assessment, and related agreements reached, are reflected in the following sections. Funds Flow Mechanisms within the Program. The steps in the funds flow process are expected to be as follows: I . Three bank accounts would be set up in a commercial bank (preferably the same one): (i) a Special Account, in US$, for loan proceeds; (ii) an Expenditure Clearing Account (ECA), where the total arnount received via the warrant (budget) process would be deposited; and (iii) a Program Account, to effect transfers to program beneficiaries. 2. The budget for the program would be approved annually in accordance with Jamaican law and processes. 3. Funds would be released (made available) by the Accountant General on a monthly basis, in accordance with the quarterly warrants issued by the Ministry of Finance and Planning. 4. Payments for all expenditures except those of the transfers will be made via the ECA. Approximately monthly, a reimbursement will be effected from the Special Account to the government's Consolidated Fund for any portion of the expenditures that are eligible for loan financing. Some expenditures - such as those in foreign currencies, those financed 100% by the loan, or very large equipment purchases - may also be made directly from the Special Account. 5. To effect the bimonthly cash transfers, a block transfer would first be made from the ECA to the Program Account just prior to the date of payment to beneficiaries. Based on instructions from the MLSS, the private payment agency would then effect the transfers from the Program Account to the beneficiaries. The loan-eligible portion of transfers made would be calculated using the financial and MIS systems of the program, and this amount would be transferred from the Special Account to the government's Consolidated Fund only against lists certified by the Operational Auditors (as described in the following paragraphs). 6. To ensure that Bank funds are used only to finance payments to eligible recipients, a firm will be contracted to carry out periodic Operational Audits prior to replenishment of the Special Account. These audits would, inter alia, focus on: * the validity of application data; * whether, based on this data, the recipients were eligible for benefits; and * whether other key operational procedures in relation to the cash transfers (e.g. denial of benefits when school attendance is below the threshold) are being followed. - 50 - Part of the Terms of Reference for the firm conducting the Operational Audits would be to estimate, based on professional sampling techniques, the percentage of total amounts disbursed that had been paid to ineligible beneficiaries. This percentage would be projected to the total population and deducted from the amounts to be drawn by the project from the Special Account, thus facilitating the smooth processing of the Bank's replenishment of this account. 7. Disbursement applications would be prepared to replenish the Special Account for any payments/reimbursements made from it. They would be prepared by the Project Accountant/Financial Manager and would require appropriate authorized signatures from officials in the MLSS and/or Ministry of Finance. Program Financial Management Personnel and Duties. It was agreed during project preparation that it was not desirable to create a separate "project accounting unit" for this program. Instead, the Project Accountant/Financial Manager will be placed in the Finance and Accounts unit of the MLSS, reporting to the Principal Finance Officer, with perhaps a "dotted line" reporting responsibility to project management. The work of the Project Financial Manager will be in many ways integrated with that of the Finance and Accounts unit as a whole, but some project-specific resources, such as guidelines, training and a personal computer, will need to be provided to this person. The person selected will be a professional accountant, with good computer skills, and knowledge of the govermment's Financial Management Information System (FMIS) and government accounting practices. He/she will be given training, as needed, in Bank financial management requirements, as well as technical assistance, as needed, in the use of any project-specific software and the creation of financial reports. A sample Terms of Reference for the Project Financial Manager was provided to the MLSS by the Bank, and a qualified person was assigned at appraisal. Audit Arrangements. Project accounts will be audited annually by Jamaica's Auditor General, under terms of reference to be approved by the Bank. Certified copies of the audit reports would be furnished to the Bank no later than four months after the end of the fiscal year. The auditor for the financial audits will be appointed prior to effectiveness under Terms of Reference acceptable to the Bank. In addition to the annual financial audit, Operational Audits, focussing on the eligibility of grant recipients, will be carried out periodically. These are discussed in the "Funds Flow Mechanisms within the Program" section above. A procurement process would be carried out in order to select a firm with appropriate expertise to complete the Operational Audit in a timely and effective manner. The Operational Audits will be performed and reported in accordance with terms of reference acceptable to the Bank. The costs of these audits will be financed under the "Consultants" category of the loan. The respective audit reports would be provided to the financial auditor, so that they could be considered as part of the annual financial audit. This would serve to streamline the financial audit process with regard to the eligibility of disbursements made under the Unified Benefit Program. Action Plan - Other Issues In addition to the items discussed above, the following actions remained to be completed as of the project appraisal date. Further details as to what they involve can be found in the initial FM assessment of April, 2001: - 51 - Item Completed By Responsible Party 1. Agreement as to the project's Chart of Accounts Negotiations MLSS, Bank (i) agreement as to format of quarterly PMRs, with financial section in accordance with agreed Chart of Accounts Effectiveness MLSS, Bank (ii) Incorporation of Chart of Accounts into govt. budgetary Framework and the FMIS Effectiveness MLSS, MOF 2. Preparation of a financial manual for the project* (i) draft, submitted to the Bank Negotiations MLSS (ii) finalized Effectiveness MLSS, Bank *The financial manual will form part of the larger Operational Manual - 52 - Annex 7: Project Processing Schedule JAMAICA. Social Safety Not Project Project Schedule Planned Actual Time taken to prepare the project (months) 18 18 First Bank mission (identification) 11/27/2000 11/27/2000 Appraisal mission departure 06/18/2001 06/18/2001 Negotiations 07/09/2001 07/18/2001 Planned Date of Effectiveness 01/02/2002 Prepared by: Planning Institute of Jamaica and Jamaica Ministry of Labour and Social Security with the assistance of consultants funded by Japanese PHRD grants and Bank staff. Preparation assistance: Trust Fund: PHRD TF025979 and TF026843 Bank staff who worked on the project included: Name Speciality Andrea Vermehren Task Manager Jeanine Braithwaite Social Protection Hideki Mon Social Protection Christina Alquinta Operational Support Vladimir Jadrijevic Procurement Marcelo Osorio Procurement Eduardo Brito Legal Edward Daoud Disbursement Daniel Boyce Financial Management Karla McEvoy Environment Ana-Maria Arriagada Sector Manager William Experton Sector Leader Consultants Sonja Harris Lorraine Blank Sylke Von Thadden Carmen Hamann Francisco Ayala Susan Parker Donna Edgerton Henley Morgan Howard Moo Young Kristin Fox - 53 - Carole McDowell Udo Kock William Jack Noel Jones David Logan Dillon Alleyne - 54 - Annex 8: Documents in the Project File* JAMAICA: Social Safety Net Project A. Project Implementation Plan * Draft Operations Manual B. Bank Staff Assessments * Anderson, Dr. Patricia, Labor Market Study. * Blank, Lorraine. Draft Training Assessment, May 2001. * Blank, Lorraine. Jamaica: Social Safety Net Assessment, January 2001. * Blank, Lorraine, Joerg Goldberg and William Jack. Jamaica: Social Sector Expenditure Review, March 2000. * Blank, Lorraine. Preliminary Training Needs Assessment, June 2001. * Blank, Lorraine. Youth at Risk in Jamaica Policy Note, November 2000. * Boyce, Daniel. (FM Specialist, LCOAA). Financial Management Assessment, April and May 2001 * Handa, Ashu and Daniien King. Macroeconomic Policy and Poverty in Jamaica: An Evaluation of Option, February 2000. * Harris, Sonja. Report on Beneficiary Consultations on Social Safety Net Reform Programme, April 2001. * Jones, A. Noel. Reform of Jamaica's Social Safety Net: Workshop Report-Government of Jamaica/World Bank, July 2000. * Jones, A. Noel. Social Safety Net in Jamaica: Workshop Report-Government of Jamaica/World Bank, May 2000. O Kock, Udo. Income Transfer Programs in Jamaica: Institutional Analysis of the Food Stamp Program, Poor Relief and Economic and Social Assistance Programs, January 2001. * Logan, David, Cost-Benefit Analysis of Income Transfer Program. * Morgan, Henley and Noel Jones. GOJ/IBRD Reform of the Social Safety Net: Civil Society Consultations, October 2000. - Osorio, Marcelo, Procurement Capacity Assessment, April 2001. C. Other * Perez, Cecilia. Jamaica Social Safety Net Reform: Analysis of Budget Allocation and Execution Procedures, May 2001. *Including electronic files - 55 - Annex 9: Statement of Loans and Credits JAMAICA: Social Safety Net Project May-2001 Difference between expected and actual Original Amount in US$ Milions disbursements Project ID FY Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'd P038700 1997 JM- STUDENT LOAN 28.50 0.00 0.00 0.89 0.62 0.00 P007490 1997 JM PUB SCTR MODERNIZ 28.40 0.00 0.00 18.07 15.85 8.87 P039029 1997 JM- SOC. INVEST. FUNO 20.00 0.00 0.00 0.91 -0.59 0.91 P007485 1994 PRIVATE ENTERP INV & 35.00 0.00 0.00 4.92 4.92 0.00 Total: 111.90 0.00 0.00 24.79 20.81 9.7, - 56 - JAMAICA STATEMENT OF IFC's Held and Disbursed Portfolio May-2001 In Millions US Dollars Committed Disbursed IFC IFC FY Approval Cornpany Loan Equity Quasi Partic Loan Equity Quasi Partic 1995 Jam Energy Prtnr 16.41 0.00 0.00 36.86 16.41 0.00 0.00 36.86 Total Portfolio: 16.41 0.00 0.00 36.86 16.410.00 0.00 36.86 Approvals Pending Commitment FY Approval Company Loan. Equity Quasi Partic Total Pending Commitment: 0.00 0.00 0.00 0.00 - 57 - Annex 10: Country at a Glance JAMAICA: Social Safety Net Project Latin Lower- POVERTY and SOCIAL America middle- Jamaica & Carib. Income Development diamond' 1999 Population, mid-year (millions) 2.6 509 2,094 Life expectancy GNP Per caoita tAtlas method, USS) 2,530 3,840 1,200 GNP (Atlas method, US$ billions) 6.6 1,955 2.513 T Average annual growth, 1993-99 Population (%) 0.8 1.6 1.1 Labor force (%1 1.5 2.5 1.2 GNP Gross Most recent estimate (latest year available, 1993-99) per p enrolment Povertv I`% of pooulalion below national PovertV line) . .. . Urban DoDulation t% of total population) 56 75 43 Lite expectancv at birth (vears) 75 70 69 Infant mortalitv (per 1,000 live births) 21 31 33 Child malnutrition (16 of children under 5) 10 a 1S Access to safe water Access to improved water source (% of population) 70 75 86 Itlliteracy(% of population a8q 15+) 14 12 16 Gross primary enrollment (%of school'aoe Ppoulalion) 100 113 114 -Jamaica Male 100 . 114 Lower-middle-income group Female 99 116 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1979 1989 1998 1999 -- Economic ratios' GOP (USS billions) 2.4 4.1 7.1 7.2 Gross domestic investment/GDP 19.2 28.5 29.0 29.6 T Exports of qoods and serviceslGDP 49.8 47.2 47.2 46.7 rade Gross domestic savinqslGDP 18.4 19.0 21.0 20.3 Gross national savinoslGDP 13.3 20.2 26.0 25.1 Current account balancelGDP -7.2 3.0 4 5 D1 _n\ Interest Davments/GDP 4.4 4.2 2.4 3.0 Domestc _I Total debt/GDP 71,7 111.1 56.2 56.4 Total debt service/exports 23.8 29.6 14.9 18.6 Present value of debt/GDP - 53.5 Present value of debt/exports 106.0 Indebtedness 197949 1989-99 1998 1999 1999-03 (average annual growth) , GOP 12 0.6 -0 S D.0 12 Jamaica GNPPercapita 0.6 0.5 0.0 -3.2 1.0 | Lower-middle-income group Exports of qoods and services 4.0 0.6 -3.2 0.2 2.4 STRUCTURE of the ECONOMY 1979 1989 1998 1999 |Growth of investment and GDP (%) (1% of GDP) 10 Aariculture 7.2 6.9 7 0 6.9 Industrv 40.3 42.7 31.7 2 7 .7 Manufacturing 16.4 19.6 13.9 12.4 Services 52.5 50.4 61.3 65 .4 5 5s Private consumption 62.3 67.0 60.4 62 .3 10 General government consumption 19.3 14.1 18.6 17.4 -GOI GDP Imports of qoods and services 50.6 56.7 55.2 56.0 1979-89 1989-99 1998 1999 Growth of exports and imports (%) (average annual growth) Agriculture 0.3 3.0 0.2 1.7 20 Industry 0.8 -0.2 -1.4 -0.1 I Manufacturinq 1.7 -1.8 -3.9 -0 9 Services 1.5 0.9 0.2 -0.1 Private consumption 3.5 -0.9 8.1 0.4 -10 General government consumption 5.2 1.5 -5.3 -2.6 Gross domestic investment -1.1 5.4 -8.8 0.4 -20 ImDorts of goods and services 7.7 1.4 -2.3 -2.4 - Enports - Imporls Gross national product 0.7 1.4 0.9 -2.4 Note: 1999 data are preliminary estimates. - The diamonds show four keY indicators in the country (in bold) compared with its income-qroup averaqe. If data are missing, the diamond will be incomplete. - 58 - Jamaica PRICES and GOVERNMENT FINANCE 1979 1989 1998 1999 Inflation (%) Domestic prices 6 (% change) 6 Consumer prices 28.7 14.3 6.0 8.4 40 Implicit GDP deflator 16.6 12.6 6.9 10.4104 Govemment finance (% of GDP, includes current qrants) Current revenue 31.8 28.0 30.3 94 95 96 97 96 9 Current budget balance 5.6 -4.3 -2.4 - GDP deflator -CPI Overall surplus/deficit 1.2 -7.2 -4.3 TRADE 1979 1989 1998 1999 Export and import levels (US$ mill .) (US$ millions) Total exports (fob) 1,000 1,551 1,535 4.000 Alumina 475 588 672 Bauxite ill11 83 48 3,000 Manufactures 69 43 44 * Total imports (cif) 1,674 3,131 3,179 2,000 Food 160 280 328 1o000 Fuel and enerqy 274 293 429 Capital goods 565 516 472 o 0J l. _ 93 94 95 96 97 98 9 Exportpriceindex(1995=100) 81 107 110 Import prce index (1995=100) .. 81 107 111 * Exports * Imports Terms of trade (1995=100) 100 100 99 BALANCE of PAYMENTS 1979 1989 1998 1999 cunent account balance to GDP I%) (US$ millions) Exports of goods and services 1,165 1,941 3,353 3,365 0° Imports of goods and services 1,198 2,291 3,925 4,035 Resource balance -32 -350 -571 -670 Net income -187 -271 -283 -354 iI1 U II i Net current transfers 80 323 638 698 Current account balance -298 -217 -326 -4 Financing items (net) 136 204 204 Changes in net reserves 159 161 13 122 .6 Memo: Reserves including gold (US$ millions) 700 801 Conversion rate (DEC, locallUS$) 1.8 5.7 36.9 40.1 EXTERNAL DEBT and RESOURCE FLOWS 1979 1989 1998 1999 (US$ millions) composition of 1999 debt (USS mill.) Total debt outstanding and disbursed 1,705 4,560 3,995 4,069 IBRD 127 650 410 393 IDA 0 0 0 0 G 638 A:393 C:866 Total debt service 302 643 537 674 IBRD 15 109 99 99 IDA 0 0 0 0 /D: 526 Composition of net resource flows Official grants 13 123 92 Official creditors 110 75 -144 -186 F: 1,215 , Privatecreditors -39 -11 217 -108 Foreign direct investment -26 57 369 : 1,216 Portfolio equity 0 0 World Bank program Commitments 60 75 0 0 A - IBRD E - ilateral Disbursements 19 52 31 64 B- IDA D- Other multiateral F - Private Principal repayments 5 54 72 75 C- IMF G- Short-term Net flows 15 -2 -41 -11 Interest payments 11 55 28 24 Net transfers 4 -57 -68 -35 Development Economics 9/9/2000 - 59 - Additional Annex 11 Overview of current Social Safety Net Jamaica spends approximately US$78 million per year on social safety net programs, defined as programs intended to provide assistance to poor and vulnerable groups. The main programs in the safety net, along with their associated budget, and number of beneficiaries (where relevant) are listed in the table below. 1. Income transfer programs Jamaica has three main income support programs which provide cash or in-kind welfare benefits, and which together account for about 20% of spending in the SSN. The largest and most important of these is the food stamp program, which was started in 1984 in part as a response to large public sector layoffs at that time, and is administered through the Ministry of Labour and Social Security (MLSS). The food stamp program's annual budget is US$9 million, and there are about 170,000-200,000 beneficiaries, with the two largest beneficiary groups being the elderly and/or disabled, and families with nutritionally at-risk children aged 0-5. The second transfer program is poor relief program, which also targets the elderly and disabled, as well as indigent families, and is administered by the Ministry of Local Government. Beneficiaries are identified by local poor relief workers, who also perform casework. There are about 24,000 beneficiaries in this program. The third income support program is the Public Assistance Program, also administered by the MOLSS. This program provides a small cash transfer to a target group consisting of the elderly poor, disabled, and indigent individuals. 2. School-based programs The Ministry of Education and Culture administers a subsidized School Feeding Program (SFP), which consists of a hot lunch component and a snack component ("nutribun" and milk). The program is intended to provide one meal per day to beneficiaries in basic, infant, primary, all-age, junior high and comprehensive schools. According to the Ministry's Corporate Plan for 1998-99, the objective of the program is to "provide students with meals of basic nutritional value in an effort to encourage regular attendance, and give support to developmental activities in the schools." While the cost of lunch is shared by the Government (through a subsidy of the production and delivery of the different products) and the student, schools are supposed to be provided with funds to cover up to 20% free lunches per school to needy students identified by school administrators. However the current cost-recovery and exemption procedures and targeting are neither systematic nor well monitored. The cost to students of the snack is J$2 and the cost of the cooked lunch varies from approximately J$ 10 to 40. The SFP is one of the larger items in the SSN, with an annual budget of US$9 million and coverage of about 170,000 with the snack and 130,000 children in the cooked lunch program. Although one of the objectives of the program is to encourage regular attendance, it is not apparent whether the current design of the program, which is not clearly poverty-targeted, is achieving that aim. The cost of lunch is the most significant component of non-tuition out-of-pocket school expenditures for households, representing 40% of all such expenditure, while 80% of households from the lowest quintile cite 'money problems' as the main reason for non-attendance by children. School attendance, especially for poor children in rural areas, is a significant problem in Jamaica. Within this context, the cooked lunch - 60 - component, which formally requires a fairly large co-payment, may not be going far enough to overcome the financial constraints for school attendance among poor children, particularly in rural areas. This hypothesis is consistent with anecdotal reports from school-level administrators and teachers. Additionally, data from the 1999 SLC show that a full 59% of children from the richest quintile participate in the SFP, while only 65% of children from the poorest quintile do so. Further research is required to reform the SFP' s targeting mechanism in order to achieve its objective of improving school attendance and making program expenditures more progressive. A major education-based program with the potential for impacting poor families is the Grants to Basic Schools Program. Enrollment in early childhood education (age 3-5) is extremely high in Jamaica, and predominantly through basic schools or infant departments of primary schools. However, the current subvention of Basic Schools is not clearly poverty targeted nor focused on any beneficiary's need criteria, potentially leading to schools in poorer regions (rural and inner city areas) receive lower subsidies than others. The other program for school-aged children is the School Fee Assistance Program, designed to help needy secondary level students pay school fees that were introduced in 1994/95 as part of a formal Cost Sharing Scheme which requires that parents contribute to the cost of secondary education. Parents must apply for assistance, and the school principal or guidance counselor deternines the amount of subsidy, if any, based on an assessment of need. In 1997, 38,500 students received assistance, 18% of which received a full fee waiver. Only 17% of the students who receive waivers are from the poorest quintile while 31% of students who receive fee waivers are from quintile 4. The amount of resources spent on this program has increased 329% in nominal terms between 1995 and 1997, while requests for full assistance during this samne period increased by 126% and by 227% for partial assistance. The current poor distribution of the subsidy across quintiles and the rising expenditure trend implies that a better targeting system needs to be applied. 3. Other SSN programs The Ministry of Health operates the Jamaica Drugs for the Elderly Program (JADEP) provides subsidized drugs to the elderly who suffer from specific diseases such as hypertension, diabetes, glaucoma, artr.itis, and asthma. The Ministry also administers a small supplementary feeding program, which distributes commeal to malnourished children in public health clinics. Finally, there are three community-based safety net interventions, the Jamaica Social Investment Fund (JSIF), which is co-financed by the World Bank (LN 4088-JA), the IDB and other donors, the Social and Economic Support Program (SESP), and Lift-Up Jamaica. The JSIF is a social investmnent fund that finances community social and economic infrastructure on a demand-driven basis. The SESP is administered by the Office of the Prime Minister and also provides funds to communities for infrastructure and training projects, although the selection criteria for projects and beneficiaries are not clear. Lift-Up Jamaica is a community based public works program targeted towards youth-at-risk. It was designed as a short-term response to a critical social situation, with a project life of 18 months and funding from the profits of public sector enterprises. -61 - EXPENDITURES ON MAJN SOCIAL ASSISTANCE PROGRAMS 2000-01 NUMBER OF BUIDGET BNUMEIIRIOS ___________:__E_______________:______ USS MILLION BENEfICIARIES INCOME SUPPORT PROGRAMS Food Stamps 9.0 200,000 Poor Relief 2.5 16,000 Public Assistance 3.8 24,000 SUBTOTAL 15.3 SCHOOL BASED WELFARE PROGRAMS School Feeding Program 10.0 300,000 School Fee Assistance 4.8 40,000 SUBTOTAL 14.8 COMMUNITY BASED PROGRAMS Social Investment Fund (IDB, World Bank, CDB) 8.3 Social Economic Support Program 9.0 SUBTOTAL 17.3 LABOR MARKET PROGRAMS Lift Up Jamaica 14.0 4,000 Skills 2000 1.3 Self-Start Fund (EU) 6.3 SUBTOTAL 21.5 TARGETED HEALTH PROGRAMS Jamaica Drug for the Elderly 2.8 100,000 Supplementary Feeding Program 0.1 80,000 SUBTOTAL 03.0 INDIGENT HOUSING Operation Pride and Golden Age Homes 2.0 SUBTOTAL 2.0 OTHER PROGRAMS 5.0 SUBTOTAL 5.0 TOTAL 78.4 - 62 - Additional Annex 12 Social Assessment In preparation of the new Unified Benefit Prograrn, a range of social assessment data informed the design of the project, including: * Studies conducted as part of the project preparation, including a Social Safety Net Assessment, a Labor Force Assessment, a Profile of the Poor, an Econometric Study of the Impact of Structural Adjustment on the Poor and a Policy Note on Youth-at-Risk. * The Jamaica Survey of Living Conditions (SLC), an annual Living Standards Measurement Study used to assess the incidence of poverty and other social indicators in Jamaica since 1989. * A Study On Coping Strategies of The Poor commissioned by the Plarning Institute of Jamaica as part of the 1999 SLC. This report highlighted that the primary coping strategies of the poor are to reduce food intake and to keep children home from school. * The draft UNICEF Situation Analysis of Children and their Families 2000 that highlighted the increased incidence of late immunizations among young children, low levels of pre- and post-natal care, high incidence of low birth weight babies and high incidence of micronutrient deficiencies in children and pregnant women. * A Beneficiary Consultation commissioned as part of project preparation to gain insights into how existing and potential clients perceive social assistance programs and to afford beneficiaries the opportunity to participate in the design of the proposed program. Highlights of The Beneficiary Consultation Beneficiaries (N=248) from the Food Stamp Public Assistance, Poor Relief programs were interviewed in eighteen focus groups held in eight of Jamaica's fourteen parishes. Respondents identified the following weaknesses in existing programs: insufficiency of benefits; stigma; discontinuing children's benefits at age 6; fact that children's benefit sometimes starts up to 4 years after registration, leaving only 2 years for benefits; problems with cashing Food Stamps because of the inflexibility of shopkeepers (this affects roughly half of respondents); long intervals between payments; regulation that one person cannot collect more than 3 Food Stamp payments which discriminates against large families and those who may be collecting for someone else; unsatisfactory condition and location of pay stations; lack of system to inform beneficiaries of payment date changes; high time and travel costs to receive benefits. Based on their assessed levels of need, the benefit required to better able beneficiaries to "fill a gap" in satisfying basic needs was between J$ 1,000 per month or J$ 1,500 every other month for approximately half of those consulted (irrespective of geography) and between J$500 and J$ 1,000 per month for the remaining beneficiaries. Male respondents tended to be the ones citing extremely high amounts needed - some requiring between J$ 3,000 and J$ 10,000 monthly. - 63 - Positive features of existing programs include: caring treatment of beneficiaries; advice on accessing other programs; assistance in accessing healthcare and medication for those who are ill; benefits can be depended on, even if they were occasionally late; benefits 'stop a gap,' particularly when there were no other sources of income or benefits. Beneficiaries felt that a combined program would be better. The response was largely based on the ideal of having sufficient money at one time and therefore being able to plan and budget better, permit them to be less dependent on credit and reduce their time and travel costs. Beneficiaries overwhelmingly support the requirement of school and clinic attendance, as a condition for remaining on the new program. Respondents recommend the following eligibility criterion: elderly incapacitated; disabled elderly poor/elderly disabled; destitute; unemployed household head; large number of dependents; no visible means of support; inadequate food intake. With respect to payment arrangements, the majority wanted (a) the location of pay stations to be retained and (b) cash on a monthly basis. However, beneficiaries noted that cash payments have their downside because clients could be easy targets for robbers - especially if pay station are moved - and because payment in cash requires restraint on the part of the recipient. With respect to procedures for registering grievances, responses ranged from keeping the current 'informal' system of registering complaints in person verbally with the respective officers, which is more sensitive to the needs of non-literate clients, to written complaints taken to the main parish office. Disabled and elderly clients constitute a special category for whom infrequently paid benefits is particularly difficult. They also have a broader range of needs than the benefits they receive are able to meet. Home visits are reported to be critical, more so for those without families, so that they can be continually monitored for any deterioration in living condition and ameliorative measures taken. Beneficiaries emphasize the importance of home visits to investigate and monitor the poor. Re-certification was seen as a part of regular case management and respondents saw routine re-certification as necessary. The role of existing clients and community residents in making referrals was highlighted. Beneficiaries pointed to the need for public information through a neutral system for the more marginalized poor. The church could be invited to play an active role in this vital area of information dissemination. - 64 - Additional Annex 13 Institutional Arrangements: Responsibilities of the Social Protection and Development (SPAD) Division 1 . Oversee and facilitate the implementation of the Unified Benefit Program, the Bank-funded Project and its comnponents; 2. Formulate and recommend revisions of Unified Benefit Program policies and present submissions through the Permanent Secretary for consideration by Cabinet. 3. Formulate divisional goals and account for progress or otherwise towards predetermined objectives; 4. Direct the preparation and carry out the final review of amendments and revisions of operating guidelines methods and procedures for implementing the UBP; 5. Work closely with the MLSS Finance Division in financial management arrangements related to project implementation and disbursements (see Annex 6 on Financial Management); 6. Work closely with the Management Information System Division in the design and implementation of the MIS system for project implementation; 7. Prepare terms of reference, supervise the work of consultants contracted to assist in project implementation; review and approve on a preliminary basis the documents produced by consultants and request final review and approval by Director of Social Security in the MLSS and the Bank as required; 8. In collaboration with the Finance Division, operate a computerized control system for tracking all project specific activities: budgeting, contracting, procurement, disbursement, accounting and auditing to enable adequate monitoring and control of implementation; 9. Organize based on need, workshop or other training activities for the MLSS staff (central and perish level), other agencies and beneficiaries, directly related to project implementation; 10. Oversee the design and supervise the implementation of public information and education campaigns related to project implementation; 11. Prepare periodic reports on physical and financial progress of project performance and propose corrective actions as needed; 12. Develop and maintain a documentation system for project implementation to generate complete and updated information on the progress of project implementation for each of the components and for the project as a whole, in line with specific indicators, to permit the production of periodic reports as required by the MLSS and the Bank; 13. Act as MLSS counterpart for Bank missions related to project coordination submissions, implementation, and other matters related to the project; 14. Coordinate the design and implementation of a monitoring system, prepare terms of reference for the design of the impact evaluation; 15. Establish the linkages with other Ministries and Agencies directly related to project implementation; 16. Provide terms of reference, oversee, supervise and establish procedures for the pilot income transfer scheme and the transfer program thereafter, - 65 - 17. Organize and prepare the agenda for the Annual Review. - 66 - Additional Annex 14 PROPOSED ORGANIZATION CHART MINISTRY OF LABOR AND SOCIAL SECURITY Minister |Permnanent| Director of Director of Director of MIS Director of Human Administration Finance Resources Director Director Social Security Labor Directo Director l National Insurance Social Protection & _ Development Program Admientra t ivestra ParishCManager Program Coordinator Informaacon &Training Coord. M & E Of ficer Senior Social Worker FM Specialist Procurement Of ficer Administrative Staff Clerical Staff NtoaInsurance |Unified Benefit PrsAdinistrator |Parish Administrator | Workers - - 67 - Additional Annex 15 Proxy Means Test in Jamaica A proxy means test is a method to estimate household consumption or welfare without requiring extremely detailed information about household income. In countries such as Jamaica, Russia or Chile where there is a large informal sector, it can be very difficult and administratively very costly to verify true household money income. Furthermore, in Jamaica and other countries, a significant part of household food consumption comes from food grown on private garden plots. It can be very difficult to estimate the true value (impute the value correctly) of home-produced goods, since typically, they are produced with "costless" family labor and their quality may be different than for example food items which are produced for sale. The Government of Jamaica is interested in finding cost-effective ways to determine who is poor and how to best help the poor. In proxy means tests, rather than trying to measure total income perfectly, information is collected on items which are much easier to measure and verify, such as the number of children in the family, etc. These variables should be ones which are known to correlate with poverty in the country, and ideally, which are easy to measure and thus require little administrative cost to verify. The first large-scale use of proxy means-testing occurred in Chile in the late 1970s and 1980s, in a program called the Ficha CAS (card for social assistance). Since 1994, Costa Rica and Columbia have adopted proxy means-tests for some of their social assistance programs, Mexico is about to start a proxy means-test program, and Argentina and Venezuela are actively considering the idea. In other regions of the world, Armenia has a proxy-means tested family benefit (child allowance) and experiments with the approach were conducted in three provinces of Russia. Fortunately, Jamaica has an annual Survey of Living Conditions (SLC) - a household expenditure survey which can be used to determine the correlates of expenditure-based poverty and transform them into a scoring formula that can be used to rank households from the poorest to the best-off. The task is to measure the correlation between household welfare (per equivalent expenditures) and other easily-measured variables. The technique used was ordinary least squares (OLS) regression, and further, stepwise regression (in which variables are excluded if they are not significantly correlated with per capita expenditures) will be used. Technically speaking, the OLS or stepwise techniques should only be used for variables which are thought to be independent (exogenous) and not directly correlated with each other. However, since we are only trying to find proxies (substitutes) for poverty which are more easily measured than household expenditures (rather than trying to decide what determines poverty) we can ignore this caveat in this context. The resulting scoring formula will be revised periodically to minimize errors. - 68 - Additional Annex 16 Letter of Sector Development Policy MINISTRY OF FINANCE AND PLANNING 30 NATIONAL HEROES CIRCLE eP.O. BOX 512 ..tbM4. IL.4' ½i '4 P*ACA ~t~r~4 ZIS' 48 I -Wsr.'4I1,t tW4k . rffiThg, KINGSTON 4 . ,x¢ : s. .... JAMAICA Kingston, July 31, 2001 . ,,S2CAN-NEI FILI r r-l. Dilnles L . Wl ill I N liDate 9 (C No.h_ I IIe Wtorld Ralik (MR I IS Il Street Fdder I U C > [2t Wasiington lI' 0433 I D)ar Mr. \WI IL'flSOil j 1134. ( pCri1JI3 of1 jitOht. ab as of r ils 'Mcktlmtani Toms Fcuntic :md Social Potiev rtamcwork. is umiscrlaklti, a relbiV n of tle Soc:ial Safety Net (SSN) tO imprtOvc, targctgnw 01 Vfie leedy, relevuince alnd eIltivcncss of the lf .ad r;ichd programmes. and e-;Licincy itt tle tiClemitry o1 the services. These acisomis are lwmng laken ii thle< cow%lt ;l iitUJOr McJiumitnnr social polsmcy agendia aimod at ;sddrussina special wceds tf tliThiictsii 2 Ibis Letter or Social Sector D v%e cloproeiw Policy desenbes .Iantazcit's current SOCLO LiuHit coilditiOns anid its cullrent and propvised process of social soetr rvforms, in suppoit of mIte SSN reforms, the (iovcniniellt hlws rquested a loanl firolio tile Wtisrld H3alnk, -The¢ (GO%enmmctient appreciates tlhe Hanik's 0ilculmn 10 pl rovide over tlhe: nICit twto yeaIrs. up LO S75 miillioni in MtTpport to-, ttim weocal :cL;tt. ot o Which tle proposed lot) to I;ett 7 itarget of 14 YI NweCks oI pmjVclC(d1 111portS 01u,s . I services. In twrmk oif strtuio hienchmiaurks, tlhc Governmeint was- succefussful Mn Alt11\ 1 Solme Q>f the. %;Irges incluklil thic rcduction ot ceal rcsrve requirements to 12, per Ccki 1 X hci ave0Agc anuweztj1 csxvNazie fi r 8 jas A 7 a -ic i litm ul t tcs - 70 - :i hM hq~thi.Xx*5lnv r tre'soLS to) 21.0 per cent-: ttahhtn ol approyir ial: k-ias w t t rc&tfrds thk ili Fiti.anial Scr e tcc } Commission: aKi the privatisition ovl tclclrwcityl lit- Janica Ptlbltc Scrvicc Co4mpany iiitlcd. ( rlic fiscait 2100001 pcrjira;tlcc undCrinis Ilic efforts at rual. sustainei m'tj cmlt It cconomy, Trie ptiubic sector lm)imiUary surplus had increasd by 6.5 pcrccn:agc f-wints ol (ii)1 to 7 0 V . ccit in 1999, aiivly through strengtheneod taxs dninistralioi) and eff(ewnc gains. ti the operation tsif the public ntnerpriscs. Thle growing interest bill on thle large public s%ctor dcbt had morc thai olYset iltis gain, and tte overall ptthlic sector dJeicit 1h;ad ino%ced fromn ?T per cent of (ilW, I 19S'`99 to 3.6 p3r cetnt of 1'0.1- in 191199/201). 1Furtliea consolidation efforts in N9'.2M(), relying miiailly on expndinture cuts anid somtte reVC'lttle' tlcasUtres. raised the public set'cor ptimary sutrpls by .bouti 4.0 lxreeniagtc points to 11 ,I pci cern i1 OD1. Theu ovcrrll public sector dericit impnovod by 3 ruagv pointS oF (l)i}' tuscaw of, vxpenditure CuiS Ind ijncreaised reveLue. Suh%qucn0y. tie sitIck l of puhlic &t had risen fronil atbon 1131S pe;r cciit of GDP at IhI: end ofthe tiscat year 099sP9) to aNxiht 144,0) pcr ¢cot of `00 P tt tit., vmi ol f"MO MW P for some n yvears, the Go.J has pursued strategics io iltigatie crses in thc Financial Scrmico Setor (F.SSif which could have resulted in finiaicial colIapss. hI 1997. a Goernmintit OWAned Iumxll1cd liability tompn;yt. Fitac (1Finuncial SnLor Adjusttmcnt omipaiiy~ NW aS ronned, to manage the rst&whor al 'io liq4uidity and reswtiring of the FSS. Fitsll, ae iith - risinrt dcht pilronfoo was operaled 'offbudget 1or ovc' two years. lit crallillng teMdtint 'I cnn r bconomic and Social Framnwork. a itioro aWlgtssivc sItraegy Iiir Fillsav w.va developed. To support (tc st,utcly. Ionctary inflows rrom nIultiltcralt lituviing m-tumwc, were avaituble through ol'filciat (oJ borrowing, starling in 20KM10t. Cotcurreitly, ttic Fiisuc dcbt was br-ought into thc Iiscuai liigc With the bringing ol Finsac' dcbt into the 2(g)z 01 hbudel, the Govemmnm) will hK challenged to resolve thie debt and debt wrvlcing cotmts. rht planncd deht manutgmerne strategies hatYC tlkAct into accounit the need to achievc it continu11tedk lowering of tic iitcrest rakle. t'hc potential to mcci the chalIcagcs has gained ismtl# rcoysliliols ili the jpgradmilw. ti l:amatic's long-torm sLovcreigni crcdit ratlimgp 1w .iatid.ir anld Yoor, TI'his improvedi r.linl8g will facilitate tle (iO'S sihift of its det4 port olbo to lotci cost tireign sources, ane comniinbtte to the lowcrilig ol'intercSt raics. thi (iTh nGverunivicn is comimtmtcd io taking the necessary actions Lo rclurn toa suslaimudble lone- tern paiti. IFonr year,, the straiegnes to mitigaic thC Clisis in the lititc tal "rvies 5tsc tiom n^ mainly donseStic resources relaced (htc cApacity orf thl )ublic SOector to dteivcr estsn fiat sorvices, particularly healtil. education and social services used hy ihe pior. (iceniraleJ cfforts mt reditcing the anntuil ebht service requirents of (3o.. will rlceasc resource.s tlo assist itt l'nlcinig social. %C:eootitc, atul prodtHwfiv t mns nt,ilctut. .11nd to sustalin Mtc prporse increitSes in the social safeti n. n,Within ttle wi4er coltlxt. the mimtllinclnt returil (to a Patil o -rowth will provide OppOrlniuties for man3y of' tilm tiiivemptoyed ai uaK ider-eimployv% Io ;articiplut in thl liUsctio moltulie tacivilies ol'-th coanltry. B3. fI h Social Sector i 0)J's long-tmn) social prliey critelrs on an itit.grateid programnoic of sociaL dcvlopmncli designed to create a Mor N pmroducLive anjid empowed citif.anry. As such, tIe priorttiL' Mr di short o mediurn cm are tcuSc on protectiti, poo and vulncrabl while inmpml iity the quality of liic throughi increased access to dcveloplmtetal progruiminics, xi; itj mi '3 - 71 - cowullniic 1)}(llp-luI cs :ttIL l iaCti socialhtn iio s¢*tot ill concautraw omv: fik osiot of curly childhood carc and devclopl lwiW imnpfoving quality. access, fkrAOsUnce and equity at the scconduwy level; atic provisioit ot appropriate klnowledge and skills tltrough tertiary education lld Ihe Iraining system (o t cel thlc ncds or the l.our xarkct. il tbe tailth sector, wc will see to consolitdate (Ile oamns madc in primary hemlth; care Und simultanmeously emphasize preventive stralegics and lealthy life styles. 1hi addition, rocus will he placed on seexting the wclfaro of Me most vtulncrahlh. cspccially the poor and childrei. via a mlodcriic andi smretimlited SSN. 12 InI advatcig (tic social a-tcida, the e nprchensivu pro gratno of rfurmi currently underway will ha intensiliold I or ex-amplo, lAwal Govornment Reform and Public Seclot Modern isaion will allow ihe average citiz.en to play *m grcater role in tile process of govc:rnuncc atul tihX rsmullt III nereacd accountability. bttwr 1t-Mus'tdi atnd iiorc mvtiVmt public policics uInd a morc involved and empowcr dA ciltiycry. Morcovwr, refiwt-n% Siviilmc it) Ilic stejal sectlor sutcih s' t}h .Jamaica Social Policy F'valuaiion Prnojet (JASiJ*PV) %jli creatc a fraunicwom tior lig-ioenil policy planning. continuous policy review and juadsltoelil. and more integrated and e.sd,olalital policy planninii1g amsd implementatiotn. JASPEV will also Xestablish benchmarks aainst which policies will be otintlorcd and cvalualtcd Priorities for Poverty Eradication Consistent witlh Ih policy goid o eCOOrklic (irowttt iuld vl OOP"Tnc t, ( vCrosneit rclAtins focu5sed oti thI eradicalioti of Absolute poverly in Jamnica. In addition tto 11h in"provCd purchasing power brought aotwl by the stability aitd improved clitmate of cot mpctiion Ir consumer goods, coordiiated efforts to iinprove thc quality of life of the poor hegant with ih1 niiplcmtemialtntm of the National Povrty Er-adicaAion P1rogaunmme (NPEP) inth ilic 199596 riscal year. 'The incidetnce tiflxveny has fallem fNrm 28,0 per cenlt in tha year, to i 17.0 pe coitt in 1O99)9 Ovet the next dtivo years, poverty ceraditatiott will remain a tmajor focus l'thc social agenda. Withi enipha'.is oin consolidating gatins anil riucing Iisk tlhrougli implemunlat ion of more developrnentoriented progrinmu¶eq I lih hpopulation growth 1 Axitiiiibuledi to ltighi levels otf 'iasulultt povertyv environmnlem. dc,gradatioi, antd xcessive (I.ia-ldI on availablc resources. Stabilization of Jamaica's popiuation at zcro growlh is ;i oujor objective ofthe National Population Policy. Over th: miediunm terni, xpulatioi gn)wlh rate is exlpcted to declinr to 0.7 pr cont frotm its currnm level of 0.9 per cent. in ortier 1 imnprove wc)lheing ud achiteve thc desired lppUlatiot growth rate of 0.7 per ent targets to be pursu Wd include reduction of the Total Fertility Rate (TFR) to an average of 2.6 ciiltdreni per womai by 2003. dowI frtm its presownt rate ol 7.X children per woman. f[he G(;wMttlent rexxileC iZe., the 11ed for a IonMglei. eompreheiisive sotluion m t t aidros% il uticds of the poor and vUonCr'.hle. Ai commitment to contiprelItisive reformim oi hm scwial s:ccirity arx WtA (lre sys" wa4ll tsi riilaliwAl in a (tahilwet lDxisioa in October 20Xg). For hiyv specific IUtiii'tn benerit reiotrm it) which the 13ank is providing supporL, the Cahitice Lk-o o d4mision In Vebrary 2001. In the shou to iedium rinm. Government has cmb^rket on reforin and rationolisatiotn of the social security and welfare system to achtevc grawtr effectiveness and efiTcincicy. Ihis is to be achicved by a two-prongod strategy a simetd a improved social scurity o t11im cne hand, wid a better targeped and strcuinmlmi soelat.t neft sysitcm on the other. .- - 72 - 16. Social sccurity is sen ii, 11}w key to prvontilng povery in, th populaton's non-workiung years. 'lli nutcklus of the social security cmpojcnl is comprVhensivu pension rchiml Li rcflcet current global uan national ecnomic and labour market enlvironlmou an1d to esusur that all persons andlor thcir bvictcioarics are adequately provided fr after retirenienl and arv protectLd against loss of inIcojm duc to iWvaliditydisability or cmp1oynwn-relaite injtar of dcath* During 1499 and 20ft, dliscussions on proposed Pcnsion Rformn were held wiilt industry staikeholdrs and at public ncdins. In tirder to itcrporate th views of the public and iniplenicl th;e rrom1z wcomonnded, a N iannt Pcn3ions Act is being drauf. '. 'rite ncw Pcnsiotis Act s expluted to bc ini pl" duritg 7iscal 20023. Atmiong lth cxpcctcd ouicorrcs or pensio rcbrni will be: the cxtensin of the basic provisions of th N1alional Insuraiwe Schete (NIS) to) at wider critm-section of Jamiaicuns; improvement in tlh administration or the NIS. iniroduction of a wiusex irutiresnetit age. initroductiuii o4' rraigeienmts ior ehiidrvis to iprovide pensions lor their parents, bcltr rqgulafuiof th,of pension antd superaamuatioll ,henes rw both public aixi privaic seclor enphwe s; u tmtden and ralevant legal franmewoik ftr pension aiaratioti. S. i'hc philosophy in res:pel of we:lar coAiOiues to bx that or reduciig dependeney tnd pronioting self-rcliance wmong huneficiarics. Thu undcrlying arategy is lhrme-pniiett: 3a mciai assistance cornpone4t with t11 prosed txrgettud. inome iransfcrs unuler the I titifitl B.liurtd Piogitjuitiua U the mIajso lhtvst, making the lbtai rits condilional on atwitdance at school andi IwalIh clinics by poor children between 0 and 17 yeas will cottuibtuw to breaking sih cycle trf povrty in the long term, * tievcoping the II -CO nngcapucity or tho working ago Wle-bodied poor hy providintg tratlvng Opportunities, micro enterprise suPort. anid ltnancial services., using ctXtnlmUtntv- based upproaches: and * provision and upgrading of m.wial inrrastnicture (sucd as waWr supply and saitwation* in pooi areas. ' Tbese will be cpkxpcmented by on-going refonns in oducation nUd lhealth. P'riority programmes in cdtca!aon and healkh, contributing as they dto o the development of human capitai undcrlyinig the aimns of the SSN refornts, are described below Rofrwms for Mutation 20,. nhe Governfmeanc is conrntitito to niaintaining priority bugdwry allocation ibr educalion andl traininlg in the medium) term. In the lscalf yer 20(0/1 tshueaiion ands tr-tining rct'eivc, 11 0 per cent ol thy budgn. tlhe largest allocation to any other -Ministry excep the Mmrastry ol Financo .tinl Planning. hi addition to public funding for oducation atuf trainigl-. the Govrunment intinds to attract private sector support, so A;gage the people in thc stronxcst ptssibic pa2rncrship for devlopinmnt through education and traininig. This pallousrhill s based un the rcognition thliti is lthe reLumn Ot invesituent in the building oCr iit mian anld isvial capital that repstnits owu best hope for eonotimic growth axd social weMll-h:ug, qh, major requirentcnls for an improvcd aixd suitable cluality of lifc in Jamaica. - 73 - 21 1 lt is-tIS at OWi EU' 011 4I /IIood level (O}-5 yearS) iS tLhe expaniofl of |rlt)lient atld improvecIctrrl ° (tuality withl .r Commiitmenlt made t1ir the provision or' a least ofic 11Irined teacher at evcrv b.>asic slwoo wiltitl iiv: years, At tthe jwhaivn l^i el, 1W limWi,}11 ir ilt t .Wse the nunth;t of studens prqpmred to access s"ihnary tvevl editucatiol3S 4I cinoijmcot at this level is 9&) per cnl. eCnp1rbi I'is of) (n >hancing 4uulity: lVvIsioin 01 curricula, ,siablishmnt of I;ibrarics, improving physical facielics. a3id retention anil renl(liatioun at Grade 4, to t.3SLitc tihat pupils at this level itar flunctionally lilcralte aInd nurncrale and prepared or lic1 sccoodary level, 2 At the sccondadrvs levcl trpasls is oil ctuiLy aml access. 'l hie intotjiion is to provide * vcars of s¢c4tuda7ry education lbt all students enLering (iradle 7 in 2{)03 asi thereatfcr. Al tOe wiri(rmv Icvc]. while increasimr, t(ire crimilment'l rate to i5,0 per ecern by 200), focujs will he on provkidin,, students withi ctImptencies wlhich arc relevait to ffte Ilneeds of a Uyilvaimic enlvironmen¢1t. fIn lilI row1 wt-.Ji.'; caicgory, er;;lphai3 wisvl)l iJe o11 pwtv3dirrr reedoialt .arid ph" %Acational imining, Particularvl i'o- young itmen. A trainiig p1rotramime targetted .i mti; oimu- of sckhool youth, and 4t11ill t3 rC-irte.tratc iem oItto the¢' fOmllA edueartnii 5ySic. ro >belrdulcd to he itiplcnretrlct "-itlin the text three vrWs. Iartncr5imps WiIll ho m'mullt \vlfli N(;Os vvho Nvork witlh thi-s L,,rotip of yowig PQopCe. 23. Hlcalth indirators have rcmiamtund relatfivey stablc taid the populatioln's lhL.altlh stauts rill tonipares faiourtbVly Wihll lticr CaribbeKn cotlries. 'I'liw Gvernment wi1l cotttinutec to) pursue the vision tf lloJatl?h kr AlJ, ihrosugh Jittegratiug lwrimary anid ¢sccondaty StrVices. and through the protiiotiort offi ealthy hchaviour. The health sctor c nlprss ca iubliJprivare nul.k wi3il substanual (1 nrco lhkinrms frorn Non-overosinnilt Organisrtions (N(3Os) itdtt reflects tirc (overnmerlln's expresscd desirc or ta parnwrship approach in healthl di\ncry Ihe privatw sector has grown, l7ui accounts for the brgesa pinriain of health expenrditures i ambulatory. diagnosmtc, and phlariuaccutieal scrvices, The public thcalth seeLtor continues to bes the major provider of iiipaLtient scrviccs. It is recognised ilat sutbstartial frianciun gap.S, which halve constrained thle dclivciv or all tlhe health care services, will have toi be ad-lkroiss vvith some mi_gcy. (Cosi reiox cry lthrough IS,,er Ce xS ildl comtinue;'1 il1 levels. 24. A d ceniralisd Admintisiratinv s(ructure has been intrIuced;xi: Reg ional I tealtir ALUitirmle,:. are: Inanaged by Regional ltcrrtis ol' Directorsm while the Mirtistry or lcatilt's heal oflic. identifies national priorilici. toais and targtss establishes standarms anl rc rttet, ons. and t3rovides policy guidelncs, Fratymncntafioi andi Jtiplicatton of scrvic" au cxpecct(l tu dccrcasc utnider the Regional IlCilih Authorities Iitrough thet 1fill inlegratioin rl' JrWttIIf secondary. crtl:ary, amd untiaul hoalth care ser% ices aridi prograrnmes. 2 In ils eflfor ILI reduce incquatli and im1prove access to hcalth cae tIr el Ministry off I leal Ikiah osver the last foiur anfd a tiafl years, hecti d:veloping a suitablc methoLdloIogy 3;3 implemcnting a Nahional sIfallth 1ilsurince Pllan Resource constraint bave ted t o; dccisiont tO litttW0dtiCc tbli' Pltal iti Ph1uA; lhc lCist phawil will bk a National i ltklh FUnILI It lt)tU^i.idi( pcslritioli nCedi(ctiJi4.1 at greatly icdulde( CoLIs IiSi all pCisons witth a itwidu limi: ot Specii(l ttchronic 4hscases - 74 - Refoms tfor National Security and Justice 2) 'T'lhe Ministry ol'National cetriiy and Jutice (MNSJ) has atopti.td as inwcgratc irlippitaclh to RiihtitnM crime ad viokatC' Isn thai ed Ihe Minairy lia~'started to} devekW plublic Jorr prograrncms witlh other Ministrics having critical roles to play (rratslwort tnd Wtks, LtKal Govetnmient and Conmiunivy I>cvclop wni; Education, Youth and Chilrtire). 2. The Jamaica cotl:rabulary F(Acc (JCP' is to contiillue to u,t; crimle by dcccnlrdlisitBg ws Oper~UQOat I ar i enzitncir, Iintllilgsca. placing gIutrer reliuncc on foretsic cevidiocc. 'i. ;SN prograninws are deli-ecd broadly as those wbiuh provide inconte stsppwl and acess to s crviCeS hy thc' p;oor and needy andVor clos requiring assistancc uflur economic dowuittrins. nattiral dtsasiors. or housellol4lspVcific adverse cvents thai lower incomc. lixisting sialul safcly nct provisions itncludc. dit incollie supporcI school-bascd welfare for fleding, fix-,. hooks, sihos and unilrnts; -moniniunily-bascd pIgranirnes; labour miiarket iutmventions. inedicalionS; itidigetl liousitw, tinati asSistance for micro-investment; andj assisanvce to 'NGO2s wIhich srco the b^,): its T'he Gal c.tt ied otit Atn aw mslvs (If eXiSlilng SSN jttigtsttcs nll d iMUdltified IVeral 1411o Sh)r1COmingS. lXnadcNuale trguelitit mcihanisms have lcd to a situatkn in whitchi nian oh the most ncedy arc ,xcludedl (rom benefrts and undeserving recipients arc intludled. Svcral types of beucitits are paid andil- on avcragi. hetlfits arc low (transfers range frojim JS75A}t monllthly tiM Food Stamps ('Or Children 0-0 years to J$24(1,(J a monih for Poor Rdlicl rccipiemts). L)clivery is frugmentled. there is duplication Mn] lacGI of timeliness int dlivcry. and udinnisu-ation costs arc h4ilh. Trhe social sector rcfonr proposals dwere dlineLd in a policy nuitrix approved in liprnciple in July 2000tJ with the unuerstanding that, sarting in i1scal 2tXOl!ti2. priority woIdki be givci to tht; reftimt ageula. 'Ilie pxlicy matrix was the sub"jot of Comliunislity ioultttns fr inorutmion,. e;onysdcration, Jmnd inpt*It; t1e vViarat theniz was tth itmporEant ro' oltiie conmmunity working, in parnership with erwvnittni it) ineet the nesads of the vulnerabtle i. t is proposed that a rctloincd SSN be a permanenit eluenst of social policy witih built in ilexibility to rospond to chasigcs in the levels aidi types of needs as dictated by the economy asnd the widLr environnlect. It will addiess risks and ssues oi' the different lire stages a%k - 75 - w ASt us tboK whiCh tnW KV IAX l ae 4 rU1pS ait will sp6iktlly r 1t dimnwullv poor arud vu;lnerable_. .32. HseI o(n aInalyss or tiW mlajo t&)ia issues, groupt presenily a risk i'Or poverty, andX1 ih1 content aind scop of extisiing ilgramrrrs, thC SNN rcDi'ntl rocuss Ull' : isthnaivcly pro-lpor pmgr'Immes. itsing a culrdSgiicd t%euirg inThiUhn_nR i_, icakage orh(crielii O.dl jrwietsid heutcr vcrag tir tile needy hItteration ol the range of blnellks to addrcss the risks asstciatcd with diferenit Condition.tso povertyivulocrability ovecr tile various life stags of the poor, and wi incretabett tkevl of hialefits Consoliated. ratiolWiscd aind integrated progrAma;i., antt scrvicc% led by a single welfre ageticy bil3 itivolvi;n othur sL'uwer ageinces and using Appropriate ted nology ikr pr%vssi1ng. payment and r-ecard keeping. io ;itlprvc tinieliness of &elivery I'conomny. el0iiesiecy and fiqc.aif sust.-;inability - doing mrtore wVit lessc achicved 1y clitnminuatin mmrginal programmes, csrtlmittaills andt modifyint 0t11rs. divestlent of sorie ser iceS, and forging straie4ic alliancms pjaicularly with NCOs Floxibilitzvadapahiilily uItIii i set tofore clemelils whilch aurc casiiy seaIlcx f Lp or douit itL relect demantd , anid wilh a stIotsig Inolitoring systemn lo track betneficiories atid rcuinv c tlhe:li fih*nl rocipmn sl tss iW> hiit lo .moly Or IrtIcir status improve. 3. Sp.ctxiically. IIIL rforinis ofiU the SSN iIIVolve ShOrt tWril anld IIedLHiUil1 t nlt 3j S t;iDlows: Shi2U 1S31.- I SimUfing in October 20tHi, itntroduction of an objective atd transparent nicclUmism lor better targetting, to identity household-aindlividuals who receive bWfit.. . target3ing/scoring Ioniwula lias ben deeloleI as part of the ppradrlion activities iol the proposed SSN refunn pr)ojct with tho Batk ari will be uscd to selec thl h:4wrICiur;: it) rwcVIVv poymcn"t. To mitrnnis; delivety costs, improve udmnitirative cUifcicncy, aXd :eloutcte dluplication. thfre inastin programmes (food anid kcxnue stanp. ptiblic assistaiLw. annd poor rclicf) will be itciged intno oe inonic transfer under a inilictd Vtene11t Program ,nc starting wilth a 6n-month pi1o plum targeliug atout 34 lA?) befie:iurns in onc parish in Jantwjry 2002, an expeling to reacth atmut 236,00 boncticiaries in all 13 parishes by the ithir year of the prograne, this will i volve thv gaidual phasing out of the ex isti ug programmucs ovor tbe poriod Junte 202 io M areh 200311. 3. Ilmasing the Value U4: i h bvllofits to a nior' realistic level, taking iiLo consideratioi Ihe erosioJ7 or purchasing power of existing bencfits whih has occurrad bocause of inflation, the privatv vo-sts of obtning halth and education among the poor. ant thec capacity of the tIifFr l 6tietw to absorl tdie ;ncnIt^'Sc' - 76 - 4. li'ec2lits unider etic (;ilied ikzwfilt Inorainetr will hw ciodtional twin iic itdltaunticu lilt 0-5 yvai Ulls,; reFuir schno a Kttennce anmoig the 6 to i? Vajs olds -an regular clinic visiu, f'i the other cateiwics or teneficiarics. A winaim *vill he intodueWd pciietly to mwnior progres of tic delivery an1d conpliamie with condiutiots. anJ to li; vah the impact of the lijnikag of trdnsfe.S it allendlanet: aU caltlih facititics anid swools: the results of this ptwi:LSS will provide ihl ustitiicatioji br oihnuo supploil troini il Bank. during tih- Ntcriod vf tlc pro~pobd Wanl. 5. Siartitig itn 2(0KW(Ji2 ;uti conlinuuing a(t tle ti nil ?(1t1.04 *xni1*l'imli a1bi. cducatHti/ticiptlion w progrnlic tk inlvolve all play.rs; atul stk.eholtlers in Irnmulation of stra-eici tos rshaipo and imptcrlont Ihe reformed SSN. 6 n .Enatincri of a Chikl C',rc sad rltAcclior Act isn N(A. to bringS Jmntawica titnisu iii linc with ihL. principlcs ol' dw nittntational Cotivtntioo o it 1T Riglts of tile Cliild A plaesd iniplenuatatiion if the National I Latli ldiIfrtu e Plain, start1toi in fit 2 nit witi a National ficalli l undl to provide prescriplion medication al greatly frMtlued coist ifi all persons with a wite range ofspeiezttd eironic diseases. Mtsitimt} lter S. L;Vaiun o11 to,lh Stih,ol ]'CdIng1 Ilgr}anlilne Wilth i VIeW js r;41ili-VAItII. 4tsld ideifyify tialtorn3live methods to pnxhctu aindl deliver i:iwol lfoeidig from ihl pre. school to the seconldary levO' and OFotrihUtb it) increased covnirge iuali ;diulol attendance; studsic i nw heing conduteci will providc tlhe bascs i, chanpo and r tnimmend an implrnipk ntation horizon. 9'. .Pplying the tar3ctultl nil :haitinii to the p-lVistson of educationial betel'iks suci ws school fevding and a;&istlicu with schoo wad examtinrAtioni fces at all helecl. 1I1jS will he implIcteted on a plh;ased basis. starting itn fiscal yea 2003104. ahier the rewults ol' ith swt,ing fonrmoa n tite Wkoik's SSN project h3avc bn cwateldw aMd adjusted. I. F-valuation of the ;Scn l anti dEconomic Suppon Programme during 212t)3. to i(Wntify the aras of diuplication with existing prograri1es such as thc assistatice with schtol anld ex aminaltioir fies and tie Joniaieta Soti:. I nv%strnt; unI ut, el tmafsing an) ttuphrcaloIws fitbr. atd rc-focussing o-n imafl cniomunity developmenit and cnlergency activiilsc, It iltainilain equity aul Lrtnltsparency, bciefilciaries will also hc i*ntilied tirgttgil sti t(f l icoring trniulb, I ^I Evaluation of tic exs:nence ol the Lift Ullp .1aXlamate pn-jLCt durii?i 2(Xy4J., anld incorporation of tlib l)b"t fracticc entering to youtl.-al-risk Info the Ytt4ill ve1topnioent projixt hiieV develtir,ned for financinig by tlhe ll 1. 12. Modification of clSibililty critera for Drugs for tlw' Fl&-rly and O)rigScri programnivet to recovo- a gruater portion or tite coas fronm noet-poomr he,ficiarics ant fulier reducc thec cmt to) thos idwti;iod by the argeting ineeasoin.to conicitt witl thlic inplentation tiof tl Nationial I Icaki Funidl. - 77 - 13 1 Io vtdc *, i ni + in d Icehr at eao70 hbaSic sic lt.o ;ih*n S y s iraei _0ft(i l vas part ofi a1k: CommitnIn. ko i vPfOVe (tie quality of I.ar1y (on,JJhoU, 14~ TO Impliumul g ort~tilw r t~t Alto for Pie IIv yuq's 2,j(12 to 2W)(,ac lw , 1n relc1,m 5}' cOn1 o ' i XpaLl of tIllV/AIDS o) the econoy;ly enbis will be ou prevcntitin (cspti-iqy of p4Cdialric AIDS) survOlMoJ4#w&, mideimiohvi autl rQCSjI Cl Policy a*lVOCU'y, a4ld tivl and humzini right1s. 34. Mo,tosin~an~ C lation a the ocrz,lI cial 4jCc4or r 1,filr Will eud icia an ll lvraiollal lavcK ' it (GoP s I luman) Rcsout".s. Council. a st&( ommilt' >b. i' t. will onllutorto cosurc thal die liolicy reformits ar beinlg ifliPlOlUamccd. anl willh re tprcdt du;ilc oan po3licy adjustlneJlls idkentiicdi Thc Pl'icy Rcview, 1)nii tidwe Office orI th 1rittw Mwiswr wvi)) have utnbrOla" resqxonsibility for ot'fbrn,ajwC rcvitc, 'Trie phum4ifn IISII)II) of uamaica will continuiec ti mll.tint(litte poly raclareh, nt3siasl5 cltuillon adi Jd,evAJolor7n II ptsS Which itkltiry tlue ncLxi folr potriry itjltoiwint's and to} mjkA; (iudc r~cewn nzltt,i,sl (ir COIISIde;Ltznm. nth Janisaie,, Siurvey 0o '1.vin; Cionijiion}:. wJil psros'i i tlvaIblahl inlo'itj004f Iw utit poverItVy and prowammo alysi& F4i"naning tbe SSN lReforxn N., OIrning the t.xptccd pcriodl ofl w Project (Ociuhi,i' 20I) to 'picnuiwl 2i$hS ) 1 x l l Itrvid. ovcrall, about 48)2 1-wir cjtnit of ttib estimatcd tUSS77,4 willion itunacing reqpiwd tn ii~Snpkztn thc z l l i s av tv SWapr'AamrC tr wh7 ci3v t)he Bank will prov id4e 1onl fnils Thhs fCiancing wll i rcase tle mllonthly Va1w nif' otbenlils fi-ot 1 a rwtg of bvltk.'enIt p.iijo to S240.0; (dqvaShti;Pg (ml lth eatto}try at pnt. t a monthly $2300) fOr all juteg-wrim in 2002. a 50 pe' cntl ctrcasc to S375A)0 iin 2003, Atd£ a M3A0 Ier cctut mct 2. amdl 1%S43(2,1 0 t y¢ar 3. 'o reflect > cmrnitmeat ito make te btowilaeth mre paLaniij&jtl. the level for ycar I vwas set a3 3 aOi wlc' ce11ti higer {thnhat catlkcae. T11h levels FoIr years 2 antd 3 were adjusted byy bcow-cn If)t" and} 5o.2R pr Cxain in keeping with cest matd budget capcitly. i t . l-inauca , sof t)w J Ulifictk litictil ig t tih fitst a JStics * plai iitcreases iii Si)1Sit' on key SSN progam ete, vllics tit G tllS lo fince y dit de bt stIifltn t . increased revenue injlow%s a, a result of improvedt adinuitstrattion and collectioi lrIgics. ain1 ulsed4l troh inl (W)1'. (Xwnlxplecncntary to d]¢R btt¢¢ivS (N r t;lalcits. wk'ill te It' 10 - 78- aIliwation st ,'rtacSs dctiti14 ;,s t'casible as a cois U:iee ol pariiel reviws and S4ttdiS zs 'Xiisti% SS'N programnws (~.S ,iicliurn Wrrn at;vitics dCSCic ft p tpi ObIher Finaneeial and Tec4hnies Assgitanee ii ~ ~ ~ ~ iI iilul.+@. Wll W-I|'4'Xt Ow mqi' uliml 1Ow your loanl, Ith%Q tlx-i% lgriAmcr:L) 1Devieeopnieit Ba'ik, hias hbvit prtcw sinig a reqtetst for a US$40.0 tillitiisixtar htsif ood aibout 1 S$SI.2 iti1tkn rit tc1I1iiiwl voopemrion iuiuls.. PThi. finuin will he?p to prtotvc.t _ Aiwm safcty nct spenldiua duriosig fhi, priod of strontg tiScad adjustmCnt. aiid t1x61itaw tfhic rn,vruwturII- and be h acr gtatgt m of pecific OiSil: snwt pnograninmicsD t)iti SaupuiX dI tic pirvitidc rif r rms ktt5 dw " sits Fdini ng1 rogranimme attd tic Schoodaiv vclIol F.cv Assistantce (r°og -iiiinnc; ttsi impnmve thc iargctt6i.g (' 'grants lo tiasic tiloo,ik. aad I to 1111t1-s ttihc i1nitoriinl .aId cvaluation (i Ilit. SSN. C'. ('oacIui srn .'). Jamaica hias Ititad signitfiutut jroggcss tit ad4risstitl ig ih uis rcsuhltl fhi ni 1twt Ji:e iIU tncr~o-ornoic stiructural r. l`0rmne. as Well 1tS refOrMft oF 1the %ocilt set4rnt Al; i'*sd.*1 tts ttis 1.1cr £t1i: Ck)VmrUmt lL.11m its tisaktittito g suk stantiataz l ftlirher ptgrvss iu f wivitl tcas. Tht; pubey atnd proccidlut changes ito hLe implemented during the exit tlhrue v:u-s. s0outl stren,tBhen the sotu:lness ol thc soCial siCC oi and trlevut;ee of the social &afvty uet T he Jaatcnl Govemnmol Mitsevas that the Worlid I4iitk's sassislumcc will bizi tegral it) dxe s-ucct,SS ol thel propost;i progr;xm Si ib enJ y. Oramr Davies llinM,ter of Fitiance and Phlanitjg - 79 - -25 8155 U.S.A\.J800 c 7 70 77030 77 000' 76030' BAHAlt4AS Elevations:J HA M,AS -t 9°00i Feet Meters JA MI A ICA t9,0 ME 0 CUBA DOMINICAN 5908 1800 Main Arterial Roads o Selected Towns 2 CA R16SEAN HA 2954 900 Main Secondary Roads @ Parish Capitals BELIZE JAMAICA 477 450 Main Ports National Capital IInternationalInternational Airports Parish Boundaries IjONDURAGA Boundaries 1500 0 Region Boundaries County Boundaries SALX#2R NICRAGUA 80 700 oV 185 180 l l 0 78°000 CA RIBBEA IV CORNWALL i;0 -1830'ALMOUTH j MNE T A4 ' SEA 1830'0 L0 10 20 30 40 50 KILOMETERS S E A 0 10 20 30 MLES cm ~~~~~78'00' 77030' 77 000 78030'