Document of

The World Bank

FOR OMCLAL USE ONLY

611-2TRqxwt No. 11927-BO

STAFF APPRiISAL REPORT

BOLIVIA

SECOND SOCIAL INVESTMENT FUND PROJECT

JuNE 8, 1993

MICROFICHE COPY

Report No.:11927-BO Type: (SAR)Title: SECOND SOCIAL INVESTMENT FUND IAuthor: VASILIADES, KANELLAExt.:31970 Room:15005 Dept.:LA3DR

Human Resources DivisionCountry Department IIILatin America and the Caribbean Region

This document has a restricted distribution and may be usd by recipients only in the performance oftheir official duties. Its contents may not otberwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENCY UNiiT8

Currency Unit - Bolivino (Bs)Be 1.0 = US$0.35

US81.00 s- B 2.86

ALA YEAR

January 1 - December 31

AnRnmlTa

CA Consejo Administrativo (Administrative Council)CEMEI Educational and Intercu-Itural CentersCONAPSO Consejo Nacional de Polftica Social

(National Council for Social PoiicyiDINASBA Directurate of Water and SanitationEIA Environmental Impact AssessmentESF Emergency Social FundETAP Environmental Technical Assistance ProjectETARE Equipo Tecnico de Apoyo a la Reforma EducRtivaFNDR Regional Development FundICB International Competitive BiddingLCB Local Competitive BiddingIDA International Development AssociationINE Instituto Nacional de Estaticas

(National Institute of Statistics)MAU Ministry of Urban AffairstIIEC Ministerio de Educacidn y Cultura

(Ministry of Education and Culture)MPC Ministerio de Planeamiento y Coordinacidn

(Ministry of Planning and Coordination)MPSSP Ministerio de Previsidn Social y Salud Pdblica

(Ministry of Social Welfare and Public Health)NEP New Economic PolicyNGO Non-Governmental OrganizationONAMFA National Agency of Minors, Women and FamilyOPEC Fund of the Organization of Petroleum Exporting CountriesPAHO Pan American Health OrganizationPNSDISM Plan Nacional de Supervivencia-Desarrollo Infantil y Salud

MaternaRA Requestng AgencyRDC Regional Development CorporationSIF Social Investment FundSEDEMAS Regional .vironmental OfficesSOE Statement of ExpenditureSPS Subsecretarra de Previsidn Social

(Subsecretariat for Social Security)SSP Subsecretarfa de Salud Pi2blica

(Subsecretariat for Public Health)TCU Technical Control Unit (SIF)TGN Tesoro del Gobiemo Nacional (National Treasury)UDAPSO Social Policy Analysis UnitUNDP United Nations Development ProgrammeUNICEF United Nations International Children's Emergency FundWHO World Health Organization

STAFF AIRSAL REPORT FOR OMCIL USE ONLY

BOLInSECOND SOCIAL WESTMEN FMN PROJECT

Page No.

BASIC DATASEET ............................. I

CREDIr AND PROJECT SUMM A RY ........ .......... iii

1. MACROECONOMC SETTI NG ............... 12. TEE SOCIAL SECTORS ....................... . 23. TE EMERGENCY SOCIAL FUND (ESE) AND

TBE SOCIAL ]NVESTMENT FUND (SF) ........ 4TMeEmagencySocialu Xd(ESF) ........... 4T=niiM fOm EMegey t LAnger-TamDev meZ ............. ................. S

he Social Investment Fund - Sip .. .......... . 5Oqpn2FkWxm nd Savfltadb ......................... 6

4. rADTERM REVD> ............................... 65. ENVIRONMENTAL BMPACT AND

INDIGENOUS PEOPLES .................. . 86. RATIONALE FOR IDA INVOLVEMENT AND

LESSOSLARPE ......ct.Poessin................. . 109. T ROJECT COS ...FIN.CIN, .DI ..RSMEN . 11

POjecCests.....a..... ............. 11

Procueamescition. . . ... ... .. .. . .. . .. .. 11 2

S.8PROJECrouNts NTATIN .............. .1iI A nan ge m ~~~~~~~13

Subroject Pi ceng 131. NRECN COSTS FN , DN. ..

PROCUGEMENT, ACUDrG AND ANDG 19ProectCost and Financig Plan . . . . . ...... . . 19

Disb.00... .. O.*. 20

10. B E S NDF RI .... ...... 2211. AGKFEMENnSRE p C EDAMRECM &NDI ATION ........... 22

To topmd was prQaed by Kale& C Vsuado (sk Mana, LAMDM) ad hm PalFa.t (Residuit Mission, Bolivi) inm daf o bSoc ivsFun. TeP arsltook plae in Wasikt, D.C. fm Aprl26 to May 7,1m. L. . de S Antoine ( EA2HR) was do PoReevieww. Mesmi lam' van der Gusad Yosik Abe am, se"civey, the manao_8 Dis aCif ad D4xft Dieto.

This document has a rcstrircd distribution and may be used by ecipients only in the performaeof their official duties. Its contents may not otherwise be disecsed without World Bank authodzadotio

ANNEXS

ANNEX 1Table 1 DoePaidroje Cos ........... .......... 24Table2 P8ectCodFhanwingby o C ry ............. 25Tbble3 FinancingPlan ......... ................. 26Table 4 Metodsof Prurme ................... . 27Table 5 P n t mits by pe . ............ ..... 28

abble 6 Dib metAlocatios ................... . 29'ibe 7 Dibur etForecast ..................... . 30Tible8 Finauciag PW4 ,'T SIaSProgmm .............. 31

ANNEX2 ProjectPromotion ndB vahuionProcedu s ........ 32ANNEX3 SIPs Itenal Monitoring System . . . . . . . . . . . . ... 35ANNEX 4 PrQ ct *onai SdxduendP fema c

indicaor ........................ 38ANNEX 5Tble enta D buiof Appwved Proects

and Committed Resours ................... 41'le 2 Distibuion of p Prjets and Resources

byP6Niot . ..................... * 42Tale3 Summary of Approved P rects by A am ........... 43Mible 4 Prcenrt Rlatio of Number of Projec

Distiuted by Area ............................. 4Table 5 SIFsCmnimitedResourevs. Countekpr ...ski', ............ 45¶lbkb6 DisxbutioaofSlPsResourcs by Department ....... 46

ANNEX6 Piject cCyce . .. .. ............. . ........ 47ANNEX7 Key Proect Proessing Bvents ................ . 48ANNEX8 Selected Documents and Dat Availa b

in theProjedtMe ....................... . 49

Slrs ORGANIZATIONAL CHRT .................. . 50

M&P MDM No. 24021

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5OUVIASeecn sd Sci laweugmm Fund PftiJq

DATA WEAR SOURCE

A. GENEAL COUNTRY DATA.

1. Tol Am (Sq. Klm.) ,099 1992 NDR

2. TW! PpAW= (MU=) 7.2 Mid- WDR1990

3. Usban k_baz as S of To! S1 1990 WDR

4. PopAtice in Caa Ciyes of Uba 34 1990 VDR

4 u a n of Toll 17 1990 V/DR

S.- Ovet Incidence of Udan A W (%) 55 1990 IES

6. WbUNama NatMiupado in dhe Labor Fame.Pd.au in thomal Seaer (S) 44 1N6 DNSof which EwpIymet in Manl Uda Ame 80 1986 DMS(%)

7. GNP per Capit (UsS 652 199 USM

IL POPULATION DATA

1. Cade ith Rat. (Per 1000 Popuou) 36 1990 V/DR

2. Crde Da" Rat (Per 1000 _pan 10 1990 VWDR

S. Toda Pti Rat Bh VW Wma) 4.8 1990 WDR

4. WomAn of Cildeain Ass as % of All 47 1990 V/DRwomen

5. Conaepti Pra(S of Wom 1549) 18 198 DR

6. Woman's Risk of Dying of PiqAssocided Clnasl(s) 10 1918 D}S

7. Avep Anuul Pbpuaion GOrsh 2.5 1990 VWDR1989-2000(%)

8. Pbpultion Age Stuctm (S of Tot!)14 and under 42.5 1990 V/DR15-64 54.1 1°90 WDR

C. HEALTH DATA

1. Lift E1potXazqntBth (Yeam)Ove0 60 19.90 WDRFac_ 62 1990 vRMae . 58 1990 VWDR

2. Ia MRtalky Rae ar 1000 Li" xths) 96 1988 DMS

3. Mamnal Mortalrt Rater G00,000 Li" Birts) 480 198 WDR

4. Under-5 Moralty Rat (per 1000 LW* S1xt)Fanls 109 1990 WDRMe 127 1990 WDR

| u| i Euf ! t

S1sI 8' tY1 -

I l 323 31g

a XB > l s O X XC. i"^I I " w

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BOiIAM

SECOND SOCAL INVESTM FUND PROJECF

CI1T AND PROJECT SUMIWARY

LnQzWw Republic of Bolivia

Social Investment Fund - SIP

Azu=uut SDR 283 million (US$40 million equilt)

: . SbKlandard IDA terms, with 40 years maturity

Onknd Te Tmr Gmta

The project would continue the suppo pwvided under te First Socialnvestment Fund (SIP) Project (Cr.2127-BO) buling on itsachievemens and corecting Is I com -- identifd during te mid-tem vw. It would asist te Gownment a improvw coe andqaity of basic serca in te halth, educaton, wate suply andsanitato sectors It would al provd istonalsupport to SIP to imrv the quality of its opera by, i aWbete tagetig the poor, improing supervision of is sbproj,reduci4 the me in subproject proce%ing and m ifinancia plamning capabiities The credit would finance investmentsubprqjects in: (i) healt, iuding ntrion prgrms and basictraining f commnities to imwv teir nutrition; basic and primaryhealth cae, inc luding hh infrast efor the healtli disticts(health posts, health centers and district hols), immu andepideiology programs; (ii) basic water supply and saniioninfrasucture, including wells, diibuio pipes and small-scale

sge systems or latrines in rural ommuniies, combined wititWaining of the comuities in the opeaon and maintece othevstems and on basic hygin; and (iM) educaion, incudingconstructon and on of pqmary schools, multsvice centers,rural boarding sch-xols, and prviso of equipment, furntu and tat;and short -term adult litrcy and pcal taining, particuaytargetg women. In addition, the Credit would financespport to SIP, including salary sWport an a decining basis, andtechl aistance in the areas of suprvision, porty targeting,monitoring project imact, inaal mgem and planning,subroct procosing procedur and project appraisal criteia.

Sl! ilI

Etia ot: Al

-US$ Mwllon-1. Supoct

Hiealtfi 12.3 3.9 16.1Water Supply and Santaon 14.3 4.0 18.3Eduati l 2i a

Subtoal 41.5 10.7 52.2

2. Ittutional Swpprt to RAs L6 0 1^6

Subtotal 43.1 10.7 53.8

3. SIP - Institional Support 13.2 2.0 15.2

other operatip xedtrs

4. Techniea Assia (sude - mehdlg,ifmo

s9s, monitoring and Impact)

Tota Costs 57.1 12.9 70.0

a/ EB1uuive of =axe ad d.hics which am ato afflicabe.

:~~pln

IDA 40.0GOB 14.2Beneiciaries and local

istuto 10.8OPEC Fund S O

Total 70.0

_:a~&DA u Us mil

IDA Findal Year 1994 1995 1996 197 998

Annual 1.2 8.0 10.4 16.0 4.4Cumulative 1.2 9.2 19.6 35.6 40.0

RalM of Retum: Not ofieaole

rnUCUW Prom of Ta,d

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BOLVA

SECOND SOCIL rIMTM FUND PROJECT

1. MACROECONOMIC SETTING

1.1 Bolivia - oe of the poorest couies in Latin America - bea its stabilization andadgustment pgrams in 1985 after a period of rapidly deteriorg economic conditionsRcovrng to mds rates of growth, Boliviaentered ths decde having successf!llytabiliz its economy. Economic performance since the eady 1990s has been co .

GDP growth was 4.1 percent in 1991 and 3.8 percent during 1992, yielding modertinca in real per capita GDP. During 1991, prvate sector investment grew by 12.9percent (although from a low base), and accelerated even more dudrig 1992 (24 percent).l curt account deficit (before official tansfers) has howeer deteiorated from 9.4percent of GDP in 1991 to 14.0 percent of GDP in 1992 due to decling export revenues(primarily as a result of the drop in the naba gas prce) and ineasing impos of goodsand services. Also, the deficit of the nonfinancial public sector inmcresed om 3.6 percentof GDP during 1991 to 4.6 percent of GDP in 1992, C'ue to nearly equal on in bothcapital and rt However, Bolivia bas been successful in maintaining picestability; inflao reaced 14.5 percent at end-1991, and furier dorased to 10.5 percent atend-1992.

1.2 Bolivia stl fa difficlt prospects over the medium-tem. Despite succe inreducing the country's debt, as of December 1992 it remains burdened by a high leael ofextnal debt of about 81 peent of its GDP, and debt service amounting to abo;ut 34 percentof exots While Bolivia retains access to official loans and recived a substantial netinflow of foreipg savings over the past three years, it is unlikly that Bolvia will regaincreditarhiness for loans on commerc terms for years to come. The economy continuesto depend on a few primary commodity aeports with uncertain market powspects, and theongoing disification of its export base will take tim Further, despite the imp inecononuc policies, the weak scial and physical infas combined with a limiteahuman resource base will make it difficult for Bolivia to acelert economic grwth in thenear fitum

1.3 Despite these difflcties, the Govemment's medium-term stategy aims to maintamacreconomic stability and to achieve a GDP growth of at least 3.5 percent per year. Tomaintain stabilit, it wil requir continued tight fsa policies and market determina ofthe ehange rate. To achieve at least 3.5 peet avenge growth Mate, invstment wouldhave to rise from 5.6 pcent of GDP in 1992 to 10 pearent in 2000, financed by higherdomestic vins, increased private capital inlows, and coinued asace from donors.Domestic savings i ectd to we sharply by 2000, ecuged by a nger fiscal effortand increased confidence in the maintenance of appropria macrenomic policies Animproved incenis fiamework sduld encourage increased inAows of net prvate capia,from dlose to zero in 1992 to above 1 percent of GDP by 2000, which together wih anincreased private domestc investment efft should result in a tronger supply response.

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2. T{E SOCIAL SECTORS

2.1 D e the good economc manageme of rec ye Bolivia remain one of thepoorest countries in Lati Ameca Accordig to the 1976 census, 89 perent of all Bolianhouseho wae poor. While income resut ar not yet avalable frm the 1992 census,inii a _ indicae that seve, povet contnues to afect a gnificant share of thepoplaio Based on daa from the 1990 _ntertd Household Survy, th ndece ofurbn poverty is 55 per cnt Pvuv is ighera the rurl ars Mh educaton lvel ofmost of its 6.8 milion Inhabitants is lmted; ad heat i a are the worst in theontien Abot 23 pecn of the population. is illlte Mmo than 70 percent of theillitate popao lives in runr areas and 60 percent are women Life eqectac at birthis esdmated at 60 years (1990), beow the avage of low income countries; infant mortalityre is 96 per thousand live birt (1990), a lve comparble to tht of Hat In the Region.Mlnution rates are high in 1989, peent children in the tee months t 3 yeasuage group wre sed and 13 percent underweght. At any gi time 30 percent ofchildren suffer from diarrha, mainly reld to poor quality water. Only 25 percent of therural popuato and 74 percent of the urban bas access to potable water, whie 14 percent ofthe rurai and 35 percent of e urn populati has access to siti series.

2.2 The Soca Sectors: -1tltutloal and Policy Framewor: Low coverage andqult of services are the critical Issues in the social sectors. In the eduaio sector the

;instry of duion and Cultre ) is reosible for pimary and scodayoducaton, while higher education is prvided by plc and prvate univeaies. AlthoughGos coveage of the educaton system ranges fom 60 pet of school-age (ages 6-14)

cidren in rral areas to 97 perce in ubaa anras, net covage s substantially lower. Theprvate sector is playing an inceasgy imprta role in Bolivian educaion, including forprfit instition and schools managed by non-prflt NGOs, and church groups. In urbanareas, pivate scools enroll 17 prent of interediat leel tdnts and 22 percnt ofsecondary level There are sere ineffilciencies m the pubi;c educaton system: low studInt-tea ratios, high rat of drop-outs, rptton, a illiteact among s:hool l£avers,few hours of Instucdon per day, Iiterte tcher and a powef teache' union thatensu lielong job securty for normal school (teacher taning) graduates. A reaively lowshare of GDP is et by the caad Govenmet on educato annually, averagi 3 percentfrm 1989-91, compad with an averge for Ladn Amerca of over 4.0 percest. 1baddition, resource allocation is ineffiient in the sect. An estmated 80 to 90 percent ofrural students, and 40 to 50 percet of urban studens, lack textbooks. At the same time,Bolivia rank fourth wo de in p_ertge of the public educaim budget dvoted tounivesties, and 95 to 98 percent of expenditm on pro-unversity education are absobedby salades of teachers and adm ive pe l

2.3 The health secto comprises a multiity of private and public instuo. TbeMistry of Socia Welfare and Public Healthi (M rahes 46 pert of the population.NGOs serve 20 percent, mostly I rural and pen-urban area A few i tandRegio Development Corprtion (RDCs) are active in the health sector, with less than 1peet of their repective ivestment potfios tre tward heat. ve forprofit sector serves a small porton of the poption (5 percent). Duing the 1987-91period, investmet in heal avetaed 2.9 perent of total public investment or .2 percent ofGDP. More emphasis needs to be placed on shiftng expenditures toward pdmary healthcare in runl and perk-uman areas, with specl focus oan motes and children. Under an

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ongoing ]DA-assisted health prqect, efforls are undeway to realocae pesonne tordprmary he ca failitie

2.4 The Minisry of Uin Affais (MAU) Ib the ationd uthority for th wate supplyand saniation sector. In 1991, within MAU, a new Diectate of Water and Satatdon(DINASBA) was created to cany out nomatie, planni, coordination and supervisoryfuncions Te Decree eablng this ew structuat requr that the RDC situt waterand sanitation units to frmat d priizepplans and prgras, and providetechnical asitance to k ope g o. A new naional seo Plan prepad byMAU, 'Water for All, sets out the now Istitutonal str re, sevie leve tgeb andivesmt rqimnts with hiheast proity to rura ilti. It ao designates, theRegional Development Fund (FNDR) and the Social bvestment Fund (SIP) as channels forextema and domestic financig for utban (NDR) and rural (SIP) inves in the sector.Th Plan sets targt to Impve ceagie by the y 2000 as f1llows; fo urbn watersupply fom 74 percent to 80 pacent, ur sewerage fom 35 pecent to 55 prcent, rurlwater from 30 pecent to 60 percent and nal sanitato from 16 percent to 50 percet ThePlan's ivestment reqirements for the 1992-2000 perod are around US$440 milidon forurban water and sewer, US$223 million for nual water and sanitato and US$92 milmionfor institutional Strengthening progrms, whih is ambit reltiv to past investment lev.

2.5 SoIal Sectow Constcans and New niaves. AIthough the GOB long hasespoused its commitment to social dvlopment, over the past few decades, it condstenlyaile to ensure that the reqise instutional base was in plce, and that suffient nancial

resources were allocated to design and deliver sustnable social progrms. Main constrintsaffect the socia sectors icude: (i) weak situtnal capacI chraeie bycetrzantion in decson makin; (H) absene of defn of the roles of pic and prvatinsttutio active in the soci secto; (M) weak policy making, plnnins andimplementation capabilities; (iv) ineffldencies in resoure allocation and inadequate financal

ement; (V) f ing inadministrvejobs, low salies and poor traiing; (vi) lakof benefiiay patcpato; (vii) absence of mehanisms to ensure susanabiity ofsubprojects; (viii) lack of adequate polic and mecham for cost recyery; (ix) lack ofadequae norms and stadrds*; (x) iadequate ifrmatm sms fo moting covage,quality of service, and insutio perfomance; and (xi) oveappg s amongpubLic sctor agenis Recgnizg the need to bett targ social spending to the poor andthe serious instuonal constaint to doing so, in the late 1980s the GOB iniated a series ofmeasues to improwve capcity. It atcated its scial polcy and obtive in its SocalStategy Estate Social Boviana-September 1991). This policy under the need tofocus on human capital development and to Improve the quality of lit of the most vulnablepopuiation, thus attainin a more equal distribution of the beets of economic growth. Thesategy assigns high prity to incra socia sector ivesmts, strng theinfomd base for social polcy decsion making, and increasing the efficiency of domesticand exnal resource use tugh slect sectoral rem, better tageig policies andprogams, and iproved cdation of actidtes in the ddivery of cal rices. TheGOB estabished a National Council on Socid Polic (CONAPSO) in 1989, andsubsequendy, in 1991, established a Soci Plicy Analysis Unit (UDAPSO), to ptovWidetecni support to CONAPSO. These inWitiativ have contributed toward building theGovenment's capcit to ormuate and evaluate sow policies. oInof theSocial Investment Fund (SIP) in 1990, builing on the uc Ems een Fundeperiee, has been a pote step. Another step was tae in 1991, when the GOB began,wnth IDA assnce, to design an educatona reform pgram to impve the quality of

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education and tie ovefflciency of the system. In recent yes, the GOB restrce anineffecdve agency and renamed it as tie Naiona Agency for Childre, Women and theFamily (ONAMA), assigning it th bay role in caying o a Ten-Year Acto Pla forChildren and Women Plan Decena), to im the codto of dcldren andwomen. Th Pln icudes th Natonal Progrm for Women, ad an nteatd ChildDevl t Project (PIDI), for which IDA support ir ;so being proosed. The creation fCONAPSO, UDAPSO, DiNASBA and other bodi a enhanced germent capaW toanalyze and fomulate socil pocy, but the remauis a consdeab need to strengthen thtechnical capacito consol policies, analyze inform and desig pityintventin in the areas of porty allevaon, educaton, healt, water and sanitation, andnutiin.

3. THE EMERGENCY SOCIAL FUND (EM ANDTHE SOCIAL NETMENT FUND (SIP)

7lbe Emegency Socdal Fud MM

3.1 In light of evere poverty conditions and weak instuton capacity, descriedabove. the Government took emergeny measures to ashion te pact of its stbilztipodli in tie mid41Os and, subseotly, to address longer tm pvery allevibo, toughth policy and instuional initiatves mentoned above Te Emergency Social Ftmd's (ESP)prmary objectve was to gerate employmet rapidly for toe displaced by the econovic

-ns. It financed small-scale ubprojects in prducive and ci i and of non-ment intvento in education, health and nunrio These s ects wer desged

and caried out by a varety of endties including NGOs and community goups. Two IDAcredit opats (Cr. 1829-BO SDR 7.8 million, and Cr. 1882-BO SDR 19 million)spoded X ESP.

3.2 Project lem tain proceded without major problems, despite the enormouswokload of DSF to identify, evauate and supse a lre number of widy dispeedsbrojects. The early success of the project and the commtment of IDA to }SP led toresource mobilization by other dona on a lar scale; by mid-1989, total commitstood at US$140 million. The program reached an esimated total of 1.0 milLon direct and7.9 millio indirect beneiciaries. Surpassing expecatons, it financed 3,269 subprjects witha totl value of US$191 million during its six year lif seexpansionsUmprovemnts of the inr wer made and essental peventiv heathservic were provided.

3.3 Useu lso from the ESF imcude (i) speal effort is needed to idetify socicoss of adjustment progams so that acons can be desged to address them specifically; (u)the imporce of makinig the ESF program a cent eement in h Governmen's macro-economic adjustm progam; this was vital for its success. Similady, the BSP was a majorhcowr in explaining sustained adhevence to the macn econom progam; (M) exeiencedemlostrated the need for and benefits from srong sparvi suport; (rv) with respect tothe economic and scial impact of the ESP subses, resac showed that the public wkcomponent of the project benftted the lowe social aa thug inceased emplymentopprtitis and higher inome levl is reduced ta o p rty duig theadjustn period. However, te allviaion of stuc pwety-that is assstance for

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groups who suffer from a combinaio of low income, and limited accs to basic heah andeducaion services-is more problematic unde a stdctly demanddriven appoach as in ESF;(v) eeen in p ing subsdies to de poor through geoaphic targetin gssome success, but is not sufficient to reach the very poor because of wide vadations inhushold inome within geogrphic jursd n;(v) played a lre role in teheat and educatio seco which undsores the value of connng t s estaisheW dwith such agence; (vii) a simplified procmnt pmoes can be successfully appled forsmall nd widely disersed subpojcts, prvided ta an effectve sysem of quality conropvide the necesy checks and balance; and (viii) hgly qufed and strog lederhipand ESF's fexible insidtuoa stcure we essenial to its success.

3.4 The above lessons wei in the deig of the follow up opeaton, theFit Social Investment Fund project (SIF).

Tansion from Emeqpney to LoWr-Tem Deveopmnt

3.5 A longer tem deveopment-orented kersetve evod witn the Govemment asthe sense of economic emergency gave way to a mor stategic assement of Boliviaesdevelopment needs. In view of ESF's coside oble ss in chanDeing efcieny andquickdy investment rsurces in a number of sectors, the possblity of continuing ESP in itsxsg ibgrm or with some modifias, was consdered. At same dme it was

nized the MPSSP and MBC bave weak cacity for planing ad sperviing theecuton of inestments. A deciio was tkn to estab an instution that would (i)focus on health water spy, snition and eduation services; (u) be strucud tocodnate with the resetv mistrie, :Mtgrating Its activities into the sector stragiesand invstment plans; (i) buid upon ESF's stengths wih reprd to speed and flibity Incaryig out investme projects, an conating with a wide range of publc and privateagencie, paruady NGOS; and (iv) target its benefits to the neediest communities (amadat that the sctor ministris are preseny ill equipped to carry out). Such aninstun was to complement rather than dupic the effoas of the socia sctor ministand would provide a cost effectie way of enhancng pubic iwvstment capacity in thecdri sectors. The Social Investment Fund (SIF) was esluished an January 11, 1990 tocany out this mandate.

Wu Socal vestment Fund - SIF

3.6 Drawing an the ESF experience, SIP was created to atrct and efficiently chanlexma funding to addrs the ountrys basc needs in heal water supply, snitio andeducat. SIPs objectves in addito those mentoned in pam. 3.5 above, woud includethe mobaon of £exten assistance to the health (inuding water suply ad )and educadon scts. While under the ESP cost per man month of employment was Iheprmary indicat for subproject slecton, under the SIP the pimawy indicator is cost perbeefica and beeficiary profie r the SIP, prject gatio is party demand drven,with pomotaon effotsgeared to deveoping istutona capct to reah underservedpovty areas. SIP wil conue to inea its emphasis an an actve pro_m strategy(see paa.8.3).

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Orgniatna Stutr nd Sta_fn.

3.7 SIP was establshed by a Supreme Decree issued on Jany 11, 1990 as a publcefty with legal pronty and technical, flancil- and trati ve automy,iresponble dir to the Preiddt of h Rpubic. t is managed by an Exutive Director

bapInted by the Pridet of th Rebc, with he rak of Cabinet Mnister. MeExecutive Diretor repmrs to t Ad ins Councl (CA), compdsing the ExecutiveDirector, the Under Secretary of Planng and Coorination for Socia Poiy, and trother membes named by te Presidet. The CA b chrgd with establishing SIPs intealstructure, work prgams, and procedures apving all sbrojects for SIP fnancig andpesenting semi-annual epot of SIPs acvties to the GOovenmet

3.8 SIF's Exuve Director is suorted by a Deputy Director, fthree opedepatmt(Heat,EducatIon, and SupervWn), three imini ve am gal.Affas, Fund-raising, and and one Audit Unit which reports directy toth Exeutive Direco. SP has esihed fied offic in the nine departme cmpnga promoter and a supeAsor. SIP intends to suengten its fied offices by increasing staffand delegating more . SIP saw fte need fo establishing an InstionDevlopmt Depatment to montor the impact of its activit and pwvide feedback on bestpractices in order to impre its op n. The Infmaon Dqtment became part of the

stitutinal Develnt D qartment. SIP has a pressional staff of 120 people Aboutone quarter of the costs are covred by the Govenent, wbile the balnce isfwnded by eernal donors as acrs are expected to allocate an appropratepeetage of total fnding to admcost

3.9 IDA suppted SIP's 1991-93 vestment program, which was imated to amoutto US$95.6 million, with a credit (Cr.BO-2127 SDR 15.1 million) pprved on March26,1990. Numos bilateral and multi-lateral donors joed this effort. T-date, US$74.5million has been contributed in total from thde sources and the GOB. The balance isexpcted to be commted shordy by the dor, based on he fo able outcome of the mid-tem review of the prqec This woud be absorbed quicdy, as the pace of project apprvalshas for outstripped the valility of fnancig. The fndigs of the March 1993 mid-temreview are presnted below.

4. rMTERM REVEW

4.1 Tbe midterm review asrts tat SIP has ddopWed substata inst nl and staffcapacity for fe financing, monitorn and supevision of social sector investments. It hasdeloped teholg and procedures to enr tanpent applkation of objective criteria,which are shaped to take account of the local environmenL Sls two-year track record isencouraing, as tie instiduon has cnel subsa amounts of soc#i investments to thepoosg 50 pe of the popuain ough sound pjects in the area of water, santon,heal and eduon. Tbe report recom s I t SIFs stence would be justified overae lor tem in a scenaro where the Goverment undertk parallel effort to bet

defie sector ps and priorities, stfength te normav functns of Hl minisie, anddefine pcificPly the roles of the public sctor ties ivolved in the social sco.

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4.2 SIP began opertions in Septmber 1991. By end-April 1993 it had apprved 1,311supjets valued at US$111 millon. Cumuative disbursements have reached about US$26million, 864 ubpojet are underway and 45 have ben complted. Hal and basicantato subproec account for 48 percn appwved proects (US$67 million) and

education 52 percent (US$43 million). Senty-five pe of ap poved sbpojt,representing US$61 million, are for runl areas; 25 pet amounti_g to US$49 min arefor perpheral uba ares. Over 80 peent of SIP t are sfor suprjects locatedm areas whose habi are among the poor alf of the popuon, with 55 pecn oftotal mm sageted to the poore 25 perent ofthepopulation. S estmatesth1.6 mllon peop, or 24 percent of the pqpultion, would benefit from the sbprojts it hasapprved. SIF has devlped seve progms that focus ifcally on women. Tetraiing of poor women to take a more prominent role in the &mily, community andeconomy, addres fundamental issues affecting half of the countrys poplation, particularlynrur females, indi o grups and migrants to rban areas. SIP has retned the seviesof a specialist women's rle in devLopment, and prepared a program for in ing, ineach type of sbproect, a fou on women as actve patcipant and as beneciaries.

4.3 The image of SIP that emerges ftom the Midtrm Evaluao is that of a dynamicinstiuion that has tae acton to stengthen is opeaions as it has percdive the need to doso. Examples of this ae meures to impoe pwerty trgetig, valuate proect imact,simplify procurement and move to an integratd approach to deveoment at the dtict lelinstead of a purely demandmdrie ddn e.

4.4 SIP's subprct hoave been implemene by small and medium size conact witha post impact in deveopn tis seto of the eoonomy. There are cuntly 316 frmexuting contracts for ever sbprojectL SIF has had also a positive impact on theinsdtutional dewlopment of a number of agencies preai and\o execut subproects(NGOs, RDCs, Cocqjatves, water supply and wewe uiies, mu iti and oes).The local ining and socil sevi cons industry also benefits from SIP ancingtough project prpartion and es.

4.5 The midterm valuation msi made the lowing _ 1) SI'should redlocae its interal resoures to obtin a better balance betwee its abilit to bringsubroject fward throug the aial sage, and to admIste them theafter, no staffshud monitor more than 25 subprojects imu y; () while iS jct acrteria are generaly consisent with sectow policies and are aimed at ensung pzojectssnabity tugh various mechanisms, iudig encoagin wide communitypartic ion, more emphasis needs tD be placed on socal, fnancia and institinal anaysisand on means to interat bettr with and motvate comm iies; i) SIP soud obtan thenecessary epre to cary out the m oned tasks hrough sF training and/or hiing;(iv) while SIPs pocedures for handling prect poposas ar sfficty e tprocess sold be more fient, and specii c are made to t efect; (v)SIP should review the lvel and struc of is administativ expendtu with the viewtoad reducing cos; (vi) SIPs policy fr basc sanitation ubprects sould be vised,so that sevie providers recov a lawer sh Of costs from b; (vii) SIP mustensu that all its inructu swbprcts, part y in the water suppy and sectors, are acm nied by t ncining Xwu ae admg ad ope andmntenance£ of hdtes; (viii) unti ne teacher taining norms and impleenaIonarang ts are establishedftoughte ducaim rem that is der preon, SIP Fncollaboron with ETARE and MEC) should be permitted to pvde training for teacher at

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schools as an integr part of its new, ongoing and completed subprojects; (ix) SIF shouldfirther sren its nsttutoal Development Depar_tmn which moitos impact and

a of ubprqc , by estabshing well4efined monitoring indices and edbackmechanisms to en that lessons of exerence are incorrated in new subprojects; (x) SIPshould adopt quantified, specific objed which woud help in setng imnt ioiesand dhoosing among ompetig demanid fo pfcr ct inaning; (x) SIP should itsfcial plming and management capacitg by ddeoping and regularly updating a mediumand ng-term financial plan that int alia will help SIF to iden* and comrct imbalances inresource use, guie its opeationa decso and help ensure iutionl s s ; (xli)SIF shoud comptle the 33 distri aayses (see paa. 8.3) and review results with IDA;(xaii) SIP should flnalize its plan for dnaizaon of its q ns, discuss it witi IDAad put it into effect; and (xiv) given that procurent procedu are well-defined,trans nt, and cosstently applied, and the r price system work well, the ceilgfor IDA prior subrqect review should be raisd to US$250,000.

4.6 Tne midterm rview makes sval ifor the GOB including the needto provide financing for SIFs idministative costs so as to reduce its e sive dependon foreig sources. The new Civil Service Reform progrm shold hicrporate SIPs staff.The midterm evaluafion alo recommends that the Govenmet needs to make a stoncommitmt to social development, improve efiliency of resource allocat and use ofsocial services, and define the roles of there ents in the public sector to avoid

overlapin respand inconsstent policies. Specific recomm include: ()the Government to prepare a sategy to adds the above issues and discu wi IDA theactions that need to be taken; (ii) the Govemment to cary out a study to estimate a cost ofprovidin basic servis to the poor under different opions (service levels, techicalsndards and hence, costs), and use outcome to set up ntonal pograms wtin whichpublic and priva z sector ageciaes would operate efflciently; (iii) Goverment to take aUnecessry acton to ensu that the Ministy of Health pwvides agreed equipment, materia,ldrugs, community training and services to the 40 prmary healft care ailities constructed bySIP under conact with the Minsy, but which have ner functoned because the abovehave not been prvided; (iv) Govenment should try to ensure that NGOs regster as requiredand that, at least the larger ones, publish perodicay reports an ir activiti and finances;and (v) an analysis of the capacity of the new normative agency for the water and seweragesector, DINASBA, should be carried out and an appropategm put in

S. ENVIRONMENTAL IMPACrINDIGENOUS PEOPLES

5.1 Pir to April 1992, when the broad Envital Iaw was approved, Bolivia hadno legal structure for envimn protectiom The Goverment's concern of the need toaddress inn problems led to the followin initie. The Nationa EimentalSecetaia (SENMA) was establishe in January 1991, and is responsible for formaftingenv nmental polcic motodg and coordinat impLemtation and reiwing andappwvi nvion Ipact Asments (MIAs). S A would asppt the process ofestabling an effecive legal and rguatorystem, and it will also focus on intoducingeconomic incents to foster envir elly sound dvel he Natona

lonml Fund (FONAMA) was establisied in Deceber 1990 to cordinate and

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administer extemal financal assisa or the en ment Water pollution, de,soil eosion and loss of natua habitat are Bolihva's main el problems. An IDAEnvironmental Technical Assistance proect (ETAP) (Cr.2443-BO) and a GEP-fundedBiodiversity Conservat pect (Gran 28620-BO) are supporti t above tatives.

5.2 Under the Government's decealto sta, Spniility for anvir elprotecto is to be t fd= to local authts In particular SEDEMS (SEMA'sregional offices), muidaitl renal deopmet crporatios and local groups willbecome inceasngly involved in moni and enoiAg complnce W em iroaw and regulations.

5.3 lhe institutional capacity to undertahe EAs in Boivia i wea l The newEnronmental Iaw, apoved by the National Congres last June, requi that EBAs bendeak for a development prjects. SENMA s curny prping the Regation for

E[As icuding establishing categorie, noms, rgulatomo r and contrlprocedures. SENMA suported by the IDA ETAP proect will cary out a seres of taningseminars on WIAs SIP staff responsible for caryig out EIAs under the proposed opratimwould a d these taining seminas SIF wil collaborate with SENMA in establishig theaproite critea and prcedur for carring out ELAL LATER will also provide sometchnical assistan in this respec E1A critedra and procedure wi be in ated in theEvaluation Manual by td.

5.4 SIP does not presently have any provisions for envirmental fimpa assemts oflva subprojects. Health and educaon subprojects, wben competed, are tued to the

respective minis, Whih a to follow the esblished sndards that apply in eac case.SIF would eue that in consucting heal posts and health centers approprFe designs willbe used to ensure that thy do not contminate the enirnn They will be equpped withSeptic tank or improved latrnes For constucto and litationsbroject, adheenceto norms for appropra waste disposal would be obsrved. Watr suply sbprjects will inall cases be anied by sniton subprjects. This is a strategy tat SIP has tdrd tofollow, but it has not scceeded in aU cases. Given its new empasis on an integateddlopmental approach, onment conces wi be addresd more directdy.

5.S Indigenous peoples are diey psented among the poor, and theGovenment through SIP has recognied the need to tailor specific pwgrams addressing theirneeds. SIP, since its ceato, has bee coemed with issu of ethic minorities. SIP hassevea programs (see pam 7.4) that spcficaly address th needs of indigenous groups.The r arends prgram is amng thos progamsL It is a rual taining progamdeeloped by a Church group, for the guaran-speakers in the south-eastern parts of tecountry. The program inludes health m produc taining co , as well as fomaeducato and na extension, taking into account diflerent cultural fictors partica tGuares. SIP is currently explbng to replicate this progrm o other ed c grous inBolivia Overall, SIF puts great emphasis on commuty for aU its activitiesfrom proKect design to implment and folow-p.

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6. RATIONALE FOR IDA INVOLVEMENT ANDLESSONS LEARNED

6.1 MIMAs oveal assistance sategy fes oan the ky prirte of the Government'sdevdopment stategy to: (1) mann ma sility and to imlment the struc

rem rquired to bring about ineased gvowth; (ii) i the efficency of public sectormanagement; (i) continue sectoral rfrms, undertake apprprate inestnts ininfrastructure and prmote private sector development; (iv) promobe dement of humacapital and alleviate povrty; and (v) develop a natonal poliy for i developnt.

6.2 In 1990, IDA completed an assesment of povty in Bolivia as weu as ofgovernment initiatives to alleviate perty. The report (8643-BO) sppot the Government'ssocial policy objecives that aim to improve didenc and remove inequities in spni. Inhe"l the report recommeds shiting xfpenditues oards pimay ealth care; ineducaton shifting to basic educatio, imog teachers' salaries, reducingurban-rur gaps, and improving the Ministy's capacity in policy formulation, planning,budgeting and financial manageme DA's assistance strategy in the ocial setors isfocussed on long-term in sti na, development of apprte sectr policiesand strategies, concen o f esources on prmary health and educaion, and exesion ofcoveige through nancing for both pubLic and prvate agenis. As part of this strategy,IDA has suworted the ESF with two Crt (1829BO of SDR 7.8 millon and 1882-BO ofSDR 19 million), and SIP with one credit (2127-DO of SDR 15.1 million). In additon, IDAis wpporfin the atregthning of MPSSP with a cri for tbe hItgrted HthDeeloent Project (Cr.2092-BO SDR 15.7 million). The prposed bgrted ChildDevM pment Prject would supor the Govnmens TeI-Year Action Plan aiming to assistin onalizing its progms and policies for children and women through targeed progamsto provide day care and nutrition suport in poor pe6-urban and ubn areas. A proposedEducato Policy Reform Ptrect would support the Germents iniaive to retuceand strengt the education sector. It would provide financig for developing the MEC'scapcity to establish policy guidance; eaing the qualic of teachers at prmaryle; bgnning the development of curicuum reoirm, and introducing mchanisms toimpr access to oducation for the mos disdvan groups (is and children in ruareas). A pRual Water Suply and antatio Proect wotld aim to improve watersupply and anittin services in selecd depamt in rurl areas, sengthen RDCs toplan' coordinate, sevis and monitor the deWly of services and Wport the applicationof coherent cost recovery policies and practices, as well as appropra techncal stadards.The povrty assessment completed in 1990 will be updated in FY94. IDA also plans to canyout a EaltM Sector Assessment in FY94.

6.3 The poposed operatn wold continue the spport provide to SIP und the firstoeation and ths asst the Genment to sutain ib povert alevton and humanresource deveopment objectives for the medium term, while parallel efforts are taking placeto engthen the respective line ministris It would gente addition ectedal financingfor urgently needed i in mt wscial sectors essental to humwa resorcedevelopment. SIP, in the context of medium to long-trm institutioral geing of liDvministries, woud play an importDat c mprole in reachin ; Bolii's poorP-o.

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6.4 Lessons led from the Bolivia ESF, the SIP (the Mdterm Review) and ohrsocial investment funds are the following: (i) it is impotant to maintain a flexible stucre,which can be adopted to new developmet aad emerging needs; (i) provisons forcompedtive salaies help to attrac nd rean goodq staff-,; (m) the insistence on theneed for full transparency, fullacunaity well-defined project appraisal critriacontinuous effort to refine poverty ig m e can ensure proper use of fundsand can prevet political interferences; (iv) resources devoted to leding must be balncedwith resources addressing supervision needs; (v) collaboraton with line ministries isimportant not only for ensuing that poverty invsmt At into sector priorties, but also forthe excutig agency to get Government port at the ministal level and to help ensuresustainabilit; (vi) the efficiency of the insttion's operations must be msmured againstwell-defined institutional objectives; (vii) eqpience demonstes the benefits of strongsupervison sport; (viii) the ad of a demand-dven aoach does not necessarilyaddress directly the alleaon of sc poverty; promoion efforts and tchnicalasisce for the poor communites are neeed in order to channel more resourc to thesePOOrer communies; (lx) NGOs play an inmt role particarly in the health andeducato stors which suggests st ng the vecuting agency's links with NGOs and(x) medium and long-term financial ning is an important tool for guiding operaionaldeciions and resource use. The above lessons have been icorored in the design of theproposed operation.

7. THE PROJECT

Objective

7.1 The prmary objectve of the proposed option is to continue assing theGovment to improve coveage and quality of health, water supply, sanition andeducadon services targeting primarily the rurl poor, iding indigenous peoples,disadvantged women and chil Strategies adopted to achieve this objective include: (1)emphaszing basic and prventiv ealth care, primary education, and basic santafion andwaw supply; (ii) futher refining tgetng mechanisms; and (iii) encouraging increasedresposibi of local governments and inihuons, communities, private setor agencies andNGOs.

Project Deserpto

7.2 The proposed opeation would conist of: (i) subprqjects (US$53.9 million) in thehealth, water supply, aniatin and education sectors including subprojects for insitutondsupport to RAs agencies and; (ii) an insfitutio devel ment component which includesadministrive s tD SIP (salaie, training and trael exes for SIF's staff-US$13.3million), vehcle, offilce equipment, computers and miscelaneous expnses (US$1.8 milloan)and tchnia assistance, including studie (US$1.0 million). This lat sub- componentinludes made by the midterm reiw.

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Subproject

7.3 Te poposed opeatioL would pport ubpojects In th sectos mend above.Het sector subprojects include pmary cae, nutrion, demiology, water supply andsitation. Nutrition Includes progms for moderte and vely maled childrenfrm 6 months to 6 years, and a suppl y fding program for pregnant and lactanwomen. The oypgam compr vector contol. Santai ubrojects Iclude

gdrini water and swege fciliies. In addion, there ar two taining prgra:istiona and community tring relt to the, maintence, and operato of watersupply sbrojects and hel tining at the community leve focusng on local clnic staff,community midwives, womens and indigenous docton. Health training isdone accding to the gudelines tblishd by the MOH and designed in copeato withWHO and UNICEP. IDA would not finance the constrctio of any heal posts before theMOH bas addressed the issue of supplying the rued services for se posts alreadyfinanced by SIF, and which are not operating.

7.4 Educaion subprojec comprs frma and non-fmal educaon taining. Theformal is mainly targeing pimary educato in rrdal areas. The non-fma is taengwo in both urban and rural armas. The formal educatio progrm inldes: (1) multi-

Rade prmay schools located in rural piority aeas 1 and 2 (see para. 8.5); (ii)rehaitati, repair or of schools, incding prvso equmnt and

Ctecing materials; and (i) Mlti-sevice Eduonal and Itecltur Centers-CEMEIproviing teaching filities on a colectve basis for a nmbe of publc schols In the poorurban are incuding hbrries with relevt lieature, compue laboratories, videos,wohops for mnual activites, and training fclties for children with laring disabilities.Within the non-fomal area, thre are the following types of subprojects: (i) rural boa gschols which give stuent frm dis rur vilges an opportunity to move to the nearestown tD fini thir basic educato (this program is based on the succssful expedence of theYawhay Wasi-schools in te Quechua speaking areas implenented by a Jesuit NGO-F6 yAlegrf); (i) adult taining for women tafgeting indigenous women and focusing on bilnguallitery including health, frtilit, nutrition and gende reatn issues; and (imi) adulttrning in production teiqus, food nation, tr reneut andmanagement of naural resources targeting peaSants, arsans, ethnic groups and small-scaleentrepreneurs, who have not fnished prim educaton, in both uban and rurl areas with alre prpotion of women SIP wud make spea effots to link the adulttrag in producti progam to credit schomes finaWed by othe instutos. hi additoto the Yachay Wasi experiment, there are numerous diverse educato expeimet inBolivia, whih SIP is in the process of analg and aluati, in orde to deteinereplicability. SIP wol dcuss the ret and cbty with ETARE and MC, deignan appropie action plan and a mefm for by the end of the last quartof 1993. IDA wwld review said planL IDA's commaets, if any, would be incorporated inthe plan. These requrements a included in the contx of tie tan dnperformamce,indicators. New progms deloped by SIP would be pented to IMA forreview and appval, prior to implementao

7.5 Thele is an urgt need to improve the quality of pdmary school eaching. Pendgestablishmet of new tehing norms and th rough the educatn reform underpreparation, SIE7, in cooeation with ETA and MBC, would prep a plan by the end ofthe last quarter of 1993, for he fnancing o teaer taiing for the schoos already finoedby SIP ad the o to be financed, discuss the pla with IDA and reach agreement an

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implementat_on.Thew requiremnt are included in he contet of the plemeation andnidcator Once an appropiat rain plan has been kqreed, tnn

woud be an Integal part of eduation project cilies financed by SIP,

7.6 The 1tttn St _g iCoonet would include: (i) SIPsadministrative eson a decining basis, iuding saaries of fixed term technical

ad managerial staff and tbal een; CH) trining of SIF staff; and (iii) tehiaassistance, including coulan to asist SIP to impove the eficency of its prations.This wod focus on d li SIPs opeans, based an an aessment oforganiatioa and cost implcaions; reorientn and srtheing its in capacity;rducig the tme reued for subproect pressing; dewg the strucr and lee ofadministrative endits, with the vwiew twd reducing costs; and raewig its appricriteria with the view twd revisn them to incorporate a moe in depth socia, fnancaland institutional analyis. IDA would also finance c to assist SI to impve itsfinaal plnnng and managem capabilities by adoptg quid, specific obectvesand by devloping and regularly updatn a medium and a long-term fnancial plan that interalia will help SIF to identify and corct imbaances In inta resource use, guide itsoperaionaldecsons and help ensure nstt n su b. his latte study will alsoincude a review of SIP's expience with At fncing enefi andinstiions), and a program to improve their c ce, if needed, and asses scope forgreater cost reovery. SIP would also explore ways to enfor its requrement for the donoto pay for the overxad costs assocated with proect p ssing. Both suies wil becompleted by March 31, 1994. An actio plan for the a of these studies wouldbe agreed between IDA and SIP, and would be put into effect immiately thereafter. IDAwould alow prvide tecnical assistanc to SIP to iMprve its povery targeting methodlogy,and its capacty for moiring proect impact and , and to grgthen itsin a system, including for prorement .

8. PROJFC= IPLEMENTATION

8.1 SIF woldd have the om l respolty for project impmati. SIP'Sprocedure and crtea for promot appraising and subpiojects areincorporated lb manuals, and are acceptable to IMA. The Boower would pass on theprocees of the credit to SIP as a granu unde a ssdiary contual arrangement betweenthe Borro and SIP. This would be a conditio of effectve . SIP would appre andfinance subprjects on a grt basis. They would be aecuted by public and pit ciesicuding NGOs, privW enterprises, cooperatives, regional bealth at ties and s.

Subproject Processng

8.2 ide t Jn conts to ESF, where its objective was to geate emporarynapidly durig the ecoomic crsis, SIPs mandate i to alviate pove by

pviding basic healdh and education srv for the poors 50 percent of the pWoutn.and nsing tht subprjcct sele is consistent wih sector poicies. SIP has delopedan actve and a pasve promton stegy. Its active pwmoto sategy ues its powert

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tageting methodology to identify needy mmunit which bad been beyond the reach of theESP, assess the most urgent needs of those commuties and identify instituions to serve asRA Under the pasive promoion strategy, SIP receives subprqect proposals submitted byRAs and screns them for consitcy with sectoral prortie and with poverty targincrteria. In both cases, site vsi tke place to verify that the proposed subpect isappropriate to the community needs and that the benets reach tde trget group. SIP wouldbe placing increased emphasis on a needs asessment pomodon satgy.

8.3 The system of prioritization, under the active needs assessment approach, is basedon a national scale, rather th deparmnt by deparment. The new srategy would beapplied though an Opeative Diagnsis eercise (which is being caried out in 33 proritydistricts) which would produce intaed intervnon plans and tarets in primary health,education and basic sanitao within the prioity micro-egio This inegrated approach isexpected to inrease the impact of each of the subpoets on the general development of theregion. Of the 33 piority dtrict selected, 16 have completed the diagnostic phase; theothe 17 will be completed by the end of the year. Te diagnosis involv the participationof the taeted communities and the intevento pln are guided by the muniies'assesment of their needs. The Operative Diagnois aims to verify data more prcisely,identify and quantify population, neds, services, qualty of eitig senrand insriidonal support aailable in the selected districs his pocess involves thecommunities, local authorites, and personnel from the line ministries. Outside of the 33disticts, SIF will continue to support subprojects in areas 1 and 2 (see pam 8.5). SIPwould review with IDA the reslts of the 33 district analyses, and agree on an action plan byhe end of the second quarter of 1994, in the contet of the implementatio and prmanceindicators agred during ot s

8.4 Although the lack of instutional capacity in poorer communities to formuatesubproects, seems to bave been solved to some extent by induding pre-investment costs inthe sUbproiects in order to subcontact third pas to do the studie, it is not clear whethertse proects fully reflect community needs and aspirations. To impre tgeting, SIP islookng to improve its staffing in the central and regional offices by hiing profsionals withexperice in organizing commu and with field perien n the sodal sectom, andalso providing relev taining for its staff. In addition, there is scope for SIP to makegreater use of NGOs, particularly regarding its needs to focu more on poor rurAlcommuies. To fciLitate participation of larer NGOs, SP would consider treatingpackages of an integrated set of subprojects for a given area, or subprojects in the samesector cving a larer geographic ar as a single subproect or prom. Tbis approachwould pvide sufficient economies of scale for larger NGOs.

8.5 Poverty Targeting. Based on data from the 1976 census regading social indicators,SIP m coopemtion with the Natonal Statstics Institute (DM, produced a poverty map thatranks the county's 89 health districu on a scale of 1 to 4, with one being the poorest Onthis basis, the 33 districts with the poorest populan were identified, which includes 50percent of Bolivia's rural populaon. SIF opertes in the areas which are rankd 1 and 2.These areas have been identfied on the basis of the ollowing indicators: for urban areas(communities larger than 10,000 people) they include, access to potable watex, sewerage, andelectrty, and for rura areas (les than 10,000 inhabins) the indicators are infatmortality, greater than 170 per 1,000 lie births and illibcy rates exceeding 40 percent ofthe adult popubai Due to the strng capacity to generate ubpects in the urban areasSIP oiginy approved a larer prporton of prqects in the uran areas as compared to

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rura ones (80 pecent vs. 20 percent). SIP, however, has made effmors to generate moresubproject in ural arms, and its resources are now focusing 75 pert in rura ars and25 pecent in ubm (See pam 4.2 for beneficiaries reached and distution of SIPsresources, uder the ongoin opeatin).

8.6 Althu e existng targWetinI has srved a usfu purpose, it fersfrom a nuer of mao including reliance on out-daed cemus data (dat wi soonbecome aibable fhm the 1992 cenu). SIP wold update its povrty tangmetdology, and would improve it based on itgad assements of deelopment needs,which SIP is carrying out in 33 distrc, in cooperaton with local insdttuon andcommunities, as we as othr delopment agencies active in the arm in questo. Inconsultion with IDA, SIP would adopt an imprved taretng methodology by no later mnthe end of the lt quarter of 1994. Upon complein of the 33 district adyses, SIP wouldprpae intated intervention plas fo ageement by IDA. These reu me areincluded in the cntt of the iplemena indicators.

8.7 Apprial of Subprqjects SIFs appaisal of subpqjec t into account a seriesof fctors idig eomic, technical and instiutional feasibility. SIP also vedfies thatthe subproject Is located in te SIP taget area Broad project appraisal criteda include: (a)for subprects for whic quafyg costs and benefits is not aplicable (scuial assistance,consuction of schools and heah posts), an assessment is made of cost effectiveness asrelected in the cost per beneficiary indicator, (b) provion for matenan f infand or sustainabilityof su£ ject operin beyond the prqect perod, including recovery ofoeating and maitence costs, where appwpraie (c) adherec to norms estabshed bythe MPSSP and\or MEG, when aplicable; and (d) assesme of the insttutona capacity ofthe eeun agency to cany out the subproject including prment. For subprojectsinvolving construction, adheren to noms for apprpriate wase disposad and menalimpact would be obseved. The methodology used for paisl fr each type of ubprojectincluding selecon criteria is descibed in detai in the Evuaton Manuals. SIP, byeffeceiveness woud have revisd its project appaia critera to inude e impact

, when relet SIP would also ree its project apprl criteia for watersupply an aniato sectors paying partcular atentim to cost recovery. Revised criteriawould be inped in its Evaluato Manual, by effectivesm.

8.8 SIP woud also eamine t participation of communities and the RA agency in costshai. Communiies nomaly partpate with 5 peet of total ubproject cost, and theRA with 15 to 20 perent. SIP, is eploring the pwssibilty for financially sto RAs tofinance higher countpat share of ubproject financg than is curenty required. At thesame tim, SIPb i also explor the possibilt to wave the requrement for bank guaateesfor a few selected very poor communiie It would establish a maximum ceiling ofsubprojec apprved without guarantees.

8.9 Subproject Eecution. Once a subprject and a contacto or a supplier is selected,a subroect multilateral agreement, for subproject excution, would be signed by SIP, theRA, and the concor or supplier. In addin, fr supion puwposes a separatgrement would be igned with an indepedent Supervio for al infras subpoects

Model contracts are satisfctory. Fidd offices are used for promotion and supervision,including prorement and disbre . SI wld stathen it field offices byestablishing teams, and deeaig addonal re biliies including

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pect appraisal. Furthe dets on con4tr g and excutionf suprct are containedin SIPs Superision Manual.

8.10 Superion - SIF The Supevion Depatmen tou the nine field offices isrespondble for caryng out all suris wor External upviso are also bire tosupevie day-toay execuo ofcvil w contactsTe Itona DewelopmentDqetment would rview peodicaly the work of tie S9up sion Depatment and of thesubpoject (non-SIP) Supevisor and woud be epoi for brnging to the ecutiveDirecto's attention problems aing I the s iion pwoess, and make rComfor imrv n.Further detail are In the Supervision Manual. The Government incolboration with IDA would carry out a mid-term review by Aprl 30, 1995 of proges inthe Imle ati of t pec he focus of the mid-term rmviw wold be: (i) theteting of SIPs fwuns; (u) impact of subprojects; (Ih) SPWs administati efficiency andfinancial soundne of its opertons; (iv) the prosmc for te futue of SIP; (vi) anassesment of tk qualty and leve of c ination wit line mnie d with other actveagenies in the field (i.e FNDR); (vii) progress made by the Goverment insrngector polices, sategie and social sectr ministrie; (vffi) prgress in undrising activities;

@m) Govnment budgetary alloctio to SIP; and (x) an _ of overll projectprogress taing into account the imple and performan inditors An action planwoud be prpared to implem the aco agreed upon, betwen IDA and SIP, as a resultof the review.

8.11 IMfoon,o ing and EvaIto SIE inherited from ESFan co ized mifrmation stem, used manly to follw upphysical and financal progress of subprojec. SIP ed its scope to Inlude fulmonto f the procing of surect propoa, supervision of wcudton, andmaintenne of monitoring indicators, including avemge time t at each pcessing stage,aveage cost per benficiary, level of commitments and disbure

8.12 Under the prposed operati IDA would finac consultants to asist SIP toimpwve its financa pling and mt cbili SIP would adopt quandfied,spcfc oljectives and develop and regulary update a medium and a ong-term inancialplan, that inte ali would help SIP to identify and corret imbalace in resorc use., permitthe settng of inestment prties, measure its performance and help ensure instutons inabilty. Lnger-term mitong would also be caried out to measure the impat ofSIP actvities on the health and education of th benefiary commun The instiionalDeavelpent Deprtmen (IDD) has begn recenty to moni aNd evalue te perfomancof subprojects in operation, by geographic zon. To date, the activities are incipiet andSIP will have to strgthen its impact and evaluation acities to help emure subprectsstinabity. SIP would rdine monitong ico used by the IDD, by the end of frquarter of 1994, establish feedback menims bewe ID and other Dqeamts in SIP,so tat lessons leaned firom opetins are take into accut in the design of newsubprojects. IDD woud prepar e ally a report on lessons learned fromimpl. A pilot pr fect fr developing a im pac euatin prgam is beingcarried out in the Chaco area. The apeence genetated from fths pilot tdy will help SIPadopt a brader impact evaluaio progrm. Ti prgrm would be reviewed by IDA andwoud be put into effect by the end of the first quarter of 1994. The above requiements areindcluded in the context of the i Mon and pefrmac indicators.

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8.13 Staly The prope opeation is e eped to receve broad politicalsupport, as it was the case with the prvious opeons (ESF I-I, and SIP 1). TheGovenment has demonstrated its support to the proposed opet by agring to fiance,on an increasn scale, SIP's maaics and otber admini co, and to incorpate SIPsstaff into the Civil Service Refrm Pam. Ihe above actions are ed to contribute tothe susainabiity of the insitution. As to the subprojects, SIP has itroducod evalmech_nisms and afeuards which wil help to achieve subpJect sAs one ofthe conditions for subrojet approval, SIP demasds eiec of secuted fud for cotinuingsubrject support at the end of the SIP supp RAs are ruested to incorporate in thespecific subprqect prposa mcnisms for continuing the suo Including mehnismfor cost recovery, opertion and mainnce, when rent. Ib the case of water supplyand sanitao sbproect communities would nsitutedm isms to allow svice prviderto recover suffcient funds through tariff and contributon in kind to cove coss of opaaonand mainteance. Health infst subprojects, once they are consucted, are turnedover to the Health Ministry to provie needed sevices. In cain cases, for halt adnutrition subprojects, upport is provided by foeign donr through NGOs or churchrganition, which work under a codination agreement with the Health Ministry. SiP

has financed seva health posts, under the ongoing operation, which remain closed as theHealth Ministry has not povided the needed svices. Under the proposed opertion, SIPwould not fa any addional health posts until IDA is satfied that the Ministry hasaddressed the issue of supplying services. Und the ongoing Health Pect, efforts areunderway to addres this issue. with regrd to public school subprojects, MEc is to providesupport for teachers' salaries. An agreemet has been raced that SIP only doesrepais/reconstructi for schools tbat are currently opraing, or where MEC guuarntees thatsalar are already budgeted.

8.14 SIP undertds that the invlvement of the respective commut in the subpctdesign, implen and follow-up is crucial for prqdect ilit. hmugh

reasing community partcpati SIF can ensr that the ubprect would reect the needsand interes of the benefies. St ing its field offices and hiing stff witeperce in commuity OgIzaIon and apise in the socal sectors would also enhansutiaility.

8.15 Sector Coordinaion. Existing institutional arrang_eeunt for inter-sectoralcoordinatn for SEF-funded subproject are largely adequate. SIFs ovall strategy and planis presented for aprval to CONAPSO, of which SIF's Executve Director is a member. Indevelopig its annual opational budget, which is fully aiaed in the annual pubLcinvestment progam, SIP agrees with the line minsr on prorty interventions. For thesubprjects for which govement funds are needed either as cwuntpart fnds for supnactexecution or needed to cover recurent costs thereaf, fa approval of the subproject bythe corespoding line ministry is required. All subprojects are prsnted to the respectiveLine minies for pproval on a unon-objectton basis. When the planned educadon refrmis fomuated, SIP will alig its operatons in the sector with the new natoa directivs andnoms.

8.16 The MOH creatd recently a Ndcleo de Conducdn. It is formed by severaDiviWions of the MOH, the SIP, UNICEF, WHO and PAHO rep It is the mainnmatve body for priary hea cae in the cotry to ensure that different part of thecountry would get the same health systems. This Nucle should be srengteed and shouldencourag wider participation of institudons active in the sector. The Plan Naciona de

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Supervivencla-Desarrollo tnfAnDi y Saud Materma descres the diffrn heath progrms forthe different age groups, and serves fir the SI as gudeine fr the ontent of taningcomponents in its health subprcects.

8.17 A national sategy has been reny aculatdd for the water suply and sanitationsector (se pa. 2.4). DINASBA, tie Directorte In MAU is aZsned nomatve,planning, coodatio, and sprsory functions. SIP coodinates With DINASBA in tefolowing mann. At the beginning of eah yer SIP snds to DINASBA a plan taindicates the of Its resources in the setar for eah dqeprmt In addition,every week it sends the t o bprojects in the sector apved by the CA. Every month,it sends a list of projects in execution indicating respective disbsm . SIP alsocoordinates with FNDR. FNDR is a financal intermiary instition th channel funds insupport of water suly and sanitation sbpjec, limiting islf to capital cities and mediumsie cities. SIP meets with FNDR twice a yea to echanp views an their respective plansand stateies. SIP and FNDR are in the process of signi a coordinto agreementdefining areasof intveo for each institution so as to avoid duplicati of effort SIFalso works umbrella NGOs to avoid duplication of activitie SIPs regional officescordinate with the RDCs and othe local agencis.

8.18 The pridiples of coordination are set fo in agrents sige by SIP and thecomspondg line minie The detai and procedure to assue coordination areincorported in SIPs Opeations ManuaL SIP would review uy the constencyof its program with sector sategies.

8.19 SlFs FTancal PlannIg. SIP, to-date, has been weak in financial planning asconsequene of the dmand-ddven approach to ubpurect geraton. The filure to matchresources received with reources committed, a direct resut of the differences in the SIFsprocessing seed of subprojects at the promotion\evaluation vs.ionmoni gstages, rulted in over US$33 million-worth of subproects approved *at are awatingfinding. Effectie financial planning, whch coud baln resoures received withosecommitteto subprojects, would allow SIP to betr plan it intera administration.Resources could thus be allocated aionally, accring to prqected needs. Financiaplang could also extend to treting by sector and regin SIPs shift to regonrApromotion, based on the 33 health ditric, identfied as p t inten, and thepreparton of integted intrvntion plans, wold greay facili the planning process.Adopting pecif, quantifled objees will penmit settng investment priorities and choosingamong competg demands for subproject financing. It will enable SIF to asses theefficiency of its investments, as wel as institutional efficiency in meetng its objectives.

8.20 Supervison - IIDA. The ongoig SIP project has had one of the highest supervisioncoefficient among the projects in the Departmenes portfolo. No doubt, close IDAsupervision must have contributed to the good prqect imp tirt confimed bythe mid-term review. HEower, given that SIP has now d nd a strong instiduonalcapaty to aise and vise a large number of mbprojects in an efficient andtansparent manner, IDA would reduce the amount of auvson resurces. Greaterdelegation of authrty would be given to the assiged staff at the Resdent Mion. inaddi, donors have epessed interest to finance one or two posion (a social sectorspciist and an engineer) to suevse the project from the Reident Missio Financsupport wou also inlude fimds for the Resdent Mision staff to hire consants forsuervsion as needed.

8.2i The subpoect ct cili for MDA por review woud be raised. SIP wouldsubmit to IDA for prio review subprojects wit a tota subpqect cost of more taUS$250,000 equivalent SIP would appve subproject cost below US$250,000equivalent and fall. wihi the agreed suproject slectio parametes. All ubpjects woldbe subject to random ex-post ri by IIDA durag project superio. IDA would carryout semi-amual prqoect revis to assess project m n The rvi will focusinter alia on the issues included in the SIP smnn prgr reporm submitted to IDA(see para. 9.7) and on the impl t and p detiled in Anne 4.In addion, SIP would submit to IDA for review and pval, not later than a month beforeeach of the above reviws, its work progam including operating ns bfor each part of theproject proposed to be carried out during the fllwi six months, including cors ngbudgets and implem at and pefom indicators. It woud also spcify compliancewith the opeating plans submied the pio smester.

9. PROJECT COSTS, FINANCING, BSM NTS,PROCUREM, AUDlTIG AND REPORTING.

Project Costs and Tiandug Pai

9.1 e toal project cost is etmated at US$70.0 milLon, with IDA contribuftingUS$40.0 million, the GOB US$14.2 million, beneficiaries and RAs US$10.8 million and theOPEC Fund US$5 million. The sgnng of the OPEC Fund Loan Agre between theBozrower and tie OPEC Fund is a conditin of effedieness. The OPEC Fund hasoffcially confirmed its commiment of US$5 milLon. Local cost amount to US$57.1milion (82 pecent of total costs). Conti have not been included; any increase in theexpected aerge subproject cost (US$85,000) will be reflected as a reducton in the numberof subproects execubtd. Ihe total cost of each sproject involving constructio wouldgeerly include beneficiary contribudons in tem of klad, lbor, and materia. The exactproportion of benefiday contributon to investment would vay by eubprct tpe and theresources of the beneficiaries. RAs would also contribute to suproject costs, usually incash. While presently contibutions by beneficaries and RAs are between 15 to 20 percentof total subproject cost, on the avage, SIP would e the possblity of getting highecontnbutions from financally strong RAL IDA aod SIP would reviw SPs budget andamual progm semi-auly to ensure inter aL tat agreed Govenment budgetaryallocati are confirmed and are tmely disbursed. An agreement was reached duringnegotiations for the Govenment to finance SIP's admini budget indluding salaries, onan ineasing scale, reaching full coverage by the end of the proect period.

9.2 The proposed credit will finace only a slice of SIFs projected four-year program(1994-, which is estmated to be around US$137 millio of which US$120 millionrepresent subproject invesm and US$17.0 million are estimated administive expenses.Although, disbs and coitments, from e months immediately preceding themidterm review, i dte tat the SIP is of processing ubprojects at a rate of US$40million annually, it wil cary out the more modest investment progm indicaed above, toensure high quality of subrojects and internal resource balance between lending,disburse ts and svison The proposed credit would nance bprojects committed onor befre December 31,1995, sudies and techna assistance, and the first tuee years ofadministrative expend s on a deloig basis. SIPs fundmaising stategy seek to mobilize

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a further US$67 million to close tie finandng gap of the four-year progmam. In the eve ofshortfall, the program would be modifed accordingly. SIP is also execting to rceiveadditona funds from the proceeds of the ongoing process of pivatiaon of Govenmensaset, and also from debt reduction.

Dlsbursmn

9.3 The proposed Credit would be disbursed over a four year period, wt a closing dateof Dembe 31, 1997. The proect is expected to be completed by June 30, 1997. Theprwposed disbursement proile reflects experience gained under the previous the cret.Te Credit is expcted to be fully committed by Deember 31, 1995.

9.4 Di ts would be made ag (i) SIP subproects selected accoig toestablished selecon cdteia and evaluation procedures and apoed before Dccember 31,1995. Al proceeds of Credit 2127-BO for invsment subprojec have been fulycommitted; () cost of consultant services, tavel and tg and equipment, supples andmaintenanmce Saaries wil be coverwed on a decliing basis after January 1994. Annex 1,Tables 6 and 7 give detailed information on disbursent percentges.

9.5 Du ton of E Wlthdrawal apcatio for goods and rvieswith a contract vale of US$100,000 or more would be supported by full doContracts of less tan US$100,000, disbursements for expnditures not Ud bycontract, and all dib under subprojects woud be made on the basis of SOEs, forwhich spporting ntin would be maintained by SIP for review by 3DA staff. ASpecial Accunt with an authoized allocato of US$3 million would be opeed at thecentral Butk

9.6 The midterm review confirmed that SlPs procement procedures are wll-definedvtnspaent, and are condstenty appled. SIP has prepared two sets of draft standard bidindocuments for the pouent through LCB of civil works below US$100,000 (texecuted by the RAs) and above US$100,000 (procurement executed by the outsideprurement agents including Crown Agents and C3D), which IDA is currny rviewing.SlF would daso prepare sandard biddig documents for the proyurnt of goods, underLCB. SIFs expeince and improved efficieny as shown in the ongoing operation meritgreater delegation by IDA. Except for contr awarded through ICB, the treshold forprior eview by IDA of invitato to bid and proposed awards and final contracts ould beaised to US$250,000. IDA woud addiionIly revew each year oan an eciamg basis the first

three contract fr goods procured under LCB, as well as the firt three c acts fr wrspored under LCMB, irrespective of value. SIF and IDA agreed on a sytem of semi-annua procureet reviews throgh consultants and with TORs sati y to IDA. IlDAwould prvide assistance to SIF to imp its infmation system regrding urement,including prvsion for monitodng of contacts, and ex-post evaluation. IDA would carryout on an czps basis semi-annual procuement reviews based on a sampling of 5 percent(by number) of all contracts. For subprojects financed under the Credit, RAs or outsideprorment ag will be responsible for prcement in aordance with BankUDAgudelnes (May 1992). Prior to signing the subproject contract, SIP would asre that

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agroed pr ewmt procedures will be followed. Aveage subproject cost would be aroumdUS$85,000, wnth mamum project cost not exceedng US$500,000. Civil wa valued atless than USSS$,ooo eqalent each, up to an aggegae of US$6,800,000, would beprocured by th RA under local shoing. The RA would provide SIP with all rlv

forn_ ¢ review. i works esdmated to cost each more than US$50,000 calcompetve b g (LCB) would be carid out ICB will not be tequred becaue it is

xpected that no works contrcts wil be of an individual value hig than US$I million.

9.7 Procedures folowed for LCB wouwld Pet participation by forign bidder;howev, due tD the wide dispesion of subproects in rmote locations, it liskly that motcivil works contmats wodd be awarded to local firms Goods, including equipment,textbooks, a, fiture and supplies to be purcased under subproects, wouldbe grouped to allow procurement in large packages. Contra for goods that can bepackd in US$100,000 or more would be awarded on the basis of ICB, fowing IDAprocurement Guidelines of May 1992. Where ICB procedures are used, goods manufacturedlocally would be given a margi of prence in accordance with DA guidelnes For ICB,SIF woud use the Bank's stadard biddig docments. Packges of goods esbmated to cosUS$100,000 or less, but more than US$25,000, up to an aggregate of US$10,920,000, wouldbe awarded an the basis of LCB procedures satisactory to IDA. Goods esdmated to costUS$25,000 or less up to an aegate of US$2,100,000, would be procured by RAsfolowing klocl s ing procedures, acceptable to IDA, with offers fom at least threeqaified suppers. Computer equipment and related software wit aggregate walue of notmore tan US$120,000, for the expnsion and linkage of SIP's eistig sem, woud bepurhased tbrnugh direct conracng. Direct conactng is reqired in this case to esmure thecompatiblity reqirementsof the existg sm and it srvicing which is available throughonly oe source. Purchase of vehiles woud be packaged and procured thwough ICB, in asingle contract estimate to cost appximately US$800,000. Table 4 indicates methods of

Procureomt of cnulting services wBil fw the August 19M1 BankiUDAGuidene for the Use of For complex, tmebased assgments, theBower a employ csul ts under Cacts using the stndard form of conuact forcoul ' services issued by the Bank, with such modificatis as ba have been agreedby IDA. Where no relevant stndard contact documents have been issued by the Bank, theBorrwer shall use other andard forms agreed with IDA.

Accouts, Auditfng ad Reportig.

9.8 SIF would maintain accounts for all expendit financed under the prwposedoperation, disaggregatd by type of sbproject, tehnial assistance activity, or is ecost caegory and by epditure fnanced by IIDA, other donors and the Govement A1lproject accounts, the Special Account, and aU SOBs would be audited annuaUy by anibndep nt auditor acceptable to IDA in a dance with the Bank\IA Guidnes SIPwoud submit to IDA its audit reports not lat than four months folowing the end of theGovemnt's fiscal year. SIi would submit to IDA semi-anual progress repo by Apr31 and October 31 eah year, up to the dme the proect is completed. The semi-anualprgas rports woud contain inter alia mmay in on o SIP's subproject portfindicg types of subprojects, sources of financing, status of cuJtiOon, budgetaryallocations, benefiiares reached, prcurement reviews, ubprojects evalud ex-post andcossency of SIP opeins with line mint SIP would prepae a al report onimplemaitatioi~ expeience witin six months of te c ing date of the proect.

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10. BENIS AND RJSKS

10.1 Beneits. Bendfits would be: (i) aviting pody through the provision ofsemces and faties in health, nutriion, educa=on, wate supply and sanitation pimaily tothe rural poor, (i) strehning SIE in imprving it supeision work and better targetingits servie; (iil) improving productivity of the tgeted popultio; (iv) strengtheningiusitutions involved In preparn and executing subprcects; and (v) mobiliing additionalexteral financing to supor SWs operatons

10.2 Rsks. Risks would be: (i) politcal inteeence in SIFs operons .hich couldaffect its autonomy and credibility; (ii) staff tumover brought about by the new Govennmentcomig to powe i August; (iii) SP's high dqedec on foeign sources for coverng itsadm ratve expenses undemine its isitun stabity; and (IV) ikability of localcommunities to sn subprojects SIW spport It is expected that te new Govermentwould continue the suo provided to SIF under the currt Govnment to ensue that SIWwould carry out its mandate o satisfy the basic needs of the poor. The agreement reachedduring negoaons for SIF to be incorporated in the Civi Svicel Reform Program, wouldue stability in SW's staff, and the Government's agrem t to finance administraive

costs, including salaries, on an increing scale, wolWd bring stability into SIP' operations.With regard to ssinabilit, SWF would place greate emphasis on beneficiary particpations3t from needs identification, to imo and follow-up. In additon, subprojectapproval criteria would require that satsfactory mechanisms and plans are in place forcontinuation of opemions beyond SI support. SI is cuntly reviewing its cost recoverypoicy and mechanisms for the water suply and snai secton and is expong thepossibility for beneficiares and inancially st RAs to cover a laWr share of costs. inaddiio, fiaher refinement in the aWetig methddology would invole the participation ofbeneficiries more directly in the identificaion of their needs, in cost sharing and insubproect implnon. These prvisions are epected to enhance ssainabiht.

11. AGRE S REACHED AND RECOMMENDATION

11.1 Agreed Actons: During negoations, agreements were reached on the folowing:(i) SIF to review, the apprAisal critera perting to the watr supply and sntatio serspaying partiular attention to cost recoery, echnial norms and sandards, suinability andcommunity padtcipao (pa. 8.7); revsed citeia woud be inc d in the EvaluationManual by effectiveness; (ii) SIP to cary out semi-annual procurement revws (April 30 andOctober 31 each year), thugh consultants with TORs stfactory to IDA, submit reults toIDA and take actons as needed (am 9.6); rii) SIP will carry out evironmental impactassessments of relevant subprojects and will see that the neceary measur are taken toreduce negative ental impact; this prwiin will be incooated in its EvaluationManual by effecdve (am 5.3); (iv) SF woud adopt, by the end of the fi quarter of1994, mechanims to enu that best praices identfied by tie Inttiona DevelopmentDqetment are incoirpoted in the design of new subprojects, (par. 8.12); (v) SIF wouldrview semi-annually (April 30 and October 31 each year) the costency of its programwith sector strategies and prortes (par 8.18); (vi) SIP and IDA would review SIWsbudget and annual program semi-annually (Apr 30 and October 31) to ens inter alia that

-23-

the Gormet is pwrding agreed budgetay alcatio (a 9.1); (vii) SIF wouldpresent to IDA by Apil 30, and October 31 each year, kw its semi-aua review, semi-annual progress reprts which wouWd include inter alia reviewsof source and uses of funs,procurement, list of subpects appoved, und execurton and ubprojects evla ex-post,number of beneficires ead In uban and run areas lvd of operatichanges in progress in fundming, and an assessment of overall progessbased on implemetation and permance indicato uded in Annex 4 (paras. 8.21 and9.8); (viii) SIP to review with IDA reslts of the 33 ditic analyses by the end of thesond quarter of 1994, and incorpoat IDs comments i im e ing rediLtervention plans (Pa 8.3); (ix) SIP wil not finance the of additonal healthpost until the MOH has ken actfon to prvide the srvices needed for those posts alreadyfinmced by SIF and which ae not operag (par 7.3); (x) two studies to be completed byMarch 31, 1994 (rORs agreed during negooans); one to carry out an instiuonal analysisand the othr to focus on imprving SIPs fiancial managemen t and planming capabilities(para. 7.6); (id) a mid-term review to be caried out by Apr 30, 1995 (par 8.10); (xii)new progms developed by SIP would be presented to IDA for review, prior toimplementation(pam 7.4); (xiii) the Goverment to tak over on an icasing scale SIFsadministtive e ses, incuding sali (pam 9.1); (xiv) SIP staff to be included in theCivil Servie Rfm pgam (par 4.6); (xv) SIP to prepare a plan to address the teacher'Waining issue by the end of the last quarter of 1993, and reach agreement with ETARE and

IDA for its lementa (pa 7.5); and (xvi) SIP to compete the ongoing impactevaluaton studies, and devop and adopt, by the end of the first quarter of 1994, an impacevaluaion progm, in consulation wift IDA (pma 8.12).

11.2 Condtlo of Credit lOPeci"YIess: (1) a Suidiary Agreement for making thefunds available by the Borrowe to the SIP, saactory to IDA, would be enered into (par8.1); (ii) SIPs Evaluadon Manual wwd have bee revised to indude rvsed apraisalcrteria for the water supply and snion sector, and critera for assessig envi talimpact (pam 8.7); the revised Evaluation Manual, sasfactory to IDA, woud have beenapprved by the Adminisative Council; and (iii) the OPEC Fund loan Ageement wouldhave been entered into beween the Borw and the OPEC Fund, and te Agreement wouldhave been duly authrized and rtfied, and woud be lealy binding (paa 9.1).

11.2 Subject to the above ageements and assrnces, the proposed pret wouldconstitute a suitable basis for an IDA credit of SDR 28.3 million (US$40.0 milliequivalent) to the Republic of Bolivia.

- 24 -Annex I

BOLIVIASECOND SOCIAL INVESTMENT FUND PROJECT

Table I

Detailed Project Costs(US$ Millions)

% TotalProject

Local % Forelgn % Total Cost1. SIF Sub-Projects1.1 Health 12.3 76 3.9 24 16.1 231.2 Water Supply & Sanitation 14.3 78 4.0 22 18.3 26

Subtotal 26.6 77 7.9 23 34.5 49

2.1 Formal Education 7.2 89 0.9 11 8.1 122.2 Non-Formal Education 7.8 80 1.9 20 9.7 14

Subtotal 14.9 84 2.8 16 17.8 25

3. Institutional Support to RA's 1.6 100 0.0 0 1.6 2

Subtotal, Sub-Projects 43.1 80 10.7 20 53.8 77

II. SIF Institutional Development1. SIF Administration

Salaries 9.2 100 0.0 0 9.2 13Travel, training, insurance 3.0 75 1.0 25 4.0 6Maintenance 0.1 60 0.1 40 0.2 0

Subtotal 12.3 92 1.1 8 13.3 19

2. Vehicles & EquipmentOffice Equipment, incl. Computers 0.0 0 0.2 100 0.2 0transport & Equipment 0.0 5 0.7 95 0.7 1Miscellaneous Expenses 0.9 100 0.0 0 0.9 1

Subtotal 0.9 51 0.9 49 1.8 3

2. Technical AssistanceAuditing 0.2 100 0.0 0 0.2 0Institutional Evaluation 0.1 100 0.0 0 0.1 0Financial Planning 0.1 100 0.0 0 0.1 0Operational Research 0.2 70 0.1 30 0.3 0Poverty & Demography 0.1 70 0.0 30 0.1 0information Systems 0.1 85 0.0 15 0.1 0Impact Evaluation & Monitoring 1.2 81 0.0 19 0.3 0

Subtotal 0.8 82 0.2 18 1.0 1

Subtota, Instfl DeveL 14.0 87 2.1 13 16.1 23

TOTAL 57.1 82 12.9 18 69.9 100

N.B.. Intutional Evaluation - funds for an institutional analyss of the SIF.Operational Research - funds specific consultancies related to the SIF's design of new programs, project criteria

and paramatersPoverty & Demography - funds the review and updating of the SIPs targetting methodology based on the 1992 censusImpact Evaluation & Monitoring - supports the development of mecbanisms and monitoring indices to strengthen project

implementation and impact evaluation.

- 25 -Annex I

BOLIVIASECOND SOCIAL INVESTMENT FUND PROJECT

Table 2

Project Cost Financing by Category*(USS Millions)

% TotalProject

Local % Foreign % Total Cost1. SIF Sub-Projects1.1 Health 4.4 27 11.7 73 16.1 231.2 Water Supply & Sanitation 6.0 27 13.3 73 18.3 26

Subtotal 9.4 27 25.1 73 34.5 49

2.1 Formal Education 2.2 27 5.9 73 8.1 122.2 Non-Formal Educaton 2.6 27 7.0 73 9.7 14

Subtotal 4.8 27 12.9 73 17.8 25

3. Instutional Support to RA's 0.1 6 1.5 94 1.6 2

SubtotaI, Sub-Projects 14.3 27 39.5 73 53.8 77

II. SIF Instiwonal Development1. SIF Administration

Salaries 6.1 67 3.0 33 9.2 13Travel, training, Insurance 3.0 76 0.9 24 4.0 6Maintenance 0.1 82 0.0 18 0.2 0

Subtotal 9.3 70 4.0 30 13.3 19

2. Vehicles & EquipmentOffice Equipment incl. Computers 0.1 60 0.1 40 0.2 0Transport & Equipment 0.0 0 0.7 100 0.7 1Miscellaneous Expenses 0.9 100 0.0 0 0.9 1

Subtotal 1.0 56 0.8 46 1.8 3

3. Technical AssistanceAuditing 0.0 0 0.2 100 0.2 0Institutional Evaluation 0.0 0 0.1 100 0.1 0Financial Planning 0.0 0 0.1 100 0.1 0Operational Research 0.0 0 0.3 100 0.3 0Poverty & Demography 0.0 0 0.1 100 0.1 0Information Systems 0.0 0 0.1 100 0.1 0Impact Evaluation & Monitoring 0.0 0 0.3 100 0.3 0

Subtotal 0.0 0 1.0 100 1.0 1

Subtotal, Instit Devel. 10.3 64 5.8 36 16.1 23

TOTAL 24.6 35 45.3 65 69.9 100

* This table details the breakdown of project costa by source. Local sources Include TON, and RA and communitcounterparts Foreign sources include IDA, cofinanciers, and other external financiers

BOLIVIASECOND SOCIAL INVESTMENT FUND PROJECT

Table 3

Finarning Plan(US$ Millions)

lBeneficiary OPECSIF Subprojects GOB RAs Communities IDA Fund TOTALHealEh 1.2 4.2 4.2- 21.9 2.8 34.2Education 0.6 2.2 2.2 11.5 1.4 18.0lnsional Support to RAs. 0.0 0.0 1.4 0.2 .6Subtobil t.9 6.4 6,4 34.8 4,4 53.9SIF Institutional Development

Salaries, training, travel 7.7 0.0 0.0 3.6 0.5 11.8Equipment, suppliesvehicles 2.0 0.0 0.0 0.8 0.1 2.9Technical Assitance 0.6 0.0 0.0 0.8 0.0 1.5Subtotal 10.3 0.0 0.0 5.2 0.7 16.1

TOTAL| 12.2 6.4 6.4 40.0 5.0 70.01% of total| 17A 9.1 9.1 57.1 7.1 100.01

. t_~~~~~~~~~~~

- 27 -

Annex 1BOLIVIA

Second Social Investment Fund ProjectTable 4

Methods of Procurement(US$ Million)

+ TotalCateaory of Expenditure ICB LCB Other Costs

Civil Works - 15.3 6.8 22.1(10.4) (6.3) (16.7)

Fumiture, Equipment, Supplies 1.6 9.1 1.0 11.7(1.2) (5.1) (0.9) (7.2)

Computer Equipment 0.1 - 0.1 0.2(0.1) (0.1)

Vehicles 0.8 - - 0.8(0.7) (0.)

Books - 0.9 0.5 1.4(0.2) (0.1) (0.3)

Pharmaceuticals 3.8 0.9 0.8 5.5(1.1) (0.2) (0.2) (1.5)

Consultant's Services - - 1.0 1.0(0.8) (0.8)

Salaries, Travel, Training (SIF) - - 13.3 13.3(3.6) (3.6)

*Personnel, Operating Costs - - 12.9 12.9(under sub-projects) (9.0) (9.0)

**Ofter - - 1.1 1.1(0.1) (0.1)

Total Project Costs f 6.3 26.2 37.5 70.0( 3-1) (15.5) (21.4)_ (40.0)

NB : Numbeis in parentheses reflect IDA fnancig.* Refes to cer operating cosft for sub-projects which SIF funds on a limited basis

for up to 18 months.** Includes mlsceUneous expenses funded by the Treasury (e.g. rent, public relations).+ Refens to: procurement by local shopping for goods and civil works; procurement

of technial assistance services according to Bank guidelines; direc contracting fotsome specalized computer equipment; and salaries, whic require no procurementprocedures and wh IDA will pay an a dealu_ bass.

- 28 -

Annex 1

EOLIVIASecond Social Investment Fund Project

Table S

Procurement Umits by Type

Expected Average Value AggregateNumber of Contracts Umit Type ot

aC rmnent Contract Value of Contracts US$ LUSS) Procurement

Civil Works less than S0,000 170 40,000 6,800,000 Local Shopping

more than 50,000 51 300,000 15,300,000 LC8and less than 500,000

Equipment, less than 25,000 105 20,000 2,100,000 Local ShoppingFumiture,Supplies more than 25,000 133 80,000 10,600,000 LCOfor Sub- and less than 100,000Projects

more than 100,000 14 320,000 4,600,000 ICe

Equipment, less than 25,000 8 15,000 120,000 Local ShoppingFumiture,Supplies more than :5,000 8 40,000 320,000 LCBfor the SIF and less than 100,000

Vehicles more than 100,000 1 800,000 800,000 ICs

Computer less than 100,000 2 60,000 120,000 DirectEquipment Contracting

- 29 -

Annex 1

BOLMA

SECOND SOCIAL I4VESTMENT FUND PROJECTTable 6

DlSBURSEMENTALLOCA1IONS(US$)

1. SubpoJects for Health 10,140,000 90% of dsbursemenSt by SIF foreligible sub-projects approved before

a) Ptmary Care 6,084,000 December31, 1995b) Nution 1,690,000c) Epkdmig 2366.000

2. Water Supply & Santation 11,49,000 90% of disbursments by SIF foreilgible sub-projects approved before

a Water Supply 6,760,000 December31, 1995b) Sanitaton Progms 4,732,000

3. Sub-projects for Fomral Education 5.070,000 90% of disburement by SIF foreligible sub-projects approved before

4) Coruon of schools 4,066,000 Deoember31, 1995b) CEMEls 1,014,000

4. SubroJets for Non-Fonmal Educatn 6,084,000 90% of disbursements by SIF forelgible suL.orojects approved beforeDecember31, 1995

5. Sub- sJet for hnsdiulona 1,014,000 90% of disbu sment by SIF forSupport for RAs. eigb sub-projec

6. SIF insItuclonal D ment 5,20,000

a) Sa tavel, raning & IbAsce for SIF 3,640,000 75% of eigibe expenditres in 1994staff untl December31, 1996 50% of eligie exnires In 1996

10 25% of eligible expendinues In 19960% of elgibb eendtures In 1997

b) Equime spplies,hvehls 780,000 100% of expndires for impoftdgoods; 80%of expete for

-oc* p-md goodS

c) Technical Assltance 780,000 100% of epndwi forconsltns' sM108% travel

expems, per dinm.7. Unalocatd 1 000.000

TOTAL

- 30 -

Annex I

BOLIVIA

SECOND SOCIAL INVESTMErT FUND PROJECTTable 7

DISBURSEMENT FORECAST

_,IS <f LK;; Sr.: ,9EMENTSAND SEMESTER SEMESTER CUMULATIVE % SEMESTER

(US$ Million)

19942nd (Jan 94 - Jun 94) 1.2 1.2 3% 1

19951st (Jul94-Dec94) 4.0 5.2 13% 2

2nd (Jan 95 -Jun 95) 4.0 9.2 23% 3

19961st (Ju195-Dec95) 5.2 14.4 36% 4

2nd (Jan 96 - Jun 96) 5.2 19.6 49% 5

1997lst (JuI96-Dec96) 8.0 27.6 69% 6

2nd (Jan 97 - Jun 97) 8.0 35.6 89% 7

19981st (Jul97-Dec97) 4.4 40.0 100% 8

losing Date: December31, 1997

BOLIVIASECOND SOCIAL INVESTMENT FUND PROJECT

Table 8

Financing Plan, Total SIF Program1994 -97

(US$ Millions)

Beneficiary OtherIF Subprojects GOB RAs Communities IDA Donors TOTALHealth 5.6 7.8 7.8 21.9 33.6 76.7Educaton 2.9 4.2 4.2 11.5 17.3 40.1Insftiutional Support to RAs 0.3 0.0 0.0 1.4 1.6 3.2Subtotal 8.7 12.0 12.0 34.8 52.5 120.0

IF Institutional DevelopmentSalaries, training, travel 7.7 0.0 0.0 3.6 0.5 11.8Equipment, supplies,vehicles 2.0 0.0 0.0 0.8 0.5 3.3Technical Assistance 0.6 0.0 0.0 0.8 0.5 1.9Subtotal 10.3 0.0 0.0 5.2 1.5 17.0

TOTAL 19.0 12.0 12.0 40.0 54.0 137.0%of total 13.9 8.8 8.8 29.2 394 100.0

-32- ANNEX2

BOLIVISECOND SOCIL INVESTMENT FUND PROJECM

ftjed Promotion and Earatin Proceur

L Promotin Procedures

1. The cut promoton pocedue are as flow: C) the SIP recives aptoect and co an iniial creenig to determine digibity, con ctIng especial onwhetier the project is located in a SIP poy area, and on the coherence and completenessof the project document; (ii) a promoter makes a trip to the reques_t community to conductananlysi cf the proposed project. The promoter submits a promoton report to theapprpiat departmet (Le. Education, Health) on the eligibility for SIP funding The majorshortcoming of the promotion and s nig pocedu is that tre is a bias aginst needycommunities which do not have the institiona cpabiies to deabome sound projectprposals. eo risk has been tat SIF funding tends to be povided to communities whichare better equpped to desgn project prposls but ar not necesary the neediest.

2. To address the shotcoming noted ab've, SIP is intoducing a new set ofprept promoton and scning procedures. SIP has tated 33 health districts in thecountry (nealy 40% of the total), where the popuation is categoried accoding to the levdof poverty. A p-active promoto stragy Lis bee adapte which will inlude thefllowing steps: (a) promoon for any gien heal district will begin in the approprate SIPdepartmental office, where a 'social inventoy' wil be drawn vp of the infrastructure prentin ta district; (b) the initial inventory will be updated and cofmed by SIP promoters inthe field, who will eauate: (1) state shools, health posts, potable water, sanitaryfclties; (i) real needs of the commu in the distdct, along with projects poposalswhich would resod to these needs; (iii) the effec ess of the RAs opafi in thedistrict; and (iv) the oraizato and p em of the community govring suctr (e.g.municipality, ouncil of elders). Once this infmat is gathered, the promotion teamretr tD La Paz and submits its diagnosis, incng pwpoed projects and promising RA's.The precis mechanism by which project ideas and RA's will be matched remains to beelaboated.

3. The advantages of the new pro-acdve promotion strategies are as fllows: (i)improved targeting, which will reach the neediest Bolivians; (u) improved match between thepooret communities and ageies which have strong project impmentation capabities; and(iii) a coordinad approach to regonal deveopment, which ensues minimal duplication ofreso- and acdivite

- 33- ANNEX2

IL Evabudon Procedum

4. Sbproect evaduation follows a series of procedures, which enre that al ofSis minimum requeme for project fancing are stisied. The steps re as follow:

1. Social Evaluation2. Institutona Evaluation3. Technial Evaluation4. Financal Evaluatio

S. Ihe process begns when the promotion report on a paricular proect isreceived by either the Education or Health Department. The Evaluation Cbief of therespetive deparmt eiw the report, makes comments, and assn an evuator to theproject. This evaluator the embarks upon the eraluation prooes. S/he first caries out adeskbased evaluation of the project, followed by a site visit, during which the evaluatornvesigates ionable s and develops a bet idea of the veacity of the project

document

Social Evaluaton

6. The mai part of the wscial ealua is caried out duing the site visit. Theevalon begins by examining socia idiato in order to determin whether thecommunity in queston represn a priority group for Sf intervent. The evaluator then

miines the degee to which te proposed project responds to the communit's mostimport needs, the scope for community par and the ability t geneateconterpar funding. In cas where it's not feasible to meet wth rpreseives of allcommunities, a cross-sample of individuals is assembled for discuss witi SIP staff.

Insitonal Evahuaion

7. The insttutional evaluadon begins with an evaluaton of the rdaionship of theRequeting Agency (I.e., NGO, RDC) with the reevant ministry. The RA'sreainpwith othr institutions in the respecdve sector is examined, as wel as its legal status,operional struc , financal administatio and staffin pattes. SIF staff also amineclosey the xpedence of RAs in carrying out similar projects.

8. In the case of Basic Health Care projects, the evauon is doe at the lvel ofte health distrc, with a view t evaluating insduonal financial, and human resourescapabitia. Site vists are sill done in the cases; the evaluaton reports are suffientycomprehensive that adtonal projects in the same district do not require more than anupdatin of the original insdtiona aealuai

Te Ial Evluatn

9. The technical evuation aims to assess the proect pwpos againt thefowing citeda (a) inal cohee, (b) appropateness and (c) feiility. For BasicSanitaon, Health, and Formal Education insucu projects, this tails vwing the

- 34 - ANNEX 2

architctr and/or tWhn pla (e.g. whethr he wewea sstem is wel designed andadequate to the communi's needs). The technical evaluainl for Non-Formal Educationsubprojects ccte on the propos ethodogical awroach, the apprin ofdidactc materials, and the adequacy of ponnel who wil carry out the taining progrms orrun the rual boarding chooL

Finnha Evaon

10. The financial evaluation for alU SIP ubprojects, (ecept tie Non-FomalEdcation pjects) aims to eamine the bless of proect cost and to calculate thefinanil feasibiity and intnal rate of rtun of the project. Special attention is given to thepopuladto's abiliq to pay user fees, in cases where cost recovery is applicable (e.g. potablewater prqeM).

11. For Non-Formal Educaton sbpojects, the financial evaluation focuses on theadequacy of psonnel and rdated opertng costs, since SIF projects can finance only up to60 perce of hes costs. SIP also loo cosedy at the RA's administraive costs, and atequiment and supplies which are needed to cary out the project. As NGOs workdng in thesocial sectors have limited finandal Scapailities, S so evuates theircapacides, to ensure compliance with SIP finanal ts (bank guarantees, etc.), andto prvent casow difficultis

Concluson

12. In the future, a. SIP moves towards a regiona approah, the functions ofsocal and nstituonal alua will be increasingly pefrmed by reponal promoters.This will help ensue tat promoters and evauators use the same critesia and focus on thesame issues.

- 35 - ANNEX 3

BOLMASECONI SOCIL INVTMT FUND PROJECT

SE's lnenal Monitoring System

1. SIW's Information Division the Instituioal Development Department maintains theIntera Moitoring System and prvides tMely report to the Executive Drector ani otheSIF operonal dqeame. The reports will be deigned to flag pqjects expeiencigunuIal delays in any phae of the prect cycle of cost overrUnS dug impl .

2. The main information to be tracked by the MIS System include:

A. Basic Project Data:

Project NameProject Code NumberContact Code Number(s)Category (Health or Educaton)Sub-CafteoryType (Tnfmstuc or Non-investment interventions)Name and Type of Requestng AgencySuperVisorExecutg Ageuny, contractor, or supplierMethod of Procrment (for all contrcs, if more than one)Reated Projects, if anyOther projects in same area

B. Prect Fincing:

Amount requested from SIPAmount approved by SIPCounpart AmountCoutepa SourceValue of Commun ContributioSource of Community ContributonType of Community ContributionSource of SIP Financing (reasuy, IDA, donor)

-36- ANNES 3

C. Povety Targeing:

Name of:DqwatnmS

CantoPiority ditrit or outsideLcaity Rul) or Negborood (Uban)aassfctn (rua/ra)Povety Tareti Mediodology adopted by FIS

D. Sub-project Evaluao:

Decrio of Projectmated duatin of sub-project eecuon (SIP-financ

Model sub-project costComposition of sub-proect cost (labor, materials, equipmen)Physical Targets (e.g., area to be const , number of

desks or textok)Socia Targ (number of people trained, qualve goals)Estimsatd number of beficaresCost per benefidaryImpat indicatorsObservation

E. Sub-pect cycly:

Date request rceived by SIPPrrity assignd by the nfmaon DivisionDate request asigned to Promoion Unit (DepL of Promotion &

MonitoigDate of £protio site visit to communiyDate request sent to EvaBla UnitDate of auator's vit to communityDate of appoval/rejecton by hdm nIs CouncilDate sub-project sent to Legal Depatment for initia of

Oy 4 Ind to be AfidNumber of contracts and amounts ($) per projectDate of conwc ignaure

V Sm,of f.m us%willbe cbend amSIadalftaift --- n utafty.-

-37- ANNEX 3

Date of tiat of sub-project eec0utonDate of cmpltoCurt daSIlme elapsd in each phaseDate of coclu3ioUcompiWn

F. S nperviso:

Amount and Date of DismentsPecent*g of work completedDeays, reasonChanges in conta amounts r ar mnObservatons

- 38 - ANNEK4

BOLIASECOND SOCIAL NVESTMENT FUND

Preeot XI_S2=0cheSdbi and Perfomance Indicators

A. Iidple iodicators Date (by)

1. SIF would hire consultants with April 30, and Octobea 31TORs satsfactory to IDA to carry out ecx- each yearpost -annual ptsbased on a sampling of 5 percent (bynumber) of all contacts. The reults ofthereviews to be submitled to IDA aspart of the semi-annual progress reports.Agreements would be reached on neededactions.

2. SJIp and IDA to reviewsemi-annuallv April 30 and October 31SIP's budget and annual program to each yearensure inter alia that the Goverment ispovidng agreed budgetauy allocation.

3. SIP would submit to IDA semi-annual April 30, and October 31progress rpos (for IDA's semi-annual each yearreews) which would include inter-aliareve of sources and uses of funds,Government budgetary alcaos,procurement reviews, conistency of SIPsprogram with sector strategies andprorities, community paricipato,highlighting problems dentfi duringimplementation/suprviso, lIst osubprojects approved by sector,beneficiaries, disbursements, subproectsunder e-ecution, expost evaluafions, andleve o adntve ependitures Nolater tan a month befoe each review,SIF would submit to IDA for nevw andapproval its work prgm including

rtng plans for each part of theProject prposed to be cried out duringthe following six months, including thecorreponding budgets and the relaed

ject imp andindicator. SIP and IDA to reachagreements on needed acto based oanthe progress reports, and on the opeaigplans.

-39- ANNEX4

4. SIP to pesent to IDA revised povty December 31, 1994tAgeng methodology, reach ageementand corate the new methodology intoits operations.

5. Complete the 33 dsict anayses and June 30, 1994discuss raelts with IDA.

6. SIP to complete impact evaluation Marh 31, 1994baseline sdies, develop and adopt animpact evaluation program in consutationwith IDA; establish mechanisms to ensurethat best practc identified areincorporated in the design of newprojects.

7. Carry out the instional analysis March 31, 1994 (compl.)study, present the results of the study toIDA and reach agreement on an acionpian. June 30, 1994 (impL)

8. Carry out the study on imprving March 31, 1994 (compl.)SIF's financial, planning and

cilitwand reach agremet an anaction plan, and a timefram for June 30, 1994 (imp4.)implemenain

9. A midterm review to be completed by April 30, 1995April 30, 1995; SIP and IDA toreviewresults and agree on an acdon plan.

10. SIP would revie and analyze the October 31, 1993numerous diverse ducaiona expedmentin Bolivia, discuss the results andreplicabiLiy with BTARE and MEC,deign an appropiat actn plan andreach apgement with IDA, beforeimplmnain

11. Pending esblihmen ofnew October 15, 1993teaching norms and arageme throughthe education refom under prepaton,SIE woud pment to ErARE, MEC andEDA a plan O adde s the teah'-iig issue and reach agrement fori,p,_mentaon

-40- ANNEX 4

B. Perfoma_e Indicators

1. By December 1994 the SIF wil have disbursed te US$111 milLioncommitted at the time of appraisaL By 1996 it wi a onally havecommitted no less than $55 milLion in new projects, meeting the folowingsectoral targets:

Sub-program Target

(a) Heath $16.1 milLion(b) Water Supply & Saniaon $18.3 million(c) Formal Educafion $ 8.1 milLion(d) Non-Fonnal Education $ 9.7 milion(e) s supportto RAs $ 1.0 milLion

2. No less th 80% of new project approved each year (masured bydollar amount) will be located in the 33 health disricts designated as piorityfor SIP ivention.

3. No lss than 80% of projects approved each year (dollar amountequivalent) wi be located in rural areas.

4. The tan program for SIP staff, agreed with IDA annually, will befully completed£ by end of each calendar year, startg 1994 though 1997.

5. nstiuoal development fo RA's will be caried out annually andwill hae produced at least 40 graduated insituftions by end of 1997.

6. rimatey 200,000 women will benefit annually fiom SIP's

1. Pafomn targo iSudmgS's _mvctme progrm woud be mome remsoday aabbEdsawe SIP ha End th Dsgatic Analy of dhe 33 disict ad has completd ik IntuvaitiO_.

BOLVISECOND SOCIL RNWTMENT FUND PROJECr

D itbution of Approved Projects and Committed Resources(Amonts In Milons of $US)

Tbel

HlEALTH EDUCATION TOTAL

No. ot IF Amount % olal Cap'a % No. of UF Amou % olal Ctp % No. of $US $ Ctps TotalProl. VUA 1SW Piol. US SUS Prol. SIF

aEm 49 3.46 3.37 0.5 0.57 so 3.41 3.33 0.58 0.57 137 6.87 1.16 8.03CQOCKAMBA 78 9.21 9.00 2.40 2.34 01 4.55 4.44 1.03 1.01 139 13.77 3.43 17.20 *

CHUCJAISA lt 1.51 1.48 0.22 0.22 67 2.64 2.77 0.8B 0.86 84 4.35 1.11 5.46LA PAZ 99 11.66 11.38 3.05 2.98 87 4.46 4.35 0.94 0.92 186 16.12 3.99 20.12CRUM 43 2.63 2.47 0.31 0.30 71 3.45 3.36 0.48 0.45 114 5.97 0.76 6.74PANDO 10 0.86 0.84 0.17 0.16 14 0.49 0.48 0.04 0.04 24 1.35 0.21 1.56POTOSI 121 4.31 4.20 1.80 1.76 102 4.14 4.04 0.64 0.63 223 8.45 2.44 10.89SITAGCR 113 13.00 13.28 3.02 2.94 158 3.16 3.09 0.60 0.59 171 16.77 3.62 20.38TARIJA 65 3.0 3.81 .14 t.t11 .SI 2.41 2.36 0.53 0.52 116 6.31 1.67 7.98NATIONAL 0 0.00 0.00 0.00 0.00 _ I 1t.90 1.85 2.21 2.16 11 1.90 2.21 4.t1

TOTAL 595 61.04 49.62 12.68 12.38 810 30.02 30.08 7.92 7.73 1205 81.06 20.60 102.46

S8ur: Soc hwwnt Fmd

V

BOUVIASECOND SOCAL KEVMfNT FUNI) PROJECT

DirItution of Apprved ProJects ad Re _rc by Prry

Tbb 2

Plt a *a2 4 TAL

PR 91 N. 1 PR 91 Nd S1 V8 91 tb.o d1 pS 91 N.eIt. #1 tW P 0~__,_._.____.____ Proj.. 0 __________ Prol. Prol __ Prol.1St. St 14.06 to 6.14 0 4.38 5t.04

220 2 is@ I* 104 t *$ 5 9

_ __.__ __- __.. .._ ____ i t

t2.C6 i 1t.40 14 S." 5f 2.65 S 3. 0.2 245 24 217 16 72 6 as a siD

.~ ~ .,__. *_. - _

. IMA , n.6 0 623 4X 2.35f 92 406 34 tO.$3 i3 i Is 7,04 i lOt S $1.86 120S

* ~ ~ VRAMtO l rlsClOV 'CO07E VAOM

| _, *PRKAlY~tY2y -| ip TY3 Y 4 ---- 1~~~~~~~7 *A_

22%

So:e $od hwsf Fw

tA

BOLIVSECOND SOCIAL INVVSTMEN FUND PROJ

Summary ef Appmed Preijet By Aa(Ahmndts In MiUms of $US

TIbb 3

.RRAL URBAN OUTSIRTS TOTAL l._______.__ No. dProl. % $J % No. of Ptoi. % ,$Us- % No. of Prol. $US

383 32 212 18 595I. E.L_H.

29.29 29 34.43 34 63.73 *.

503 42 107 9 610EDUCAON.

26.21 26 12.53 12 38.74

TOTAL see 55.50 54 319 46.96 46 1205 102.46

SlWV&. So.l bw.amsn Fun

t_____ , . Z . . ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t

- 44 -

AEXS

i! , i : § r :~~~~~~~~~~~~~~~~~~~~~*.

-45-_ _ - ANNFA5

IE

EL

* * U~C

v-~ ~ ~ ~~~~ C;~~~~~~~~~

tv~~~~*

- 46 -

ANr S

ROLVMSOCIAL VTMENT PROJECT

Talbe 6

Dstribution1 of SIP's Resoures by Depatqnt

Pop2hton fo Trt Group('0) USSCapit Poem

Beni 251 31 143C fchabamba 1094 14 158Chuquisgac 452 12 94La Paz 1883 9 193Oruro 339 19 119Potosf 646 14 234Santa Cruz 1351 13 193

ija 291 23 136

sow= socw JnwBko lud

- 47 -

ANNEX 6

BOUVIASECOND SOCIAL INVESTMENT FUND

PROJE ICYCLE>I

DEMAND

|REQUEST -]Information

: R~ANK OF REQUESTS

PromotionPROMOTION STAGE |m_

HEAL1TH IEDUCATIONApria.APPRAISAL | < APPRAISAL ] Appraisal

I ADMINISTRATIVE COUNCIL Approval

MPSSP MECAPPROVALAPPROVAL

PROCUREMENT jj]procurement

CONTRACT SIGNING

| FOLLOW UP AND SUPERVISION l

Follow-Up

I SOCIAL IMPACT

- 48 -

ANNEX 7

BOLIASOCAL V MGMT SUN PROJC

(a) ime take to prepare: 2 months

0) Pepaed by: IDA and SIstaff

(c) Negodations: June 1993

(d) Schedued Board Date: Jue 1993

(e) Planed Date of Effectes September 1993

-49- ANNEX 8

BOLPVIASECOND SOCIAL DH4WSTMEN lUNI PROJECT

Selectd DgocUme and Data Availbl in the Projt Mgl

I. Doww

1. SIP - Mid term Review, May 14, 1993

2. SIP Manuals of Promotion, Evaluation Folow-up, Adm f .

3. Reglamento del SIP.

4. Decreto Supremo No. 22407, January 11, 1990, as amended by Decret Supremo No.22452, March 8, 1990.

5. Educain Scor Stategy - Draft April 1993.

6. Bolivia - Poverty Report 8643-BO, October 3, 1990.

7. Cordination Ageements betwee SIP and lie ministries.

8. Convenio (draft) SIP and FNDR.

9. TORs for the Institional Analys and the Fmancial Manant and PlannStudies.

10. Training plan for SIP's staff.

Ii !

, I .

I IIII

I

.Ios w. .~ ~ ~

Sai

S

NOw.

AP SECTION

RD 2402BOUJVIA

B R A Z I L ENVIRONMENAL TECHNICALr 3 t ASSISTANCE PROJECr

§1 ~~~~~~~~~ROAM&To Rn &wo\,,Scnw

TCRocOM M gGIcpil04nmn Trac$

National Capital

-Ir t< / " ' ' .} -- bnValleys

Ap;1 01 290 140

l hA~totgos1o I *cR A Z I LT.Th