Document of The World Bank FOR OFFICIAL USE ONLY Report No. 16199-GUA IMPLEMENTATION COMPLETION REPORT GUYANA TECHNICAL ASSISTANCE CREDIT (CREDIT No. 2169-GUA) December 30, 1996 Public Sector Modernization Country Department III Latin America and the Caribbean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Guyana Dollar (G$) The Guyana dollar floated with the pound sterling from July 1972 to October 1975, when the Government announced its linkage to the US dollar at G$2.55 - US$1.00. A new rate of G$3.00 - US$ 1.00 was established on June 1, 1981. On January 11, 1984, it was adjusted to G$3.75 - US$1.00. The average rates for the period 1984-89 are set out below: Annual Average 1984 US$1.00 = G$ 3.8 G$1.00 = US$0.261 1985 US$1.00 = G$ 4.2 G$1.00 = US$0.235 1986 US$1.00 = G$ 4.2 G$1.00 = US$0.235 1987 US$1.00 = G$ 9.7 G$1.00 = US$0.103 1988 US$1.00 = G$ 10.0 G$1.00 = US$0.100 1989 US$1.00 = G$ 27.2 G$1.00 = US$0.367 1990 US$1.00 = G$ 39.5 G$1.00 = US$0.253 1991 US$1.00=G$118.8 G$1.00=US$0.841 1992 US$1.00 = G$125.0 G$1.00 = US$0.800 1993 US$1.00 = G$126.7 G$1.00 = US$0.789 1994 US$1.00 = G$138.3 G$1.00 = US$0.723 1995 US$1.00 = G$142.0 G$1.00 = US$0.704 1996 January - July US$ 1.00 = G$140.25 G$1.00 = US$0.713 FISCAL YEAR January 1 - December 31 Vice President:- Shahid Javed Burki Director: Paul Isenman Division Chief: Krishna Challa Responsible Staff: Sr. Public Sector Mgmt Specialist: Rita Parrilli ITask Manager: Jit Gill ABBREVIATIONS AND ACRONYMS FOR OFFICIAL USE ONLY BEEP - USAID's Building Equity and Economic Participation Project BOG - Bank of Guyana BOS - Bureau of Statistics CARICOM - Caribbean Community CAS - Country Assistance Strategy CDB - Caribbean Development Bank CFTC - Commonwealth Fund for Technical Corporation DDSMS - UN Department for Development Support and Management Services (Statistics) DIEC - Department of International Economic Cooperation DMD - Debt Management Division DSI - Department of Social Infrastructure EC - European Community EMD - Enterprise Monitoring Division ERP - Economic Recovery Program ESAF - Enhanced Structural Adjustment Facility FISBEC - Financial Sector Business Environment Credit GDP - Gross Domestic Product GOG - Government of Guyana HIES - Household Income and Expenditure Survey ICR - Implementation Completion Report IDA - International Development Association IFI - International Financial Institution IMF - International Monetary Fund LSMS - Living Standards Measurement Survey MCA - Monitoring and Coordinating Agency MCSD - Ministry of Culture and Social Development MFI - Department of Multilateral Financial Institutions MOF - Ministry of Finance ODA - British Overseas Development Agency OPS - UN Office for Project Services PAP - Public Administration Project PCS - Public Corporation Secretariat PFP - Policy Framework Paper PRKS - Personal Records Keeping System PSDAC - Private Sector Development Adjustment Credit PSIP - Public Sector Investment Program PSM - Public Sector Management PSR - Public Sector Review SAC - Structural Adjustment Credit SDR - Special Drawing Rights SIMAP - Social Impact Amelioration Program SOE - State-Owned Enterprise SPS - State Planning Secretariat TAC - Technical Assistance Credit TOR - Terms of Reference UK/ODA - United Kingdom Office of Development Assistance UNDP - United Nations Development Program UNIDO - United Nations Industrial Development Organization UNVs - United Nations Volunteers This document has a restricted distribution and may be used by recipients only in the performance of their Iofriciai duties. Its contents may not otheruise be disclosed vithout World Bank authorization. IMPLEMENTATION COMPLETION REPORT GUYANA TECHNICAL ASSISTANCE PROJECT (CREDIT 2169-GUA) TABLE OF CONTENTS PFEFACE .....................................................1i EVALUATION SUMMARY ..................................................... ii PART I: PROJECT IMPLEMENTATION ASSESSMENT .............................1 A. Introduction/Background ......................................................1 B. Statement/Evaluation Objectives ....................................................2 C. Achievement of Objectives .....................................................3 D. Major Factors affecting the Project ...................................................4 E. Project Sustainaility .....................................................5 F. IDA Performance ......................................................6 G. Borrower Performance .....................................................7 H. Assessment of Outcome .....................................................9 I. Future Operations .................................................... 10 J. Key Lessons Leamed/Reconfirmed .....................................................1.1 PART II: STATISTICAL TABLES ..................................................... 14 Table 1: Summary of Assessment .................................................... 14 Table 2: Related Bank Loans/Credits .................................................... 16 Table 3: Project Timetable ..................................................... 17 Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual ............... 18 Table 5: Key Indicators for Project Implementation ................................................ 19 Table 6: Key Indicators for Project Operation .................................................... 20 Table 7: Studies Included in Project .................................................... 27 Table 8A: Project Costs .................................................... 28 Table 8B: Project Financing ..................................................... 29 Table 9: Economic Costs and Benefits ..................................................... 30 Table 10: Status of Legal Covenants .................................................... 31 Table 11: Compliance with Operational Manual Statements . .................................. 33 Table 12: Bank Resources: Staff Inputs ............................................... 34 Table 13: Bank Resources: Missions ............................................... 35 APPENDIX A: AIDE MEMOIRE ................................................ 36 APPENDIX B: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE ............................................... 42 A. Introduction/Background ............................................... 42 B. Project Objectives ............................................... 42 C. Implementation ............................................... 43 D. Assessment of Credit ............................................... 44 APPENDIX C: DESCRIPTION OF SUBPROJECTS ........................................ 51 I. Improving the Incentive Framework ................................................ 51 II. Public Sector Reform ................................................ 52 III. Improving Public Sector Investment ............................................... 54 IV. Social Sector Reform ............................................... 56 V. Improving ................................................ 58 VI. Central Bank Supervision ................................................ 60 VII. Long Term Development Strategy ................................................ 62 APPENDIX D: SAC/TAC MATRIX ............................................... 63 i IMPLEMENTATION COMPLETION REPORT GUYANA TECHNICAL ASSISTANCE CREDIT 2169-GUA PREFACE This is the Implementation Completion Report (ICR) for the Technical Assistance Project in Guyana, for which Credit 2169-GUA in the amount of SDR 2.3 million (equivalent to about US$3.0 million at the time of approval on June 28, 1990) was made effective on August 29, 1990. The credit was closed on the original closing date of June 30, 1996. As of October 31, 1996 the value of the loan was equivalent to US$3,308,895.00 million of which US$2,859,283.51 equivalent had been disbursed. Preparation of this ICR was begun during the Bank's final supervision/ICR mission, which took place August 1 to 9, 1996. It is also based on material in the project file and discussions with staff who participated in the development and supervision of the project as well as discussions with UJNDP, the Government, and some TAC financed consultants. The borrower contributed to preparation of the ICR by submitting its evaluation of the project's execution and achievements, which is included as Appendix B. ii IMPLEMENTATION COMPLETION REPORT GUYANA TECHNICAL ASSISTANCE PROJECT (CREDIT 2169-GUA) Evaluation Summary Introduction 1. One of the direct consequences of the continuous negative real GDP growth which characterized two decades of severe decline in Guyana's socio-economic situation (in the 1 970s and 1 980s) was the sharp decline in living standards. This led to a large scale migration of qualified and experienced personnel both from the public and private sectors in search of better opportunities principally in Canada, the UK and US. The loss of skilled and experienced personnel was particularly acute in the Central Government as the financial position of the Government made it impossible to improve salary and other benefits of civil servants. Senior positions had to be filled by junior personnel or had to be left vacant, affecting the delivery of basic public services. 2. The shortage of skilled personnel was particularly severe in the ministries and agencies with responsibility for the management of the economy. At the time of the launching of the ERP in 1989, GOG and the donor community had realized the paucity of the national capacity to manage and carry out the reform program. Effective implementation of the ERP and IDA's SAC, through which critical imports needed to restore economic growth were financed, was essential. The Government, therefore, sought and obtained TA to bring in outside skill to fill positions critical for the success of the reform program and to strengthen core macroeconomic units. These entities were: the Statistical Bureau, the Bank of Guyana (Central Bank), the Debt Management Division of the Ministry of Finance, the Office of Coordinator to the ERP, the State Planning Secretariat and the Public Corporation Secretariat. Project Objectives 3. The project's objective was to assist the Borrower to implement its medium-term adjustment program, including the SAC, and improve macroeconomic management so that the objectives of the adjustment program could be achieved. The TAC was intended to assist in strengthening the public sector agencies responsible for implementing the adjustment program by financing expert advice, staff training and equipment to improve management and analytic capacity and strengthen the borrower's capacity to analyze the social costs of adjustment and the efficiency of social sector programs. The institutional strengthening activities were intended to lay the basis for transition to local management at the project's end. ill Implementation Experience, Results, and Outcome 4. Guyana has taken far reaching reforms bringing about a fundamental shif't in economic policies towards a market oriented economy. Real growth averaged about 8 percent per year during 1991-94. The incentive framework for the private sector has improved, while state intervention in agriculture, industr-y and commercial activities has declined. Progress has been made in restructuring and reducing the size of the public sector, including through privatization of SOEs. The SAC ICR notes that the social impact amelioration program (SIMAP) mitigated the most adverse effects of the adjustment. 5. Sustainability of TAC funded activities is. however, largely uncertain. The project substantially achieve its major development objective in the short term and successfully supported measures required to secure release of the second and third tranches of the SAC (Appendix C). These included: (i) completion of a study on consumption taxes to address deficiencies in the application and administration of consumption taxes as part of the trade policy provisions of the SAC; (ii) favorable Bank assessment of the macroeconomic framework. TAC financed consultancy services assisted in coordinating the adjustment program and improving GOG's analytical and management capacity at that time; (iii) commencement of a program to eliminate over]apping functions and identify non-critical vacancies in the public service (PRKS) as part of central government reform; (iv) establishment of a rolling PSIP; and (v) improvement in targeting the poor under SIMAP. 6. In its final three years the TAC supported the institutionalization of many of those measures. Two institutional development activities have been self-sustaining: the BOG in banking supervision and computerization of the BOS to enable construction of national accounts and the carrying out of basic surveys. Both agencies are semi-autonomous with somewhat higher pay than the central civil service. Assistance to SIMAP and the PRKS has been sustained through follow-on IDA and IDB projects. 7. The PSIP assistance, which fell into disuse following the departure of the TAC consultants and trained personnel, has been resuscitated through the return of the same consultant under the auspices of USAID. TAC Procurement, aide coordination and macro-economic, and public enterprise monitoring assistance was helpful at the time, but was not sustained following the departure of the consultants. USAID and UNDP are again supporting strengthening in these areas, except PE monitoring. 8. The outcome of the TAC, therefore, is moderately satisfactory. The dearth of professional and skilled personnel in the public sector has been identified as a major constraint to Guyana's development efforts. A sustained effort is being made to implement IDA's PAP, the main elements of which are: (i) reforming the public sector salary and employment structure; (ii) public sector management strengthening; and (iii) an improved recruitment program. Revenue increases from continuing growth and persistence with rationalization of the public service are means which could ensure the iv maintenance of reasonable levels of salary. While important first steps have been taken under the PAP to streamline the salary structure and improve the staffing of the public services (paras. 41-44). without additional significant public sector reforms, the success of other efforts at development will be compromised and the crisis of implementation will make sustainable change difficult. Lessons Learned/Reconfirmed 9. "Substitution TA"', which fills gaps when local capabilities are insufficient, can be an acceptable short term remiiedy tor a staffing crisis. flowever in order for substitution I'A to become TA for institutional development, a combination of institutional factors (adequate pay and employment policies) and qualities of TA personnel must be present. With respect to the latter, consultanits tend to be most effective when they have had actual hands-on work expcrience (as opposed to solely advisory or academic experience) as well as talent as mentors. trainers and problem-solvers in difficult institutional environments. 10. 'I'he greatest impediment to long-term institutional strengthening in Guyana is the inability to attract and retain qualified Guyanese staff due to inadequate civil service salaries. This was the single most serious obstacle to the successful outcome of TAC financed activities. While non-monetary incentives are important, they are not sufficient to retain public servants if public sector pay scales fall seriously short of private sector comparators. 11. Several counterparts should be assigned to each consultant when turn-over is high to increase the prospects of at least one staying. This might be accomplished, even in environments where it may be difficult to identify even one counterpart, by reviewing the organizational structure and combining related work units to create a larger critical mass and, thus, bigger pool from which counterparts may be drawn. 12. When there is an absolute shortage of personnel to serve as counterparts to internationals, local consultants or even UNVs may be engaged to carry out line functions, work with international consultants, and transfer knowledge as counterparts become available. Also, UJNVs tend to incur less resentment than international consultants over issues of pay differences when salaries are extremely low. 13. Counterparts should know from the outset that they are not merely assistants or helpers to the international consultants, but rather that they have prospects (if performance warrants) to assume the consultant's line responsibilities upon completion of the consultant's assignment. 14. In countries with weak project evaluation capacity, evaluation training should be built into TACs, TAL. and PSMLs, including assistance in preparation of the Government's portion of ICRs, to ensure that the lessons of experience -- successes and weakness -- are understood and taken into account in future project design. I PART I: PROJECT IMPLEMENTATION ASSESSMENT A. Introduction/Background 1. The SDR 2.3 million credit (equivalent to about US$3.0 million at the time of approval on June 28, 1990) assisted in the financing of studies and technical assistance related to policy areas included in IDA's second Structural Adjustment Credit (SAC). By 1988 Guyana's economy had been in a state of decline for over a decade. The development model of "co-operative socialism" pursued after independence in 1966 had led the state to dominate the economy, through state-owned enterprises (SOEs) and direct control. Traditional exports of bauxite, sugar and rice had fallen sharply, causing the real Gross Domestic Product (GDP) to decline by about one-third. Repeated efforts to adjust the economy during the 1 980s did not succeed. Guyana's overwhelming debt was in arrears resulting in cutting off of assistance by international financial institutions (IFIs) and other donors. 2. In 1988, the Government launched comprehensive economic reforms under the Economic Recovery Program (ERP). The ERP consisted of broad adjustment measures and structural reforms to realign relative prices, dismantle state controls, and establish a market oriented economy. The SAC was part of the donor community's support for the ERP through which critical imports needed to restore economic growth were financed. The SAC supported reforms in (i) improvement of the incentive framework through reforms in domestic pricing, trade policies, and private investment procedures; (ii) improvement of public sector finances through elimination oi' central government transfers to public enterprises, streamlining the civil service, increasing revenue transferred by public enterprises to the Central Government and divestment for selected public enterprises; (iii) formulation of a realistic public sector investment program; (iv) better targeting of the poor in social programs; and (v) commencement of a program to reform the public service by eliminating overlapping functions and non-critical vacancies. 3. Implementation of SAC measures was supported by the IDB, ODA, CDB, UNDP, EC and by this Technical Assistance Credit (TAC). The Government and donors developed a comprehensive set of technical assistance packages to improve public sector management (PSM) since it was recognized that the quality of PSM would play a critical role in determining the success of the adjustment program. PSM had deteriorated over the decade prior to approval of the SAC resulting in deficiencies in qualified personnel and equipment. Low public sector wages and a high rate of professional emigration from the country contributed to the problem. Staff in place frequently lacked experience and relevant training. Computer equipment and software, which could increase productivity of scarce professional labor, was largely nonexistent. 4. The shortage of professional and technical manpower impeded the operational as well as the developmental activities of the public sector. Even basic information for macroeconomic management crucial to the success of the ERP, such as the national -2- accounting data, was extremely weak, in large part owing to the lack of personnel to collect, compile and analyze key economic data. The national statistical system fell casualty to the adverse effects of the contraction in the economy with the departure of trained staff at all levels to the point that, by the end of 1990, there had been an almost total collapse of the statistical force, with the professional staff reduced to two persons. The Bureau of Statistics stopped publication of its reports. 5. Social and economic infrastructure also deteriorated due to the prolonged period of under-investment. The commitment of the government to maintaining free public health and education facilities was not matched by its ability to meet these commitments. Inadequate allocations of basic materials and supplies was aggravated by an exodus of teachers and health personnel, resulting in declining quality of service. Social data and indicators were inadequate to facilitate appropriate social policy interventions. This was essential given the need for sensitive and targeted attention to adversely affected groups whose condition might have further deteriorated as a consequence of the structural adjustment element of the ERP. 6. The lack of professional manpower also adversely affected the formulation of effective economic policies and the development and monitoring of the PSIP. Guyana's ERP would crucially depend upon developing a "critical mass" of higher level manpower through increased incentives, training, and technical assistance, attracting Guyanese professionals from abroad, albeit for short periods. IDA was to help address these issues through the TAC. 7. The TAC was appraised in May 1989 together with the SAC and was approved on June 28, 1990. The Development Credit Agreement was signed on July 13, 1990 and became effective on August 29, 1990 with a closing date of June 30, 1996. The TAC was amended once on June 26, 1992 to reflect the financing of two new activities: the Advisor on Banking Supervision to the Bank of Guyana, which was important to the preparation of IDA's Private Sector Development Adjustment Credit (PSDAC), and the establishment of a personnel record-keeping system (PRKS) which facilitated compliance with SAC measures to eliminate overlapping functions and non-critical vacancies. B. Statement/Evaluation Objectives 8. The project's objective was to assist the Borrower to implement its medium-term adjustment program and improve macroeconomic management so that the objectives of the adjustment program could be achieved. The project was intended to assist in strengthening the public sector agencies responsible for implementing the adjustment program by financing expert advice, staff training and equipment to improve management and analytic capacity and strengthen the borrower's capacity to analyze the social costs of adjustment and the efficiency of social sector programs. The TAC did not aim to strengthen all functions of these primary agencies, but rather to strengthen those units essential to implementing structural adjustment. The institutional strengthening activities were intended to lay the basis for transition to local management at the project's end. -3- 9. These limited objectives were appropriate given the absorptive capacity of the government and the priority of the program of structural adjustment program. They were clear and realistic, although some of the institutional strengthening activities assumed a faster turn around than proved feasible in improving conditions of employment in the public sector, and thus sustainability. Many of the project's objectives and activities were mutually reinforcing, supported jointly with other donors, and directly underpinned policy measures supported uLnder the SAC (Appendix C). They were essential for economic recovery and continue to be important elements of the CAS and the Guyana Policy Framework Paper, 1996-98 presented to the Bank's Board of Directors in May 1996. 10. There were no significant modifications to the project's objectives during implementation. The two activities added under the 1992 project amendment were directly related to the SAC or other aspects of the adjustment program. Because the hiring of a relatively large number of consultants, purchase of related equipment and training were demanding for the under-staffed project executing agency, the MOF's Monitoring and Coordinating Agency (MCA), implementation and coordination assistance was provided by UNDP. C. Achievement of Objectives 11. The project substantially achieved it's major development objectives in the short term and facilitated SAC tranche releases required to finance critical imports needed to help restore economic growth. However, the extent to which the project has been able to build sustainable domestic capacity is mixed. Achievement of long term institutional development objectives for policy analysis and economic decision making, public sector investment planning, public enterprise monitoring, and aide coordination is negligible, although other donors continue to support most of these efforts (Appendix B). Assistance to the Bureau of Statistics (BOS) and Bank of Guyana (BOG) have been sustained largely due to the relative adequacy of salaries and training and promotion opportunities compared to other TAC beneficiary agencies. Assistance for the Social Impact Amelioration Program (SIMAP) and PRKS have been sustained through direct follow-on IDA and IDB projects. 12. The project's immediate objective of assisting GOG implement its medium-term adjustment program and comply with SAC conditionality were largely met per Appendix C. The outcome of the longer-term institutional strengthening activities is mixed due mainly to inadequate public sector salaries and conditions of service to attract staff to serve as counterparts and to retain staff who served as counterparts or were trained under the TAC. 13. The President's Report correctly pointed out the risk of the benefits of assistance not being sustained after the project's completion due to staffing deficiencies. It was thought that the risk would be reduced through training under the TAC to increase the analytic and management skills of staff and, later, through pay and employment policy changes initiated under the SAC and continued under IDA's Public Administration Project (PAP). These changes have taken longer to realize than expected. -4- 14. Performance Indicators. The TAC's President's Report included a SAC/TAC matrix with clear qualitative indications of the policy areas to be supported by the TAC prior to Board presentation and second and third tranche release. This matrix is reprinted as Appendix C along with the results and outcome of the related TAC assistance. Neither the President's Report nor TAC supervision reports provided quantitative indicators for assessing achievement of objectives, as is currently required. D. Major Factors Affecting the Project 15. GOG's commitment to policy changes related to the ERP and SAC enabled substantial achievement of the TAC's SAC-related short term objectives. Achievement of the longer-term institutional development objectives, however, was impeded mainly by inadequate public sector salaries, and partially impeded by staffing and organizational changes resulting from the change of government, and less than optimum management of technical assistance. 16. Salaries. The project was plagued from the start by a shortage of professional and skilled personnel to serve as effective counterparts for advisors under the TAC due mainly to inadequate levels of remuneration. An important objective under the TAC was that skills provided by the long-term and short-term advisors were to be transmitted to Government officials and thus provide the domestic capacity for continuity of these specialized and vital skills beyond the life of the project. Almost all advisers financed under the TAC expressed concern and frustration regarding the counterpart situation1. Recurrent problems included: (i) absence of any counterparts; (ii) excessive delays in appointing and replacing counterpart staff; and (iii) assignment of higher level staff to work with the consultants who, on account of their work responsibilities, were unable to serve as full or even part-time counterparts. As a consequence, the transfer of skills did not always take place upon completion of the advisor's assignment. 17. Change of Administration. With the arrival of the new Government in Guyana in 1992 came the restructuring of the central administration. As a consequence, the Public Corporations Secretariat (PCS) was dissolved and the State Planning Secretariat (SPS) became the State Planning Unit in the Ministry of Finance. One negative feature of this restructuring has been the loss of trained staff in these agencies (e.g. Public Enterprise and PSIP sub-projects) who left the public sector to take higher paying jobs in the private sector or abroad. Similarly, the Project Executing Agency, the MCA, was dissolved and responsibility for the TAC was placed with the MOF's under-staffed Project Cycle Management Unit. 18. Management of TA. Even given the problems described above, it may have been possible for the borrower to have derived greater benefit from the TAC consultancies through Report to Carl G. Greenidge, Minister of Finance by Alwyn B. Taylor, Macroeconomic Adviser and TAC Chief Technical Adviser, The Problem of Counterparts, September 27, 1991. -5- better management of the technical assistance. Ways in which this might be achieved in future TA projects are addressed in the Lessons Learned section of this ICR. 19. UNDP. At the design stage it became clear that the MCA did not have the capacity to implement the TAC and coordinate related assistance from other donors. While the UNDP/OPS arrangement did not provide the expected substantive backstopping support (paras. 33 and 34), the UNDP field office did provide essential administrative and logistical support for the project activities, as well as bridge financing for SAC related technical assistance required prior to TAC effectiveness (PEs and Aide Coordination). 20. United Nations Volunteers (UNVs) played a valuable role in the BOS, BOG, and Social Indicators components. They incurred less resentment over pay differences than international consultants, brought to bear valuable technical knowledge to several components, filled in as counterparts to internationals, and carried out line functions when necessary. While this is far from an ideal solution, it proved to be an effective low cost way of dealing with an absolute paucity of local talent. E. Project Sustainability 21. Sustainability of TAC funded activities is largely uncertain. During the TAC's first three years of operation it mainly supported measures required to secure release of the second and third tranches of the SAC. These included: (i) completion of a study on consumption lax to address deficiencies in the application and administration of consumption taxes as part of the trade policy provisions of the SAC; (ii) favorable Bank assessment of the mroenicfrawk, TAC financed consultancy services assisted in coordinating the adjustment program and improving GOG's analytical and management capacity at that time; (iii) commencement of a program to eliminate overlapping functions and identify non-critical vacancies in the public service (PER) as part of central government reform; (iv) establishment of a rolling PSIP; and (v) improvement in targeting the poor under SIMAP. 22. In its final three years it supported the institutionalization of those measures. The SAC related TA successes were sustainable in the short-term, but only two TAC supported longer term institutional development activities have been self-sustaining in the longer term: assistance to the BOG in establishing banking supervision and computerization of the BQS to enable construction of national accounts and the carrying out of basic surveys, such as those for Household Income Expenditures (HIES), the Labor Force, and Living Standards Measurement (LSMS). Both agencies are semi-autonomous with somewhat higher pay than the central civil service. Assistance to SIMAP and the PRKS has been sustained through follow-on IDA and IDB projects. 23. The PSIP assistance, which fell into disuse following the departure of the TAC consultants and trained personnel, has been resuscitated through the return of the same consultant under the auspices of USAID. Procurement and aide coordination and macro- economic assistance was helpful at the time, but was not sustained following the departure of the consultants. USAID and UNDP are again supporting strengthening in these areas. -6- 24. Perhaps the least sustainable TAC activity was assistance in monitoring the financial and operational performance of public enterprises. The main agency receiving that assistance, the PCS, was disbanded with the change of government, its staff were dismissed, and systems were not transferred to the MOF, where the function currently resides. Strengthening capacity to monitor the remaining 20 SOEs does not appear to be an area of Government priority in view of plans to privatize/liquidate most companies before the year 2000. Other TAC activities, such as external aide coordination assistance and macro- economic analysis strengthening. were not sustained in part because consultants devoted much time to carrying out line functions or filled line positions -- including Budget Director - - for which counterparts were not available. That position is currently filled by an IDB funded consultant. 25. The most recent activity to be supported by the TAC, preparation of a National Development Strategy. was completed in November 1996. Guyana has not had a comprehensive policy framework to underpin policies and priorities. It is expected that much of the strategy, which was developed in consultation with NGOs, universities, labor unions, public and private sectors, and international organizations, will complement and reinforce many completed TAC activities and PAP supported initiatives. This is likely to include recommendations that growing government revenue2 be directed toward improving public sector salaries (see also para. 44), wage decompression, improved performance evaluation and merit based increases. Government has not yet sought funding for the implementation phase, although assistance may be needed if the Strategy is to have an impact. 26. TAC supervision missions were informed in 1994 that the assigned counterpart staff to the PSIP and Public Enterprise Advisors had left to take on high paying jobs in the private sector or abroad. The mission noted that the continuing counterpart problem had significant implications for the sustainability of the technical assistance program. The SAC ICR noted that unless Guyana's serious constraints in terms of human capital are overcome, Guyana would continue to be a "gap-filling dependency" with little prospect of attaining self- sustaining development. This issue is being addressed under the PAP where some progress has been made (paras. 41-44). However, unless salaries are increased to levels at least approaching those of the private sector, TAC follow-up assistance will continue to be ''substitution TA" and real institutional strengthening will not have been achieved. F. IDA Performance 27. The overall IDA performance was satisfactory. Project components were appropriate for removing binding constraints to the success of the ERP and SAC. The TA program was appropriately identified, prepared, appraised and supervised in close collaboration with the borrower, other donors, and the SAC. The project's objectives remained valid throughout 2The Guyana Policy Framework Paper, 1996-98 records that real GDP growth averaged nearly 8% per year for 1990-94, inflation fell from 100% to 16% and international reserves increased. Additional revenue is also expected from financial management reform and PAP support tax reform to increase the tax base. -7- implementation and continue to be so. The design was flexible enough to allow for inclusion of three priority activities during implementation: banking supervision, PRKS, and preparation of the National Development Strategy. Implementation was closely linked to other projects in the IDA portfolio (PAP, SIMAP, PSDAC/FISBEC). 28. Care was taken at the design stage to ensure that the project was not overly complex. Only the most pressing SAC and ERP related needs not covered by other donors were addressed. Also, expectations about the prospects for institutional development were tempered by a realistic assessment of the absorptive capacity. It was understood that "substitution" TA was essential in an environment where the public service was as debilitated as Guyana's in the early 1990s. With 20/20 hindsight it can now be seen that it may have been somewhat optimistic to assume that salary increases would make public sector pay competitive prior to conclusion of the TAC. Lessons of operational experience with TACs/TALs from the 1980s were taken into account: unallocated funds were kept to a minimum and project activities were well-targeted toward the government's adjustment program, thus avoiding the "Christmas tree" approach to TA design. 29. IDA carried out nine supervision missions for a total of about 48 staff weeks. Considerable technical support was given by IDA staff during supervision of the SAC and TAC and contacts were intensive with TAC beneficiary agencies from Washington. Project problems, especially counterparts, were discussed at every implementation review. Implementation progress and problems were correctly identified and reported. The project, however, might have benefited from (i) more frequent TAC supervision missions coinciding with SAC missions (resources were available for only one supervision mission per year); (ii) more guidance on the management of TA; (iii) and quantitative performance indicators. With respect to the latter the SAC/TAC Matrix (Appendix C) shows the clarity of direction of the project. G. Borrower Performance 30. Borrower performance was satisfactory in respect of the SAC measures supported by the TAC and deficient with respect to fulfillment of its long-term institutional strengthening objectives in terms of provision of counterparts. The Government that initiated the ERP had strong commitment to and ownership of the program. It fully participated in the preparation and implementation. The weakness in MCA's implementation capacity was correctly identified at an early stage and UNDP was engaged under OPS execution to compensate. When the MCA was dissolved as a result of the 1992 government reorganization, the successor project executing agency had difficulty in providing substantive follow-up. 31. Compliance with loan covenants was generally satisfactory, except for provision "promptly as needed, [of] adequate facilities and qualified staff in adequate numbers as counterparts for the consultants to be employed under the project." The borrower was unable to pay wages sufficient to attract and retain qualified counterparts, in part due to fiscal constraints. The priority of this problem and the likely consequences in terms of sustainability were repeatedly bought to the borrower's attention by Bank supervision -8- missions and by the consultants themselves from the inception of project activities. Special audit arrangements had to be developed between IDA and UN/OPS since neither the existing arrangements for UNDP CSAs nor for UN/OPS MSAs apply in situations where OPS acts as executing agency for UNDP projects. 32. Although the quality of the consultant services was generally high, maximum benefit was not derived, even within the constraints of the counterpart problem, due to less than adequate management of technical assistance. The nature of the problem and ways in which this problem might be addressed are covered in the Lessons Learned section of this ICR. For example, the organizational structure of the beneficiary agency might be reviewed and related organizational units merged to take advantage of natural synergies and create a larger critical pool of staff from which several counterparts (rather than just one) might have been drawn. In addition, although consultants were paid reasonable market rates, many of the local staff with whom they worked resented their fees. This morale problem was made more acute by the fact that most of the consultants assumed line functions similar to those of the poorly paid local staff. This problem might have been mitigated if counterparts could have been assured that, if their performance warranted, the responsibilities of the consultants would have diminished as responsibilities of local staff and prospects for promotion increased. It should be noted, however, that UNVs were used effectively (per para. 20) and might have been used more extensively together with local consultants as a transitional measure until local staff could be hired. 33. UNDP. At the TAC design stage, IDA and the borrower determined that the under- staffed MCA would have difficulty in executing the project. It was decided, therefore, that US$2.8 million of the (then) $3.0 million TAC would be implemented under a series of seven TAC financed UNDP projects (the remaining funds were used for preparation of the National Development Strategy). Five were executed by the UN/OPS at 11% overhead, one by the UN Department for Development Support and Management Services (DDSMS) at 13%, and one by the Government at 3%. All seven projects received valuable logistical support from the UNDP Field Office. A total of $285,000 in overhead was transferred to UNDP. 34. UN executing agencies normally take substantive and administrative responsibility for the project output, monitoring, and evaluation under the modality of UN agency execution. However, a terminal tri-partite review and evaluation was prepared only for the DDSMS executed project. There is no record of substantive OPS intervention beyond what would have normally been provided under a Management Services Agreement (MSAs), which is a procurement agent type arrangement for which considerably less overhead is usually charged. Supervision reports record instances of delays in procurement, due to lengthy OPS procedures. OPS took no substantive responsibility for the output of the five TAC financed projects it executed nor did the borrower receive value for money. MCA, and later the Project Cycle Management Unit, were not in a position to compensate for this lack of substantive involvement for which OPS had been engaged. r -9- H. Assessment of Outcome 35. The project outcome is moderately satisfactory. The project satisfactorily achieved its major SAC related objectives per Appendix C. Guyana has taken far reaching reforms bringing about a fundamental shift in economic policies towards a market oriented economy. Recovery has been accomplished, with real growth averaging about 8 percent per year during 1991-94. The incentive framework for the private sector has improved, while state intervention in agriculture, industry and commercial activities has declined. Progress has been made in restructuring and reducing the size of the public sector through tax reform, strengthening expenditure controls and privatization of SOEs. The social impact amelioration program (SIMAP) mitigated the most adverse effects of the adjustment. 36. Supervision missions recorded impressive progress on the SAC related analytical work carried out by most TAC funded individual consultants. The skills provided by these advisers were vital since they substituted for skills not available locally. Many of the recommendations and observations incorporated in the consultant's reports were used by the Government in formulating major policy decisions in the area of Macroeconomic Management, Public Sector Investment, Public Sector Reform (PRKS and strengthening public enterprise performance); Incentive Framework (improving the consumption tax structure); and Banking Supervision (establishing an operational banking supervision function at the Central Bank). In addition, the TA to SIMAP and BOS in preparation and implementation of the LSMS and the HIES yielded important data on the location and extent of poverty in Guyana essential for and targeting of social programs. This information was also important for the Bank's 1994 Poverty Study.3 37. However, the outcome of TAC supported long-term institutional development efforts is unsatisfactory, except for the PRKS and SIMAP which were follow-up directly by additional assistance from other Bank operations, and assistance to the BOS and BOG, which are autonomous bodies and benefit from higher pay than the central civil service. They were able, therefore, to retain a greater number of counterparts and trainees. A PE Performance Monitoring System was developed but never installed in successor units to the disbanded PCS, and trained staff departed. A computerized data base on external financial inflows (volume, type and conditionality of external resources) fell into disuse upon departure of the consultants, as did the system of quarterly macroeconomic reports which provided decision- makers with an assessment of progress under the ERP. As with most TAC assistance, the principal macro-economic adviser provided valuable data and advice at the time on issues that would have an adverse effect on the economy if not addressed, such as debt. But no skills or knowledge was ultimately transferred either because no counterparts were assigned or the counterparts left and systems developed were discontinued. 38. Further, for all the strong policy progress made and recovery achieved so far, Guyana's economic position remains precarious, given the: (i) heavy debt burden; (ii) dilapidated economic and social infrastructure due to widespread decay; (iii) acute shortages Guyana: Strategies for Reducing Poverty, Report No. 1286 1-GUA, May 6, 1994. 1 -10- of skilled personnel in public service; and (iv) widespread poverty. While the Government remains committed to deepen the reforms, it will need adequate strategies (e.g. the TAC financed National Development Strategy) to deal with these issues or they will prevent achievement of sustained growth. I. Future Operation 39. The objectives of the adjustment program, which the TAC supported, remain highly relevant, as set forth in the CAS and Government's Policy Framework Paper for Guyana (March 1996). The TAC contributed to the formulation of several ongoing IDA operations: The PRKS is being completed with assistance provided under the PAP (2480-GUA); the SIMAP/Health Nutrition and Water Credit (2358-GUA) benefited from the TAC's SIMAP design assistance; and IDB's proposed SIMAP project will also benefit from a second round of the LSMS proposed for 1997, which will help better target social interventions. The PSDAC (2746-GUA) and FISBEC (2669-GUA) are providing follow-up assistance to the Consumption Tax Study to broaden the tax base and remove disincentives to long-term investment in the economy. They also provide continuing support for banking supervision in the BOG. 40. USAID's BEEP project is reviving TAC work to strengthen the PSIP and MOF's Macro-economic Division to undertake quantitative analysis of economic issues. IDA's IDF Grant (No. 28581) for debt management is providing consultant services. These interventions are essentially "substitution TA" given the continued lack of counterparts. A proposed ODA grant will upgrade the computer equipment purchased in the early 1990's for the Statistics Bureau. External Aid Coordination remains weak, but is being addressed in the context of the latest (August 1996) CPPR, as is management of TA, for which an EDI seminar is under consideration. 41. The PAP is addressing the single most important issue affecting the sustainability of the TAC -- pay and employment policies. Substantial advances have been made in reforming the public service salary and employment structure. A new 14 band salary structure was introduced in May 1994. Top band salary had increased by about 184% in real terms as of January 1996. Eleven senior expatriate Guyanese have been recruited to key and critical positions under the PAP's Recruitment Program and GOG intends to use the incentives under the Program to fill about 90 key and critical positions at the middle level before the PAP's close at the end of 1997. 42. In December 1995 GOG announced guidelines for Public Service Wages Policy which aims to bring public service pay levels to 10% of the market lower quartile, in the medium-term, and to within the market median quartile in the long-term. The policy would also introduce a performance evaluation system, regular salary reviews and an improved job evaluation procedures. GOG is taking a variety of additional initiatives to improve the staffing of the public service. These include: (i) giving salary supplements of 15% to 20% to about 1,850 key and critical positions; (ii) converting certain agencies into semi-autonomous agencies so that better remuneration could be given to their employees outside the confines of -7- -11- the public service pay structure; and (iii) developing a new staff appraisal system and linking annual appraisal to monetary and non-monetary rewards. 43. These are important first steps in streamlining the salary structure and improving the staffing of the public services. However, considering the poor initial conditions and the fiscal constraints that limited the amount of salary increases granted, much remains to be done to enable the GOG to attract and retain high quality skilled employees on a sustainable basis. In the period 1993-1996 about 400 employees at the middle levels (14.5% of 1993 strength) left. This is bound to have adversely affected GOG's institutional capacity. The number of vacancies at the middle and higher levels continues to be high, about 45%. Thus, in spite of the assistance provided by the PAP in streamlining the salary structure and improving in salaries in absolute terms, the public sector is still not able to attract (high vacancy rates) or retain (continued attrition, especially at the middle levels). Real salaries in the public sector have fallen so low that only a three to fourfold increase would have an impact on recruitment and retention. 44. Since the lack of adequate human resources will continue to keep public sector performance at a low level, a concrete strategy to reach the goals set by the Public Services Wage Policy announced in December 1995 needs to be developed. GOG has to find additional resources to raise pubic service salaries further. Several options were recommended during the PAP Mid-term Review in August 1996, including moving forward with the PAP's modernization of the revenue administration component to enable it to collect high revenues, a part of which could be used to improve public service salaries. The National Development Strategy is likely to provide other options, per para. 25. J. Key Lessons Learned/Reconfirmed 45. The most pressing sustainability issue in Guyana, as in many countries, is attracting and retaining qualified counterparts given the very low public salaries ((a) to (c) below). Low salaries exacerbate a common TA problem of staff resentment arising from disparities between public sector salaries and consultant fees (G) and (k)). Also, Guyana has one of the weakest institutional structures in the western hemisphere. Different approaches to TA, therefore, may need to be taken ((e) to (m) below). What matters most for TA to be successful is the combination of institutional environment factors (a) - (c) and qualities of TA personnel (d). Salaries/Counterparts (a) The greatest impediment to long-term institutional strengthening in Guyana is the inability to attract and retain qualified staff due to inadequate civil service salaries. This was the single most serious obstacle to the successful outcome of TAC financed activities. While non-monetary incentives are important, including some mentioned below, they are not sufficient to retain public servants if public sector pay scales fall seriously short of private sector comparators. 1 -12- (b) If fiscal constraints imposed by the IMF impede increasing salaries and thus jeopardize sustainability of Bank operations, this should be identified at the design stage and taken up jointly by IDA and the borrower with the IMF. (c) The TAC beneficiary agencies that were most successful in retaining counterparts were semi-autonomous government entities not subject to the same severely inadequate pay as the central government (BOG). Management of Technical Assistance (d) Consultants tend to be most effective when they have had actual hands-on work experience (as opposed to solely advisory or academic experience) in the field in which they are consulting (e.g. Banking Supervision Adviser). They also need talent as mentors, trainers and problem-solvers in difficult institutional environments. Better use might be made of Senior Executive Service Corps type volunteers. (e) Several counterparts should be assigned to each consultant when turn-over is high to increase the prospects of at least one staying. This might be accomplished in environments where it may be difficult to identify even one counterpart, by reviewing the organizational structure, and combining related work units to create a larger critical mass and thus bigger pool from which counterparts may be drawn. (f) Recognizing that international consultants are likely to be called upon to assume line functions when the public service is severely depleted, the consultant's TOR should ensure that their operational workload is diminished over time as counterparts assume increasing responsibility. (g) Counterparts should know from the outset that they are not merely assistants or helpers to the international consultants, but rather that they have prospects (if performance warrants) to assume the consultant's line responsibilities upon completion of the consultant's assignment. (h) The consultants should return for brief periods internittently following completion of their assignment to see their work through and adjust, support, and revise their recommendations. (i) When there is an absolute shortage of personnel to serve as counterparts to internationals, local consultants or even UNVs may be engaged to carry out line functions, work with international consultants, and transfer knowledge as counterparts become available. (j) UNVs tend to incur less resentment than local or international consultants over issues of pay differences when salaries are extremely low. -13- (k) National and regional consultants may also be more acceptable than internationals when resentment runs high over pay differences. International consultants should be hired only as a last resort and for as short periods as possible when resentments are strong. (1) High level public servants should not be appointed as counterparts if they do not have time to work with the consultants. (m) The "top down" approach of some Bank financed consultancies may not always be the most appropriate. In some cases interactive sessions, led by skilled facilitators with staff at all levels, may be a more effective way of revealing problems and possible solutions that may not be apparent to outside consultants (e.g. computerization BOG). Project Implementation/Administration (n) Implementation Timetables should take into account that even the most dedicated and skilled consultants and counterparts may not enjoy the confidence of new administrations and may be replaced resulting in implementation delays and setbacks. (o) A strong Project Implementation Unit (PIU) is needed for continuity and follow-up even when UTNDP provides implementation assistance. (p) OPS executed UNDP projects do not provide value for money in terms of implementation assistance. Borrowers should seek out UNDP cost sharing arrangements (CSAs) for which less overhead is charged and the role and responsibilities of UNDP is clear. Lessons for the Bank (q) Monitorable, time bound, qualitative and quantitative performance indicators and decision points are useful from the outset to facilitate mid-course corrections and project evaluation. (r) SACs and supporting TACs should be supervised simultaneously, where possible, with a single aide memoire recording the findings and recommendations. Similarly, ICRs for each should cross reference activities supported by the other. (s) In countries with weak project evaluation capacity, evaluation training should be built into TACs, TALs, and PSMLS, including assistance in preparation of the Government's portion of ICRs, to ensure that the lessons of experience -- successes and weaknesses -- are understood and taken into account in future project design. --T -14- PART II: STATISTICAL TABLES Table 1: Summary of Assessments A. Achievement of Objectives Substantial Partial Negligible Not applicable Macro Policies 2 2 2 Sector Policies 2 2 2 Financial Objectives 2 2 E3 Institutional Development L 1=1 Physical Objectives 2 2 2 Poverty Reduction 2 2 2 Gender Issues i 2 2 l Other Social Objectives 2 2 2 Environmental Objectives 2 2 a Public Sector Management n 2 C Private Sector Development a 2 2 E3 Other (specify) 2 2 2 2 (Continued) B. Project Sustainability Likely Unlikely Uncertain (/) (/) (/) 2 2 -15- Highly C. Bank Performance satisfactory Satisfactorv Deficient (1) (/) (/) Identification LI Preparation Assistance E izzi Appraisal E3 Supervision n III Highly D. Borrower Performance satisfactory Satisfactorv Deficient Preparation II] Implementation a [j] Covenant Compliance E E0 Operation (if applicable) E3 Highly Moderately Highly E. Assessment of Outcome satisfactory Satisfactory Unsatisfactory unsatisfactory L (L) (E () T ~ Table 2: Related Bank Loans/Credits Guyana - T.A. Credit No. 2169 Loan/Credit Title Year of Proceeding Operations Purpose Approval Status 2168-GUA Second Structual To create a viable and stable economic conditions conducive to restoring a 1990 Closed Adjustment higher and sustained rate of economic growth; improvement of the incentive 12/31/93 framework, public sec finances, and formulation of realistic pub sec inv prog. Following Operations 2358-GUA SIMAP/Health Assist the gov. in cushioning the social costs of the adj. process through the 1992 Closing Date Nutrition & Water establishment of an effective mechanism aimed at addressing basic needs 6/30/97 of the population: in a decentralized manner, through groups, like NGOs. 2480-GUA Public Administration Facilitate adequate staffing of the public service, and eliminate staffing 1993 Closing Date redundancies; and create conditions for accountability in financial and 12/31/97 personnel mgmt; and preparation of long term strategy and public sec reform. 2669-GUA Financial Sector To implement sustainable institution building mechanisms supporting the 1994 Closing Date Business Environment financial and private sector, and to facilitate the effective implementation of 6/30/98 policy measures supported by private sector development adjustment credit. 2746-GUA Private Sector Dev Improve the environment for the private sector and thereby 1995 Closing Date Adjustment stimulate economic growth. 12/31/97 -17- Table 3: Project Timetable Guyana - T.A. Credit No. 2169 Steps in Project Cycle Date Planned Date Actual/ latest est Identification (Exec Project Summary) n.a. February 23, 1989 Preparation n.a. March 21, 1989 Appraisal Mission March 1989 May 8,1989 Negotiation April 1990 May 7,1990 Board Presentation n.a. June 28, 1990 Signing n.a. July 13, 1990 Effectiveness August 1990 August 29, 1990 Project Completion December 1996 December 30, 1996 Loan Closing June 1996 June 30, 1996 n.a.: not available -1 Table 4: Loan Disbursements: Cumulative Estimated and Actual (US$ million) GUYANA - T.A. Credit No. 2169 FY 91 92 93 94 95 96 97 Appraisal Estimate 1.2 2.5 2.8 2.9 3.0 3.0 3.0 (Cumulative) Actual (Yearly) 0.9 0.0 1.4 0.0 0.4 0.1 0.0 Actual (Cumulative) 0.9 0.9 2.3 2.3 2.7 2.8 2.9 Actual as % of Est. 71% 34% 80% 78% 89% 93% 93% Table 5: Key Indicators for Project Implementation I. Key Implementation Indicators in SAR/ President's Report Estimated Actual N/A II. Modified Indicators (if applicable) N/A III. Other Indicators (if applicable) See the SAC/TAC Matrix (Appendix C) and the Outcome sections of the Description of Subprojects (Appendix B) Page I of 7 -20- Table 61 Key Indicators for Project Operation Key Implementation indicators in the SAR/President's Estimated Actual Remarks Report 1. Macro-Economic Framework: a) Consultancy Services in the Government's structural 24 m/m 2 Consultants adjustment programme appointed b) Consultancy Services to the Bank of Guyana 6 m/m c) Computer equipment to the Bureau of Statistics 2. Incentive Framework: a) Consultancy Services to the Monitoring & 6 m/m 2 Consultants Coordinating Agency appointed 3. Public Sector Reforn: a) Technical Assistance to the Public Service CONSAD management at the office of the President (PRKS) Cargentine Firm Personnel Rec. Keep. Sys. Local Finn 4. Public Sector Investment Programme a) Consultancy services, equipment and supplies 36 rn/m 3 Consultants including a vehicle and training to the State appointed Planning Secretariat b) Consultancy Services, equipment and supplies and 24 rn/m 3 Consultants issued training to the Ministry of Finance, Bank of Guyana and the Ministry of Trade and Tourism 5. Social Sector Programme: a) Consultancy Services equipment, supplies and 12 m/m 2 Consultants training to the State Planning Secretariat and the appointed Ministry of Education, Culture and Social Development to improve targeting to the poor of SIMAP programmes 6. Public Enterprise Management & Monitoring Systems 'Prepared by the UNDP Office, Georgetown, Guyana. lp Page 2 of 7 -21- Project Estimated Actual Remarks Consultants: GUY/89/003: Macro-Economic & Financial Management a) Procurement Adviser, Bank of Guyana (Crown Funded by WB Agents) & MONITEC b) Banking Supervisor, Bank of Guyana 12 m/m 36 m/m Funded by WB 12/04/91 for 12 months c) Adviser, Macro-Economic Trends, Ministry of 24 m/m 24 m/m Funded by WB Finance 14/03/92- for 12 months 13/03/94 d) Public Enterprise Adviser Funded in part by WB e) Public Enterprise Adviser 12 m/m Transferred to GUY/89/006 GUY/89/006: Public Enterprise Monitoring a) Public Enterprise Adviser 12 m/m 9 m/m Resigned Post Nov. '91- 21/08/92 b) Public Enterprise Adviser 24 m/m 45 m/m Extended with funds 18/12/90- from the previous 17/12/93 Public Enterprise Adviser GUY/89/007: Macro-Economic Management System a) Adviser to Minister of Finance 24 m/m 24 m/m 28/06/91- 22/06/93 b) Adviser, Extemal Finance inflows 24 m/m 12 m/m Was not renewed by 14/08/91- GOG 12/08/92 c) Adviser, Consumption Tax 6 m/m 12 m/m Extended a request GOG Adviser, Consumption Tax (2) 0.5 m/m 0.5 m/m Page 3 of 7 -22- Project Estimated Actual Remarks d) Document Management UNV Specialist- 24 m/m 24 m/m Includes $30,020 & Bank of Guyana 10/03/95- $7,020 1996 & 1997 09/03/97 Projected Expenditure GUY/89/008: PSIP a) PSIP Adviser 24 m/m 3 m/m Adviser resigned State Planning 12/04/91 Secretariat 17 m/m Feb. '92 b) Adviser, Economic Cost Analysis 12 m/m 12 m/m 14/08/91- 12/08/92 c) BEEP (IGI) Adviser hired & resigned 5 months into 2nd year GUY/89/009: Construction Social Indicators a) Social Indicator Systems 6 m/m 6 m/m Consultant (State Planning) 07/02/92- 06/08/92 b) UNV PC Specialist 24 m/m 12 m/m 16/10/93- 15/10/94 c) LSMS GUY/90/00L a) Bureau of Statistics Equipment only GUY/93/001: Public Service Management T7 Page 4 of 7 -23- Project Estimated Actual Remarks Consultants: a) Systems Analyst Programmer 6 m/M 6 m/m 6 rn/m June-Nov. b) CONSAD c) Strategic Info. Systems d) Data Encoders Equipments GUY/89/006: - PEMGT a) PCs (2 in SPS and 1 in PCS) 2 3 3 All arrived b) Generator 3 1 All arrived c) Vehicle GUY/89/007: - Macro-Info & Management System a) PCs (3 in MCA & 2 in MOF) 5 5 All arrived b) Fax Machines (1 in MCA & 1 in MOF) c) Photocopiers (1 in MCA & 1 in MOF) d) Vehicles (1 in MCA & 2 in MOF) 3 3 e) Typewriters (3 in MCA & 2 in MOF) 5 l.)Y/89/008: - PSIP a) PCs 2 2 All arrived b) Photocopier 1 1 All arrived c) Vehicles 1 1 All arrived GUY/89/009L : - Construction Social Data a) PC 1 1 Arrived b) Video Camera I I c) TV Monitor & VCR Colour 1 1 d) Slide Projector- A Carousel loading I e) Tripod Projector 1 1 f) PA System 1 1 g) 1 AST Premium Notebook Computer 1 GUY/90/00f1: -BOS a) PCs 17 17 All arrived b) Laptop Computers 3 2 1 Stolen -24- Page 5 of 7 Project Estimated Actual Remark c) Vehicles 5 5 d) Photocopier e) Stencil Duplicator f) Electronic Scanner g) Generator GUY/93/0011: - PSM Computer Equipment Training: a) Training Programme in Comm. Development - Organised by SIMAP Agency b) Training Course in Applied Econometrics, Macro-Economic Theory & Macro-Economic Modelling of Resource Availabilities GUY/89/008 - June 2-30, 1993 GUY/89/003: a) Rose Marie Alaso provided on the job training to 8 assigned consultants in all aspects of Banking SPN GULY/89/006 a) Ms. Evelyn Wayne b) Mr. Keith N. Gittens "Analysis & Negotiation of BOO and BOT Projects: Alternative Strategies for Infrastructure Development". June 17-18, 1991 Washington DC. c) Mr. Godfrey Frank "Commercialization & Privatization of Public Enterprises". October 7-18, 1991 Surrey, UK. GUY/89/008: a) Mr. Samsundar Ketwaru "Regional Development Planning". April 1 - May 2, 1992 Nagoya, Japan. Page 6 of 7 -25- Project Estimated Actual Remarks b) Ms. Donna Abrams "Project Management/ Project Analysis: Arthur D. Little Management Education Institute May 26- August 7, 1992 c) Mr. Lennox Adams "Restructuring Industrial Enterprises". March 2-13, 1992 Washington, DC USA GUY/891009. -Social Data a) Dr. Lloyd Roopchand 24th Session of ECLA Santiago, Chile April 8-15, 1992 b) The bank agreed to finance 3 W/shops GUY/89/009- The LSMS Consultant conducted Workshops for Living Std. Measurement Survey (LSMS) Enumerators & S/visors (55) Anthrometorists Students from the G/town School of Nursing (65) Data Entry Managers (3) & a Policy Analysis (1) GUY/90/001: -BOS a) Mr. L. Benjamin Mr. Bristol Mr. Manifold 'Workshop on Labour Force Statistics" St. Lucia, Sept. 12-18, 1993 b) "Conference on Population and Development for Latin America and the Caribbean", Mexico, April-May 1993. c) "Seminar on Statistics of Tourism & National Incomes", OECS, Antigua, 1993 d) Paul Austin attended IMF Course on Balance of Payments Statistics, Washington, 1993 I Page 7 of 7 -26- Project Estimated Actual Remarks e) Part-Time in-house training of 25 Junior Staff in Mathematics, Statistics & Economics, August 9, 1993- January 1994 f) The Chief Statistician attended training course at the Bureau of Census, Washington in 1991. g) The Senior Statistician attended study tour in National Accounts at Central Statistical Office. Barbados in November, 1991. h) Mrs. P. Roberts attended study tour in foreign trade at Central Statistical Office, Trinidad & Tobago, in 1992. i) Mr. L. Benjamin attended study tour at Jamaica Statistical Institute in November, 1992. j) Mr. P. Austin attended study tour on Balance of Payments at Central Bank of Trinidad & Tobago in 1992. k) Mr. L. Benjamin attended a workshop on microcomputers at Bureau of Census, Washington in 1992. 1) Mr. G. Persaud attended a workshop on computer technology in Barbados in 1993. -27- Table 7: Studies Included in Project Purpose as Defined Study at Appraisal/Redefined Status Impact of Study l.Consumption Tax Address deficiencies in Completed Substantial the application and administration of consumption taxes with a view to simplifying the tax, reducing rates and broadening the base by improving compliance. Table 8A: Project Costs Guyana - T.A. Credit No. 2169 Appraisal estimate (US$M) Actual/Latest estimate (US$M) Consultant Services Local Foreign Total Local Foreign Total Costs Costs Costs Costs Implementation Unit 0.00 0.50 0.50 n.a. 0.2 a/ 0.2 Incentive Framework 0.01 0.09 0.10 n.a. 0.1 0.1 Public Sector Reform 0.02 0.60 0.62 n.a. 0.6 0.6 Public Sector Investment 0.05 0.75 0.80 n.a. 0.5 0.5 Social Sector Programs 0.01 0.18 0.19 n.a. 0.1 0.1 Macro-Economic Managemnt 0.06 0.41 0.46 n.a. 0.9 0.9 Sub-total 0.15 2.53 2.67 n.a. 2.3 2.3 Training and Equipment 0.00 0.48 0.48 n.a. 0.5 0.5 Total 0.15 3.00 3.15 n.a. 2.8 2.8 n.a.: Not available. Local costs actuals as services provided in kind from Government. a/ Overhead paid to UNDP Table 8B: Project Financing Guyana - T.A. Credit No. 2169 Appraisal estimate (US$M) Actual/Latest estimate (US$M) Local Foreign Total Local Foreign Total Costs Costs Costs Costs IDA 3.0 3.0 2.8 2.8 Government 0.1 a/ 0.1 a/ n.a. a/ n.a. a/ Total Project Costs 0.1 3.0 3.1 n.a. 2.8 2.8 a/ government services in kind n.a.: not available K.Wai September 24, 1996 -30- Table 9: Economic Costs and Benefits For all projects, this table identifies the major costs and/or benefits that enter into the calculation of a re-estimated net present value (or economic rate of return) or, where the net present value (or economic rate of return) was not estimated, of cost-effectiveness in achieving project objectives. N/A Table 10: STATUS OF LEGAL COVENANTS GUYANA TECHNICAL ASSISTANCE CREDIT (CR 2169-GUA) Comnments Agreement Section Type of Status Original Revised Description of Covenant Covenant Date Date Credit 2169- 3.01 13 C The Borrower shall carry out all studies included in the Project under terms of GUA reference satisfactory to the Association, which, unless the borrower and the Association shall otherwise agree, shall include the preparation of specific l____________ ___________ ________ __________ programs or plans of action to meet the objectives of the project. meet_the_objectives_of_the_project 3.01 13 C Promptly after the completion on each such study, the Borrower shall furnish l___________ ________ _________ to the Association a copy of its findings and recommendations. 3.01 13 C The Borrower shall afford the Association a reasonable opportunity to comment on such findings and recommendations and on any plans or programs l_______ _______ ________ included therein. 3.01 13 C Taking into account the Association's comments thereon, the Borrower shall prepare programs or plans of action, satisfactory to the Association, to carry out the recommendations of each of such studies. 3.01 5 CP The Borrower shall, through the Executing Entities provide, promptly as Success of some TA was needed, adequate facilities and qualified staff in adequate numbers as compromised due to lack of counterparts for the consultants to be employed under the Project. counterparts. 3.02 9 CP The Borrower shall coordinate and monitor the progress of Project None received in CY95/CY96 implementation and submit to the Bank (a) quarterly reports on such progress Borrower ICR expected in beginning three months after the effective date; and (b) annual Project September, 1996. evaluation reports not later than March 30 of each year. 3.03 5 C The procurement of goods and consultants' services required for the project and to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 3 to the Credit Agreement. 3.04 5 C In the carrying out of the training programs included under the Project, the Complied, but many trainees left Borrower shall: (a) fumish to IDA for approval, the content of each of such due to poor salaries. programs as well as the schedule for its implementation; (b) select the beneficiaries of such training programs; (c) not later than Sept. 30 of each year, exchange views with IDA on the training programs to be carried out for the following calendar year. 3.05 9 C The Borrower and IDA agree to undertake, at the request of either party, at a Borrower has appointed staff and date not later than the first anniversary of the Effective Date, and has sought UINDP's assistance to approximately every nine months thereafter, a review of the performance of the undertake a final project review in Borrower and each Executing Entity in respect of the execution of the project. connection with the ICR 4.01 1 CD The Borrower shall fumish to IDA not later than six months after the end of Special arrangements acceptable to each fiscal year a certified copy of the audit report by said auditors. the Bank have been reached with UNDP to provide a letter annually confirming that audits of the l ___________ ._________ ______________________________________________________________________ project funds have been carried out. Type of Covenant Sau 1: Accounting; -C :Covenant Complied with. 2: Financial Performance/revenue generation; CD :Complied with after delay 3: Flow Utilization of Project funds; NC :Not complied with 4: Counterpart funding; SOON :Compliance expected in reasonably short time. 5: Management aspects of the project or executing agency; CP :Complied with partially. 6: Enviromental covenants; NYD :Not yet due. 7: Involutary resettlement; 8: Indigenous people; Covenenat Effectivness 9: Monitoring, review, and reporting; 10: Project Implementation not covered by categories 1-9; 1. Is the Selection of covenants appropriate? Have any proved to be ineffective or superfluous? I1: Sectoral or cross-sectoral budgetary or other resource allocation; Selection appropriate. No covenenat has proved to be ineffective or superfluous. 12: Sectoral or cross-sectoral policy/regulatory/institutional action; 2. Are there general problems or issues relating to compliance with covenants under the project? 13: Other No Date: August 20,1996 -33- Table 11: Compliance with Operational Manual Statements Statement Number and Title I Describe and comment on lack of compliance No known lack of compliance 1~~~~~~~~~ Table 12: Bank Resources: Staff Inputs (SWS, Actual) GUYANA T.A. Credit No. 2169 FY Stage 89 90 91 92 93 95 96 97 Total Preparation 32.7 32.7 Appraisal 15.5 15.5 Negotiations 9.2 9.2 Supervision 12.6 12.0 11.2 2.9 3.3 7.8 49.8 Project Completion (PCR/ICR) 0.1 2.9 3.0 TOTALS 32.71 24.7 12.6 12.0 11.2 2.9 3.4 10.7 106.2 n.a.: final figures not available 1 These figures do not reflect the full supervision of the TAC, much of which was carried out in connection witht the SAC. Table 13: Bank Resources: Missions Guyana - T.A. Credit No. 2169 Performance Ratings Stage of Project Month/ No. of Days in Specialized staff Impl. Dev. Cycle Year Persons Field skills represented * Status Objectives Types of Problems ** Identification Preparation Appraisal May 1989 3 17 PF Post Appraisal Sept. 1989 n.a. n.a. PF Supervision Oct. 1990 2 8 PF 1 1 Jan./Feb. 1991 1 5 PF 1 1 B, D, E, J III June 1991 1 6 PF 1 1 B, E, J IV Oct. 1991 1 5 PF 1 2 B, E, J V May 1992 1 5 PF 1 1 B,J J VI Nov.1992 1 5 PF 1 1 B, J VIl Jan.1994 1 7 PF S S A. B, J Vill Jan. 1996 2 3 PF S S A. B, J Completion Aug. 1996 3 5 PF S S A. B, J * PF: Public Finance Spec ** Types of Problems: a/ compliance with legal covenants e/ training progress i/ financial performance: not applicable b/ project management performance f/ tech. asst. progress j/ monitoring and evaluation c/ availability of funds g/ studies progress d/ procurement progress h/ environmental aspects: not applicable October 23, 1996 APPENDIX A -36- Page 1 of 6 AUGUST 7, 1996 AIDE MEMOIR GUYANA: IDA TECHNICAL ASSISTANCE CREDIT (TAC) (2169-GU) Introduction 1. A World Bank Mission consisting of Mr. Jit Gill, Task Manager, Mrs. Rita Parrilli, Senior Pubic Administration Specialist, and Kyaw Wai, Budget and Administration Specialist, visited Georgetown, Guyana from August I to August 8, 1996 for the final supervision of the TAC and discussion of the Implementation Completion Report (ICR) to be prepared by the Ministry of Finance and the Bank. 2. The mission had fruitful discussions with the staff of the TAC beneficiary agencies as well as donors involved in TAC implementation. The mission met with Mr. Tarachand Balgobin, TAC Project Coordinator and Head of the Project Cycle Management Ministry of Finance (MOF); Mr. Robin Sivanand, Permanent Secretary Ministry of Public Service Management, Mr. Colby Frimpong, Chief of Party, Building Equity and Economic Participation (BEEP) Project MOF; Miss Denise deSouza, Division Head, Enterprise Monitoring and Private Sector Development MOF; Miss Deborah George, Macro- Economic Planning (MOF); Mr. Donald Declou, Head Multilateral Funding (MOF); Miss Carmencita Santos, Bank Supervision Advisor and Miss Wendy Hazel, Director Information Services Bank of Guyana; Mr. Harrinarine Nowbat, Director and Mr. Persaud, SIMAP; Mr. Lennox Benjamnin, Chief Statistician, Bureau of Statistics; Mr. Andrea Tamagnini, Acting Resident Representative, Mr. Thomas Gittens, Senior National Program Officer, Miss Patsy Ross, Operations Assistant, and Mr. Mohammed Kanneh, Program Officer, UNDP; Mr. Charles Greenwood, IDB Representative; Mr. David John Johnson, British High Commissioner; Mr. Ian Stuart, First Secretary, British High Commission; Mr. Wendell Lawrence, Deputy Director, CDB; Mr. Edward Cummnings, Project Officer, CDB; Mr. David Ross, First Secretary (Development) Canadian High Commission; and Mr. Rayman Mohamed, Carter Center. 3. The Mission wishes to thank the Government of Guyana, the TAC Project Coordination Unit, and the UNDP for their kind cooperation. 4. This Aide Memoir has been prepared in the field. It records the views of the Ministry of Finance, the TAC beneficiary agencies, and IDA on the project design and implementation. It will be attached in its final form to the ICR. Agreements reached during the mission and reflected in this aide memoir are subject to confirmation by IDA management. 5. The Proiect. The US$3.0 million (equivalent in SDRs) TAC was approved June 28, 1990 and closed June 30, 1996. Due to exchange rate changes in favor of GOG, the totAl current value of the credit is about US$3,360,000. Approximately US$2,816,000 (equivalent) has been disbursed to date. The undisbursed balance of approximately 1-~ APPENDIX A -37- Page 2 of 6 US$545,000 will be canceled on October 31, 1996 if not drawn upon to pay final bills for services rendered or equipment purchased prior to June 30, 1996. 6. Proiect Objectives. The objectives of the project were to assist GOG in implementing its medium-term adjustment program, improving its macroeconomic management capacity and strengthening its capacity to analyze the social costs of adjustment. 7. Project Activities and Post-Project FOllow-UD. The TAC financed consultant services (including UNVs), training and equipment: (a) Improving Macroeconomic Management - assistance in coordinating and implementing the adjustment program, including capacity to monitor and analyze macroeconomic data; assistance to the Statistical Bureau to increase capacity to collect, process, and report macroeconomic data (services of Alwyn Taylor, Desiree Field-Ridley, Samuel Bekele, Rose Marie Olaso, Kathleen Gordon, Crown Agents, computer equipment for the SB); USAID's Building Equity and Economic Participation Project (BEEP) will build on TAC assistance in strengthening the capacity of MOF's Macroeconomic Management Division to conduct macroeconomic analysis and planning; The IMF is providing continuing support to the Banking Supervision Department of the Bank of Guyana; The BEEP and ODA will provide additional assistance to BS in the construction of national accounts and other surveys. (b) Assistance in formulating and monitoring the PSIP and assuring its consistency in terms of size and composition in relation to the macroeconomic framework and objectives and available funding (services of Colby Frimpong, Zenon Garcia); The BEEP project and IDF grant will provide continued strengthening of the PSIP. (c) Public Sector Reform - Strengthening the PCS and SPS to monitor financial and operational perforrnance of public enterprises and assistance to the Public Service Management Ministry in development of the PRKS (Basil Hinds, V. Paramanathan, CONSAD (Argentina); The PRKS has been implemented with assistance from ODA and IDA's Public Administration Project (PAP). l* APPENDIX A -38- Page 3 of 6 (d) Improving the Incentive Framework through a study to identify deficiencies in the application and administration of the consumption tax (Frederick Crittle/Mark Gersovitz) This work laid the foundation for subsequent measures (banking legislation and regulation) supported under IDA's Private Sector Development Adjustment Credit (PSDAC). (e) Social Sector Reform - improving targeting of the poor in the SIIMAP (Katherine Anne Webb, Judy Baker) Basic operating/appraisal manual developed by Webb in 1991 was revised and updated under the IDB SIMAP project; LSMS to be updated in early- 1997 with IDA assistance; IDB's proposed second SIMAP project is likely to use data from the updated LSMS as the basis for selecting projects. (f) Preparation of a long term development strategy (Carter Center) The World Bank View of the Proiect Implementation 8. - The project partly achieved the major objectives as set forth in the IDA Credit Agreement. It is doubtful that the GOG could have fulfilled the SAC related measures without the assistance provided under the TAC. The short-term SAC related assistance (e.g., consumption tax work) was particularly effective. While some longer-term institutional development assistance was sustained (e.g. Banking supervision), the sustainability of other TAC related assistance (e.g. to Public Enterprise monitoring and PSIP) suffered due to the departure from the public service of many counterparts and trained staff. 9. The review of implementation of TAC components with the MOF, TAC beneficiary agencies and donors, reveals that the single most pervasive problem limiting the productive use of TAC funds was inadequate public sector salaries to retain qualified staff. Related to this was the use of consultants in line operating positions to compensate for the lack of qualified technical staff either without having counterparts assigned or without having clear instructions to turn over responsibilities to counterparts. 10. Proiect Administration. It was recognized during the project design that GOG needed technical support as well as assistance with the timely contracting and procurement to support the adjustment program. Therefore, with the exception of the Carter Center Contract ($200,000), the TAC was implemented through a series of 7 UNDP projects. The UN Office for Project Services (OPS) served as executing agency for 5 of those 7 totaling $ 2,450,000 including 11% overhead. UN executing agencies normnally provide technical backstopping and substantive supervision. Essential assistance was rendered in identification of consultants, contract administration, and procurement. However, APPENDIX A -39- Page 4 of 4 substantive assistance was not forthcoming, nor, according to OPS, was it understood to be their responsibility. In addition, OPS declined to provide final support for the Government's ICR preparation in lieu of the usual final tripartite review and project evaluation carried out under UNDP projects. The UNDP Field Office has, however, offered such support. 11. Some aspects of TAC implementation might have benefited from substantive UNDP/OPS involvement and follow-up. IDA is of the view that, while the logistical and administrative assistance of the UNDP Field Office was vital to the project implementation, the GOG did not get value for money from this arrangement. It is recommended that future project implementation assistance from UNDP be carried out under "government executed" UNDP cost sharing arrangements for which the Bank and UNDP have established clear guidelines and for which the overhead is significantly less. This mode of collaboration has worked successfully in other countries. The Ministry of Finance's View as Project Coordinator 12. The Ministry of Finance expressed its satisfaction with the project's overall implementation. It agrees that the TAC provided readily available funding for SAC related measures, and other assistance related to the adjustment program. The MOF is aware of obstacles to sustainability mentioned above. The Minister of Finance endorsed the proposal discussed at the Country Project Performance Review (CPPR), which was held concurrently with the TAC ICR mission, that the assistance of EDI be sought in developing training on the Management of Technical Assistance to enhance benefits from donor financed TA. The salary issue will not be resolved quickly, especially in light of fiscal constraints, but it is being addressed under the Public Administration Project supported by IDA. Proiect ImDlementine Aeencies' View 13. The mission was able to meet with all TAC beneficiary agencies or their successor entities. In general, the beneficiary agencies expressed their satisfaction with assistance provided under the TAC. In many cases, transfer of technology and know-how from the consultants helped to strengthen local capacity during critical periods in the adjustment. The sustainability in some cases is, however, questionable as noted above. Most agencies expressed their satisfaction with the consultants' work. The satisfaction stemmed from: (i) the quality of the services rendered; (ii) the transfer of knowledge, albeit temporary in some cases; and (iii) the basis it formed for future activities. The section below on lessons learned incorporated many to the insights of the MOF and TAC beneficiary agencies. 14. Some Lessons Learned: l* APPENDIX A -40- Page 5 of 6 (a) Public sector salaries sufficient to attract and retain adequate staff is the essential perquisite for sustainability of TA; (b) Non-monetary incentives can also contribute to an improved work environment and thus sustainability: (i) delegation of authority; (ii) the prospect of gradual assumption of increasing levels of responsibility from consultants serving in line positions; (iii) prospects for promotion for good performance, including assuming the line function filled temporarily by the consultant; (iv) training on a regular basis to maintain skills; and (v) encouraging a work environment where information sharing and backstopping for colleagues is the norm (c) Organizational structures of beneficiary agencies should be reviewed at the design stage with a view to consolidating units, if needed, to create a critical mass of staff and thus increase prospects for identifying more than one counterpart (to increase prospects of at least some staying); (d) Additional UNVs and their bilateral equivalents sh,ould be used to continue or complement work of the consultants and enhance sustainability. PreDaration of the ImDlementation Comoletion Report (ICR) 15. Additional copies of Bank Guidelines for the preparation of ICRs, disbursement information, and sample ICRs from other countries were left with staff responsible for ICR. The retrospective as well as prospective approach to the ICR were reviewed. The mission and the MOF agreed to take the following steps in preparing the ICR: (a) The MOF has appointed two staff to complete the borrower's portion of the ICR during the remainder of the month of August and send it to the Bank in early September; (b) The MOF will seek UNDP's assistance for background information and other support, as needed; (c) The Bank will prepare a draft ICR and send it to MOF by mid-September for comment; APPENDIX A -41- Page 6 of 6 (d) The final version of the ICR will be ready by end-September 1996 16. Last Steps (a) GOG will submit by October 31, 1996 any final withdrawal requests for expenditures incurred prior to June 30; (b) UNDP will reconcile its final expenditures against advances of about US$2,655,185 and return to the credit account in Washington any undisbursed balance or request a final TAC disbursement as the case may be; (c) The project account closes on October 31, 1996. -M-. 7arachand Balgobin / Mrs. RitaParlli Division Head, Project Cycle Management Pubic Admirnistration Specialist Ministry of Finance World Bank ,i -42- APPENDIX B Page 1 of 9 PROJECT REVIEW FROM BORROWER'S PERSPECTIVE A. Introduction/Background 1. This Implementation Completion Report (ICR) is an evaluation of the Guyana Technical Assistance Credit (TAC). The SDR 2.3 million credit, which was approved by IDA on June 28, 1990, provided technical assistance to the Government to undertake studies in support of meeting SAC conditionalities and also lay the basis for capacity building and institutional strengthening of selected agencies and ministries within the public sector. 2. In order to reverse Guyana's economic decline and create the basis for sustained economic growth and a viable external position, the Government of Guyana designed a medium-term Economic Recovery Program (ERP) in June, 1988. This involved a fundamental change of economic policy and shift towards a market-oriented economy. The key elements of the ERP were the unification of the exchange rate system, liberalization of the external trade, increase in the primary current account surplus of the public sector, tightening of credit policy, pursuit of a flexible interest rate policy, and major structural reforms, including the divestment of a number of public enterprises. Also important in the viewpoint of restoring growth was the improvement in power supply. 3. Decades of long neglect of the economy and poor public sector wages, however, had resulted in emigration of a large number of technical and professional staff to North America and the Caribbean in search of better employment opportunities. Technical staff in the public service at the time of the ERP, therefore, lacked experience and relevant training to undertake analytical work; where technical skills were available, staff was stretched very thinly. In addition, infonnation and capacity for policy formulation and analysis were almost non-existent, there was little capacity for development and implementation of the public sector investment program, and, by end 1990, the Statistics Bureau had stopped the publication of statistical reports and computer equipment and software were largely not available for key ministries and agencies. B. Project Objectives 4. To alleviate this situation and also assist in implementing the SAC measures, the Government and the donor community developed a comprehensive set of technical assistance packages to improve public sector management. The TAC, which was appraised in May 1989 and approved in June 1990, set out to (i) improve the incentive framework by carrying out a study to identify the deficiencies in the application and administration of consumption taxes; (ii) strengthening the capacities of PCS and SPS; (iii) improve the public sector investment framework; (iv) improve the analytical capacity -43- APPENDIX B Page 2 of 9 of macroeconomic management; and (v) the capacity of analyzing the distributional effects of the adjustment program and developing procedures for assessing the efficiency of social sector projects. These activities were intended to lay the basis for transition to local management at the end of the project. C. Implementation 5. The following consultants were recruited under the TAC to assist in studies critical to tranche disbursement under the SAC, and also to provide institutional strengthening to several areas of the public service. PROJECT SUB-COMPONENT ASSIGNMENT DURATION Improving the Incentives Framework 2 Consultants 6 months Consumption Tax Study 3 months Public Sector Reform (i) Public Enterprise Monitoring 3 Consultants 45 months (ii) Personnel Management Record- 9 months Keeping System (PRKS) 12 months Improving Public Sector Investment PSIP 2 Consultants 17 months 12 months External Aid Coordination (i) External Financial In-flows 1 Consultant 12 months (ii) Procurement Assistance 2 Firms Social Sector Reform Social Program 3 Consultants 6 months Social Indicators 6 months LSMS 6 weeks Improving Macroeconomic Management Macroeconomic Advisor 2 Consultants 24 months Bureau of Statistics 24 months 3 UNVs 12 months Central Bank Supervision 1 Consultant 24 months Several other consultants were recruited by other agencies to help coordinate and implement some TAC-supported interventions. In the Statistics Bureau, for example, the CDB and UNDP/UN Statistics Department provided long-term technical assistance to assist the construction of national accounts and national income estimates. Technical assistance other than the TAC was also provided to enable the Bureau to resume publication of quarterly reports, improve survey design and, implementation, and enhance data processing. T1 -44- APPENDIX B Page 3 of 9 D. Assessment of Credit Overview 6. The project had two main objectives. The short-term objective was to assist the Government implement its medium-term adjustment program and comply with SAC conditionality, while the longer-term objectives was to build and strengthen capacity in public sector management. The short-term objectives were largely met as the Government complied with all conditionalities envisaged in the SAC. As shown below, attainment of the long-term objectives was mixed. Improving the incentives framework 7. The key element of this sub-component was the consumption tax study. Implementation of the recommendations of this study led to the simplification of the tax code, elimination of discretionary exemptions, and the adoption of a program to address deficiencies in the administration of consumption taxes required prior to release of the third tranche of the SAC. The progress made in this area formed the basis for policy dialogue and follow-up of another intervention in fiscal reform under the IDA-funded PSDAC. Assessment 8. Even so, little skills transfer took place in the capacity of the Public Service to undertake fiscal analysis. This was so because the counterpart assigned to the consultants was thinly stretched. The USAID-funded BEEP project is following up in developing an investment guide and code so as to enhance the investment framework. The Government will seek further assistance in the future to review its tax structure in order to provide an enabling environment for the private sector development. Public Sector Reform 9. The purpose of this intervention was to generate more timely and better monitoring and financial analysis and to assist in developing investment programs for public corporations. Improvement in the performance of PEs was intended to reduce transfers from the Central Government. In addition, systems were developed at PCS and SPS to improve oversight, supervision and management. Also, a computerized information system for measurement and assessment of performance of individual enterprises and their impact on overall performance of the economy. Staff from SPS and PCS were trained in financial analysis and forecasting techniques. Overseas training was also provided to some staff of the SPS and PCS on public enterprise restructuring. Assessment 10. In spite of the longevity of this assignment, little or no progress was made in capacity building. The computer information system designed to monitor and evaluate -45- APPENDIX B Page 4 of 9 performance of public enterprise never became operational as a result of (i) incomplete and untimely data; (ii) the closure of PCS; and (iii) change in computer systems. In addition, the training offered in financial ratio analysis and forecasting techniques were not utilized in work of the Enterprise Monitoring Division. Also, the recommendations provided in the study of the performance of the four poorly performing enterprises were not implemented in part because it did not provide any new insights into how to turn these public enterprises around. 11. Several factors are responsible for the poor outcome of this activity. First, counterpart staff did not stay long on the job and some staff were transferred to other ministries/agencies in the public sector. Second, the change in Administration in 1992 also led to the dissolution of the PCS and the merger of SPS to the Ministry of Finance. The dissolution of PCS resulted in the loss of trained staff who left the public sector to take up higher-paying jobs in the private sector. Personal Management Record Keeping System (PRKS) 12. This activity, a requirement for third tranche disbursement under the SAC, was expected to eliminate overlapping functions and identify non-critical vacancies in the public service. The establishment of a PRKS and job classification system to achieve transparency in evaluating, selecting, and monitoring the filling of public service post was also a condition of negotiations of the Public Administration Project. Assessment 13. This sub-component of the project achieved most of its objectives. First, the development of management information system was useful in storing and managing basic data. Second, this intervention also assisted in developing an operational database that includes all positions in the public service is in place. 14. The key factor responsible for the relative success was the smooth coordination between IDA and the UK/ODA in the various aspects of this sub-component. The ODA carried out an institutional analysis of the Public Service Ministry (PSM) and provided substantial technical assistance to strengthen MSD. This was followed up with more support from IDA for the development of a computer-based personnel records system to provide access to information. 15. Despite the relative success, some problems remain. The PRKS is still not an active personnel management system. As a result, the Government will seek additional assistance to make the current system more functional. This will assist personnel units in each ministry to efficiently carry out its personnel management functions. Further strengthening of personnel infornation system is planned under the Public Administration Project. The main personnel records system will be linked to line ministries. Already ten additional computers and related equipment has been procured for this purpose and staff from line ministries will be trained to utilize the equipment. -46- APPENDIX B Page 5 of 9 Improving Public Sector Investment 16. Two consultants were recruited to strengthen the technical capacity of SPS in the preparation of the PSIP. As a result of this intervention, a rolling four-year PSIP was put in place, guidelines were developed and staff were trained in fulfillment of the SAC's second and third tranche release conditionality. In addition, the size and composition of the investment program was brought in line with economic priorities and available financing. A quantitative basis for the establishment of selection criteria and guidelines to improve the system for project formulation and appraisal were developed. Further, the technical capacity to carry out economic evaluation and cost analysis of proposed investment projects within the Project Cycle Unit at the State Planning Secretariat was strengthened. 17. In spite of the progress made in several areas, little institutional strengthening remains, In part, this is attributable to the reorganization of the SPS and staff turnover after the 1992 elections, and in other part, the demanding day-to-day work program of staff minimized skills transfer. Through technical assistance from USAID and IDA, the Government has initiated steps to strengthen the Project Cycle Division. External Aid Coordination 18. The objective of this component of the project was to assist the Government to coordinate and facilitate the procurement and disbursement of external funds and to train staff of multilateral financial institutions, the Bank of Guyana, and the Ministry of Trade, 'T'ourism and Industry (MTTI) in international procurement of goods and disbursement procedures. Procurement assistance was also provided through Crown Agents and MONITEC Consultants to assist the Government identify eligible imports and documentation, and conduct procurement review to provide assistance for third tranche disbursement. Assessment 19. The consultants developed a quarterly report to keep management abreast of external financial inflow. A review of aid coordination and management system was also undertaken. This resulted in the establishment of a database on the volume, type and conditionality related to external resources. Nevertheless, these activities of the consultant could not be sustained. The computerized database on external financial inflows is no longer in use and donor coordination still remains a major problem. The Government, in January, 1996, set up a coordinating committee in the Ministry of Finance to coordinate donor efforts so as to avoid duplication in donor activities. This committee will be strengthened to allow it to play a crucial role in coordinating donor support during the implementation of the National Development Strategy. 20. The procurement assistance was only short-term and the work in this area only facilitated the tranche releases under SAC II. The Government is currently revamping the procurement and tender process with assistance from USAID and UNDP. A consultant's -47- APPENDIX B Page 6 of 9 report on the review of the tender and procurement process has been completed and Government is presently reviewing the recommendations of the report. It is expected that once these reforms are completed, sufficient capacity would have been created for improving procurement and tendering process. Social Sector Reform 21. Consultants were recruited to analyze the distributional effects of the Government's adjustment program and were required to develop procedures to assess the efficiency of social sector projects, including those of SIMAP. Under the services of three consultancies, (i) an evaluator's manual was developed for SIMAP project officers and training provided for project appraisal; (ii) manual of social indicators was developed and on-the-job training conducted for central and line ministries in using the indicators to conduct policy analysis, sectoral planning and project preparation; (iii) LSMS questionnaire, detailed budget for survey and logistical arrangements and timetable for implementation of field operations was developed for the Bureau of Statistics, and the Ministries of Health and Education. Assessment 22. The work of the consultants resulted in the formulation of IDB (US$13.5 million) and IDA (US$10.3 million) credits to SIMAP, a pre-test of the LSMS which yielded important information on the location and extent of poverty in Guyana. In the case of social indicators, no counterpart was assigned and many of the staff trained in development and analysis of social indicators left SPS and the other agencies. As a result, capacity-building process initiated could not be sustained. Nevertheless, the manual and computer systems developed under the TAC have been updated. Improving Macroeconomic Management 23. Two advisors were recruited over a period of four years to provide analytical support and management capacity, including training to staff of MCA. In the first consultancy, a system was established to provide quarterly macroeconomic reports and timely information, including progress of implementation of the ERP to decision makers., Studies were also carried out on some aspects of macroeconomic policy, including debL issues, operation of cambios, and the impact of adjustment program on income. Due to the seriousness of staffing at the Ministry, the second consultant undertook more line assignments, including serving as Director in the Office of the Budget and Acting H lead of the Department of International Economic Cooperation (DIEC ). Assessment 24. Although the assistance of the consultants helped in facilitating compliance with second and third tranche disbursement, they were not sustainable. In part. this was the result of the absence of staff to continue, for example, the publication of quarterly reports and other analysis of macroeconomic issues pertinent to the Government and in other part -48- APPENDIX B Page 7 of 9 because of the fire fighting nature of the second consultant's assignment. In recognition of improving the macro-analytical framework, the Government, through the assistance of USAID and IMF, is putting in place a Policy Analysis Division to undertake the analysis of policy issues and resume publication of quarterly economic review and monthly economic bulletin. The Bureau of Statistics 25. Through the assistance of this TAC intervention, the Bureau of Statistics was computerized. Long-term technical assistance provided by CBD, UNDP/UNV Statistics Department enabled the Statistics Bureau to resume publication of quarterly reports and facilitated marked improvement in survey design, and data processing. This intervention also assisted the Bureau to improve its national income and balance of payments accounting and laid the basis for developing capabilities to evaluate the impact of economic reforms on standards of living. Assessment 26. Through TAC and other donor intervention, the Bureau of Statistics is again functional. Over the last four years, its major accomplishments include Household Income and Expenditure Survey and analysis, Living Standards Measurement Survey and Labor Force Survey. Through the procurement of informatics, a large number of staff have become computer literate. The procurement of vehicles through TAC assistance in part continue to facilitate field work and in other part has markedly improved the capacity of the Bureau to carry out surveys and data collection. The Bureau in 1997, will conduct a Labour Force Survey and update the 1992 LSMS. Nonetheless, the capacity of BOS to carry out analytic and forecasting remains weak. Staffing is still a problem. Power outages also continue to hamper the activities of the Bureau. The Government will be seeking additional assistance from donors to follow up on the work undertaken by the TAC and UNDP consultants and also deal with some of the problems that are facing the Bureau at present. Central Bank Supervision 27. The objective of this intervention was to strengthen and modernize the regulatory and supervisory framework for commercial banks and other financial institutions in Guyana. Sustainable systems and procedures were developed for on-site examination of credit portfolios, off site performance and industry tracking sheets were established and maintained regularly, laws and prudential regulations were reviewed and assistance was given in the preparations of banking legislation. 28. Among the major accomplishments of this intervention was the establishment of the Department of Banking Supervision. This Department has 11 technical staff and 3 support staff. Over the last few years, it has implemented periodic inspections to enforce compliance with banking regulations. Support is also being given to complete work on on-site inspection training and guidelines for the implementation of the Financial l -49- APPENDIX B Page 8 of 9 Institutions Act are being developed. Under the Financial Sector Business Environment Credit (FISBEC), IDA will support the Bank of Guyana with computer and other equipment so as to strengthen the Banking Supervision Department. Computer Information System 29. Needs assessment of management information system was undertaken for the Bank of Guyana. However, the recommendations of developing a fully-integrated system was not implemented. Follow-up to the consultancy report on MIS will be provided under the IDA-funded FISBEC project. The UNDP is assisting the central bank to develop computerized retrieval systems for its library. Lessons Learned and Recommendations for Future Assistance 30. Although some sustainability in capacity building was built over the project life, the difficulty in attracting and retaining professional technical staff was perhaps the most serious constraint in capacity building. In part, this was due to low and inadequate civil service remuneration. Given the tight budgetary constraints facing the Government over the medium term, it does not appear that this situation could be overcome in the short term. The Government is therefore considering granting contracts to technical and professional staff at higher salaries so as to attract and retain technical personnel in the civil service. 31. Given the shortage of staff in the public service, the second serious obstacle to capacity building was the notion of counterparts that became the main vehicle for skills transfer. The volatility in the civil service and the frequency of emigration meant that the model where a main counterpart was attached to work with consultants was not far reaching. This is so, because whenever a counterpart staff left, the investment put in training and skills transfer were lost. Perhaps, in the future, the model for technical assistance should be first recruiting consultants for line positions and requiring them to train all staff under their responsibility. Second, consultants at the end of their assignment should have transferred to staff skills sufficient to allow them to generate division/department output. 32. Thirdly, oftentimes donor intervention lacked proper coordination and, in some cases, became counter-productive in dealing with issues of sustainability. For example, the inability to pay adequate salaries was, in part, the result of fiscal constraints imposed on the Government by the IMF. Perhaps, in the future, the Bank and the IMF should carefully review their programs and ensure that they are internally coherent and consistent. Government's View of the Project This IDA intervention provided critical assistance necessary to implement measures related to the SAC and provided expertise whose work in a number of areas laid the ground work for capacity building and institutional strengthening. Nevertheless, in the -50- APPENDIX B Page 9 of 9 future, the Government, in consultation with the Bank, will seek assistance from EDI in developing training programs on the Management of Technical Assistance so as to enhance benefits from donor-financed technical assistance. The project was executed largely by the UN Office for Project Services (OPS). Except for the identification of consultants, contract administration, and procurement, OPS did not provide the technical backstopping supervision, nor did it provide final support in the preparation of the Government's ICR. The UNDP Field Office in Guyana, however, was supportive. It provided logistic support to consultants, coordinated tripartite meetings, and provided comments on technical reports. December 9, 1996 -51- APPENDIX C Page 1 of 12 GUYANA TECHNICAL ASSISTANCE CREDIT (TAC) (CREDIT 2169-GUA) DESCRIPTION OF SUBPROJECTS I. IMPROVING THE INCENTIVE FRAMEWORK IDA CREDITAGREEMENTPARTA: Carrying out a study to identif the deficiencies in the application and administration of consumption taxes and make recommendations to address such deficiencies. 1. Consumption Tax Study. With respect to trade policy the Program of Structural Adjustment envisaged a reduction in the list of prohibited imports, changes in procedures for issuing import licenses, and a study of trade taxes and ensuring agreement on a program to rationalize trade taxes. The TAC provided a short-term consultants to work with the Monitoring and Coordinating Agency (MCA) on a consumption tax study. They reviewed both policy and administration and developed options for improving the efficiency of the Consumption Tax. The Principal Consultant built up a data base on trade and carried out a survey of sample manufacturers to look at the impact of the tax. He examined the implications of simplifying the tax, reducing rates and broadening the base. He concluded that maintenance of the status quo would mean the continued multiple level consumption tax rate structure with its associated administrative complexity, inherent distortion of production and consumption choices, and significant inherent inducements to abuse the system. His findings revealed a high level of corruption, tax evasion and lack of compliance with tax obligations. 2. Outcome. Although his designated counterpart, the Assistant Comptroller of Customs and Excise Department, was fully occupied with daily duties, and, therefore, little skill transfer took place, his work contributed to the simplification of the tax code and elimination of discretionary exemptions and the adoption of a program to address deficiencies in the administration of consumption taxes required prior to release of the third tranche of the SAC. This work also formed the basis for policy dialog, was used by the borrower in budget speeches, and was consistent with later Bank work in implementing a reform of the consumption tax (together with other indirect taxes, direct corporate taxes, and tariffs) under the PSDAC. The Private Sector Development Adjustment Credit (PSDAC) and Financial Sector and Business Environment Credit (FISBEC) include follow-on assistance to support adoption of tax policy reforms that broaden the tax base and remove disincentives to long-term investment in the economy. -52- APPENDIX C Page 2 of 12 II. PUBLIC SECTOR REFORM IDA CREDITAGREEMEN5TPARTB. Strengthening the capacities of Public Corporations Secretariat (PCS) and the Enterprise Monitoring Division (EMD) in the State Planning Secretariat (SPS) to monitor the financial and operational performance of public enterprises, including training of the staff of PCS and SPS. 3. Public Enterprise Monitoring. The TAC assistance was intended to generate more timely and better monitoring and analysis of the financial performance and development and investment plans of public corporations with a view to reducing transfers from the central government to PEs. A performance monitoring system along the lines of those functioning in selected Asian countries was to have been introduced. A TAC financed consultant (45 months) developed systems in PCS' and SPS to improve government oversight, supervision and management of PEs. He developed a computerized information system for measurement and assessment of performance of individual enterprises and assessment of their impact on the overall performance of the economy. His work was highly regarded by the government and extension to his contract were requested even following the change of Administration in 1992. 4. The consultant trained SPS and PCS staff in financial ratio analysis and forecasting techniques and financial management and prepared several studies on public enterprise finances aimed at improving efficiency. The TAC financed overseas training of SPS and PCS staff in Commercialization and Privatization of PEs and Restructuring of Industrial Enterprises in Washington and the UK. 5. A second TAC financed Public Enterprise Advisor (9 months) to the PCS completed in-depth analyses of the financial performance of four poorly performing public corporations: the Guyana National Engineering Corporation (GUYNEC), SANATA Textiles Limited, Guyana Airways Corporation, and Guyana Pharmaceutical Corporation. Recommendations were formulated for their improvement or divestment. Bank supervision reports record that the PCS was of the view that the consultant's contribution provided no new findings and no action was taken based on his recommendations. He developed a training program for PCS staff, including overseas training in accounting, econometrics and financial modeling. 6. Outcome. GUYNEC has been divested and SONATA closed. In 1992 the PCS was dissolved. The computer information system created for the PCS to monitor and evaluate performance of public enterprises was to be transferred to SPS. However, the systems in the SPS and PCS never became operational due in part to the incomplete and untimely data produced by the PEs to be fed into the system, partly to the closure of the PCS, and partly to a change in computer systems. PCS was later dissolved, some functions divided up among other agencies, and trained staff left or were dismissed without handover of systems developed. -53- APPENDIX C Page 3 of 12 7. A 1994 Bank supervision mission aide memoir further records that the assigned counterpart staff to the PSIP and PE Advisors had all left to take on higher paying jobs in the private sector or abroad. Current staff of the MOF's Enterprise Monitoring Division are of the view that this TAC assistance may have been more valuable if more emphasis had been placed on improving the quality, timeliness, and format of the data submitted by the PEs themselves. 8. The MOF continues to suffer from an inadequate PE monitoring system, lack of timely and reliable data from PEs, and antiquated computer equipment. As a consequence about 20 enterprises continue to be inadequately monitored (including GUYSUCO) and policy decisions are made on a piecemeal and inconsistent basis. However, since a significant portion of PEs have been divested or closed, and additional divestments are slated before the year 2,000, follow-up assistance in this area does not seem to be of priority to the government. The training financed under the TAC, while not sustained, was useful at the time. IDA CREDITAGREEMENT P.4RT G (added by amendment in June 1992): Development of a computer based personnel records system that will provide rapid access to information on individual staff at each of the Borrower 's ministries and other relevant agencies and aggregate information on stafffor overall personnel management purposes. 9. Commencement of work on a Personnel Management Record Keeping System (PRKS) to eliminate overlapping functions and identify non-critical vacancies in the public service was an action required prior to third tranche release of the SAC. Establishment of a PRKS and job classification system to achieve transparency in evaluating, selecting, and monitoring the filling of public service posts was also a condition of negotiations of the Public Administration Project (PAP). The UK/ODA carried out an institutional analysis of the Public Service Ministry (PSM) and provided substantial technical assistance to strengthen the MSD. The TAC funded follow-up support for the development of a computer based personnel records system to provide rapid access to information on individual staff at each ministry and regional administration and aggregate information on staff for overall management purposes, including those related to salaries administration. The TAC financed an international Argentine and local consultants to develop the system, ensure effective transfer from manual to computerized methods, and advise on the selection and assist with the procurement and installation of suitable software and hardware. A UN ASSOCIATE EXPERT (Systems Analyst) was recruited in January 1993 for one year to help implement the basic personnel records keeping system, its maintenance and data entry and processing. 10. Outcome. The SAC and PAP conditionality was fulfilled. An ODA commissioned review of the PRKS indicated that the first phase of the development of the system (under the TAC) was useful in gathering the required manual data and creating -54- APPENDIX C Page 4 of 12 a basic system. The six TAC financed PCs and fileserver and software are in place in the Public Service Management Ministry in the Office of the President. Despite initial 2 difficulties , an operational database was set up providing information used in the salary restructuring exercise. The database that includes all positions in the public service, the particulars of the incumbents and details of their salaries and allowances. This is a major advance from the situation existing before the project when reliable establishment and wages information was not available to GOG. The system is now being installed in 27 locations. The PRKS is, however, still not an active personnel management system. It is necessary to build additional functionality in the system so that it can assist persoinnel units in each ministry in actually carrying out personnel management functions, such a issuing appointment letters, keeping record of leave and transfers, matching employee skills to job requirements to fill vacancies, analyzing skills gaps and organizing staff training, etc. The next phase under the PAP will link the system to line ministries and departments and introduce personnel information into the system to make it operational. The PAP financed equipment (40 additional computers and related equipment) has arrived and is awaiting installation. The same local consultant who trained Ministry of Public Service staff under the TAC has been retained to train line ministry staff under the PAP. -II. IMPROVING PUBLIC SECTOR INVESTMENT IDA CREDITAGREEMENTPART C. Services of consultants to assist SPS in formulating and monitoring the PSIP and assuring its consistency in terms of size and composition in relation to the Borrower 's macroeconomic framework and objectives and available funding, including training of the staff of SPS in, inter-alia, project evaluation and management and resource management. 11. PSIP. The TAC provided funding for an Economic Advisor to the SPS (17 months) and experienced Project Cost Analyst (12 months) and short term training of staff in project evaluation and resource management and computing equipment. The objective of the Economic Advisor's assignment was to strengthen the technical capacity of SPS (now the Planning Unit in MOF) in the preparation of the PSIP, including preparation of guidelines on project preparation for SPS and line ministry staff and training of staff to evaluate and monitor projects included in the PSIP. 12. Training. Coordination was established with SIMAP (see below) to host a series of community training workshops to assist community leaders define useful and well organized projects. The PSIP Advisor carried out a six week training program which included computer training in econometrics, applied macroeconomic theory, and 2 Some members of the Argentine firm were not fluent enough in English to communicate sufficiently. UNDP procedures to pay the consultants were confusing and time consuming for the PS, Ministry of Public Service -55- APPENDIX C Page 5 of 12 computer modeling of the Guyanese economy which benefited twenty five participants form SPS, the Ministry of Finance, the Bank of Guyana, the Statistics Bureau, the Ministry of Foreign Affairs, the Ministry of Education and the Ministry of Health. 13. Outcome. A rolling four-year PSIP was put into place, guidelines were developed and staff were trained in fulfillment of the SAC's second and third tranche release conditionality. The ability of the Government to bring the size and composition of the PSIP in line with economic priorities and projected domestic and foreign funding availability was also improved. A quantitative basis for the establishment of selection criteria for investment projects was developed and guidelines to improve the system for project formulation and appraisal were developed. The Project Cost Analyst strengthened technical capacity within the Project Cycle Unit in the SPS to carry out economic evaluation and cost analysis of proposed investment projects. The work undertaken by the consultants was of considerable help in the preparation of the Bank's Public Sector Review. 14. Although counterparts were assigned to the consultants, one Bank supervision mission was informed that counterparts were not able to spend adequate time working with the consultants due to the demanding daily responsibilities imposed on them. In addition, trained staff were dismissed or move during the SPS reorganization. The principal PSIP consultant, however, recently returned under the USAID funded Building Equity and Economic Participation Project (BEEP). The systems developed under the TAC have been resuscitated and new staff have been trained in the project cycle through evaluation. An IDF grant is providing additional institutional support. IDA CREDITAGREEMENT PART C: Services of consultants to assist Division of Multilateral Financial Institutions of the MOF (DMFI), the Bank of Guyana and Ministry of Trade and Tourism (MOTT), in coordinating andfacilitating the procurement and disbursement of externalfunds, including training of the staff of DMFI, the Bank of Guyana, and MOTT, in inter-alia, international procurement of goods and disbursement procedures. 15. External Aid Coordination. SAC actions prior to Board Presentation included improvement of external aid coordination though the services of an Advisor to the MOF to maintain continuous contact with donors and facilitate procurement and disbursement of funds provided by bilateral and multilateral donors. The Advisor on External Financial In-flows (12 months) provided advice to government agencies on draw down procedures for several lines of credit: the Canadian Industrial Line of Credit, the Italian Rice Grant Aid, the Italian Commodity Grant, the US PL-480, the Indian Industrial Development Line of Credit and the SAC. He established a quarterly report to keep management abreast of external financial inflow developments and considered his main output to be facilitating the procurement and disbursement of funds. -56- APPENDIX C Page 6 of 12 16. The Advisor also carried out a review of the aide coordination and management system with the aim of identifying constraints and proposing solutions. He recommended an integrated system of aid coordination management and established a database on the volume, type and conditionality related to external resources. He monitored the use of aide and examined causes of delays in disbursements and proposed actions to accelerate them. His objective was to facilitate inflows of external capital to provide support to the balance of payments and the PSIP. 17. Outcome. The computerized database on external financial inflows that he established fell into disuse upon his departure. Donor coordination remains an issue taken up at the 8/96 CPPR where agreement was reached to improve coordination though semi- annual donor meetings to discuss implementation questions and problem areas. The Project Cycle Management Division in MOF is to coordinate donors and the next meeting planned for January 1997. 18. Procurement Assistance. Two procurement agents/firms were financed under the TAC to serve as procurement advisors to the Bank of Guyana for drawdown of the first and second tranches of the SAC. The objective of the first agent was to identify eligible imports supported by the necessary documentation included in the statements of expenditure prepared with the assistance of the agent (invoices, shipping documents, and evidence of payment to support disbursement). The second agent conducted a procurement review to provide assistance related to release of the third tranche of the SAC, mainly focusing on the Guyana Manufacturing and Industrial Development Agency (GUYMINE). 19. Training. The consultant organized in-house training for the MFI on macroeconomics and policy tools, management of aid mobilization, loan administration procedures and credit negotiations. 20. Outcome. The work of the two procurement agents was short-term and successful. The USAID/BEEP project together with UNDP is currently providing assistance to strengthen the Central Tenders Board and simplify and accelerate procurement including completion of a new tendering law and publication of regulations. IV. SOCIAL SECTOR REFORM CREDITAGREEMENTPARTD. Services of consultants to assist Department of Social Infrastructure (DSI) in the SPS and Ministry of Culture and Social Development (MCSD) in analyzing the distributional effects of the Borrower's adjustment program and developing procedures and assessing the efficiency of social sector projects, including those of the Social Impact Amelioration Program (SIMAP) in correctly identifying target population. -57- APPENDIX C Page 7 of 12 21. The TAC financed three consultancies under this component. The Social Programme Consultant (6 months) developed the Evaluator's Manual to be used by SIMAP Project Officers for technical appraisal of projects. It included eligibility conditions, technical evaluation procedures, evaluation criteria, and report formats. The manual was based in part on the successful experience of the Bolivian Emergency Social Fund. The consultant also trained staff in appraisal, and developed promotional activities with potential user organizations including NGOs, private sector and local organizations across the country to generate support and project proposals. She also developed a community participation methodology and a financial/accounting system. 22. Outcome. This work contributed to the formulation of a $13.5 million IDB loan to SIMAP (mainly for schools, roads, agriculture, irrigation) and a $10.3 million IDA Credit which focuses on water and sanitation, drainage, nutrition and rehabilitation of health centers. The Manual and computer systems developed by the TAC consultant have been updated under both operations. 23. A Consultant in Social Indicators (6 months) worked in the Social Planning/Manpower Development section of SPS together with a UNV (10/93 - 10/94) in developing a "Manual of Social Indicators" and conducted on-the-job training for central and line ministry social planners in the use of the indicators for policy analysis, sectorial planning and project preparation with a view to creating capacity to continue production of social indicators after the conclusion of the TA. Areas of focus included education, health, water supply and sanitation. 24. Outcome. No counterpart was assigned and many of those trained in development and analysis of social indicators left the SPS and other agencies. UNDP referred this lack of follow-up to the Chief Planning Officer but no action was taken. 25. A short-term Living Standard Measurement Survey (LSMS) Specialist (6 weeks intermittently) worked primarily with the Bureau of Statistics as well as with SIMAP, Health and Education in development of: (i) the LSMS questionnaire; (ii) detailed budget for survey implementation by the BOS; and (iii) logistical arrangements and timetable for implementation of field operations (including anthrometric component), data processing and training (with the BOS). IDA itself finance the consultant's time for training and managing the survey. The consultant conducted workshops for enumerators and supervisors, anthropometrists (65 students format he Georgetown School of Nursing), and data entry managers. A policy analyst form the University of Guyana was also trained. The LSMS pre-test was conducted in tandem with the UNDP/CDB assisted Household Income and Expenditure Survey (HIES). 26. Outcome. The TAC financed pre-test of the LSMS was later implemented under the IDA's SIMAP Credit. It yielded important information on the location and extent of poverty in Guyana. It was used by the IDB to construct a poverty map. An update of the LSMS is planned for 1997 with direct assistance from the Bank and other donors. It will provide essential information to a proposed $17.0 million IDB SIMAP II project. It was -58- APPENDIX C Page 8 of 12 noted, however, that the Institute of Development Studies (IDS) of the University of Guyana prepared work similar to the LSMS which produced different (higher) projections on the poverty levels in Guyana. IDA considered the IDS work to have had methodological blows. Initially, there was a tendency to use the IDS data, particularly in dealings with donors. V. IMPROVING MACROECONOMIC MANAGEMENT CREDITAGREEMENTPARTE. Services of consultants to assist the Monitoring and Coordination Agency in the MOF (MCA) in coordinating and implementing the Borrower's adjustment program and improving its analytical and management capacity, including training of the staff of MCA. 27. The Macroeconomic Advisor (24 months) established a system of quarterly macroeconomic reports to provide up-to-date information, including assessment of the progress of implementation of the ERP, to decision makers. He also carried out studies on various aspects of macroeconomic policy such as on the debt problem, the operation of cambios, and the impact of the adjustment program on income. 28. While he successfully brought to the attention of the Minister issues which could have an adverse impact on the economy if not addressed, such as external financial flows (1992) and the problem of the lack of counterparts for TAC consultants, the system he developed was not continued after his assignment was completed. 29. A second Macroeconomic Adviser (24 months), who was to have succeeded the first Macroeconomic Adviser, noted in her final report that the major part of her time dealing with issues on which the Minister required assistance. "In fact, the last item in my TOR - executing special projects as agreed between the Minister and the Adviser -- was invoked more than any other". The MOF was seriously under-staffed , especially with respect to technical staff, and the Adviser served as Acting Coordinator of the Budget Division for most of her two year contract under the TAC, and later acted as Head of the Department of International Economic Cooperation (DIEC) and served as Chief Adviser to the MOF inter-alia on debt negotiations. 30. Outcome. The assistance of the first Macro Economic Advisor was useful at the time particularly in facilitating compliance with second and third tranche SAC conditionality of a favorable Bank assessment of the macroeconomic framework. He assisted the Government in meeting macroeconomic targets under the ERP and the SAC. In doing this the consultant succeeded in getting the Statistics Bureau and Central Bank to use for the first time common statistical formats in areas such as debt. The quarterly system of macroeconomic reports was however, discontinued following the departure of the consultant. An ongoing $400,000 IDF Grant (No. 28581) is providing consultant services to assist with debt negotiations with creditors and work on set up a long-term debt management program for Guyana. The Grant will also finance computers and -T -59- APPENDIX C Page 9 of 12 accessories for the MOF's Debt Management Division. USAID's current BEEP project aims to: (i) Design and install an MIS for the MOF for data management and analysis; (ii) Develop a fully functioning Macroeconomic Division, and train staff to undertake quantitative analysis of economic issues; and (iii) Identify, recruit, and train counterparts for the Macroeconomic Division and train them to replace the long term TA. 31. The second Macroeconomic adviser carried out much needed "fire fighting" and liasing with IMF and IDA. Given Guyana's institutional weakness, her services for "special assignments" were valuable for the Government and donors. Her work was understood to be substitution TA. 32. The Public Enterprise Consultant also developed a macroeconomic model of the Guyanese economy used by planners at SPS (Macroeconomic Policy Division) to evaluate how various economic policies, reforms, and development initiatives affect the performance of PEs and the economy. This work is being continued by USAID's BEEP Project. 33. Training. SPS and PCS staff were trained in: (i) financial ratio analysis, forecasting techniques and financial management; and (ii) sector analysis, identification and appraisal of projects, the carrying out of macroeconomic policy analysis and forecasting and cost benefit analysis. Mr. Hinds also taught a three week course in macroeconomics. In addition, staff of the Macroeconomic Analysis and Policy Division in MOF attended the IMF course in Techniques of Financial Analysis and Programming. USAID's BEEP project is providing follow-up assistance in developing a capacity for macro-economic analysis with the return of the consultant originally financed under the TAC. 34. The Bureau of Statistics was computerized for the first time under the TAC. Parallel assistance was provided by the CDB and UNDP/UN Statistics Department in the form of long-term consultants to assist in the construction of national accounts and national income estimates to enable the Bureau to resume publication of quarterly reports and other information, and in survey design, implementation, and data processing. This assistance enabled the preparation of current macroeconomic data essential to macroeconomic management and, thus important to the success of the Government's structural adjustment program. It also developed statistical capabilities sufficient to assess the results and evaluate the impact and consequences of implementing the ERP on the standard of living. Seventeen computers, five vehicles, a scanner, and a generator were purchased with TAC funds. In addition, three UNVs supported the institutional strengthening (Balance of Payments,Current Enterprise Statistics, and Data Processing). An Associate UN Expert in Data Processing financed by the Netherlands also supported the operation. Due to lack of counterparts at the time of implementation, most UNVs were engaged directly in line activities. 35. Outcome. The project succeeded in making functional the BOS which had been defunct. The BOS was transformed from a manual to a computerized office, in large part -60- APPENDIX C Page 10 of 12 through the micro computers, office equipment, and vehicles (critical to the HIES) procured under the TAC. A large number of staff are now computer literate and have enlarged their skills. In a relatively short time the combined efforts of the CDB, UNDP and TAC overcame a two decade lapse and through the carrying out and analysis of the results of a Household Income and Expenditure Survey (HIES), Living Standards Measurement Survey (LSMS) and Labor Force Survey in 1993. These were essential inputs to the Bank's Poverty Seminar and Poverty Report in 1994. As of December 1994 the BOS had 10 senior staff and a total of 65 staff out of an approved number of 120. 36. Most of the staff trained under the TAC have remained on board due to the somewhat better pay available at the BOS compared to the regular civil service. Younger staff continue to be attracted by prospects for training, including in-house short term training sponsored by USAID (computer and survey related) and UNDP (national accounts). BOS facilities, however, continue to be dilapidated, the analytic and forecasting capacity remains weak and the generator purchased with TAC funds has been lent for an extended period to the election commission resulting in about 10 hours per week of "down time" in the Bureau. These problems will be addressed under a proposed ODA $2.0 million grant likely to be approved before end CY96. A Labor Force Survey of about 8200 households is likely to be carried out during the first half of 1997 together with an LSMS update which will underpin the poverty focus of the Bank's CEM, if it is carried out on time. VI. CENTRAL BANK SUPERVISION IDA CREDITAGREEMENTPARTF (added by amendment in June 1992): Strengthening and modernizing the regulatory and supervisory frameworkfor commercial banks and other financial institutions in Guyana. 37. An Adviser to the Central Bank in Banking Supervision (24 months) also filled a line function -- Head of the Bank Supervision Department. She was successful, nevertheless, in establishing sustainable systems and procedures for on-site examination of credit portfolios and recommended a framework and system for off site monitoring, supervision and financial analysis of the quality of credit portfolios of commercial banks. Performance tracking sheets and industry tracking sheets have been established and are being maintained regularly. She also reviewed laws and prudential regulations and assisted in the preparation of amendments to banking legislation and recommended measures to implement regulations. She advised on the organization of a Banking Supervision Department and the need for additional TA. The contract of the consultant was originally financed by UNDP and subsequently financed by the IMF. One year of her services were added to the loan (February 1992-February 1994) to ensure continuity in the strengthening and modernizing of the regulatory and supervisory framework for commercial banks and other financial institutions within the context of the Government's move toward a more market-based financial system. -61- APPENDIX C Page 11 of 12 38. Outcome. The consultant succeeded in establishing a Department of Banking Supervision where none existed previously. The Department now has 11 technical staff and 3 support staff. The Banking Supervision Department has implemented periodic inspections which will help cement the institutional mechanisms required to monitor future compliance once the Financial Institutions Act (FIA) regulations are implemented. The consultant championed the promotion of staff already within the organization, including those who had received training abroad under the TAC at FDIC and the Examiner Training School of the Federal Reserve System. Her work on banking legislation contributed to compliance with the Private Sector Development Adjustment Credit's (PSDAC) measures on promulgation of the Financial Institutions Act which took effect in May 1995. A successor Consultant financed by the IMF is completing work begun on on-site inspection training (credit evaluation, qualitative appraisal of loan portfolios) and on developing guidelines for implementing the regulations of the Financial Institutions Act. A counterpart has been assigned to work with the consultant. The Financial Sector Business Environment Credit (FISBEC) is to finance computer and other equipment to further strengthen the Banking Supervision Department. Both the PSDAC and the FISBEC aim to improve the regulation and supervision of the financial system and restructure key financial institutions and the FISBEC includes funding to support preparation of laws governing bank supervision and regulation. 39. A Computer Information Systems Consultant to the Bank of Guyana (6 months) was to have: (a) assessed the overall computerization requirements of the BOG; (b) advised on the optimal configuration of the computer facilities with a view to ensuring linkages between the main frame and personal computers and (c) advised on the appropriate equipment and systems and future computerization program and training. She recommended development of a fully integrated information system and produced recommendations on architectures for applications and technology, policies and outlined critical success factors and action items. 40. Outcome. The usefulness of the consultant's work was limited by the lack of an identified source of funding for the computer equipment. Little of her work was put into effect. The Head of BOG's Information Services Dept. was not aware that TAC funds could have been accessed for the purchase of the needed equipment. Lack of a viable Project Implementation Unit and/or a clear agreement for UNDP to serve that function resulted in this type of confusion and delay. Funding for equipment is now available under the FISBAC; and the TAC financed consultancy is being followed by a UNV Specialist in Document Management (October 1995 - June 1996 and continuing under UNDP for an additional 12 months) with considerable experience in developing computerized retrieval systems for libraries. He is building a computerized data base to enable immediate retrieval of active files. A counterpart is being recruited to work with him and his contract will continue through mid-1997 under a UNDP project. -62- APPENDIX C Page 12 of 12 VII. LONG-TERM DEVELOPMENT STRATEGY 41. Guyana has not had a comprehensive development strategy underpin policies and priorities and as a basis for negotiating with donors. The GOG, with the Carter Center (June 1995 - June 1996) financed under the TAC as facilitators, are providing the background work for a national development strategy. A participatory approach was used to coordinate with public and private sectors, international agencies, NGOs, universities, labor unions and other interested groups to sound out their assessments of constraints to Guyana's development and their opinions on overcoming them. Time series data are being put together by the BOS and the Debt Management Department of the MOF (both of which received assistance under the TAC). The Strategy, which was nearing completion at the time of the final TAC supervision mission in August 1996, is expected to make a clear statement about the respective roles of the private and public sectors. It will contain 42 chapters, including recommendations on issues addressed in the TAC such as: (i) macro-economic policy, including chapters on fiscal policy and the public sector, and providing projections over the next 10 years on money supply, balance of payments, etc.; (ii) the social sectors; (iii) the productive sectors, including chapters on labor and employment policies; (iv) infrastructure; (v) summary chapters on policy changes, legislation and the investment program needed to put into effect the recommendations. 42. Outcome. It is now expected that final work on the strategy will be completed by end- 1996 in time for the 1997 budget preparation. However, the 42 chapters may need to be synthesized and prioritized further before they can be useful as a government policy document that is implementable. In addition, the document will be distributed for public discussion before finalization. The public sector modernization chapter of the report includes recommendations consistent with the PAP: improving public sector salaries, wage decompression, improved performance evaluations and merit based increases. Finally, implementation of the strategy will require staff not currently available in most sectors. The extent of commitment of the present government, including to salary increases which seems to be the linchpin in attracting and retaining qualified staff, is uncertain. GUYANA THIRD TECHNICAL ASSISTANCE CREDIT (TAC) (2169-GUA) SAC1/TAC MATRIX2 SAC Actions Taken Actions to be Taken Actions to be Implementation of SAC Assisted by TAC Assistance/Outcome Policy Areas Prior to Board Prior to Second Taken Prior to TAC Presentation Tranche Release Third Tranche Release A. Macroeconomic Framework Guyana continue to face (a) Favorable Bank (a) Favorable Bank (a) Favorable (a) Consultancy services (24 M/M), The Consultants helped develop a major macroeconomic assessment of the assessment of the Bank assessment equipment and supplies including a quarterly system of imbalances. These stem macroeconomic macroeconomic of the vehicle, and training to improve the macroeconomic reports, provided largely from an framework framework including macroeconomic Monitoring and Coordinating Agency's valuable advice in various aspects inappropriate mix of competitiveness. international framework, (MOF) capacity to monitor and analyze of macroeconomic policy. The exchange rate fiscal, competitiveness. including macroeconomic data and prepare reports assistance was useful at the time monetary and wage international on progress in the Government but lack of counterparts inhibited policies. competitiveness. structural adjustment program. transfer of skills. The system of macroeconomic reports developed by the consultants was discontinued following the departure of the consultant. b) Computer equipment to the Statistical The combined TAC, UNDP and Bureau to increase capacity to collect, CDB assistance computerized the process, and report macroeconomic data SB for the first time, made it essential for monitoring and analyzing functional and enabled completion the Government's structural adjustment of current macroeconomic data program. essential to the SAC. Assistance mostly sustained. Proposed ODA assistance will further strengthen national accounts and analytical capability. > (D m Structural Adjustment Credit (2168-GUA). 2 This Matrix is taken from the TAC President's Report (P-5127-GUY) of March 23, 1990. o> SAC Actions Taken Actions to be Taken Actions to be Implementation of SAC Assisted by TAC Assistance/Outcome Policy Areas Prior to Board Prior to Second Taken Prior to TAC Presentation Tranche Release Third Tranche Release (c) Consultancy services (6 M/M) to Assistance successfully completed. Bank of Guyana to provide a qualified procurement agent to ensure compliance with Bank Group guidelines and preparation of needed documentation for draw down of the SAC. B. Incentive Framework 1. Domestic N/A Pricing 2. Trade Policy N/A 3. Other Incentives (a) Complete a (a) Consultancy services (6M/M) to the Study satisfactorily completed and std o Monitoring and Coordinating Agency to SAC conditionality met. Consumption identify deficiencies in the application PSDAC/FISBEC include follow- taxes in and administration of consumption taxes up assistance to broaden tax base accordance with identified in such study including and remove disincentives to long terms of provision of a vehicle term investment in the economy. reference satisfactory to the Association, and adopt a program satisfactory to the IDA to address deficiencies in the application and administration of consumption taxes identified in such study. ow e ° X Ofr SAC Actions Taken Actions to be Taken Actions to be Implementation of SAC Assisted by TAC Assistance/Outcome Policy Areas Prior to Board Prior to Second Taken Prior to TAC Presentation Tranche Release Third Tranche Release C. Public Sector 1. Central (a) Begin (a)Technical assistance to the Public Program satisfactorily initiated. Reform Government implementing a Service Management Ministry in the SAC conditionality met. Follow- program Office of the President in the on PAP assistance is completing Guyana's economic satisfactory to preparatory activities relating to the training and system and problems also stem the Association, development of Phase I of the Personnel equipment installation throughout largely from an over- to eliminate any Records Keeping Systems (PRKS). This central government. extended and inefficient overlapping activity is contributing to the creation of public sector responsible functions and a unified and computerized PRKS within for a significant noncritical the pubic service as a precondition for deterioration of public vacancies the implementation of the next phase finances. identified in the (Reform of Public Service Salary and management Employment Structure) of the Public audits. Administration Reform Project (PAP) financed by IDA. The purpose of establishing PRKS and a job classification system is to achieve a transparent system for evaluating, selecting, and monitoring the filling of public service posts. The Central (a) Agreement on (a) End all central UNDP Consultant assistance, Government deficit ending all Central government current financed retroactively under the stood at an unsustainable Government transfers to public TAC, facilitated compliance with level of 27% of GDP in transfers to public enterprises from the actions required prior to Board 1988. This is enterprises from 1990 budget onwards presentation. attributable partly to ... the 1990 budget except for the TAC Assistance to strengthen the current transfer to onwards, except Guyana Electricity capacity of the PCS and SPS to public enterprises. for the Guyana Corporation and for develop systems to monitor the Electricity maintenance financial and operational Corporation and expenditures of performance of public enterprises for maintenance public enterprises to was related to but not directly on expenditures of be fully divested. the critical path of the SAC's public enterprises second tranche release. The to be fully (b) PCS: Put into assistance was completed but not w 3 divested. effect an action sustained. o x SAC Actions Taken Actions to be Taken Actions to be Implementation of SAC Assisted by TAC Assistance/Outcome Policy Areas Prior to Board Prior to Second Taken Prior to TAC Presentation Tranche Release Third Tranche Release (b) PCS: Agree on program and a corporate schedule for carrying strategy for the out the corporate PCS group with a strategy for the PCS view to group. determining which enterprises should (c) Operating be kept within the procedures and Government's auditing systems control to meet satisfactory to IDA strategic/social to be established to objectives and monitor the financial which should be performance of offered for joint GUYMINE, ventures or for GUYSUCO, PCS, outright sale to the and transfers of 0' private sector. targeted amounts from these enterprises to the Central Government. D. Public Sector Investment Program (PSIP) The long period of (a) Agreement on (a) Review rolling (a) Review of (a) Consultancy services (36 M/M), SAC conditionality met. A rolling economic decline and Institutional PSIP satisfactory to rolling PSIP equipment and supplies including a four-year PSIP was put into place consequently inadequate arrangements IDA satisfactory to vehicle, and training to the State and guidelines prepared and asset maintenance has principally the IDA Planning Secretariat to improve PSIP training carried out in project resulted in poor staffing in the formulation and monitoring. formulation, selection, appraisal, condition in the staffing in the monitoring and evaluation. infrastructure services. State Planning Assistance not sustained due to zD Therefore, the major Secretariat --for departure of trained staff focus of the PSIP will providing following change of 0 x a' SAC Actions Taken Actions to be Taken Actions to be Implementation of SAC Assisted by TAC Assistance/Outcome Policy Areas Prior to Board Prior to Second Taken Prior to TAC Presentation Tranche Release Third Tranche Release be the rehabilitation of guidelines on government/public sector basic infrastructure that project preparation reorganization. USAID assistance is critical for supporting to line ministries currently resuscitating TAC the program's objectives and government financed work. of increasing exports agencies and for and private investment. evaluation and The most urgent tasks is monitoring of to restore electricity projects. supply to required levels. (b) Improvement of external aid (b) Consultancy services (24 M/M), UNDP Consultant assistance, coordination equipment and supplies and training to finance retroactively under the through the the Ministry of Finance, Bank of TAC, facilitated compliance with services of and Guyana and the Ministry of Trade and actions required prior to Board advisor to the Tourism (MDIT) to facilitate presentation. O Ministry of procurement procedures and Finance to disbursement of external aid. The advisor to the MOF in maintain External Financial Inflows was continuous contact retained. The computerized data with donors and to base on external financial inflows facilitate established by the Advisor fell into procurement and disuse upon his departure. (Aid disbursement of coordination continues to be a funds provided by significant problem and was bilateral and addressed in a recent Bank multilateral CPPR). donors. Economic decline has (a) SIMAP (a) Consultancy services (12M/M), SIMAP mitigated the most led to substantial equipment, supplies and training to the adverse effective of the reductions in living State Planning Secretariat and the adjustment. TAC financed standards and the Ministry of Culture and Social consultants analyzed the (D provision of social Development (MCSD) to improve distributional effects of the v services. Although targeting to the poor of SIMAP adjustment program, developed o successful programs. procedures for assessing social SAC Actions Taken Actions to be Taken Actions to be Implementation of SAC Assisted by TAC Assistance/Outcome Policy Areas Prior to Board Prior to Second Taken Prior to TAC Presentation Tranche Release Third Tranche Release implementation of the sector projects, including those of adjustment program SIMAP, and developed objective should help reverse this means to identify the target decline in the long run, population (LSMS). A follow-up some aspects of the IDB/SIMAP operation is likely to program could impose use the results of a second round additional stress on of the LSMS (1997) in its project certain segments of the selection criteria. population. In order to protect groups which are particularly vulnerable during the adjustment process, and engender public support for the program, a social amelioration program (SIMAP) has been developed. "> 0 x I 4 I MA T N :N i., e : U! , J E t N I , . I : I 9 .3