Document of The World Bank Report No: 22264-MK PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 2.0 MILLION (US$2.5 MILLION EQUIVALENT) TO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA FOR THE CHILDREN AND YOUTH DEVELOPMENT PROJECT (LIL) June 7,2001 Environmentally and Socially Sustainable Development Unit Europe and Central Asia Region fRENCY EQUIVALENTS (Lxch-.ingc Rate Effective 04/19/2001) Currency Unit = Macedonian Denar (MKD) I MKD = US$0.0194 US$1 = 64.8 MKD FISCAL YEAR January -- December ABBREVIATIONS AND ACRONYMS AYS: Agency for Youth & Sports CAS: Country Assistance Strategy CBOs: Community Based Organizations CESVI: Italian Consortium CIDA: Canadian Development Agency CYDP: Children & Youth Development Project ECA: Europe and Central Asia ECCD: Early Child Care and Development ECHO: European Community Humanitarian Office EMP: Environmental Management Plan FYROM: Former Yugoslav Republic of Macedonia GOM: Government of Macedonia GPN: General Procurement Notice IBRD: International Bank for Reconstruction and Development ICB: International Competitive Bidding ICT: Information and Connection Technology IDA: International Development Agency LIL: Learning Innovation Loan M&E: Monitoring & Evaluation MOT: International Theater and Music Associations NGOs: Non-Governmental Organizations PAD: Project Appraisal Document PMRs: Project Management Reports PMU: Project Management Units SOE: Statement of Expenditure SOROS: League for Albanian Women UN: United Nations UNICEF: United Nations Children's Fund WB: World Bank Vice President: Johannes Linn Country Director: Christiaan J. Poortman Sector Manager/Director: Alexandre Marc/Kevin Cleaver Task Team Leader: Gloria La Cava FORMER YUGOSLAV REPUBLIC OF MACEDONIA CHILDREN AND YOUTH DEVELOPMENT PROJECT (LIL) CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2 2. Main sector issues and Government strategy 3 3. Learning and development issues to be addressed by the project 4 4. Learning and innovation expectations 4 C. Project Description Summary 1. Project components 5 2. Institutional and implementation arrangements 8 3. Monitoring and evaluation arrangements 9 D. Project Rationale (This section is not to be completed in a LIL PAD) E. Summary Project Analysis 1. Economic 11 2. Financial 12 3. Technical 12 4. Institutional 12 5. Environmental 14 6. Social 1 5 7. Safeguard Policies 18 F. Sustainability and Risks 1. Sustainability 18 2. Critical risks 18 3. Possible controversial aspects 19 G. Main Conditions 1. Effectiveness Condition 19 2. Other 19 H. Readiness for Implementation 20 1. Compliance with Bank Policies 20 Annexes Annex 1: Project Design Summary 21 Annex 2: Detailed Project Description 27 Annex 3: Estimated Project Costs 33 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 34 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 35 Annex 6: Procurement and Disbursement Arrangements 36 Annex 7: Project Processing Schedule 43 Annex 8: Documents in the Project File 44 Annex 9: Statement of Loans and Credits 45 Annex 10: Country at a Glance 46 Annex 11: Sustainability Plan 48 Annex 12: Lessons from the World Bank Post Conflict Grant and Other Projects 53 Annex 13: Minutes of the Consultative Workshop 56 Annex 14: Assessments on Youth 58 Annex 15: Environmental Data Sheet 60 MAP(S) IBRD 31409 FORMER YUGOSLAV REPUBLIC OF MACEDONIA CHILDREN AND YOUTH DEVELOPMENT PROJECT (LIL) Project Appraisal Document Europe and Central Asia Region ECSSD Date: June 7, 2001 Team Leader: Gloria La Cava Country Director: Christiaan J. Poortman Sector Manager: Alexandre Marc Project ID: P073483 Sector(s): SY - Other Social Protection Lending Instrument: Learning and Innovation Loan (LIL) Theme(s): Social Development Poverty Targeted Intervention: N Program Financing Data........... Loan [X] Credit [ ]Grant [ ]Guarantee [ Other: For LoanslCredits/Others: Amount (US$m): $ 2.50 Proposed Terms (IDA): Standard Credit Financing Plan (US$m): Source Local: Foreign Total' BORROWER 1.15 0.00 1.15 IDA 2.34 0.16 2.50 U.N. CHILDREN'S FUND 0.36 0.00 0.36 Total: 3.85 0.16 4.01 Borrower: MACEDONIA Responsible agency: AGENCY FOR YOUTH AND SPORTS Address: 'I I Oktomvri" 9 (ESM Building) Contact Person: Igor Georgievski, Director Tel: 389 2 119628 Fax: Email: marjam978@yahoo.com Estimated disbursements Bank FYIUS$m): Y~: 2 0--2002 --2003- 2004 2005-: Annual 0.59 0.88 0.70 0.33 Cumulative 0.59 1.47 2.17 2.50 Project implementation period: 4 years Expected effectiveness date: 09/15/2001 Expected closing date: 06/30/2005 CCS W, ,an. bv. bAA 2O A. Project Development Objective 1. Project development objective: (see Annex I) The Project's main development objective is to significantly increase social cohesion through the social integration of youth at risk from different socio-cultural backgrounds. in particular, the project will: (a) test community-based approaches to support adolescents and youth at risk (ages 15-24), prevent their marginalisation and reduce exposure to abuse (drug, alcohol, etc.) and conflict; (b) strengthen the institutional capacity at central and local levels to address children and youth issues by: (i) contributing to the preparation and implementation of a Children and Youth Strategy; (ii) monitoring social trends affecting youth and assess the impact of project activities; and (iii) building the financial sustainability of youth activities through cost effectiveness and increasing private and local public contributions. 2. Key performance indicators: (see Atmex 1) I. Yearly trend in the number of different categories of project beneficiaries of youth centers and drug prevention programs by ethnicity, age group, gender, school enrollment or drop out status, and rural or urban residence. 2. Project sustainability as measured by Government budget allocations for recurrent costs, share of recurrent costs covered by municipal budgets, users' fees, private sector and local NGO contributions, advertising revenues, and in-kind contributions. 3. Yearly youth and parents' satisfaction with different project activities (and suggestions for improvements) by ethnic groups, as randomly sampled. 4. Trend in community participation in youth centers as measured by the increased number of young volunteers, number of retired professionals working as volunteers, etc. B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: R2000-80 [IFC/R2000-791 Date of latest CAS discussion: 06/13/2000 One of the three goals of the CAS (confirmed in the CAS Progress Report) is to alleviate poverty and develop human capital. This project will contribute directly to developing human capital and indirectly to the alleviation of poverty. The CAS Progress Report emphasizes that social cohesion is key to sustainable development. It points out that wide ethnic differences in FYR Macedonia make it particularly vulnerable to inter-ethnic tensions, wide differences exist between cultural practices and economic and social achievements of the different groups in society, and regional imbalances are another threat to social cohesion. FYR Macedonia is a small country with relatively important regional differences between rural and urban populations, between mountainous regions and other parts of the country, and more generally between various sub-regions of the country. Because of these differences, ensuring equal access to services and economic and social opportunities is an important challenge. -2 - 2. Main sector issues and Government strategy: The following issues are particularly relevant for Macedonia's youth. Crime, drug addiction and sexually transmitted diseases are increasingly affecting the young. The number of children with delinquent behavior has almost doubled in the last five years. In the same period, the number of registered drug abusers increased fourfold and the number of criminal acts by juveniles increased by 50 percent. Furthermore, early pregnancies are high, particularly among some ethnic groups. The share of some ethnic groups in secondary education (especially Albanians, Roma and Turks) does not correspond to their proportional share in the total population, particularly in terms of the female participation. For instance, while girls in Macedonia account for 50.6% of secondary school age children, only 37.3% of Albanian girls of this age appear in the official registration lists of the secondary schools. The corresponding figures for Turk and Roma girls are even worse at 33.5% and 32.5% respectively. Given this situation, the Government's Strategy for Education (June 2000) focuses on: (i) equal access to education; (ii) increase in the access to and quality of care in early childhood; (iii) preparation of youth for the challenges in the information society; and (iv) the development of education that would serve for social cohesion. The Agency for Youth and Sports (AYS), has launched a youth strategy, complementary to the Strategy for Education, to define objectives and methods for fostering social integration of youth. However, so far this has been primariley an administrative exercise, which could be greatly strengthened through the adoption of participatory approaches. In 1999, during the refugee crisis as a result of the conflict in Kossovo, the World Bank gave a US$2 million post-conflict grant to Macedonia to support communities privately hosting refugee children and their families in a number of municipalities. The project specifically focused on ethnic conflict prevention by: (i) improving the learning environment of Kossovar and Roma refugee children as well as Macedonian children from hosting communities; (ii) creating an Early Child Care Development network of mothers in disadvantaged communities predominately inhabited by ethnic minorities or mixed groups benefiting about 5,000 families; and (iii) promoting the interethnic dialogue and life skills education among youth. With the end of the refugee crisis the project shifted its focus to three areas. The first is an Early Child Care Development (ECCD) program. Under this grant 30,000 children aged 0-6 are covered at an annual cost of child/per capita US$18.50. This includes initial investment costs for set-up of activities, equipment and pedagogic material and training. The projected per capita cost for subsequent years is US$11. The ECCD so far has resulted in a very cost-effective program as compared with governmental pre-primary per capita spending of US$1,120. ECCD currently covers only about 20% of all Macedonian children in pre-primary age, while another 11% of children in the same age group are covered by other governmental and non governmental programs, leaving about 69% of all children aged 0-6 uncovered by any program. The second area of focus of the post-conflict grant is on life education activities in what have come to be called Babylon youth centers. The grant has been reaching approximately 12,500 children and adolescents (ages 7-18 years) at a per capita cost of US$53 for the first year. The projected per capita cost for subsequent years will progressively drop to US$34. This is currently the only available public program addressing life education for youth in FYR Macedonia. However, this program is currently limited to 8 urban centers, thereby ignoring the significant needs in rural areas, and also neglects the critical vulnerable age group of youths aged 19 to 24. The third area of focus is a drug abuse prevention program implemented by the Agency for Youth and Sports in 55 secondary schools around the country. - 3 - 3. Learning and Development issues to be addressed by the project: The purpose of this LIL is to experiment with scaling up the activities in support of youth initiated under the post-conflict grant. Quantitatively the program will be expanded by establishing 23 new centers and expanding the drug abuse prevention program to all secondary schools in the country and to the Babylon Centers. Qualitatively, the LIL will address the following innovations: * Unlike the earlier emphasis of the post conflict grant on urban areas, the LIL will attempt to reach out to rural youth through mobile outreach and small youth centers in rural areas set up as satellite units for the larger urban-based centers. * The 18-24 years age group poses a particular challenge. The LIL will extend the approach to this group, while maintaining activities targeting adolescents and youth under 18 in the existing youth centers. Targeting different age groups will require considerable innovation in program content. * The project will specifically pursue a gender balance in life skills/leadership training and participation in youth activities, targeting in particular female drop-outs from secondary school. This approach to gender presents several challenges as it involves older adolescent girls and young women who face increasing social exclusion, particularly if they belong to disadvantaged ethnic communities. The program as originally conceived was not sustainable without considerable external financing. Thus one of the challenges of the LIL is to promote sustainability both by lowering costs and by increasing local financing. To this end, over a three year period the youth centers will receive progressively decreasing financing from the project. Meanwhile, the centers will receive assistance to build capacity for attaining self-sustainability through increased local govemment contributions, beneficiary fees, and private sector contributions. - Finally, the project will experiment with new approaches to providing living skills for youths, by establishing a mechanism to solicit and then fund proposals for activities in this area. In addition the project will seek to anchor this expansion and innovation in a national youth strategy. To this end the strategy under preparation by the Agency for Youth and Sports will be strengthened through the introduction of participatory approaches. 4. Learning and innovation expectations: El Economic El Technical O Social I Participation E Financial Z Institutional O Environmental El Other Institutional The project is expected to produce lessons on how to (i) scale up an innovative program of life education for vulnerable youth; (ii) make this program sustainable; (iii) involve communities in supporting their own social and human resource development; and (iv) develop appropriate policy in a sustainable, participatory way. These lessons should contribute to the institutionalization of the approach and possibly its extension to other sectors. -4 - Social The main learning and innovation expectation relates to the empowerment of youth from different ethnic groups between the ages of 15 to 24. They are expected to become agents to foster social change in their respective communities and inter-ethnic cohesion in the country. This social development expectation involves a process of cultural change in the perception of self and others involving greater individual responsibility for one's own well-being and that of the community and the environment. This empowerment is expected to: (a) enhance inter-ethnic cohesion; (b) contribute to the prevention of drug abuse; and (c) promote the development of a better-prepared cohort of employable youth. Participation The project will experiment with increasing participation in three ways. First, it will promote the active participation of youths in their own communities. Second, it will encourage the involvement of local communities in running the centers. For example, an important role has been played by young volunteers who used to attend the centers as beneficiaries and are now running some of the programs and activities. And third, it is expected that cost recovery through users' charges and private sector contributions will increase over the life of the LIL, a financial indication of participation by interested communities in project activities. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Antnex 3 for a detailed cost breakdown): The project will address several major social issues: (a) the vulnerability of youth between ages 14 to 24, of whom more than 70 percent are unemployed (this is the highest ever level for this country and a level twice as high as that of such neighboring countries as Croatia and Bulgaria); (b) the high drop out rates from secondary education among ethnic minorities and particularly among girls; (c) the very limited amount of life skills education (such as inter-generational relations, sex education, interpersonal and communication skills, team work and participation in community life, etc.) given to adolescents in schools and informal leaming venues; (d) the strongly felt need by youth to have increase access to foreign language and IT training, as well as cultural activities. The project is designed to respond to the needs of young people (both school and after school age) through a variety of education for life programs. The major portion of the programs are already defined and consist of extensions of ongoing activities. Other programs will be tested through an interactive process, with the target population at the center stage in planning, implementing, and managing the programs. All programs will rely on the support of the central government, local authorities, and private parties, both Macedonian and foreign. The proposed project will provide funding and carry out activities under the two components described - 5 - briefly below and in greater detail in Annex 2. Component 1: Youth (US$3.45 million) This component will carry out three main activities: (1) scale up the program of life education for youth through Babylon youth centers; (2) explore new innovative approaches for youth social integration by piloting new forms of outreach and targeting; and (3) expand the Agency for Youth and Sport's innovative drug abuse prevention program to all secondary schools in Macedonia and to the Babylon centers. Under this component, the project will: (i) continue to test methods and experimentation through the 8 existing Babylon youth centers; (ii) support the expansion of this program to an additional 15 sites under the Post-Conflict Grant (which has resources to cover the initial investment costs but not staff costs nor program and activities development); and (iii) establish an additional 8 centers to experiment with innovative new approaches. In the latter case, the programs will be established in existing buildings among which small youth centers in rural areas to be set up as satellite units for the larger urban-based centers. They will be proposed by potential sponsors (local NGOs) in a demand-driven selection process, designed to elicit innovative ideas, particularly in disadvantaged areas. Criteria for the selection of these new centers are identified in the Operational Manual. These are based on lessons learned from the existing centers and include: (a) geographical coverage based on ethnic diversity, needs, and the availability of social services for the youth; (b) capacity, efficiency and experience with participatory approaches of the existing NGOs; (c) youth participation in the management of the youth centers; and (d) scope and potential for community ownership. The beneficiaries of the existing centers are currently nearly 12,500 children/youth aged 7-18, their parents and teachers. Many young volunteers aged 15-24 also participate in the centers' activities. The youth activities are totally inter-ethnic and cover sports, computer and IT training, English language, social skills and creativity (art, music, drama, etc.), journalism, debates, seminars and workshops, additional to the regular scholastic activities which cover 60 percent of those age cohorts. The existing programs for children include such activities as: (a) creativity (handicrafts, games, drawing, music and drama); (b) computer training; (c) basic English; (d) social skills; and (e) sports/physical exercise. For the adolescents and teenagers, activities include: (I) information technology; (2) English; (3) introduction to legal issues (constitutional law, human rights, democracy, civic education and participation); (4) social skills; (5) debating, including role playing, by the teenagers themselves on critical issues for youth; (6) sports; (7) joumalism; and (8) environmental awareness activities. Parents are also benefiting from these centers through their increased awareness of adolescent issues, as these themes are discussed in the documentation distributed by the centers (paper, seminars or videos) and during events organized within the centers. in addition this component will fund the of the drug abuse prevention program implemented by the Agency for Youth and Sports to all 92 secondary schools existing in the country and to the Babylon youth centers, coupled with support for the consolidation of the program's organization. This component includes financing of goods, local consultants, and salaries and operating costs for the Babylon youth centers. Component 2: Institutional Development (US$ 0.56 million) The institutional development component is intended to support and consolidate the youth component by: -6 - (i) supporting the participatory development of a Children and Youth Strategy to promote ownership and sustainability of the proposed program among the policy mak-ers and communities; (ii) the establishment of a monitoring mechanism to facilitate institutional learning and improvement of the program inter alia by monitoring social trends affecting youth and beneficiaries' responsiveness to program activities and awareness raising programs; (iii) a public information campaign about the program; and (iv) facilitating the continuation of the Early Child Care Development Program under possible donor co-financing. This component also includes the establishment of the Project Management Unit (PMU). The Children and Youth Strategy will aim at: (i) fostering institutional cooperation at the national and municipal levels to support project objectives in a sustained way; (ii) strengthening the operational partnerships between local NGOs and communities on children and youth issues; (iii) dissenminating best practices gleaned from ongoing and future activities; and (iv) establishing a coordination process at the institutional level. One objective of the strategy will be to mainstreaming children and youth issues and human rights as areas of public concem in a manner that is gender-focused and sensitive to issues of children's rights. On a practical level, the Strategy would also define how to: * Cover the recurrent costs of chhild and youth-related activities; * Ensure continuity in the supply of affordable youth programs of good quality; * Promote the pragmatic approach that youth programs should be delivered "wherever youths gather in numbers", including at schools, fairs, street events, youth camps, sports halls, culture houses, and cyberspace. The implementation of project will be supported by a proactive public outreach campaign. The campaign's prime objective is to sensitize the Macedonian public at large as well as specific project stakeholders to the situation of children and young people in Macedonia. In so doing, the campaign will also support public participation of concerned individuals and institutions in articulating their opinions in regard to the subsequent stages of project implementation, and thus contribute to its monitoring and evaluation mechanisms. To keep the Strategy up to date and signal the possible need for its modification, trends on selected key children and youth issues will be monitored. Particular reference will be directed towards social indicators such as drug abuse, alcoholism, criminal offenses by minors and youth, teenage pregnancies, violence against minors, infringement of human rights, as well as tracers of greater social cohesion, increased community participation, improved inter-ethnic dialogue and other measurable phenomena. As part of the Monitoring and Evaluation activities, the PMU will identify the adequate capacity and promote partnerships with the National Office for Statistics, and /or other relevant department within universities and /or the national agency for Youth and Sport in order to develop baseline indicators, yearly beneficiary assessments, and other appropriate tools. Arrangements are being made with bilateral donors to set up parallel financing to continue to implement and institutionalize the Early Child Care and Development (ECCD) activities carried out under the post-conflict grant and implemented by UNICEF. These activities benefit families and very young children by promoting proper health, nutrition, social, intellectual and emotional development through a Better Parenting Program. These activities will be implemented by UNICEF under the coordination of the Ministry of Labor and Social Policy, Child Protection Department. As donor financing becomes available, this project will provide support to this program through its monitoring and evaluation and outreach campaign subcomponents. This component includes financing of limited goods for the PMU, local and international technical - 7- assistance and staff and operating costs for the PMU. !g&ri ;enc-S100,000 ICB 0.281 <100>50 IS 0.022 <50,000 NS 3. Services <200,000 LCS 0.459 <100,000 CQ 0.050 individual 0.344 Total value of contracts subject to prior review: 1.156 Overall Procurement Risk Assessment High Frequency of procurement supervision missions proposed: One every 6 months (includes special procurement supervision for post-review/audits) Thresholds generally differ by country and project. Consult OD 11.04 'Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. - 40- Disbursement Allocation of credit proceeds (Table C) Table C: Allocation of Credit Proceeds Expenditu Caeo Amoun --JS$m nJb F;nain -P-f ta Goods 0.39 100% of foreign expenditures, 100% of local expenditures(ex-factory cost and 80% local expenditures for other items procured locally Consulting services 1.55 100% Inc. Operating cost for PMU 0.16 80% Inc. Operating cost for Youth Centers 0.14 90% of expenditures incurred through, December 31, 2002; 80% of expenditures incurred through December 31, 2003; 70% of expenditures incurred through December 31, 2004 and 50%/c of expenditures thereafter. Unallocated 0.26 Total Project Costs 2.50 Interest during construction 0.00 Total 2.50 (1) Consulting services include contractsfor local NGOs selected according to standard procedures (Co and through national shortlist in accordance wuth para 2.7 of the World Bank Consultant Guidelines Use of statements of expenditures (SOEs): Disbursement from IDA Credit would initially be made on the traditional basis of Statements of Expenditure (SoE) and would be considered for conversion to the PMR-based method of disbursement only after mutual agreement between the borrower and the Bank. Reimbursement of expenditures made from the Special Account are made on the basis of Statements of Expenditures (SOEs), for the following items: * Goods: contracts amounting to less than US$50,000 per contract. * Consulting services-firms: contracts amounting to less than US$50,000 per contract * Consulting services-individuals: contracts amounting to less than US$25,000 per contract. * Training and operating costs: all contracts. Supporting documents for expenditures financed on basis of SOEs will be retained by PMU for at least two years after disbursements and made available for review by Bank representatives and extemal auditors. The proposed allocation of Credit proceeds is shown in the Table C above. Disbursements would not be made for works, goods and services which have been procured from ineligible sources or which have not been procured according to Bank's procurement and consultants' guidelines. Full documentation in support of SOEs would be retained by the PCU for at least two years after the closing date of the credit. This information would be made available for review by Bank missions during project supervision and by auditors. -41 - The Bank Credit is expected to be fully disbursed over a four year period. All applications to withdraw from the credit will be made in accordance with guidelines set out in the bank's disbursement handbook. All applications to withdraw wiU be fully documented, except those for training and contracts not subject to prior review, as shown above, for which reimbursement may be made against certified statements of expenditures SOEs. Special account: To facilitate timely project implementation, the PMU will establish, maintain and operate, under terms and conditions acceptable to the Bank, a Special Account denominated in US$ in a commercial bank acceptable to IDA The maximum authorized allocation of the Special Account will be limited to US$200,000, limit to US$100,000 until the withdrawal reaches SDR 700,000. Replenishment applications should be submitted at least every three months and must include reconciled bank statements as well as other appropriate supporting documents. Traditional Disbursement Procedures Applications for Withdrawal from the Credit will be used to request: (i) direct payment to third party for amount due; (ii) replenishment to the Special Account; (iii) reimbursement of payments already made by the Borrower for eligible expenditures; and (iv) application for Special Commitment. -42 - Annex 7: Project Processing Schedule FORMER YUGOSLAV REPUBLIC OF MACEDONIA: CHILDREN AND YOUTH DEVELOPMENT PROJECT (LIL) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ; -- - - : -------Pla n n e d --:-:-:---: ta ----- Time taken to prepare the project (months) 6 6 First Bank mission (identification) 10/01/2000 Appraisal mission departure 02/28/2001 02/28/2001 Negotiations 05/14/2001 05/15/2001 Planned Date of Effectiveness 09/15/2001 Prepared by: Agency of Youth and Sports Preparation assistance: Post Conflict Fund - US$2 million dollars grant (UNICEF executed) Italian Development Cooperation - Social Development initiative for South East Europe Trust Fund US$70,000 Bank staff who worked on the project included: Name Speciality Gloria La Cava Sr. Social Scientist South East Europe Elena Galliano Social Development Specialist Rajna Cemerska Operations Officer, Field Office Vittorio Masoni Project and M&E advisor Naushad Khan Sr. Procurement Specialist Sandro Zanus Michiei Sr. Financial Management Specialist Hans Gruss, Nikolai Soubbotin Lawyers, Chief and Sr. Counsels Nicholay Chistyakov Sr. Disbursement Officer Jan Pakulski Public Outreach Specialist Piet Goovaerts Community Development Specialist Stephen Commins Human Development VP Youth Advisor, peer reviewer Aleksandra Posarac Sr. Economist, peer reviewer Alexandre Marc Social Development Sector Manager Mark Woodward Sr. Social Development Specialist Richard James Operations/limplementation Specialist Emilia Battaglini Environmental Specialist Marc Blanc Operations Adviser, peer reviewer Rathna Chiniah, Daphne Sawyer-Dunn Program Assistants Other Staff Elena Bogdanska Project Officer, UNICEF Nora Sabani Project Officer, UNICEF - 43 - Annex 8: Documents in the Project File* FORMER YUGOSLAV REPUBLIC OF MACEDONIA: CHILDREN AND YOUTH DEVELOPMENT PROJECT (LIL) A. Project Implementation Plan B. Bank Staff Assessments Minutes of the Consultative Workshop held in Skopje on March 2001 World Bank/UNICEF, Needs and Resource Assessment for Youth, Nov. 2000. World Bank/UNICEF, Vulnerability of Roma Children in the Municipality of Shuto Orizari, Sept. 2000 World Bank/UNICEF, Vulnerability of Roma Children in the Dispersed Roma Communities in Skopje. Nov. 2000 UNICEF, Assessment of Youth Centers (Post-Conflict Grant), Nov. 2000 C. Other UNICEF, Young People in Transition, Nov. 1999 UNICEF, Young People in Changing Societies, Nov. 2000 UNICEF, "Key issues in Girls' Education in the FYROM. Skopje 2000. Maria Doneska, llo Traskoski et al., prepared for the World Bank, Taking Stock of Poverty in Macedonia. April 2000 The Urban Institute, Draft Report Macedonia, Local Govemment in Transition, Washington DC, January 1999 UNICEF, FYROM Report to the Regional Conference on: Children Deprived or At Risk of Being De=rived of Parental Care. 2000 Open Society Institute, Report on Children in Distress, for King Badouin Foundation, Belgium, January 2000. *Including electronic files -44 - Annex 9: Statement of Loans and Credits FORMER YUGOSLAV REPUBUC OF MACEDONIA: CHILDREN AND YOUTH DEVELOPMENT PROJECT (LIL) Apr-2001 llIerence b.tee OIpebde and acu1 Oriil Amount in USS Millone Projed ID FY PunpOes IORD IDA Cancel. Undbab. Oft Fnm RO* d P070089 2001 TRADE & TRANS FACIL IN SE EUR 0.00 9.30 0.00 9.03 0.08 0.00 P042400 2001 FESAL 2 30.31 20.00 0.00 39A .0.18 0.00 P0505E9 199 TRANSPORT 32.00 0.00 0.00 16.2 14.75 0.00 P0580E8 1999 PENNO REF TA 0.0 1.00 0.00 0.30 0.27 0.0 P066221 1099 SOCIAL SUPORT 0.00 10.00 0.00 5.62 262 0.00 P034609 19N PSD11 25.00 0.00 0.00 10.07 4.00 0.00 P038399 1968 11W REHAS 7.50 5.00 0.00 8.3 3.18 2.51 P038391 199 EDUC REHAS 0.00 6.00 0.00 0.31 0.37 0.0 P042399 1993 POWER 38.00 0.00 0.29 25.71 5.97 0.00 P036089 1996 HEALTH SECT TRANSTN 0.00 1U.90 0.00 9.01 10.29 (.00 P010D01 1996 PFRV FARMER SLIPPORT 0.00 7.90 0.00 225 2.86 0.37 Total: 129.81 75.10 029 127.32 44.21 2.93 FORMER YUGOSLAV REPUBLIC OF MACEDONIA STATEMENT OF IFC's Held and Disbursed Portfolio Apr-2001 In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quai Paruc Loan Equity Quasi Paric 1999 ALlkoid 0.00 0.00 7.40 0.00 0.00 0.00 3.57 0.00 1998 Macedomia Telcom 25.00 0.00 0.00 25.00 25.00 0.00 0.00 25.00 1997 Makedonia 2.94 0.00 0.00 0.00 2.94 0.00 0.00 0.00 1997 Nikol-Fert 3.80 0.00 0.00 0.00 3.30 0.00 0.00 0.00 1997 SEF Masinomont 0.61 0.00 0.00 0.00 0.61 0.00 0.00 0.00 1999 SEF SEAF Macedon 0.00 2.50 0.00 0.00 0.00 0.64 0.00 0.00 1997 SEF Teteks 0.81 0.00 0.00 0.00 0.81 0.00 0.00 0.00 1998/00 Stopanska Banka 0.00 3.40 0.00 0.00 0.00 2.93 0.00 0.00 Total Portfolio: 33.16 5.90 7.40 25.00 32.66 3.57 3.57 25.00 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic 2000 Akcaloid Incr. 0.00 8.00 0.00 0.00 Total Pending Commitment: 0.00 8.00 0.00 0.00 .45- Annex 10: Country at a Glance FORMER YUGOSLAV REPUBLIC OF MACEDONIA: CHILDREN AND YOUTH DEVELOPMENT PROJECT (LIL) POVERTY and SOCIAL Macedonfla. Central middle. FYR1 Aia Iincome Development diamond' :1 6t:^ : 2 475: 2.094:: : : : Popultion. mid-Year (millionsft) 2.0 47 4Life expectancy GNP oercarY*e (Aties rnelhi kiSSj) - i) ' Xia $)l i i 1 690 2.1iS 1.200 iG31P Al/es metthodt.LUS$ i.t/f ons)000000.00.T tt t it4033. 1.022 2.513 Aver. :afitnuol growth, 1993-W9 Pooulstion 0 0.7 T 01 1.1 LaborlOrce (%)iR : i; E i} T:i: 0 ::9E :i:. i: i:: : ::: i: 91.6 ::: :: 0.B 1.2 GNP Gross Moat fecent sil - ib i a Si TTiDi R iiii ite y per avaIlable. 1993-99) per primary l6tiet "ri tektoitimai latest/estarAollabb.c a199399pita enrollment iPovqrti(14of poprdltlon belownatina poverty i/ne)J i ;i; i;i Urban popultin oS. opuaion) 62 0 67 43 Wi eexpectancyiattblith(years# Is 7 69 Infantmnortalv Ifper 1,000/e bth:s)16 22 33 Child malnutritIonf oftchildren dunder 5). . . . . 8 15 Access to safe water Accdss to lmoroved water source mo poputslfion) .. . i6 IilIteracy 1% irt popuEstia,agie 64) tll I. 13 18 F iGfos8 srlDnsfyenrollment 06 of sghtoJol-age 00nUon)i i 99 i100 1114i Macedonia fYR i jj:Malei: .tig . . .tili00 . .i . 000 iti tiV i i i 100 g 101 114 Lower-middle-income group KEY ECO iilC RATIOS aidLOPiG-TERIM TRENDS 1979 1959 1198. 1999 . cnmcrto iE u i? |i a! id i TE i i i 9 TS i i T i i R RTE ? i i Economic ratios' 'GDP fUSSh/lelions) .. . 3.4 3.5 Gross doenmstic IlnvestmeallGOP 26.5 21.4 Exporta of goods ind.servicesIGOP .. 140 415 Trade GSroan domestic eavingsdGOiP$t0ft;0000004;00000;: .. t8.600t 7.1 t0 Gtross.natlonal savini:lGOP 18 M3 Currentaccount balance/GDP . i49 39 jInterest 9aymets/GDP . 1.;; ;; 0; j 0 ti; i t:$ t t 000 ;04t9 1.708 DomeSain 1 Investment Total debt/GODP * 69.4 454 Savings iTotal debt ser'icelesorts i. i i1 i i.9 127 Present value ofdebt/GDPi W . i624 i Present valuet of debt/exoorta 1403. Indebtedness 1979.8 108999 199 t9AM 1099.-03 iraverage annual growth) GOP . .. -. 29 -27 5.3 "-Macedonia, FYR GNP oer ooitau . -0.3 2.2 2.3 4.8 -- Lower-middle-income group Ex6ortsofooodsand servicesI j 31 1.2 2.5 7.1V STRUCTURE of the ECONOMY 1979 1989 1998 1999 Growth of investment and GDP(%) (% of GDP) Agriculture 12.4 11.6 40 A Industry 33.0 32.6 20 - Manufacturing .. .. .. .. j \ Services 54.6 55.8 D - _ Private consumption 73.8 73.8 -201 General government consumption 17.6 19.0 -GDI --G-GDP Imports of goods and services 57.5 55.7 (average annual growth) 1979-89 1999-99 1998 1999 Growth of exports and imports I%l Agriculture -0.4 3.0 0.7 30 Industry . 659 3.9 0.4 Manufacturing .. .. .. .. *5 Services 0.8 2.3 4.5 t 9 Private consumption 0.7 3.2 3.3 4 General government consumption 0.3 4.1 10.1 Gross domestic investment 2.2 7.4 -16.5 1 Imports of goods and services 7.2 12.2 -2.8 -Exports --lmports Gross national product 1.1 3.2 2.7 Note: 1999 data are preliminary estimates. The diamonds show four key indicators In the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. -46- Macedonia, FYR PRICES and GOVERNMENT FINANCE 1979 1989 1998 1999 Inflation (%) Dornstcpf 400 - (% change) 400 Consumerpnces .. .. 0.8 -1.1 30 Implicit GDP deflator . .. 0.2 -. t Govemment flnance 100 (% of GOP, inctudes current grants) 0 - _ Curenl revenue .. .. 34.0 36.3 -100 94 95 90 97 9S 90 Current budget balance .. .. 0.1 0.8 -GDP deflator CPI Overall surplus/deficit .. -1.8 0.0 TRADE (USS millons) 1979 1989 199 1999 Export and Import levels (USS mill.) Total exports (fob) ., 1,292 1,192 2,000 Raw materials .. 56 50 Food 66 68 so Manufactures 1043 867 is _r0 Total imports (cilt) ,1 179 Food 256 2D8 Fuel and energy ..163 158 Capital goods 12 366 o 93 94 95 90 97 00 90 Export price index (1995=100) .. .. 87 84 Import price index (1995=100) .. .. 78 124 rsExports Imports Terms of trade (1995s100) .. .. 112 68 BALANCE of PAYMENTS (US$Smiilions) 1979 1989 1998 1999 Current account balanc, to GDP (%) Exports of goods and services 1,423 1,440 o - Imports of goods and services 2,014 1,925 93 Resource balance .. .. -591 -485 Net income .. .. -44 -43 Net current transfers .. .. 327 392 Current account balance -308 -136 -e Financing items (net) .. ,, 352 259 Changes in net reserves -123 -12 Memo: Reserves induding gold (US$ millions) .. .. 334 458 Conversion rate (DEC, locallUS$) .. . 55.3 56.6 EXTERNAL DEBT and RESOURCE FLOWS 1979 1989 1998 1999 (US$ millions) Composition of 1999 debt (USS mill.) Total debt outstanding and disbursed .. .. 2,392 1,568 IBRD 115 110 G: 134 A: 110 IDA . .. 179 223 Total debt service .. .. 143 183 IBRD .. .. 12 10 IDA .. .. 1 1 Composition of net resource flows C: 113 Official grants . 28 65 Offical creditors .. 71 61 Private creditors .. .. 91 -1 Foreign direct investment .. .. 118 27 3 Portfolio equity 0 0 E 318 World Bank program Commitments .. .. 65 92 A - IeBD E - Btateral Disbursements .. .. 51 57 8-IDA D-Olthermutilateral F- Private Principal repayments .. .. 5 3 C - IMF G - Shto4erm Net flows .. .. 46 54 Interest payments .. 9 8 Net transfers .. .. 38 46 Development Economics -47 - Additional Annex 11 Sustainability Plan for the Children and Youth Development Project One of the central objectives of the project is to identify and mainstream effective mechanisms to support the social integration of youth at risk in Macedonia in a financially sustainable way. The project will identify approaches that will increase the coverage of the youth at risk without increasing the proportion of central government financing going to these activities. This is essential, in order to remain in line with the objectives of macroeconomic and institutional reforms. This means that the project will aim at improving: (i) the cost effectiveness of youth activities; (ii) increase local level financing through cost recovery from the users able to pay; (iii) increase the contribution of municipalities to these programs; and (iv) support a structured and coherent approach to raise funding from the private sector and local donors. Over the life of the project, financing from the project and the new mechanisms mentioned above will be progressively implemented, hopefully achieving full financial sustainability with Macedonian resources by the end of the project. At the same time, the program will have increased the number of beneficiaries and the quality of services. i. Central Governmentfinancing availablefor Youth outside of the education system: Central Govemment financing for youth activities is very limited in Macedonia. In the area of youth the newly created Agency for Youth and Sports (AYS) currently supports some very limited activities of youth centers, while approximately 95% of its budget is allocated to sports' activities. Also the Ministry of Education and the Ministry of Culture support youth activities, outside the curricula, either as hosts of youth-related events in their facilities or as spin-offs of their standard institutional programs. As an example, schools host drug-prevention programs executed by the AYS and promote young gatherings for choir singing, music playing and, traditional dances. Similarly, Culture Houses are open to folk events, to training activities and theater performance. The current budget of the AYS amounts to 0.27 % of the total Govemment budget. Table 1. Central Government Expenditures (in billion of Mk denars) 1997 1998 1999 2000 (provisional) Government 40.8 41.4 45.6 54.9 budget Budget of 0.11 0.12 0.13 0.12 Youth Agency Source: World Bank/lMF/AYS figures It is estimated that the AYS will remain with the same budget in percentage terms to total government budget over the coming years. At the moment, the AYS carries out a number of small activities, that may be divided into two groups: (a) events, rallies, informative publications on youth issues; and (b) a very successful annual program, initiated in 1997, on defense against the drug use among adolescents and other categories at risk. Some of these programs could be extended, re-directed and based in the youth centers. During the pilot phase of the project, the annual per capita cost of youth center activities was US$53, and this is expected to be reduced gradually to US$34 during subsequent years of project implementation, with an estimated increase in outreach and effectiveness. Data to compare similar youth programs in the region - 48 - are currently not available. Annual per capita cost for secondary schools is US$660. Institutional sustainability for the youth component will be ensured by a know-how transfer by UNICEF to the AYS aimed at strengthening management of youth centers, with the increasing participation and volunteer work by older youth, parents and communities. Another important element will be the continuous training and capacity building effort which will be directed to make each youth center self-sufficient institutionally and financially over a three/four year period. It is expected that the AYS will continue its existing activities within current budget levels, a limited amount of which would be allocated to youth centers' activities as central government financing (see Table 5). Table 2. Projected Budget of A YS (in billion o] Mk denars) 2001 2002 2003 2004 2005/6 Govenrnent 50.0 49.0 47.1 49.1 52.0 Budget of 0.12 0.12 0.12 0.12 0.13 AYS _ _ _ Table 3. Projected AYS budget (in million of US dollars) 2001 2002 2003 2004 2005 2006 Budgetof 1.85 1.85 1.85 1.85 1.85 2.0 AYS 11 Contribution from local Governiments Macedonia is legislating a reform of major political significancy to devolve important responsibilities to municipalities as well as regroup them to make them more viable entities. At present, local technical staff capacity and fiscal autonomy are very limited and local govemments have insignificant budgets so that they are almost totally dependent on transfers from the state budget. The Law on Local Self-Government (1995) makes local authority contingent upon other legislation and the cooperation of State Government officials. Local powers include: (i) property of some buildings and facilities, except any assets of the local public enterprises engaged in the provision of infrastructure or other urban services; (ii) some control over the provision of public services (although constrained by the lack of service standards inspectors); (iii) maintenance and improvement of local roads and streets; and (iv) promotion of direct citizen participation in local decisions affecting their needs and interests, a process which in many municipalities has been quite effective. (USAID, Macedonia: Local Government in Transition, Report prepared by The Urban Institute, Washington DC, January 1999). The current Govemment has just presented to Parliament a law on local administrations. Among other things, the law will devolve greater responsibility to local governments for: (i) planning economic/social development; (ii) regulating, building, equipping and maintaining all communal infrastructure (roads, building, cemeteries, sanitary facilities, etc.); (iii) treatment, delivery of water and waste, public transportation/traffic, infrastructure; (iv) construction, equipment and maintenance of health facilities; (v) establishing and financing pre-schools, primary, secondary, vocational education and student transport, including construction, equipment and maintenance of schools; and (vi) establishing and financing all sports and culture-related activities. Local govemments are thus expected to control greater budgetary resources than at present. -49- Within this framework, it is expected that some of the Youth activities would in part fall under the responsibility of local Govemments, as it is in most European and middle income countries. It can be assumed that the Local Govemments will take up up a large share of the govemment contribution to cover for project costs (see Table 5). Such contribution could also be in kind in the form of attribution of office space, in the facilitation of events and activities, in the support to management and running some of the centers. In 2006 this contribution will be smaller as it will be cover reduced maintenance and upkeep costs. Ill. Project beneficiaries andper capita cost Based on the experience of the Post Conflict Grant and the average yearly budget for the Youth Component, the cost per beneficiary is expected to decrease from US$53 to US$34 between 2001 and 2005. At the same time the overall number of beneficiaries is expected to double over the life of the project due to increased outreach, including rural areas, and increased cost effectiveness. On average, the per capita beneficiary cost is US$47. Table 4. Projected number of beneficiaries andper capita cost Youth- __ _ __ _ Youth_________ 2001 2002 2003 2004 2005 Numberof 12,500 15,000 18,000 20,000 25,000 Youth participating Cost per youth 53 57 48 43 34 (USD) (53 in 2000) Average yearly - 861,650 861,650 861,650 861,650 cost for youth component Source: UNICEF, Skopje, and World Bank project budget. IV. Potentialfor cost recovery, beneficiary contribution andprivate sector participation It is suggested that beneficiary contribution will vary according to the activities and that a mechanism to support the participation of the poorest members of the communities be worked out. The activities could in fact be partially paid by beneficiaries and cover up to 10% in the first year and 30% of costs in the remaining years. The nature of the activities is such that participants are willing to pay a modest ticket or offer service for their organization. Theater performances, sports events, arts and craft shows, fteld trips, tuition for computer and language courses are primary examples. Many of these activities will be piloted by the center. For this purpose the youth center manager training will have a component on fund raising and partnership. Willingness-to-pay assessments will be carried out in the communities during the first year of the project as part of the Monitoring and Evaluation activities to ensure that some fee mechanisms could be sustained and other mechanisms will be piloted to ensure that poorer family are not penalized by an increase in beneficiary contribution to the project. Information on the socio-economic status will be provided within the system of social welfare and child protection. In addition, local NGOs will be invited to contribute and provide additional support to the poorest of the participating families. Financial and in-kind private contributions at the community level for youth activities are expected to be available in addition to public expenditures, and gradually grow to an average of 10-15% % of the centers' - 50 - current budgets. V. Other contributions Many Macedonian NGOs are deeply committed to youth development. Organizations such as the Open Society Institute and Search for Common Ground have been working for a long time in those areas and are expected to remain active as financial suppliers, know-how transfer agents, awareness raising centers, promoters of special events. Many foreign NGOs are also active such as the King Baudoin Foundation, the Italian consortium CESVI, intemational theater and music associations (MOT) and European university-related networks for distance learning. While some organizations act sporadically, most of those mentioned above have continuing programs, they are fully institutionalized and will operate well beyond the Project. UNICEF will continue to be a main supporter of youth programs. A main pressure element of youth programs are the women associations, both local and federated as well as the over one-hundred private amateur associations and clubs. There are also party-connected youth networks, environmental movements and religious entities. Precedents suggest that local businesses will find convenient to support kindergartens, outreach organizations, and local youth centers, whether as civic duty or as part of their neighborhood relations with the community. VI. Estimatedfinancingplan The table below summarizes the Youth Component financing plan. It is envisaged that at the end of the project, i.e. in 2006, the only costs required to continue the program are the recurrent costs (i.e. salaries of youth centers' consultants) and the operational costs of the centers. In addition to financing sources which would already ensure sustainability, such as the central and local government financing, the cost recovery and the private sector contributions identified below, international donors may in some cases take entirely over the cost of some youth centers. This clearly enhances the sustainability prospects of youth activities. in Tetovo, for example, the Canadian Development Cooperation is already fully financing a Babylon Youth Center initially funded under ECHO and under the World Bank post conflict grant, and has already expressed interest in taking over the full operating costs for the next years. The total availability of financing is reached at by taking into consideration the projected yearly central and local govenmnent contributions, cost recovery and private sector contributions. It should be noted that the total availability of financing is expected to be higher than what is required to sustain the existing youth activities. Therefore, the projected balance, could be used to further scale up youth centers and youth programs. Table 5. Youth financing pla (in m llion of USD) _ Million 2001 2002 2003 2004 2005 2006 Central USD 0.09 0.085 0.085 0.085 0.085 Govemment Financing (1) Local USD --- 0.26 0.26 0.26 0.26 Govt Financing TOTAL Govt USD 0.09 0.34 0.34 0.34 0.34 Cost recovery * USD 0.11 0.23 0.23 0.24 0.25 -51 - Private sector USD 0.01 0.05 0.06 0.08 0.10 0.14 contribution * IDA USD - 0.96 0.44 0.33 0.26 -- Financing_ UNICEF (2) USD 0.08 0.08 0.08 0.08 TOTAL USD 1.29 1.72 1.06 1.02 0.74 availability of financing Disbursements USD 0.54 1.05 1.04 0.81 0.4 Youth Component _ Notes: (1) Central and local government contribution include: salaries in increasing mode, centers maintenance and further equipping, starting from year 2 of the project and rent and communication (estimated at US$ 31,000 per year), with the highest share covered by local govermments during and after the end of the project. (2) UNICEF will support part of the capacity building and training activities for: (i) the centers staff; and (ii) for the local governments in order to strengthen both their professional and technical capacity in designing, implementing, administering community-based services for youth with the aim of strengthening especially public outreach, fund raising and mobilization of local and international non-governmental actors to participate in direct services provision and thus guarantee the centers and programs sustainability. * UNICEF estimates. - 52 - Additional Annex 12 Lessons from the World Bank Post Conflict Grant and other Projects In 1999, during the refugee crisis as a result of the conflict in Kossovo, the World Bank gave a US$2 million post-conflict grant to UNICEF in the FYR of Macedonia to support the communities privately hosting refugee children and their families in Skopje, Tetovo, Gostivar and Kumanovo among other municipalities. The project specifically focused on ethnic conflict prevention by: (i) improving the learning environment of Kosovar and Roma refugee children as well as Macedonian children from hosting communities; (ii) creating an Early Child Care Development network of mothers in disadvantaged communities predominately inhabited by ethnic minorities or mixed groups benefiting about 5,000 families; and (iii) promoting the interethnic dialogue and life skills education among youth. With the end of the refugee crisis the project shifted the focus to Early Child Care Development (ECCD) and life education activities for youth aged 7-18 of different ethnic groups through the establishment of youth centers called Babylon. Under this grant, still under implementation, 30,000 children aged 0-6 were covered at an annual cost of child/per capita US$18.50. This included initial investment costs for set-up of activities, equipment and pedagogic material and training. The projected per capita cost for subsequent years is US$11. The ECCD so far has resulted in a very cost-effective program as compared with governmental pre-primary per capita spending of US$1,120. ECCD currently covers only about 20% of all Macedonian children in pre-primary age, while another 11% of children in the same age group are covered by other governmental and non governmental programs, leaving about 69% of all children aged 0-6 uncovered by any program. At the same time, the grant has been reaching approximately 12,500 children and adolescents (ages 7-18 years) at a per capita cost of US$44 for the first year. The projected per capita cost for subsequent years is US$26. This is currently the only available public program addressing life education for youth in FYROM considering both public secondary school curricula and extracurricular activities. Given the success of the above-mentioned activities and the current public concern over youth issues, the Government has expressed interest to institutionalize and further pilot youth activities through a LIL. Lessons on inter-ethnic cohesion Under the post-conflict grant to be completed at the end of 2001, a total of 23 Babylon Youth Centers will have been set up throughout the country, mainly in urban locations. Eight of these centers, which have been operational for 18 months, have provided useful insights on attaining greater inter-ethnic cohesion. The youth centers are one of the rare public places where adolescents and youth from different ethnic backgrounds leam new skills, including interpersonal communication skills, where they interact and socialize together. According to the experiences brought by beneficiaries and volunteers at a consultative youth workshop held in March 2001 in Skopje, the Babylon Youth Centers have provided a unique channel to break through ethnic isolation and distrust which may otherwise tend to increase at a time of increasing internal and regional ethnic conflict and fragmentation. In this sense, they are not only appreciated by youth and the public at large for their role in skill building and overall youth development, but can also be considered as an important investment in conflict prevention. Added value of a World Bank project and donor experiences Ad hoc pilot experiences have been carried out by bilateral donors through international and local NGOs or - 53 - by Soros Foundation, particularly to support youth activities, however, children and youth have not been high in the policy agenda in FYR of Macedonia. This has occurred despite the fact that youth vulnerability is perceived as one of the most serious social problems in the country. The Government of FYR of Macedonia, bilateral donors, UNICEF and Soros have pointed out that a World Bank project will be the most effective way to ensure that children and youth become a visible issue in public policy and that successful experiences become sustainable, supported by local conmmunities and institutionalized in national and local administrations. There is also a need to create linkages with the Education Reform, the decentralization process and to take the fiscal implications of a children and youth strategy into account. Finally, the World Bank global policy experience, its comparative advantages in shaping the dialogue on social policy with the government, and the opportunity to use the good lessons learned from the Macedonian case elsewhere in South East Europe are the key factors explaining the value added for its involvement. The Agency for Youth and Sports is taking the institutional leadership within the current Government to pursue this agenda. The World Bank has recently begun to invest in youth through experimental projects, mainly in the Latin America and Caribbean Region, as a result of the renewed focus on social capital, risk-prevention and a people-centered approach to sustainable development. Some youth components have been developed as part of larger investments in human development. A Youth Development LIL of US$5 million was approved for Colombia in July 1998 as a poverty targeted intervention aimed at youth at risk of marginalization, conflict and crime. A similar project is currently under preparation for impoverished youth in Trinidad and Tobago, on the basis of a World Bank recently completed study (Trinidad and Tobago: Youth and Social Development: An Integrated Approach for Social Inclusion, June 2000). Other studies such as Youth at Risk in Jamaica (December 2000) have also recently been completed or are underway. However, given the very limited experience, it is too early to draw lessons and estimate the actual social impact of such initiatives. As the first project of this kind to be prepared in the ECA Region, the FYROM Children and Youth Development Project will enrich the learning process, by bringing lessons from a country affected by transition and inter-ethnic conflict. Lessons for sustainability The implementation of the post-conflict grant for the ECCD and youth activities and the Needs and Resource Assessment for Youth (World Bank and UNICEF, November 2000) have so far brought out the following critical points: * Municipalities are still awaiting a greater form of autonomy, with power to levy taxes and decide about expenditures, and ownership of state-owned local facilities. However, almost all Municipalities have premises they can offer for the various programs. They range from schools, local community centers, various Ministry buildings, old disused health center, premises of closed or bankrupt companies, municipal buildings, offices provided by the national Electric Company, etc... * Parent's groups are very active in lobbying with the authorities for fund raising. Some of the Mayors are even providing financial support for the running of the Babylon Youth Centers. Local resources are scarce, but could be sufficient for maintenance, or covering the running costs for utilities (electricity, water, heating and telephone, as in Veles, Kocani and Tearce-near Tetovo), which in some cases are covered by local sponsors. * Community contributions are generally in-kind (in Radovis the community is building the sport-ground and fence for the school which houses the project). Sometimes premises are provided - 54 - by private entities (i.e. hotels) or State companies. Local communities support special activities (i.e, Olympic games, youth meetings) with or without the help of private sponsors. Private sponsors assist in publishing the Babylon newspaper, cover transport or accommodation expenses. In the ECCD's, the villagers did all the rehabilitation works (repair roofs and walls, installing wooden flooring, painting, cleaning, electric wiring, unloading and organizing the furniture, etc. * Given the successful experience and demonstration effects of the Babylon Youth Centers funded under the Post-Conflict Grant, international donors have expressed considerable interest in supporting existing or new centers, particularly the Italian, Canadian and Dutch Development Cooperation as well as UNICEF. In addition, the Canadian Development Cooperation (CIDA) has already been financially assisting the Babylon Youth Center in Tetovo during the last six months, and is committed to continue to finance it over the coming years. - 55- Additional Annex 13 Minutes of the Consultative Workshop Skopje - March 6, 2001 A consultative stakeholders workshop was organized by the World Bank and UNICEF in the framework of the preparation of the Children and Youth Development Project. Stakeholders included representatives of the Ministry of Finance, Education and Health and the Agency for Youth and Sports, representatives of the Local Governments (Negotino, Kocani, Tetovo, Kohce) various NGOS among which the Open Society Institution and Soros Foundation, the League for Albanian Women, Step by Step, UNICEF staff for both the ECCD and youth activities and beneficiaries and young volunteers from the Youth centers (Stip, Kumanovo, Krusevo, Struga) and some donors (Dutch and Italian cooperation, the King Badouin Foundation and ECHO). The workshop had a twofold objective: (i) describing the existing experience - already piloted under the Post Conflict Grant - with children and youth of 7-14 and 15 to 20 years of age (Babylon Youth Centers) and illustrating some of the main feature of the project under preparation; and (ii) providing the opportunity to all stakeholders to participate in the design of the project by expressing their views, inputs, ideas and concerns. Main Conclusions From Groups Sessions The discussion focussed on four main themes/topics: 1. Centers activities and value added of Babylon centers 2. Sustainability of the centers 3. Outreach and targeting 4. Program for the future centers. Assessment of the current programs. Beneficiaries of the current youth Babylon programs reported the general success of the activities measured by the large attendance to the centers, the high demand which results in waiting list in each location where centers are operating and the great commitment of young volunteers in the centers. At large centers are considered as a great opportunity for enhancing: cohesion within the community; learning and skill development; young people self esteem and sense of pride for their volunteer work; exposure to different cultures (national and international), travel within their own country and develop friendship across the country; awareness of the problems of the community. Sustainability The importance of the centers and their programs sustainability was expressed by both local govemments - 56- which demonstrated their involvement with generally the concession of premises and the youth centers staff which highlighted their activities of fundraising (promotion and selling of products and items produced in the centers, cultural events, etc..). For the future sustainability has been described as: * Willingness to increase local governments funds conditional to the new law on self-government; * Need to involve privates through donations, sponsorships, etc.. Possible special trust funds: (i) from the central govemment to the municipalities for youth programs: and (ii) from the municipalities directly to the Babylon centes; * Fund raising activities of the local government such as renting premises to NGOS, etc. Outreach Outreach to rural, remote and suburban areas is stil not fully achieved by the current Babylon centers. Crucial needs and the opportunity for the Babylon centers to improve their outreach design was indicated as: (i) the need for the children and youngsters of remote and rural areas to participate and be active supporter (as volunteers) to the youth centers programs; (ii) the importance of having youngsters normally isolated in their communes exposed to the life and activities that are carried out in the urban centers; and (iii) finaly the value of exchanging the life experience form different areas of the same region (rural, suburban urban). Three options were discussed: (1) installation of new centers in the rural areas with the support of Municipalities (Koce); (2) creation of satellite smaller units in the rural areas which are autonomous but depend from the central Babylon center in the nearest urban center; and (3) transports of beneficiaries from rural to urban areas and viceversa to promote interaction and exposure to different life styles. TareteinL- The current Babylon centers have been very successful in involving children and youth but their targeting has mainly focussed on children and youth from 14-18, living in urban areas. Suggestions were given on how to improve outreaching and designing and tailoring of special programs and activities to attract and target different groups among which: Social at risk cases such as drug addicted youngsters, school drop-out girls, single mothers, etc.; 18-24-year old youngsters which are already looking for jobs, getting married and emigrating abroad; Roma communities; etc. Program for new activities The participants raised the question on whether: (1) the centers programs and activities should be completely flexible and tailored according to the local needs; or (2) a core of already tested activities should be kept for all Babylon centers especially as they represent the general demand (i.e., languages and computer classes) and the piloted methodology which gives grounds to replication. Conclusions were taken as to maintain a number of curricular activities (already tested during the pilot phase) for the Babylon centers which are described in the Operational Manual under the Centers' methodology and have regular beneficiary rapid assessment for the design of tailored activities which would better fit the needs of the different communities. - 57 - Additional Annex 14 Assessment of Youth Centers Executive Summary The World Bank's Post Conflict Grant (PCG) to the Former Yugoslavian Republic of Macedonia has financed a variety of activities in the area of child and youth development implemented by UNICEF. One of the areas the grant has supported is the eight youth centers initiated under the European Union/ECHO Babylon program in June 1999. With the refugee emergency situation subsiding, the financing for this program was terminated on November 15, 2000 as planned, and youth centers were then supported by the Bank's Post Conflict Grant, providing funding for an additional eight months. This arrangement was temporary but nevertheless served as an opportunity to find a more permanent solution. The World Bank is now financing a Children and Youth Development Project in Macedonia through a US$2.5 million IDA credit and grants from bilateral donors. The Project's major component aims at establishing new youth centers and at supporting the existing ones throughout the country. This component will build on the experience accumulated under the eight Babylon original youth centers. During the project preparation, an assessment of the eight youth centers was carried out at the request of the Bank. The main purpose of the assessment was to assess the existing activities of the centers, draw conclusions about their usefulness and assess the potential of the centers to be replicated throughout the country. The assessment was conducted by an interdisciplinary team consisting of World Bank consultants, UNICEF's staff and Skopje University faculty. This assessment team reviewed the activity records and visited all the centers. Each visit included structured interviews with: (a) the centers' director and staff; (b) children, adolescent and teen-ager beneficiaries; and (c) parents. The Assessment was completed on December 15, 2000. The overall conclusion is that the existing centers are effective in delivering the much needed services to children and teenagers. They also fulfill a strong developmental and societal need for the care and development of the youth of the nation. The centers have proved to be valuable on several grounds: (I) they have enhanced social and ethnic integration among children and parents in multiethnic communities; (2) they provide education for life; (3) they reinforce the skills needed for a modem economy. All the interviewed children and teenagers (ages 9 to 19) and their parents expressed their satisfaction with offered programs and with the work of the staff. The appreciation of the centers is also manifested in the fact that all eight centers have waiting lists that would double, in one case even triple, the number of users in the event additional capacity could be provided to the centers. Thus, the youth centers fill the void in the communities to offer services directed to children and youth. The youth centers respond to the deeply felt need for this type of social services and activities regardless of beneficiaries' income, ethnic and regional background. It is evident that currently there is no valid alternative to the youth centers in providing services to these young people of Macedonia. This conclusion was reached after addressing many issues and concems regarding the functioning of the centers. Paramount among these issues and concerns are: (a) the sustainability of the centers (institutional, organizational and financial); (b) the potential of setting up the centers in different contexts relying almost exclusively on local initiatives. It is likely that the local authorities would commit their support to the centers because of the high social value the centers yield to the communities. The commitment of the authorities will help to assure - 58 - institutional and organizational feasibility, continuity and improvement over time. Financial sustainability, however, is more problematic. As for any social service, the continuity of the services provided by the centers will depend to a substantial extent on the availability of fiscal resources. So far the willingness to contribute financing by the local authorities, local NGOs or payments by the users themselves has not been adequately tested. As it stands now, coverage for approximately 70% of current costs of the centers can be expected at the outset from local public and private resources. However, in this respect, there are some potential opportunities for mobilizing additional resources such as: (a) the richer towns should able to contribute more and to the extent of also setting up more than just one center. Municipalities and local donors should be approached during the Project's launching phase to commit themselves to support this effort; (b) for these services to their children, parents should be responsible for paying a fee, as low as it may be. This is important in order to: (i) contribute to the financial sustainability of the centers; (ii) provide concrete support for the centers' activities; and (iii) internalize the principle of responsibility to pay for public services, especially when the beneficiaries are a small group and can afford making a contribution. A major task of the youth centers management will be to raise public awareness, mobilize public opinion and otherwise promote responsibility of the beneficiaries to contribute and support their centers. In addition to local interest and participation, there are other local conditions that have to be present for setting up new youth centers. The three most important conditions are: (1) availability of facilities suitable for conversion into youth centers; (2) availability of training or retraining of staff; and (3) effective public relations to "market" the centers in order to draw volunteers, donations, sponsorship and general goodwill so as to contribute to the effective functioning of the centers. In most of the localities there are good prospects for finding suitable facilities for the youth centers. For appropriate training programs there are UNICEF, public agencies, the University of Skopje (Institute of Pedagogy) and some NGOs (e.g. the Open Society Institute/Soros) that have the necessary experience and could implement adequate programs. During the launch phase, the youth centers' management would need to explore and negotiate the existence of these conditions in each town and formalize the agreements with the local authorities and key stakeholders. A strong system of management for the youth centers is needed in order to ensure administrative and quality control. In addition, efficient management would also provide an opportunity to reap the benefits of economies of scale in such activities as: (a) personnel and staff training, (b) core activities' "contents" development for all centers; (c) negotiation of more beneficial terms for supplies and services (e.g. Internet) for the entire system; and (d) report to the GOM and external donors in a systematic, streamlined manner. The management will also have an opportunity to exercise enough leverage to spur the individual center's performance, induce local revisions, represent the centers vis-A-vis the GOM, donors or NGOs. The youth centers are likely to attract the interest of additional donors aside from those already identified with the Project. This would increase the availability of resources for improvements and the replication of these activities to additional new centers. As such, increased resources would significantly improve the centers' outreach capability by facilitating the deployment of qualified personnel, suitable materials and appropriate contents. Most importantly, awareness about child and youth development in rural areas and poor communities will be improved. - 59 - Additional Annex 15 Environmental Data Sheet for Projects In the IBRDIIDA Lending Program Country: Project ID No.: MACEDONIA, FORMER YUGOSLAV REPUBLIC P073483 OF Project Name: Children and Youth Development Project Appraisal Date: IBRD Amount (US$m): February 28, 2001 Board Date: IDA Amount (US$m): June 15, 2001 2.5 Managing Division: Sector: ECSSD SY - Other Social Protection Lending Instrument: Status: Leaming and Innovation Loan (LIL) Date for receipt of EA report by Bank: Date Assigned: EA Category: B Date data sheet prepared/updated: Major Project Components: 1. Early Child Care and Development Ages 0-6. 2. Youth. Ages 14-24 3. Institutional Development (Strategy, M&E, Public Outreach Campaign and PMU set up cost) Project Location: (besides geographic location, information about the key environmental characteristics of the area likely to be affected by the project, and proximity of any protected areas or sites or critical natural habitats) Environmental Issues: (identified or suspected in project) The Project would benefit the natural environment. Environment-raising awareness and environment improving components are within the Project scope. No negative effects can be expected on habitat, natural resources, landscape or other ecological aspects. Some minimal environmental impact will be assessed at appraisal and an Environmental Management Plan (EMP), related to the treatment of proper drainage of hygienic services, the safety of paints and other construction materials used in some rehabilitation work, will be prepared as required. The World Bank has evaluated the rules of FYROM as adequate for these purposes. - 60 - Proposed Actions: (to mitigate environmental issues described above) An EMP will be developed as part of project preparation, before the appraisal mission. The EMP will address asbestos, lead paint and other material for safe disposal. Justification/Rationale for Environmental Category: (presents reasons for environmental category selected and explanation of any changes from initial classification, induding whether any changes relate to altematives) Originally, the project was assigned category Fl since it included a demand-driven mechanism. At PCD review, however, it was decided that the project will be simplified by eliminating such mechanism. Therefore, the project is now assigned category B, since some minor civil works are planned for rehabilitation of 8 youth centers Reporting Schedule: (Category A EA report: Start-up date, date for first draft, and current status. Category B: Is there a separate environmental analysis? If yes,when is it due?) Start-up date Date for first draft Current status Remarks: (gives status of any other environmental studies, lists local groups and local NGOs consulted and, where EA reports were made public locally, tells whether borrower has given permission to release EA report, etc.) There wil be no new construction, only rehabilitation of existing buildings. The project envisages widespread consultations but given the minor nature of environmental issues, there will be no dedicated environmental consultations. Signed by: Gloria La Cava (Team Leader) Signed by: Alexandre Marc (Sector Manager/Director) Signed by: Jane Holt (Head, Regional Environment Sectoral Unit) - 61 - IBRD 31409 FED. REP OF YUGOSLAVIA -< 1 FYR MACEDONIA (SERBIA/MONTENEGRO) 50 t ABYLON CENTERS FOR ' -Je5kows,--f '-jt' KRIVA S CHILDREN AND YOUTH T. L. ~ ~.kf-. KRIVA N.. 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''[ UKRA.JNEr o STRriGA PRILEP~ ' (/ tjOHRID k E9NPRLPU--< 0 t4d.oAI HUNGARY N. ..~~~ H154 cf- ( \AVA~~~~DARCI ~ 4 '\yC0TA SBrfl~~~~~~j \,-BITOLA ) ojsooi , GDAI \OIrrid /r ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~BULGARIA Sto &/~~~~FYR ( $ ~~~ itoko Knemoorco 'U { tPACBDGNIA ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~MAEDNIA -' GREECE N ~~~~~~~~~~~~~~~~~~~~~~~~GEECE ~ >~ 1 N- ~~~ K. '< (5/ GREECE TURKELakeKY-i P-opo9 APRIL 2001