33251 A World Free ofPoverty SANDRA GRANZOW FOREWORD BY JAMES D. WOLFENSOHN PREFACE BY TAMIL SOPHER AND THIERRY BRUN INTRODUCTION BY MICHAEL WALTON PUBLISHED FOR THE WORLD BANK AND WORLD BANK GROUP STAFF ASSOCIATION OXFORD UNIVERSITY PRESS Copyright © 2000 The World Bank 1818 H Street, Northwest, Washington, D.C. 20433 U.S.A. Published by Oxford University Press, Inc. 200 Madison Avenue, New York, N.Y. 10016 U.S.A. All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means. electronic, mechanical. photocopying. recording, or otherwise. without the prior permission of Oxford University Press. Oxford is a registered trademark of Oxford University Press. OXFORD UNIVERSITY PRESS: Oxford, New York, Athens, Auckland, Bangkok, Bogota, Buenos Aires, Calcutta, Cape Town, Chennai. Dar Es Salaam. Delhi, Florence. Hong Kong, Istanbul, Karachi, Kuala Lumpur, Madrid, Melbourne, Mexico City, Mumbai. Nairobi, Paris, Sao Paulo, Singapore. Taipei, Tokyo, Toronto. Warsaw, and associated companies in Berlin, Ibadan This book is a product of the staff of the World Bank, and the judgments made herein do not necessarily reflect the views of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility whatsoever for any consequences of their use. The boundaries. colors, denominations, and other information shown on any map found within this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries. World Bank production and editorial assistance: Njeri Kamau and Naye Bathily Opening photographs: Front jacket. Vietnam. Page 2. children from EI Salvador. Opposite. images from the World Bank photo library. A MEADOWS PRESS BOOK Produced by Meadows Design Office lncorporated. Washington, D.C. www.mdomedia.com Creative Director and Designer: Marc Alain Meadows Graphic Design Assistant: Heather ConneJly LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA Granzow. Sandra. Our dream: a world free of poverty / Sandra Granzow ; foreword by James D. Wolfensohn ; preface by Jamil Sopher and Thierry Brun ; introduction by Michael Walton. p. cm. "A Meadows Press book" - T.p. verso. Includes bibliographical references (p. ) and index. ISBN 0-19-5 21604-0 1. Economic assistance-Developing countries-Case studies. 2. Technical assistance-Developing countries-Case studies. 3. Poverty-Developing coun tries-Case studies. 4. World Bank-Developing countries-Case studies. 1. Title. Hc60.G649 2000 338.9' 009172 '4-dc21 00-0283 29 Printed and bound in China r r II · Ifwe act now with realism and foresight, ifwe show courage, ifwe think globally and allocate our resources accordingly, we can give our children a more peaceful and equitable world. One where poverty and suffering will be reduced. Where children everywhere will have a sense ofhope. This is not just a dream . It is our responsibility. JAMES D . WOLFENSOHN " Contents LAND , FARMS , AND ROADS India 15 From hopelessness to harvest in six months. Morocco 24 The difference a road makes. REFORMI G SCHOOLS, ENROLLING CHILDREN Foreword 8 Bangladesh 39 James D. Wolfensohn, President of the World Bank Group An education for Kulsum. Preface 10 El Salvador 46 Jamil Sopher, Chair, World Bank Group Staff Association, 1998-99 A long-term commitment to education reform. Thierry Brun, Chair of the Staff Association Working Group on Poverty Reduction TH STAFF OF LIFE Introduction 12 Michael Walton, Director, World Bank Poverty Reduction Board India 56 and Chief Economist-Human Development Network What can be done about malnutrition? Madagascar 67 Fighting malnutrition on the Red Island. Uganda 77 A healthy start for Uganda's children. :1 I CITIZEN A THE DOERS UF DEVEL PMENT HOUSTIC DEVELOPMENT ILLUSTRATED Peru 85 Colombia 151 Peace, farming, and forestry. Beauty, violence, and hope. Benin 93 Vietnam 163 Food where there was none. A steep climb from stagnation to prosperity. Mali 101 Bolivia 174 Under the palaver tree. A new recipe for attacking poverty. Philippines 111 A prospering nation thirsts for clean water. Appendices I Evaluating Impact 184 DOING GOOD WHILE DOING LL II Comprehensive Development Framework and Poverty Reduction Strategies 193 III The World Bank Group 196 Estonia 119 IV Abbreviations and Definitions 197 A breath of fresh air in the Baltic. v Bibliography 198 Bolivia 129 Acknowledgments 202 Beyond the gold rush. Credits 205 ONE NAllON, TWO WORLDS Argentina 136 PART I: A rich country seeks to help its poor. PART II: A safety net for the unemployed. Foreword JAMES D. WOLFENSOHN, PRESIDENT OF THE WORLD BANK GROUP overty amidst plenty is the world's greatest chal lenge, and we at the Bank have made it our mission to fight poverty with passion and professionalism. This objective is at the center of all of the work we do, and we have recognized that successful development requires a steadily broadening and properly integrated development mandate. There is much to celebrate as we begin this new millen nium. Life expectancy has risen more over the past 40 years than in the past 4,000, and democracy has spread to millions of people. But, in the midst of great wealth and a technological revolution, deep poverty persists. More than a billion people still live on less than a dollar a day, and almost three billion live on less than $2 a day. One and a halfbillion people still lack access to safe water, and 125 million children around the world do not attend primary school. And millions, especially children, go to bed hungry every night. In an effort to better understand the nature and causes of poverty, we recently asked the poor about their experience with poverty in our study of 60,000 people in 60 countries. We've learned that the poor lack access to basic assets such as physical and human capital. They James D. Wolfensohn, president, lack the opportunity to convert their enormous energy and hard World Bank Group, at a health center work into a higher standard of living, and they systematically suffer in Bamako, Mali. from lack of influence and voice. 8 I r These findings make liS increasingly aware of the need to rethink working together to create small businesses, improve nutrition and our approach to development. Of course, economic growth and child care, reduce violence, and build infrastructure. Such local sound macroeconomic policies are critical to poverty reduction, but doers, upon gaining control of decisions and resources, often can growth alone is insufficient. Effective poverty reduction requires increase the level of transparency and fair play. sound and pro-poor institutions, effective governance, and action to With international support, national and local involvement can deal with high levels of inequality in assets such as land and educa have a real impact. But the World Bank is only one among many tion. Poverty reduction also requires effective safety nets to mitigate actors. For this reason, we have launched a major new initiative the impact of personal and national calamities. And it necessitates with our partners to support country-owned poverty reduction actions to confront problems of gender and ethnic discrimination. strategies in low-income countries with the citizens, governments, To ensure that the benefits of growth are shared by all, both govern and international agencies assisting them and to back these strate ment commitment and community initiative are essential. gies with debt relief, development aid, and capacity building. This book gives examples of the World Bank's work with coun If prosperous people and nations act with realism and foresight, tries at the national and local levels, in rural areas, and in cities. I we can be of real help in unleashing the energies of millions of am humbled by the villagers, slum dwellers, local project managers, people for their own well-being. This is not just a dream; it is our government officials, nongovernment organizations, Bank staff, responsibility. and other partners in these stories. With courage and modesty, they have made a contribution to reducing poverty. What do the stories say? That better health, well-being, and safety are possible for the poor. That people can take advantage of economic opportunities. That women can obtain an education and skills and support them selves. Many of the stories exemplify the progress that communities can make when they become the genuine agents of development, 9 Preface JAMIL SOPHER, CHAIR, WORLD BANK GROUP STAFF ASSOCIATION, 1998-99 THIERRY BRUN, CHAIR, STAFF ASSOCIATION WORKING GROUP ON POVERTY REDUCTION · · · · he World Bank Group Staff Association is Those of us wllO have had close cOl1lact proud to join the Bank's Poverty Reduction with aCtlte poverry,famille, and the and Economic Management Network in afrermath of war, feel immmse grati presenting this volume, which vividly illus tude ill being ab/e to help charlllel tlte trates our staff's commitment to the mission resol/rees of tl,e Bank to help reduce of our institution: to fight poverty with tllese tragedies. And wilen [say passion and professionalism for lasting resources, J include rhe Bank's techni results. This book tells two stories. The first cal expertise in so many fields, its re/a story is about innovative investments, which are designed to provide tionships with tile highest levels of public agencies, civil society, and communities with the means to government, itsfilf(lIlcial weight, (wd stimulate economic activity or address social issues for the benefit of its acCtl/1lu[ated wisdom. the poor and disenfranchised. The activities covered in this book are _ Tilien-y Bru/I all producing results in alleviating poverty. They are a sampling of the many contributions to poverty alleviation being attempted by our institution and our staff. The second story is about people. The World Bank Group staff are intensely involved, doing whatever they can to improve the con dition of the weakest and most vulnerable people in the world's poorest countries. But this book also tells about leaders of govern ment, civil society, and community groups who have shown great courage in carrying out difficult and controversial programs for the betterment of their less fortunate neighbors. And the book tells about the people who receive the benefits of World Bank Group 10 funded programs, who have borne poverty with dignity and who seek to improve their lot through their own efforts. The statistics about poverty, hunger, literacy, health, and other difficult problems remain bleak, especially for the world's poorest countries. But the people featured in this book believe that, by working and learning together, they are bringing about change. They seek a brighter future for those who have been bypassed by the bounty of modern society. And they derive hope and satisfaction from working toward that dream. There have to be answers to the convenient feeling that poverty is hopeless. Our Dream: A World Free of Poverty points to some of the answers, and portrays the people who are toiling to make them a reality. This book could not have been produced without the support of many people. A complete list is provided elsewhere. However, we would like to express special appreciation to the World Bank Group senior managers who provided budgetary support for the publica tion of this book. And we wish to thank Jim Wolfensohn, who has worked tirelessly to put a human face on poverty. /amil Sopher. chair of the World Bank Group Staff Association. 1998-99. (top). and Thierry Brun. chair of the Staff Association Working Group on Poverty Reduction. 11 Introduction MICHAEL WALTON, DIRECTOR, WORLD BANK POVERTY REDUCTION BOARD AND CHIEF ECONOMIST, HUMAN DEVELOPMENT NETWORK educing poverty is a complex and diffi cult challenge. Poverty has many dimen sions. It certainly involves lack of human and physical assets and inadequate material means to acquire food and other necessities. But it also means vulnerabil ity to ill-health, drought, job loss, economic decline, violence, and societal conflict. And it often means a deep condition of disempowerment, even humiliation. The history of poverty during the past few decades is diverse: great advances in some dimensions in some regions, but stagnation, even reversals, in others. Progress requires effective public action at both the national and local levels, but this action is in turn profoundly influenced by how a society functions and by the public, private, and nongovernment institutions within a country. And action within a country is powerfully affected by international conditions. The World Bank seeks to support countries in adapting interna tional experience in poverty reduction to the design of national strategies and specific interventions. Although there is much that we have learned about what does and does not work in reducing poverty, understanding what will be effective in particular national and local circumstances is an ongoing quest. Are the activities 12 producing the intended benefits, and what was their overall impact on the population? For instance, is a nutrition program improving child health; are education reforms resulting in higher enrollments; or is rural road construction having an impact on farming prac tices? To answer these questions it is necessary to evaluate the impact of both overall programs and specific interventions on indi viduals or households. Evaluating impact is critical in developing countries. Resources are scarce and must be channeled where they can have the largest effect. Monitoring helps program managers know if programs are reaching their intended beneficiaries or if these programs are ineffective and wasteful. The knowledge gained provides critical input into the redesign of existing programs and the design of future interventions. The emphasis on monitoring and evaluation is part of the World Bank's determined focus on actual results for poor people and on continuous learning about what does and does not work in order to improve the efficacy of future advice and support. The programs and projects presented in this book were selected by a team representing the Staff Association, the Poverty Reduction and Economic Management Network, and the External Affairs department of the World Bank. To be included, activities had to show poverty impact. Activities still under way had to hold the promise of enhancing the well-being of the poor and contain effec Michael Walton, director, World Balik tive monitoring and evaluation mechanisms so that changes could Poverty Reductioll Board alld chief be made along the way if needed. The country cases presented also ecollomist, Humall Development include methods for monitoring and evaluation. Network. Impact is what counts. This volume not only shows that effective public action can make a difference to poverty in all its complexity, it also highlights the importance of understanding the impact of development measures on the poor. 13 India FROM HOPELESSNESS TO HAR.VEST IN SIX MONTHS: THE BATTLE AGAINST THE SALTS ttar Pradesh is the quintessential India, home to Delhi, the Taj Mahal, the site of Buddha's first sermon, the mystical city ofVaranasi, and to mountains as high as 25,000 feet. The state is also the country's most populous. More than 100 million peasants toil on tiny holdings, mostly under one hectare. Although most of the state's cuhivable lands are fertile, about 10 percent are salty wastes called sodic lands. There are multiple reasons for this. The most important are the mineral salts and clay particles in the soils and the weather, which alternates between heavy In Uttar Pradesh, sodic lands are monsoon and prolonged dry periods. Where drainage is blocked- either common barren areas or Ullpro naturally or by roads and canals-surface water accumulates and ductive plots mainly owned by evaporates, leaving the salts. The sodium ion from the salts forms an marginal farmers. In six months, the electrochemical bond with the clay and leads to alkaline conditions peasants can transform these waste- that, at the extreme, are too toxic for farming. On top of the inade- lands ofglaring white salts (left) into quate drainage, poor management of irrigation causes the water fertile farms. Ollce the farms are green table to rise, creating conditions for more salt to move up to the and functioning, the farmers plant surface and thus compounding the problem. both traditional and nontraditional crops. Fruits, such as guava (above), cape gooseberry, and ber, brillg in much-needed cash. 15 Overview UTTAR PRADESH 001 LAND ' RECLAMATION PRO, CT, 1993 - 2001 In the fields, men and women, for the first T he project aims to reclaim salty wastelands and turn them into farms. 175,000 families, all small and marginal farmers, among them 50,000 previously landless laborers, are working together to reclaim the land. The peasants are taught to time in their lives, were build wells and drainage and to apply gypsum and water to weeding the newly flush away the salts. sprouting wheat and Total cost: US$l12 million. World Bank (International Development Agency) US$55 million barley under a sky that Partner: The State of Uttar Pradesh was drab and dusty as GOALS an army blanket. .. . Allocate lands and provide clear title. In the whole landscape Organize the farmers into water user groups, to manage the reclamation, carry out most of the labor, and maintain the land over time. there was not a hedge to Involve women in a thrift and credit program to establish micro-businesses. be seen. The horizon tNIPACT BY 199R (PR J CT END I 2001)" seemed illimitable; only Reclaimed almost 48,000 hectares and Increased average income of families on the when there were trees improved cropping intensity by 200 percent. reclaimed lands by 8,000 rupees. on the rim ofit was it Benefited 85,000 poor families. Set up approximately 2,000 women's self-help groups, which put 8.6 million rupies into savings. possible to guess whether INIIA AT A whal Ihey rtwlly wallt alUl lire willillg 10 pay for. A majority of Bank Group contribution (Adjustable Program Loans, APL): APL I, 1999-2002, US$28 million; residellt; IllIve had to dig their OIVII APL II, 2001-04, us$60 million; APL III, 2003-07, US$100 million wells or buy water from vendors at exorbitlHll prices. GOALS When we begall tlte process of Provide sanitary, accessible water to large towns with municipally managed systems. COIIl/llllllily rOil 1I/lalioIlS, we found Involve municipal government and communities in decision making; the go-ahead requires that at that lIIallY people were willillg 10 pay least 60 percent of local residents agree to the proposed service and tariff. for Ihe services wlti,h lIIet their pref Involve the private sector in the investments. erences for collvenit?l1ct?, qllC1lity, IIlld Demonstrate that, with appropriate designs, pricing, and incentives, water supply systems, irrespec reliability-and thtls, it becollle clear tive of size, can be made both viable and sustainable. that the projecl would be able fo attract the private sector to bllild alld 2007 TARGETS operate the systems. - Vijay Jagartllalhall, task telllrt Give 90 percent of the urban population access to safe drinking water. learler. Collect and treat 80 percent of the wastewater in the 20 largest cities outside Manila. PHILIPPINES AT A GLANCE Population: 75 million Urban population: Child malnutrition: 57% of total population 30% (of children under 5) Land area: 298,000 sq. km. Life expectancy at birth: Access to safe water: GNP: US$78.9 billion 68 years 83% (of total population) GNP per capita: US$l,050 Infant mortality: 35 per 1,000 Illiteracy: 5% (of population Poverty: 28% ( of population live births age 15 and older) below national poverty line) * See Appelldix I for monitoring and evaluatioll illformatioll. WATER USAGE . A girl doing dishes at home (left). Notice the lack of plumbing. The red jug holds the water. The family may have good clothes, appliances, maybe a television. But hOl!sehold water connections are not yet standard for people who have won some of the other amenities of life. At the lower end of the Magdalena com munity, housewives complain that they waste almost half a day waiting for water. Rather than stand around, they leave a dishpan (below). When the water does come, the pan can overflow before it is retrieved. That's the reason for the puddle seen here, which creates a breeding ground for bacteria and disease. The only water treatment is haphazard cleaning and application of chlorine. The water is seldom tested, but a recent analysis showed it to be full of coliform, caused by contamination from a pigsty and seepage from septic tanks located along the leaky network. MAGDALENA IS NOTALO E In 1998, virtually no one served by the other 1,000 municipal systems in the Philippines had water for more than a few hours a day. This dribble was often contaminated. Talk to any mother living in these towns, and she will tell you that her children are often sick from the filthy water. Although it is true that most people in the Philippines have access to medical attention, oral rehydration salts, and antibi otics, water-borne illnesses are common, especially among children. The country's infant mortality rate of 36 per thousand is the most telling evidence that something is not working. 113 SAFE, PLENTIFUL WATER In the early 1990s, a review of the World Bank's portfolio reported that, in 1991,43 percent of the water and sanitation sector's projects had major problems by the fourth or fifth year of implementation. Since then, many Bank staff have intensified their efforts to develop more effective projects. The Philippines Water and Sanitation Project, described here, is an example of the resulting innovations. The project is beginning to provide sanitary, accessible water to towns with municipally managed systems. Drawing from the first of three World Bank loans, the project covered 40 towns and about 155,000 people by 1999. The second and third loans-both World Bank Adaptable Program Loan instruments-will rapidly expand services, provided some basic performance triggers are attained. ENTERPRISING WATER ASSOCIATION. COMMUNITY CREATIVITY. The same It's a myth that people are not willing water supply association also main to pay for water. The Barangay Water tains this big storage tank (right). Supply Association serves one part of Seventy-five lucky households fed by the town. A paid water vendor (above) this tank have water taps inside their maintains electric pumps and fills the houses. jerry cans of the members. Members pay three cents (U.S.) for 18 to 20 liters. WHAT CAN YOU AI'FORD? WHAT ARE Y U WILUNG TO PAY? The water and sanitation project's approach questions the tradi tional Filipino distinction between "viable" and "nonviable" water systems. Systems serving large cities and towns, where full economies of scale can be realized-reducing the cost to both investors and consumers-have been interpreted by policy makers to be "viable." These have generally been the main beneficiaries of development assistance. Small systems have, until now, been classified as "nonviable" and have had to rely on sporadic grants. The project's philosophy is that, if communities can accept the NOT VERY SANITARY. This stream idea that water and sanitation services should respond to what con (below) comes from a spring. The sumers want and are willing to pay for, any system can be viable. water is used for bathing and laundry, The project seeks to demonstrate that, with appropriate designs, and it also supplies the water for pricing, and incentives, water supply systems, irrespective of size, Calamba, a town Ilear Magdalena. 115 can pay for themselves. The ultimate test of viability will be the willingness of the private sector to participate in the needed invest ments. The project team, in consultation with local officials, first esti mated the amounts the municipalities were capable of and willing to borrow. Typically, the borrowing capacity was between us$800,000 and US$I million. Technical consultants thereafter surveyed the physical conditions and proposed technical options that could be financed within each town's budget envelope. Then the townspeople were consulted, in order to elicit what type of service they wanted and how much they were willing to pay. If at least 60 percent of the community indicated a desire for one of the feasible options, a detailed design was drawn up for their approval. ATTRACTING THE PRIVATE SE TOR The project is promoting public-private partnerships in the delivery of services. In this arrangement, the local government bears the investment risks but leases out the constructed facilities to the private sector on a Is-year lease contract. Magdalena is the first municipality to have concluded such a lease contract. The concept MUNICIPAL COUNCIL MEETING. councils and communities. At the will be proved beyond a doubt if the private sector is willing to The project's preparation has involved community level, at least 60 percent invest time, effort, and money in water supply services in several extensive consultations. Once a mayor need to agree to the proposed service more project towns. expresses interest, the project team and tariff. undertakes a financial analysis to Above: Magdalena's mayor, Pablo LOAN PHASES : WATER FOR A MILLIO PEOPLE assess the amount the municipality Agapay, fourth from righ t, and a This is the World Bank's first water supply project using the Adapt could afford to borrow and whether it representative from the Department able Program Loan (APL) instrument. This type of loan gives bor is in a position to provide the required of Interior and Local Government rowers flexibility to test innovative designs through relatively small equity of10 percent. Subsequently, the explain the water project to the operations, monitor and evaluate the lessons, and then scale up to a engineering team surveys and evalu municipal council. After more consul sufficient size. Each successive loan will be made based on the ates the technical options that are tations, the council approves the accomplishment of performance objectives under the previous loan. feasible within the available budget. project. APL I: Test the concept in about 35 municipalities, with 35,000 The options, along with costs and new service connections. implications for service levels, are pre APL 11: If the arrangements for commercial operation, manage sented to the mayor, municipal ment, and revenue collection made during the first loan prove satis 116 factory, the second loan will provide for a scale-up to around 80 the past. "The Philippines Water and Sanitation project is a pilot;' additional cities and municipalities. Mr. Jagannathan concludes. "We shouldn't claim victory when we Requirements for expanding to APL III: Satisfactory financial per are only starting. Let's monitor it and see if it works out. That's the formance in the 80 water utilities receiving financing under APL II. idea of an Adaptable Program Loan." The utilities must also provide connections for at least 60 percent of households in any participating barangay (village) and at least 16 PROJECT TEAM hours of water per day to participating households. The utilities Vijay Jagannathan, task team leader. Luiz Claudio Tavares, Aldo must also demonstrate that an average of 80 percent of consumers Baietti, George Calderon, Harvey Gam, Karen Jonesy Jacob, Karen are satisfied with service performance. Hudes, Hoi-Chan Nguyen, Mariles Navarro, Martha Ochieng, APL III: Induce private-sector banks to invest in approximately Heinrich Unger, Cecilia Vales, Albert Wright, Vinay K. Bhargava, 130 more municipal utilities for water supply and sanitation, with country directors. Keshav Varma, sector director. the Development Bank of the Philippines serving these banks as a wholesaler of the investments. This will bring the total customers CONSENSUS BUILDING. Magdalena's served to at least a million. Mayor Agapay consulted with water customers. With the assistance of a RE ULT 0 FAR local project team, he explailled the As of mid-1999, in 12 municipalities, between 65 and 70 percent of design options and the corresponding the residents had signed willingness-to-connect forms. More than prices. Then there were more meetings 250 towns had signed letters of intent to borrow money to finance and house-to-house visits. The hOllse their water systems. Ten towns were starting construction of their holders decided, and they signed up systems. In another 19, project preparation was under way. The first for the water project. system was to be completed by fall 2000. On May 31, 1999, a private opera "In virtually any country," says Vijay Jagannathan, World Bank tor, Bel/pres Holding Co., won the team leader, "there is moral suasion at the local level. Information is bid for the Magdalena water system available and citizens know what is happening. If the chief of your 011 a 15-year lease contract. The mayor village has something you don't have, you start asking questions. (left) has cause to celebrate. He is "As a male;' he says, "I must observe that, if you put a woman in confident his constituel/ts' water prob charge, you seldom get a case where she steals. Women are often lems will soon be over. more concerned with the community's welfare than with their own immediate gain. They are also the ones who are most affected by things not working out. Of course, the project works with men, but we do make a special effort to invo'lve women in the decision making." By decentralizing, the project managers hope to ensure account ability. But the World Bank's water sector projects have stumbled in 117 Estonia A BREATH OF FRESH AIR IN THE BALTIC sthma. Clothes that never would get clean. Buildings with their paint shredded by the acrid dust. The gray town was topped by a gray cloud and surrounded 40 kilometers in every direction by gray farms, beaches, and hills. "I drove to Estonia from Denmark for the first time right after independence," says Niels Vestergaard, International Finance Corporation senior environmental specialist. "It is no exag geration to say that all the color had disappeared. The town was totally gray. And no wonder: The dust cloud could easily be seen as far away as 20 kilometers." This was Kunda, Estonia, population 5,000, where everyone was Kunda, Estonia, before and after choking on the same gray dust, as much as 129,000 tons of it a year, dismal and colorless under a cloud of from the government's Kunda Cement Plant. One of many polluters dust (opposite). The people complained across the former Soviet Union and one of the worst in Estonia, the about respiratory problems and often plant belched out one-third of the country's particulate emissions. wore masks in order to filter the air. The community protested. Even though the company was the Renovating the factory reduced emis town's major employer, people tried to get the town council to shut sions by more than 98 percent and the plant down. The citizens of Finland, Sweden, and Norway didn't refreshed every aspect oflife. After the like the sulfuric acid and nitrogen dioxide emissions wafting their cement factory cleanup (above) farms way either. prospered, and the city became green. 119 Overview KUNDA NORDIC EMENT A/S rivatization, modernization, and cleanup of Estonia's only P cement company. Construction of a major port. Total financing: US$48 million; Bank Group (International Finance Corporation) contribution: US$6 million loan and US$4 million equity Partners: Atlas Nordic Cement, Government of Estonia, Nordic Environmental Finance Corporation, Finnish Fund for Industrial Cooperation Ltd. (FINNFUND) OALS Reduce polluting emissions by more than 98.5 percent. Modernize the company and increase its sales, both domestic and international. Eliminate trucking the cement to a port 100 kilometers away. IMPACT See hell while it lasts. Reduced emission of dust by 1,240 tons per year-more than 98.5 percent. -1993 Estonia/l guidebook descri/Jing KlIIUfll, Reduced unemployment to .7 percent in 1998 and 1999, compared with the country's unemployment rate of 10 percent. Saved US$372,000 per year in treatment costs and days lost from work due to respiratory diseases. ESTONIA AT A GLA CE Population: 1.4 million Urban population: 74% Child malnutrition: of total population Not available Land area: 42,000 sq km Life expectancy at birth: 70 Access to safe water: 79% GNP: US$4.9 billion years (of total population) GNP per capita: US$3,390 Infant mortality: 10 per 1,000 Illiteracy: 4% Poverty: 9% live births (of population age 15 and (of population below national older) poverty line) Kunda Cement, itself gasping for life, was hopelessly dirty and [/ i.s vay impOrltlfll 10 me that, after outmoded, with 15 percent of its annual production going up in dust. Estonia fwd regailled irs indepen If it was not to be closed, it needed mouth-to-mouth resuscitation. dence, IFC 50 Iluickly foulld lire way to In 1992, Estonia, population 1.5 million, had just gained indepen tll is lI1u51 desolate industrial area Ilnd dence from the crumbling Soviet Union and was rushing to mod tralls/ormed il. The KIII/da success ernize. But people in Kunda were being left behind. gtille people confidence that ill/illsfrial development does 110/ IICfessnrily THE SI LVER UNIN mean enonllous environmenl(/I As part of its program to privatize state-owned companies, the sacrifices. government had sold off 35 percent of Kunda Cement; but the com - Mart Laar. Prime Millister of pany needed more funds for its rejuvenation. The company had low Es/ol1ia production costs, access to cheap raw materials, a great location on the Baltic, near Helsinki and St. Petersburg-and it was the only cement company in the country. The circumstances made it a good candidate for investment by the Bank Group's International Finance Corporation (IFe). 121 Illst as we were prepnrirlgftn 'he cere Ihe celebrations (lnd recolISitJer Iheir monies 10 open the new Kund(/ port, 10llg- term investment. all old cemenl filter, and the building Bllt the Estonian Minister of Envi il wa. ill, exploded. Someolle, perhaps ronmenl poillted to the mess 11Ild said. deli/Jerately. !tad dropped II tire illto it. "Now YOIl see why Wi? hllve to fix Ihis TIJt~ citizen· in the regioll wIlIItcd 10 pinel! IIp!'' !-lis intervention sailed lite close the plant immediately, and they day. made this 1011(I/y kllown 10 all the - Jyrki Koskelo, dignitaries attending Ihe ceremony. hief ii/vestment Officer. [FC The sponsors were ready to cancel Collapsed factory building (right) after The IFC puts together investment deals in the developing coun cement filter exploded. tries and provides the technical assistance needed for a successful outcome. To assist Estonia's modernization, the IFC was interested in businesses that could boost exports. To breathe new life into Kunda Cement, the IFC helped foreign sponsors and the government to work out a major modernization and cleanup. The company committed to get rid of the plant's emissions. The investors also decided to build a port to avoid having to truck the cement 100 kilometers to the port in Talinn. VENT RIO fN JEOPARDY Two days before the ribbon cutting ceremony of the new Kunda port, with all the dignitaries coming, the only remaining old cement filter blew up. A very large building filled with thousands of tons of cement dust exploded and collapsed. A mushroom cloud like a nuclear explosion-could be seen over tens of miles. This caused a vehement public reaction against Kunda Cement. Fortu nately, the officials were able to calm the situation, and the company survived. 122 Alchough EStOlli1ll1S were reiMil'e1y prosperolls, henlthy, arId weI/ educated compared with people ill most of the Worlel Balik's iwrrowillg 11I1!/1/llers, the cOIIII[ry I\las n'col'crillg [rom du.' co[/ap~e af its socialist system. The Halik Group cOlI/l/litled to help proll/oli! ecollomic growth (Illd improl'/! livillg stlllllitlrds. - /t'mll/ ·ufl- tiin- Kas,//III, vice presidellt, il/ves/llleni operatiolls, IlItcmrariollai Finan ce orpomtioll 123 Tell yeflrs ago. tilis IVa a closed SOl'ie l One-quarter of the country's wood military zOlle wi/illlo port. NolV it is exports now move through Kunda. a lIIajor exporting center. Previously. they had to be trucked to a - Lelro VilJill1ae. truck driver whose port 100 kilometers away. logs are being off-loaded. 124 THE END OF ALL THAT DUST: WHAT CL AN ArR HAS DO g FOR KUNDA With the renovations, the company was able to reduce emissions by 98.5 percent. The us$8 million investment in environmental improvement showed an economic rate of return of 25 percent- in other words, a US$2 million bonus to the larger community. The people now benefit from new services, such as transport and auto repair; improved yield of the farms immediately around the plant; clean clothes, buildings, and cars; a reduction in respiratory diseases; and higher real estate values. Even Estonia's neighbors in Latvia and Lithuania and parts of Finland, Sweden, Norway, Russia, Belarus, and Poland-are breathing better. By 1997, Estonian cement consumption had skyrocketed by 41 percent and, in 1998, by another 27 percent-all from local demand. Even larger demand was coming from Finland, Latvia, Lithuania, Russia, Poland, Germany, Portugal, and West Africa. The surge in business has brought 200 new jobs into the area with higher wages and salaries. The factory's average wage increased from around US$50 a month in 1992 to U5$500 a month in 1999. This is about 15 percent higher than the national average. In addition, the company spends U5$3 million a year on local services. In 1999, unemployment in Kunda was less than 1 percent as com pared with 10 percent for the country as a whole. These achievements smoothed the way for the final stage of pri vatization. By spring 1999, one of the original investors had pur chased the government's remaining shares. The new port of Kunda has been a dramatic and unpredicted success. The port is close to Estonia's manufacturing centers and to Baltic markets. Although it was built to serve the cement company, 75 percent of its shipping is now from other businesses. 125 T H E KUNDA MODBL The early accomplishments in Kunda energized Estonia's reforms as the country dismantled its socialist institutions and built a market economy. The overhaul of the country's environmental and commercial laws was based on the lessons learned from Kunda. More foreign investors came in, mainly from Finland and Sweden. The new investments are responsible for a large portion of Estonia's exports. Kunda gave the government the confidence and experience needed to make additional privatizations a lot easier, and these pro ceeded very quickly. In 1996, the World Bank reported that the Estonians had privatized more than 400 medium-size and large industrial firms, and 1,100 small businesses. The Bank said that, in scope and pace, Estonian privatization had been a success. No privatized firm had failed, and most divested firms were expanding their employment. H 8 COMPANY'S FUTUR E At the end of the nineties, theIFc was invited to put together a new deal. The original Kunda partners decided to invest in a co generation plant to provide electricity for Kunda Cement and heat Look lit these spnrkli/lg willdow of Buildings and cars stay cleaner now. for the city of Kunda. This would allow the city to close the current Before, 'yOIl had to cieelll thelll with Above: the town museum with its district heating plant, the only remaining polluter in the region. acid water 10 prevent cem!!nt from etchillg itself i,IIO the glass. spotless windows. Opposite: The small farms adjacent to the plant have . The project is also doubling or tripling the port's cargo capacity and providing room for other industries to grow. - Tiill Rajll, town I/WSW/II keeper flourished. Yields are estimated to have increased by 10 percent a year. PROJECT TEAM Jyrki Koskelo, chief investment officer. Esteban Altschul, Kenneth AssaI, John Beale, Claudio Bonnefoy, Lance Christ, Milana Gor shkova, George Gouda, Assaad Jabre, Willfried Keffenberger, Caroline Kahn, Marge Karner, D. Keesing, Kristen Klemperer, George Konda, Natalie Matushenko, Mohan Pherwani, Brian Pinto, Richard Ranken, Zimie Rim, Niels Vestergaard, Andrus Viirg, Edward Nassim and Harold Rosen, directors. 126 KUllda is typical of Esto Ilia 's overall progress. lr11997, tTle Coulltry's priva tizatiolls, market reforms, fiscal and monetary policies. alld II liberal free trade regime resulted i1l GDP growth of 10 percell I alltl II drop ill illj1ntion to 11 percent. COlltinlled growth is forcClisted. Estonia was among till.' firsr group of celltrall:;lIropemf cOlm tries identified for nccess;oll to tire EI/ropenl/ Union. COli/panics 51/ .II as Klllldn nre cOlllrillUtillg 10 t/ll! devel opmellt citizens wlllead productive (lIJd fulfillillg lives. - Elsie Garfield, project task manllger and testing community approaches to development under condi Innovation Loan from the Bank plus U5$1.25 million from the state tions of extreme violence. These approaches include supporting oil company. community-defined and managed projects in education, health, With the support of the World Bank, the government is expand environment, and economic development; seeking to revive long ing the Magdalena Medio concept to other parts of the country and absent or weak community justice and municipal government; is also establishing Peasant Enterprise Zones to offer alternatives to strengthening the capacity of a voluntary citizens' network to coca cultivation. influence public affairs and develop local projects; creating educa Other Bank projects are also testing community approaches to tion programs for peaceful coexistence and citizen participation; development in conflict areas. The hope is that by strengthening and increasing jobs and income-generating opportunities for the communities and alleviating poverty through efforts chosen and led poor, particularly in rural areas. by the citizens themselves, Colombia's democratic forces can gain The project has been supported by a US$5 million Learning and an advantage in their race against time. 157 The balance between people and nature is in jeopardy. Colombia has 10 percent of the world's flora and fauna and 19 percent of its bird species. It is rich in agricultural land, water, energy, and minerals. But one-third of Colombia's forests is already gone, and much of the nation's fragile beauty lies in areas subject to intense violence. Colombia has global priority for con servation. The Bank is supporting the government 's decentralization of envi ronmental management and inte grated approaches to environment, development, and peace. In addition, it is supporting bia,diversity conserva tion. Other traditional Bank projects continue with support for such sectors as education, water, sanitation, and roads. Technical assistance is part of the mix-for example, improved budget and tax administration and redistribution of land to the poor and family farmers . ROCKY PRESENT AND UN ERTAIN FUTURE At the turn of the century, democratic Colombia was gasping for life. Taking office in August 1998, President Andres Pastrana was faced with the continuing fallout from the Asia crisis: drastically lower coffee and oil prices, a deep recession, and the virtual shut-down of international credit markets to Colombia and other developing economies. In the midst of a very difficult peace initiative, the new adminis tration had to resort to deficit spending to cope with a sharp loss in tax revenues and shore up the ailing economy. In 1999, the situation grew worse. In January, an earthquake struck the coffee region, killing 1,500 people and leaving 150,000 homeless. The recession continued. GDP growth dove to a negative 4.5 percent in 1999, and it was the poor who suffered most. While the nearly 7 percent of the top fifth of the population lost their jobs, among the poorest fifth , unemployment reached 25 percent. Several million were left without health insurance. With youth unemployment Earthquake compounds the problems. The earthquake ofJanuary 25, 1999 damaged 60, 000 homes and disrupted power, water, and natural gas lines. The Bank responded with an emer gency loan and redirected $93 million from other projects to help Colombia rebuild. 160 What will the World Bank do if the violence in Colombia iI/creases fllrther and the peace process goes l/owFII,re? We are workillg ill a COlli/try of heartbreak. We can only hope that we are helping Colombia fil/d its way back from the brink to (1 I/ew era a/peace and developnlent. - COllnie Lllf}; World Balik C%lI/hia COllI/fry officer. reaching 44 percent, 150,000 students dropped out of secondary 'PR ) ECT TEAM school. Ernesto May and David Yuravlivker, task managers. Issam Under the circumstances, the World Bank Group mobilized Abousleiman*, Jairo Arboleda*, Harold Bedoya, Susana Buenaven credits that had not been p1anned in the Country Assistance l tura, Karim Burneo*, Sandra Cardozo, Margarita Caro, Maria Elena Strategy. The loans are badly needed to help cushion the impact of Castro*, Krishna Challa, Eleo Coda to, Connie Corbett, Ernesto the recession on the poor, help rebuild the area devastated by the Cuadra, Roberto Cucullu*, Mauricio Cuellar*, Elsie Garfield*, earthquake, and strengthen the banking system. With its modest Natalia Gomez*, James Hanna, Cornelis de Haan*, Maria Teresa de external debt, Bank officials believed that Colombia could service Henao, Andres Jaime, Howard Jones,* Maritta Koch Weser, Martha the new loans. Laverde*, Marco Man tovanelli, Patricio Marquez, Eugene With help from both the World Bank and the InterAmerican MCCarthy, Dan Morrow, Carmen Nielsen*, Marina Niforos, Joveida Development Bank, Colombia determined to expand its social Nobakht, Fred Nunes, Jonathan Parker, Thakoor Persaud, Jayme safety net to about 3 percent of GDP. The programs include job Porto Carreiro, Joel Reyes, Anders Rudqvist*, Kathy Scalzulli, training for 60,000 youth, 10,000 day care centers, more school Miriam Schneidman, Julian Schweitzer, Teresa Serra. Paul Isenman lunches, community kitchens, and public works. In addition, the and Andres SoIimano, country directors. Felipe Saez*, resident rep government will provide water and sanitation, temporary housing, resentative. ("'Core team for the Magdalena Medio project.) and health services to about half a million people displaced by the armed conflict. Efforts to improve health and education continued, with the goal of universal coverage. 161 Vietnam A STEEP CLIMB FROM STAGNATION TO PROSPERITY n the 1970S, the independent and reunified Vietnam was determined to manage its ecooomic affairs through central planning. This policy impeded recovery from 35 years of civil war, and the country stagnated. In the late 1980s, to revitalize its economy, Vietnam undertook a bold series of reforms, called "doi moi" (renovation). State collectives were gradually disbanded and people were allowed to work their own plots, start businesses, and seek wage-paying jobs. Price and interest rate controls were eased. Foreign trade and invest ment began to be liberalized. Private initiative was again encouraged, and the country set out to rebuild its legal system. These reforms made Vietnam one of the fastest growing economies in the world. Income per head grew at more than 5 per cent a year. From 1993 to 1998, the proportion of people in poverty With World Bank Group support, fell from almost 60 percent to less than 40 percent. Agricultural pro Vietnam is focusing more deeply on duction doubled, and Vietnam became the world's second largest poverty, social issues, environment, exporter of rice. and rural development. In 1993, with the Cold War over, the stage was set for the World Bank to begin supporting Vietnam. From 1994 to 1998, the Bank Group's International Development Agency lent Vietnam US$2 billion at very long maturities and zero interest rates. More than half of these loans went to rehabilitate badly needed infrastructure while the rest went for agriculture and primary education. Overview COUNTRY ASSISTANCE TRATEGY,1998 - 2002 y If ou love this vast hazy world W orld Bank Group strategy for its investments in Vietnam, based on the government's priorities and developed jointly through broad consultation with civil society Please come and build and other major international assistance organizations. the rice fields of Vietnam with me. GOALS With poverty alleviation at the center, the Bank Group's Country Assistance Strategy (CAS) for The fieLds of my Vietnam is designed around the government's program: homeland have turned Improve macroeconomic stability and competitiveness; strengthen the financial sector; reform Lush and green state-owned businesses; build roads, bridges, water systems, and other badly needed infrastructure; accelerate and diversify rural growth and increase environmental protection; invest in people and And my heart opens like promote social equity; and improve public administration, transparency, and participation. a flower. V l£TNAM AT A GLANCE -Pham Duy. Vietllamese poet Population: 76.5 million Urban population: 24% Child malnutrition: 45% (of total population) (of children under 5) Land area: 325,000 sq km Life expectancy at birth: Access to safe water: 38% GNP: US$25.6 billion 68 years (of total population) GNP per capita: US$330 Infant mortality: 35 per 1,000 Illiteracy: 17% Poverty: 37% live births (of population age 15 and (percent of population below older) national poverty line) TN THE LATE NINETIES, THE TAKEOFF FALTERS Veronique Danforth, manager of the The early reforms had freed the individual energies of the Viet World Bank book store (Info Shop) namese, thus leading to a vibrant informal sector. But big businesses in Washington, D.C., has been invited were still owned and inefficiently operated by the state. The bulk of to help set up a center that will offer domestic savings was directed to investments in them. Medium information on all aspects of develop and small-scale private companies had yet to emerge, and the ment in Vietnam. The center will financial system remained weak. include a video learning center, an The East Asia crisis slammed into the Vietnamese economy just opell-stack library, a reading room, as it was becoming clear that the first wave of reforms had reached computers with Internet access, and a their limits. By late 1990S, the Vietnamese economy was showing the bookstore. Danforth has vividly strain. registered the changes that have taken Income disparities between city and countryside had increased. place in little more than a decade. The growing informal sector, short of credit and lacking institu "The timid opening toward free Partners that listen. The World Bank tional support, could not generate enough jobs for the many young market enterprise has released incred Group periodically conducts ,I people entering the labor market every year. And past years of high ible productive capacity. YOLI can see it planning process with each countr), in growth, combined with weak enforcement of environmental everywhere. One woman squats 011 which it works. The 1998-2002 policies, were threatening the country's natural resources. Both the the curb with her sewing machine, re Vietnam Country Assistance Strategy momentum and the quality of Vietnam's development were in peril. pairing clothes for passersby. Another (CAS) provides an example of the has a scale-for 3 cellts you can be Bank's illcreasing emphasis OT! obtaill RES1.'ORING MOMENTUM: NEW REFORMS AND THE 1998 COUNTRY weighed. And even more carry huge ing input from both government and A SISTANCE STRATEGY loads, yoked and balanced across their ci vil society. The economic slowdown led the government to rethink and consult shoulders, sellillg anything they call." The Balik Group and the govem broadly, internally as well as externally. The consultations, con //Iellt held extensive consultations ducted in partnership with the World Bank Group, focused on with officials, the rulillg Communist restoring the momentum of growth and deepening the quality and Party, and the National Assembly. sustainability of development. The new viewpoint is reflected in the The domestic alld foreign private 1998-2002 Country Assistance Strategy (CAS). sector; women's, farmers: ami youth With poverty alleviation at the center, the CAS is designed around cadres; research illstitutes, Ilonprofit the government's seven-fold program: (1) improving macroeconomic organizations, and multilateral and stability and competitiveness; (2) strengthening the financial sector; bilateral donors were drawlI in as (3) reforming state-owned businesses; (4) building roads, bridges, well. All important insight from the water systems, and other badly needed infrastructure; (5) accelerat consultations was that the publicwas ing and diversifying rural growth and increasing environmental pro concerned about the quality ofdevel tection; (6) investing in people and promoting social equity; and opment, and not jllst the quantity. (7) improving public administration, transparency, and participation. III pl/rts (II tire North, rhere are many patlrs alld almost 110 cars. Only a few people have bllllocks ami mules or beal-rlp old bikes. Tire re:it just halle rheir feet. They need berrer tracks so they call get to market to sell what they grow and buy what they need. - TlllIeh Ngoc PlulII, transport operaljollS officer Ket Village (top left) grows enough rice for only three months. No agricul tural extension worker has ever visited here. The land close to the houses could be used for irrigated paddy. There is a good water source only one kilometer away. The villagers identi fied irrigation as the top priority for assistance. The Bank is funding a community-based rural infrastructure project, in which communities can decide what local infrastructure im provements should be made. The northern uplands (opposite) feature steep hills and no roads. This is a difficult physical environment with differing cultures and few natural resources. The Country Assistance Strategy lays out a new poverty reduc tion project to help the people in this region . Education and human development. It takes highly motivated students and teachers to do lessons knee-deep in water after a flood (far right). A Bank supported edt/cation project will help improve the schools. In Vietnam, the desire for educatioll is 51 rong, a/ld there is widespread recog lIit ion of its importallce. But, in nIallY schools, there is /lothillg all tile walls, 1101 evell all alphabet. Many children have 110 books and simply copy what tlteir teachers write 011 tile blackboard. The C'oulltry Assistallce Strategy aims to help the governmellt target s/~pport for poor households Ilnd communities, to relieve their edt/catiol/ costs and to improve the learl/illg of their children. - Mai Thi Tlwllh. educatioll opera I ions officer 168 The CAS liaS two great strellgths: It folwws Vietttam's OWII priorities, and it is based on a broad conslIltative process, which el/gaged all key segmellts ofsociety and the I/onors. We aVOided a sitllation in which "017e is goillg to livI! with a wife or husband who was arranged by one's par '/lIs but nol by oneself" [Victllamese saying}. For these reasons, tIle CAS has support an/ollg an of tile pi/rtners. -Naoko Ishii, cOl/ntry program coordinator ENVIRONMENT. The natural resource Tllree-quarters of Viell1am are hilly tllkell steps to begin control/ing the base of Vietnam, a very densely popu and mountainous. A third of the loggillg inc/us/ry. but a serious duJl lated country, is seriously degraded. population lives ill upland areas. This lenge remains: to create productive The Country Assistance Strategy aims photo illllstrates a comnlon pro/JIem livelihoods for poor nlral commtllliries. to help protect natural resources and in the upltll/as: damllge remlting from - Plram HUllg CuolIg to ensure that people's livelihoods can a combillation of logging ana clearing Ruml Developmelll Operatiolls Officer continue to flourish. for cul/ivation. Vietllam has recelltly 170 The key to reducing poverfy and stimu Iflling rural iI/comes is helping to create nat/farming jobs. We (Ire therefore giving priority to policies and progra/lls that encourage tire development of sma/l- and medium-sized el'llerprises. Our policy is to provide tIre poor with II fislri"g rod imtend offish. - H.E. Mr. Tran Xual/ ia, mil/ister for planning and investment. COTTAGE INDUSTRIES: WELDING AND LOGGING. State-owl/ed enterprises have commanded the bulk of national bank financing. Regulations have not sufficiently cOl/sidered the needs of middle-sized and small companies. This is gradually changil/g. With its 1lOIIcOllvertiblc currency nlld absence ofa stock market, Viet/lam was sheltered fro III the worst of th e il1;tial impnct of the East Asia fillan cial crisis. Unfortullately, while the. othercrisis-affected cOIIIl/ries i/I the regioll responded with impressive struc/llral reforms, Vie/Ilam did IIOt illilillily seize the opportunity to acceL erate reforms. Whlll Viefllam /lOW urgelltly needs is 10 restore its attrac tiveness ill illternatiolla l market;· ((lid emure thllt every single dollar i spellt wilh as much impact as possible. The S/OIVt/OWII of the Ilite nineties IrIustllor be tlilowed to ul/dermine the impressive progress ill redl/cillg poveny over rhe past decade. The gov emmel/t ofViet/lrllll is aware of this and hilS committed itself to reenergize milt deepen its "doi moi" process. - AI/drew Steer, cot/wry director The COLllltry Assistance Strategy sllpports a /lew geueratioll of illvest ments ill poverty reductioN. We will mOllitor results aud feed [/rem back illro futllre design. DependiNg 011 dWllges i/l po/icy, purtfolio pelformat/ce, and illlpact ON poverty, the Bonk Group's assistallce will rallge [rani U5$300 to more than u5$800 millioll a ycar. - Nishet Agrawal, principIII eCQl10mist anri coordil1l7101~ poverty reduction A TEAM L. Meyers, Peter Russell Moock, Russel Muir, Quynh Hoa Ngo, Hoai Nisha Agrawal, principal economist and coordinator-poverty reduc Linh Nguyen, Khanh Nguyen, Ngan Thuy Nguyen, Nguyet Nga tion . Jitendra N. Bajpai, Wolfgang Bertelsmeier, Philippe Fernand Nguyen, Phuong-Thao Nguyen, Than Xuan Nguyen, Thang Chien Boyer, Tosca Bruno-Van Vijfeiken, Tim Campbell, Choeng Hoy Nguyen, Thanh Cong Nguyen, Thuy Anh Nguyen, Van Linh Nguyen, Chung, John Clark, William H. Cuddihy, Quynh Nga Dang, Tom Van Minh Nguyen, Kyle Peters, Cuong Hung Pham, Duc Minh Davenport, Alegria De La Cruz, Quen Do Duong, Carlos Escudero, Pham, Thack Ngoc Phan, Hoang Anh Phung, Pam Prangkham, Mario Fischel, Clifford Garstang, Kristalina Georgieva, Cong The Andrew Proctor, Shane Rosenthal, Louise Scura, Rebecca Sekse, Giang, Jeffrey Gutman, Donna Haldane, Dieter Havlicek, Althea L. Chris Shaw, Susan Shen, Jerry Silverman, Anil Sinha, Robb Smith, Hill, Thanh Ha Hoang, Farrukh Iqbal, Naoko Ishii, Victoria Kwakwa, Paul Stott, Herawaty Sutrisna, Chris Thomas, Thang-Long Ton, Kim Alain L. Labeau, Ranjit Lambech, Morgan Landy, Minh Thi Nguyet Thi Tran, Phuong Thi Lan Trau, Hung Tien Van, Somit Varma, Kim Le, Jacques Loubert, Lars Lund, Thanh Thi Mai, Anil K. berly Versak, Phuong Anh Vu Tran, Huong Thu Vu, Leila Webster, Malhotra, Kazi Mahub-AI Matin, Darayes Bahudur Mehta, Richard Mei Xie, Wael Zakout. Andrew D. Steer, country director. 173 Bolivia A NEW RECIPE FOR ATTACKING POVERTY , t ith mountains higher than 20,000 feet, a l V huge plateau at almost 12,000 feet, rain forests, a vast desert, swamps, and savannas, Bolivia is beautifully dramatic. The size of France and Spain combined, it is also sparsely inhabited, with some what under 8 million people. In the 1980s, the Bolivian economy was For a long time, the Bolivian develop- typified by its inflation rate: an unbelievable 24,000 percent. In the ment menu was limited to structural early 1990S, thanks to structural adjustment and financial reforms, adjustment and financialstabiliza the country brought inflation down to less than 4 percent in 1998 and tion. Now, the country is looking for a went from economic decline to a healthy growth rate. better diet. After consulting with his most loyal customers, the people, GROWTH WITHOUT POVERTY IMPACT "Chef" Banzer, the President of Bo Despite being a leader in market reforms, Bolivia remains one of the livia, asked the World Bank for advice poorest countries in Latin America. Its people are still suffering from on the best ingredients for poverty decades of slow growth, limited investment in human capital, social alleviation, growth, and strong insti segmentation and high inequality, and weak institutions. tutions. In this cartoon from the The Bolivian Gross Domestic Product (GOP) is around US$I,OOO Bolivian press, he is using the ingredi per capita. About two-thirds of Bolivians are poor, with low levels of ents to make flan (pudding) just the education, health, and nutrition. Ten percent of the children under way the Bolivians like it. c 174 I: ) ! I I I J f I!U I 1 , I · · I · : I · , I iii I I -= I , : & ~ . I' r I~_ _ L---_ I I - - --~-, -a..--_ Q ~ , ) ) (CIt will have to be only Overview with our children. We COUNTRY ASSISTANCE STRATEGY, 1999- 2002 will be poor until we die." UTo improve, you would T he Bolivian National Action Plan, formulated during 1997, grew out of a national dialogue sponsored by the Bolivian government and supported by the World Bank. The dialogue have to work double. But i was developed by commiss, ons representing the country's civil society. The international assistance agencies helping Bolivia also you can't work double. participated. The pillars of the strategy constitute the framework Because where are you for the country's development program and for the World Bank Group's Country Assistance Strategy. going to work?" THE FOUR MAIN PI Ll.AR 01' THE TRATEGY "Given that there isn't OPPORTUNITY: To generate higher economic growth with better distribution. EQUITY: To raise standards of living of the poor. any work, people don't INSTITUTIONALITY: To strengthen the institutional framework for better justice and a corruption free administra tion. have security, so people DIGNITY: To remove Bolivia from the drug circuit by 2002. steal because they don't See Appendix II for details. know what else to do." COUNTRY PERFORMANCE BENCHMARKS ~997 2000 2002 "I, too, would like to go to Poverty headcount ratio (%) 67·0 63. 0 59. 0 the university." Poverty gap ratio (%) 32.0 29. 0 26.0 Percent of children under five suffering malnutrition 10.0 8·5 6.0 "We all need and should Infant mortality rate, per 1000 live births 69. 0 63. 0 57. 0 Maternal mortality rate, per 100,000 live births 390.0 340.0 290.0 get electricity service." BOLrvlA AT A GLANCE "[Well-being) is like a Population: 7.9 million Urban population: 63% of total Child malnutrition: 9% seed you have to water." Land area: 1,084,000 sq km population (of children under 5) GNP: US$7.9 billion Life expectancy at birth: Access to safe water: 60% -from Bolivia, COl/sultallorls with (of total population) 62 years lite Poor, Tile World Bank, 1999 GNP per capita: US$l,OOO Infant mortality: 67 per 1,000 Illiteracy: 17% (of population Poverty: 67% (of population live births age 15 and older) below national poverty line) The younger generation of Bolivia (left) will reap the fruits of the across the-board reforms under way at the turn of the millennium. five are malnourished. The average schooling is seven years. "After Colllltry perfurmallce bellchmarks, I believe this is an effort with huge 10 years of external aid, totaling 7 percent of Gross Domestic such as tilose ill tile CAS, are all indi potential rewards. So far. our (I/Iswcrs Product," says Isabel Guerrero, World Bank country director for catioll IhM a govemmellt is serious to these quesliolls nre rlor ideal, bul Bolivia, "Bolivia achieved macroeconomic stabilization. But there abol/l res lilts. ' llch benchmarks. the)' are good ellol/gll to begirt lIIil". was no impact on poverty." But the Bolivians are committed to however, are a relatively new illS/ru What is importtlllt is 10 keep the focus changing this. The focus of the current government's five-year ment ill puulic administration. Devel on results. and learn by doing. effort (1997 to 2002) is poverty alleviation. opment organizations a"d govern -Ernesto May, "I'orld BlIllk leatl me/Us moving toward results-based economist For Bolivie! THE MIXl G HOWL: TH UNTRY AS ISTANCE STRATEGY lIIallagemelll (Ire SI rttggling to make For every country it serves, the World Bank periodically prepares a 1<51'. of lI,elll. They are complicated to strategic plan for its programs. Called the Country Assistance define, ell(ail agreemellt 111110"g /1/any Strategy (CAS), this plan serves as the driving instrument for the players, allri reqllire rl/Ollitorillg amI Bank Group's partnership with the country and for managing informatioll sy tems that ill fflmlY resources in response to the country's priorities. cases do /lot exist. What beuchmarks Reflecting the government's National Action Plan, the Bank's CAS llre melll/ingflll? How do YOIl lillk elll for 1998-2002 aims to help the country to continue growth and to outcome illdicator lIIith meaningful share the benefits broadly in the society. Its duration roughly coin Ot/IPllt llnd input indicators? How do cides with term of Bolivia's president, Hugo Banzer. The Bank YOIl divide responsibility for olltcomes Group's International Finance Corporation participated in planning I11110ng lire Ilarious partllers? You alii the CAS, which incorporates a private-sector strategy for Bolivia. go crazy! Bt~t, allhollglr clmUellgillg, 177 HOW TO HAVE A LOT OF CO KS WITHOUT POlLING THE DIlOTH : CONSULTATION A D DIALOGUl! Using a participatory approach, the Country Assistance Strategy was prepared during late 1997 and early 1998. The Bank team acted as partner and facilitator throughout. The DEAR WORLD BANK, WE INVITE YOU team and the authorities worked together to define the strategic NOT TO COME. In preparing the objectives for the Bolivians' plan; structure the consultative country plan, the Bolivians were approach; and rank the priorities for the Bank's development eager to be in the driver's seat. They lending. asked the Bank team to stay in the The planning was conducted in phases: background. "With the national National Dialogue-Representatives of civil society, October 1997. dialogue," says Ernesto May, World Bolivia's development challenges and how to meet them. The con Bank lead economist for Bolivia, "the clusions form the basis for the five-year National Action Plan. (This Bolivians started a process where civil dialogue has been criticized for inadequate representation by NGOS society has a direct role in identifying and the private sector. The Bank and the government have worked the counry's most important develop since then to broaden inclusion in national poverty planning.) ment priorities and suggesting what Bank Group Country Team Workshop, November 1997. How to actions should be taken. The govern support the Bolivians' strategies. ment listened to the World Bank's Joint Government/Bank Group Workshop, November 1997. Discus advice about how to structure the dia sion of the National Action Plan and the corresponding Bank assis logue but it asked us not to attend. tance strategy. The Bolivians want to make their Joint Government-Donor Workshop, November 1997. Coordina own decisions." tion of assistance to support the Bolivian program. Participating in the National Consultative Group Meetings, April 199B. (For Bolivia, as for most Dialogue, October 1997, La Paz. countries, the international donors and banks providing assistance Campesino shakes hands with the meet yearly to coordinate their policies, programs, and actions.) vice president of Bolivia (left). Agreement regarding the external assistance program, as well as monitoring and evaluation process. CHANG ING THE MIX OF SUPPORT The Country Assistance Strategy called for the Bank to lend Bolivia between US$200 million and $450 million during the period FY 1999-2002. The International Finance Corporation's plan for the same period called for an additional $200 million in investments. 178 The Bolivians laid out how they wanted the Bank Group to TOUGH ACCOUNTABILITY STANDARDS support the government's strategies: The government, the World Bank Group, and the international OPPORTUNITY: Building roads, establishing a regulatory frame donors assisting Bolivia will measure themselves by tough stan work, and supporting financial services ~Multilateral Investment dards . By defining country performance benchmarks, the Country Guarantee Agency (MIGA) and IFC] in order to achieve the GDP Assistance Strategy ensures that the government and its partners growth necessary for poverty reduction. (GDP, or Gross Domestic stay focused on results. (See Core Measures of Success in overview Product is the total goods and services produced by a country.) on page 176.) EQUITY: Supporting infrastructure and services for the poor and socially excluded and reinforcing the participatory methods that Bolivia has pioneered. These enable the government to be more responsive to the needs of the poor. INSTITUTIONALlTY: Completely overhauling public sector man agement, including the civil service, the judiciary, and the budget system-all necessary to focus on results, tackle corruption, and improve governability. The Bolivians also indicated that they were satisfied with the contributions of other organizations in the areas of environment and micro-credit, so the Bank has backed away from any new projects in these fields. THE. COMPREHENSIVE DI:.VE.LOPMENT FRAMEWORK The Bolivian exercise in developing this Country Assistance Strategy was one of 14 experiments using the World Bank's Com A village plans and builds a water small farmers. The new strategy gives prehensive Development Framework (the CDF). The CDF is a tool to and irrigation project. The villagers emphasis to helping rural communi help layout multiple priorities and clarify government, donor, and themselves (above) do a great deal of ties, indigenous people's organiza creditor responsibilities. The idea is to harmonize what Bank Group the work. tions, small farmers' associations and President James D. Wolfensohn calls "two parts of a duet, ... [the] With the support of the World women's groups to design and imple macroeconomic on the one side and the social, structural, and Bank Group and other international ment their own initiatives. These human on the other." (for details see appendix II, page 193-195.) assistance organizations, Bolivia has groups are choosing such projects as This harmonization can bring social programs and policies pow chosen to tackle a considerable list of access roads, irrigation, agricultural erfully into play in tackling poverty. priorities. Among them is rural devel processing, and natural resource opment. In the past, agricultural management. policies and institutions have tended to favor the wealthy commercial large-scale farmers rather than poor 179 W',e'l you think abollt it, the nurttlr illg ofchildrell is f[mdamental for the ftltllre of the COlli/try. Prior to tlte age ofsix, the 1I10st rapid mentalalld ocial development takes place. Ti,e children in the day care center (opposite) may look middle class but, in reality, they are extremely poor. Most of them live in Ihe hLimblest of homes. The eellters are clean and safe places 10 Icarll and grow. Impact eval /lations show a significant effect on the psychosocial development and nutritional status of tlte children who attend. Tlte cellters mea II tilat mothers can work and cam //Ioncy. By the end of December 1999, with World Bank support, the government had furbished alId rehabilitated more than 2,800 SIKh centers. -Deborah Bateman, World Bank ,rollP resident represelltative ill BoLivia Cutting palmetto in the Chapare region (right). Eighty percent of the rural population of Bolivia perceives that their income level has stagnated or dropped during the 1990S, accord ing to a recent rural productivity study. The Country Assitance Strategy aims to reverse this. HOW TffE BOLIVIAN RECIPE I. URNI GOUT other senior government officials under investigation. Officials are In 1998 Bolivia's GDP grew at almost 5 percent, but fell almost to a also required now to declare their assets, and the audit capacity of halt in 1999 due to the adverse effects of El Nino and the Asian crisis. the comptroller general is being improved. Reforms and decentralization proceeded. In fact, Bolivia's strong Down the line, could a different administration reverse the com track record and progress toward social development made it the mitment to results-oriented management and accountability? What second country in the world and the first in Latin America to about public unrest if expectations for improvement are not met qualify for debt relief under the Bank's H1PC (Heavily Indebted quickly enough? Indeed, early in 2000, violent demonstrations were Poor Countries) initiative. The Bank's US$450 million in debt relief mounted in La Paz and Cochabamba to protest proposed water fee allowed Bolivia to increase spending in the social sectors, which hikes and slow economic growth, and the Banzer Administration accounted for 50 percent of the 1999 budget. imposed a two-week state of siege. Very low taxes and poor tax collection are behind the fiscal "There is always a possibility that the reforms could be brought deficits of many developing countries. In the past, Bolivia was no to a halt;' says Ernesto May. "But the expanding involvement of all exception. But in the nineties, the government has made strides in development participants-civil society, political parties, external revenue collection, from well below 10 percent of GDP in the mid agencies, and the private sector-in the national integrity drive 1980s to more than 20 percent in 1999. In the near future, a switch gives us great hope." from a complicated value added tax to a simple personal income tax is expected to further improve tax collection. Much of the revenue is being directed to the local level, where citizens are being trained and organized to participate, maintain oversight, and insist on accountability. In the past, Bolivian governance has been greatly impeded by corruption. The Bolivians are determined to put an end to the cheating. In 1998, the government established a lO-year National Integrity Program. A major component of the program has been public-sector modernization. In 1999, the Bolivian Congress passed landmark civil service reforms, including performance incentives. Timeliness and accuracy of public-sector financial accounting reduce the opportunities for corruption. A Bank credit is support ing the institutional reform effort. An independent judiciary is also indispensable in the fight against corruption. The Bolivians recently took an important step Deborah Bateman (above) the Bank Paz, part of the Intergrated Child by reforming the selection of the Supreme Court and other judges. Group 's resident representative in Development Project, sponsored by The Bank is supporting judicial training. Bolivia, visits a day care center in La the World Bank. Underscoring its commitment to cleaning up, in 1999 the Bolivian government placed several Supreme Court judges and 181 COUNTRY PLANN I NG EVOl.VES The World Bank's approach to country planning has continued to evolve. At the end of 1999, the World Bank and the International Monetary Fund introduced a new, joint planning process. The two institutions said, "The aim ... will be to strengthen country owner ship of Poverty Reduction Strategies, improve coordination among development partners and, perhaps most important, focus the ana lytical, advisory, and financial resources of the international com munity on achieving results in reducing poverty." The process will resemble that of the Comprehensive Develop ment Framework, seeking to balance social needs with financial and macroeconomic policies. (See appendix II, page 193.) The World Bank and the IMF agreed in 1999 to require that nations seeking subsidized lending or debt relief under the Heavily Bolivia provides II clear example or Indebted Poor Countries Initiative (HIPC) prepare PRSPS. This will lire facl Ihlll' eco.llomic stniJilizlllion enable Bolivia to benefit from a second round of HIPC, following allll mtlrkel reforms lire 1I0t ellvugh another national dialogue in spring 2000. for poverty redllCl iOIl. After /IJ yenrs vf extemnl aid, tOllllillg 1 percelll CA TEAM of Gross Dvmestic Product, there has Ernesto May, team leader. Jose Alonso-Biarge. Oscar Alvarado, beelt virrually 110 impacl VII po verI)'. Patricia Alvarez Chris Barham, Debbie Bateman, William Battaile, As Ihe century turns, it is very snlis Paul Beckerman, Juan Cariaga, Maria Elena Castro, Daniel Cotlear, fying for the World Balik Group team Willem Floor, Sue Goldmark, Norman Hicks, Olympia Icochea, 10 wvrk hnlld-Ill -hand witlt lite Evangeline Javier, Chakib Khelil, Toshiya Masuoka, Mat McMahon, Dolivit'llls 011 their new {l1Il1fflllch Caroline Moser, Ines Mosquera, Deepa Narayan, Hoveida Noback, needed commilmel/llo the povr. Alberto Nogales, Fred Nunez, Izumi Ohono, Luis Pisari, Cesar - isabel Guerrero, Bolivia mmtry Plaza, Luis Ramirez, Gary Reid, Carlos Reyes, Salvador Rivera, Director Edgard Rodriguez, Sandra Rosenhouse, Enrique Rueda, Bernard Sheahan, Jyoti Shukla, Maurice Sterns, David Tuchschneider, Pietro Veglio, Eloy Vidal, Hermann Von Gersdorff, Michael Walton, Pierre Werbrouck. Isabel Guerrero, country director. President Ba/lzer's customers (left) helped to make Bolivia's fIan. Of course, the proof of the pudding will be in the ellling. In April, 2000 violent protests erupted in Cochabamba and other parts of Bolivia. The protesters were objecting to a proposed hike in Cochabamba's water charges and expressing discontent about slow eco nomic growth. The government re sponded by reshuffling the cabinet and appoillling a commission to look for solutions to Cochabamba's water situatio/l. In May, 2000, the government began a new Natiollal Dialogue, con sulting at the municipal and /lational levels, to re-tool the country's poverty reduction plans. APPENDIX I Evaluating Impact One of the purposes of this volume is to recognize the importance of system setting. It provides a basis for the modification of current activities and the atic monitoring and evaluation (M&E) of the poverty reduction impacts of design of future interventions. Impact evaluation helps maintain accountabil development interventions. The activities depicted here offer good practice ity for public funds. examples of M&E. The stories were selected by a team representing the World Good data are a prerequisite for sound evaluation. Information about Bank's Poverty Reduction Board, the External Affairs Department, and the socioeconomic characteristics of program participants and nonparticipants is Bank Group's Staff Association. Completed projects had to demonstrate an essential for impact evaluation. To measure outcomes most reliably, this infor impact on poverty, and ongoing projects had to incorporate promising evalu mation should ideally be collected before and after the project on the same ation components. The charts in this appendix summarize such information participant and nonparticipant households (panel data sets), the latter serving for most of the projects described in the book. Kalanidhi Subbarao, lead econ as control groups. Where panel data sets are unavailable, techniques exist that omist, and Gloria Martha Rubio So to, research analyst, of the World Bank can help disentangle the net impact of interventions from other nonproject poverty anchor, provided the comments at the bottom of each chart. influences. In all circumstances, it is highly desirable to integrate quantitative Some definitions may be helpful. Every project or program and participatory methods into the evaluations. intervention with inputs of various kinds leads to tangible, physical outputs Development organizations have not always incorporated sound evalua (e.g., kilometers of road or number of schools built or potable drinking water tion practices into their work. However, M&E is now recognized as a very facilities provided). Monitoring is the continuous assessment of project imple important tool in the development process. The World Bank and other inter mentation. It provides program managers and other stakeholders with infor national development agencies have increasingly required that monitoring mation about input use and corresponding output generation, identifies and evaluation be a component of their activities. It is hoped that this book potential problems, and facilitates timely adjustments in the project's opera will help further this commitment. tional details. The term outcomes refers to the direct effect of outputs on individuals or households. An example is the enrollment rate following the construction of a school. Impact evaluation consists of assessing outcomes and, thus, the medium or long-term developmental results. Impact evaluation provides program ad ministrators and policy makers with an understanding of the observable effects (both intended and unintended) of an intervention on individuals or house holds. Evaluation helps in determining what does or does not work in a given r Country: ARGENTINA CountrY:ARGENTINA Project name: MAT ERN A LAN D CHI L D H E A L T HAN D Project name: S ECO N D SO C I ALP RO J ECT NUTRITION PROJECT I AND II (PROMIN) (TRABAJAR II PROGRAM) INDICATOR ANO TARGETS INDI ATORS AND ACHIEVEME 1'5 The indicators and targets for this project are (I) reduce the proportion of From May 1997 to November 1999, 650,000 temporary jobs were created . The underweight babies to 7 percent; (2) reduce the proportion of malnourished gross income per month per worker over about five months was US$200 on pregnant women by)o percent; (3) reduce the proportion of malnourished average. Eighty percent of the workers were from the poorest 20 percent of children from birth to age five by 50 percent; (4) increase the proportion of Argentine households, with more than half from the bottom 10 percent. women receiving maternal and prenatal care to 60 percent; (5) increase to 60 MHTHODOLOGY percent the proportion of children from birth to age six receiving health care; (6) increase the proportion of children fully vaccinated to 80 percent; and (7) The most commonly used methods to estimate household income without improve clients' perceptions of access to, use of, and satisfaction with health intervention were not feasible in the case of the TRABAJAR program: No ran care services. domization had taken place to construct a control group to which to compare the income of project beneficiaries; and no baseline survey was available, rul MET liODOLOGY ing out the possibility of conducting a before-and-after evaluation. Thus, the Regular anthropometric and socioeconomic surveys will be conducted in the evaluation technique adopted consisted in comparing the income of partici target communities by volunteer women, assisted by health personnel. Survey pants with that of "similar" nonparticipants, identified ex-post using a data will be supplemented with data on birth weights from hospital statistics. propensity-score matching method based on a number of observed character Coverage of services will bl? measured regularly through the Health Manage istics. Specifically, a comparison group was constructed by matching program ment Information System. participants to eligible nonparticipants from the population over a set of socioeconomic variables such as schooling, gender, housing, subjective per PA IlTl C I ['ATORY EVALUATIO ceptions of welfare, and membership in political parties and neighborhood Beneficiary assessments are conducted regularly to collect information on associations. client satisfaction and use of services. DATA SO RCE COMME 1'5 Two household surveys were used to evaluate this program. One is a national socioeconomic survey, Encuesta de Desarrollo Social, from which the compar The evaluation component could be strengthened by specifying an appro ison group was constructed. The second data set is a special purpose sample of priate counterfactual situarion and collecting the necessary information to project participants. Both surveys were conducted using the same question isolate the net impact of the project. naire and the same interviewing teams, and both were conducted at approxi mately the same time. COMME. TS ON EVALUATION ACT I VITIES This project is a good example of how an impact evaluation can be conducted even when no baseline data are available and no provisions were made at the beginning of the project for constructing a control group. Although a qualitative approach was followed during the survey questionnaire design, the evaluation could have been further strengthened by also including a participatory evaluation of the process that yielded the project outcomes. In fact, in the follow-up project, some qualitative research was carried out among groups of workers and the agencies sponsoring projects. This work supple effect of the project on enrollment rates using the available information and mented previous qualitative research, which had been done as part of the conducting an econometric analysis. Additional beneficiary assessments can social assessment that examined issues related to the participation of NGOS be done at the end of the project to complement the mid-term evaluation. and women in the program. Studies are planned to assess the impact on fertility, health, and children's education of a pilot female secondary education program financed by NORAO. Country: BA NGLA DES H Other studies will assess the increase of women in the labor market, especially Project name: FE MAL ESE CON DAR Y S C H 0 0 LAS SIS TAN C E in the teaching profession. These studies may also help to better understand PROJECT the impact of this Bank intervention. INDI ATOR, llA EL I NE, TARGET, AND ACIII EVEMENT From a 1993 baseline of 238,000 girls enrolled in grades six to ten (the early Country: BEN I N grades of secondary schools in Bangladesh), the target was to increase girls' Project name: COMMUNITY-BASED FOOD SECURITY PROJECT enrollments to 516,000 by 1999. In actuality, the project surpassed its target: IND ICATOR, TARGETS, AND ACH IEVilMENT5 By 1998, 861,000 girls were enrolled . This project originally was scheduled to end in 1999, but it was extended to ISA ELINE 2000. The most recent comprehensive studies to determine impact took place Data were collected from Bangladesh educational statistics, population cen in 1997; the figures listed here cover the 1998 targets and project achievements sus, and household expenditure surveys. by the end of 1997: (I) With a target of 300 new income-generating micro projects in the project area, the number actually achieved was 1,412. (2) With Studies on parents' attitudes, financing of secondary education, and occupa a target of 32,500 direct beneficiaries, the actual achievement was 31,905. tional skills, as well as special school profile surveys, were conducted in the (3) With a target of 30,000 children under growth and health status surveil project areas. lance, the project actually brought 18,000 chi.l dren under surveillance. (4) FOLLOW-UP DATA With a target of 7,500 pregnant and 7,500 lactating women under close super vision, the project actually brought 800 pregnant women and 4,500 lactating The project's MIS system tracks key student and school indicat-ors such as women under surveillance. (5) With a target of a 24 percent reduction in enrollment, attendance, performance, promotion, student-teacher ratios, malnutrition (from a level of 35 percent), the project achieved an estimated 17 stipend and tuition payments, and other selected indicators for all project percent reduction . The lower achievements in several categories were due to components. delays in the beginning of the project. CONTROL GROUPS BASELINE Use of control groups was planned but, due to a nationwide expansion of the During the project's pilot phase, socioeconomic and anthropometric surveys program, control groups were not set up. covered 869 households in II sub-districts. PII RnrrPIITOR Y EVA I. ATION During the project mid-term review, several rapid studies were conducted. Beneficiary assessments among parents, students, and teachers were carried out to assess enrollment, performance, dropout rates, attractiveness of stipends, school attendance, and management of the stipend program. COM.\IENTS Although a thorough evaluation has not been done, relevant information for impact evaluation has been collected. One could try to distinguish the net 186 I I'AI{TIC I I'AT RY EVAlUAl l ON test (PAES). [n addition, the NAS has begun to apply achievement tests in As part of the mid-term review, a qualitative assessment of the project was mathematics, language, and science to a random sample of 9th grade students. conducted . A sample of 56 groups of beneficiaries were selected from target These tests will provide baseline data for future assessments. sub-districts where NGO capacity has been strongest and where only minimal fOLLOW-UP DATA delays were experienced in delivering project support. MINED is upgrading an information system to provide better statistical data Results from qualitative assessments helped identify areas in which the project on education indicators and continual assessment of the of the national edu was having a positive impact as well as areas that required special attention. cation program. fOLLOW - UP SURVEYS The NAS will continue to administer the PAES to all graduating secondary stu The National University of Benin managed collection data from household dents on an annual basis, as well as the achievement tests to a random sample. surveys and NGO monitoring reports from a sample of 56 groups of benefi [n addition, information on contextual variables will be collected from direc ciaries. tors, teachers, students and school councils. CONTROl.