Document of The World Bank FOR OFFICIAL USE ONLY Report No. 82173-BO INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL FINANCE CORPORATION AND MULTILATERAL INVESTMENT GUARANTEE AGENCY COUNTRY PARTNERSHIP STRATEGY PROGRESS REPORT FOR THE PLURINATIONAL STATE OF BOLIVIA FOR THE PERIOD FY2012-2015 January 21, 2014 Bolivia, Chile, Ecuador, Peru and Venezuela Country Management Unit Latin America and the Caribbean Region The International Finance Corporation Latin America and the Caribbean Region Multilateral Investment Guarantee Agency 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 (As of September 25, 2013) Currency Unit = Boliviano US$1 = 6.97 Bolivianos WEIGHTS AND MEASURES Metric System PLURINATIONAL STATE OF BOLIVIA - FISCAL YEAR January 1 - December 31 World Bank IFC MIGA Vice President: Hasan Tuluy Jean Philippe Prosper Michel Wormser Director: Susan G. Goldmark Irene Arias Ravi Vish Task Manager: Faris Hadad-Zervos Hector Gomez Ang Dan Biller / Frank Manuel Rossini Linden ABBREVIATIONS AND ACRONYMS AAA Analytical and Advisory Activities ASFI Autoridad de Supervisi6n del Sistema Financiero/ Financial System Supervision Authority CAF Development Bank of Latin America CCT Conditional Cash Transfer CDD Community Driven Development CIF Climate Investment Fund CPPR Country Portfolio Performance Review CPF Country Partnership Framework CPS Country Partnership Strategy ENDSA Encuesta Nacional de Demografia y Salud/National Demographic and Health Survey ESW Economic and Sector Work FDI Foreign Direct Investment FONPLATA Fondo Financiero para el Desarollo de la Cuenca del Plata FSAP Financial Sector Assessment Program GDP Gross Domestic Product GEF Global Environmental Facility GPOBA Global Partnership on Output-Based Aid GruS Group of Partners for the Development of Bolivia HOI Human Opportunity Index IBRD International Bank for Reconstruction and Development IDA International Development Association IADB Inter-American Development Bank IFC International Finance Corporation IMF International Monetary Fund INE Instituto Nacional de Estadistica/National Institute of Statistics ISN Interim Strategy Note JSDF Japanese Social Development Fund LAC Latin America and the Caribbean MAS Movimiento al Socialismo/Movement Towards Socialism MDGs Millennium Development Goals MDP Ministry of Development Planning MIGA Multilateral Investment Guarantee Agency NDP National Development Plan NGO Non-Governmental Organization NRAIP National Roads and Airport Infrastructure Project OPCS Operations Policy and Country Services ORAF Operational Risk Assessment Framework PforR Program for Results PPCR Pilot Program for Climate Resilience RAAP Rapid Assessment and Action Plan ROSC Accounting and Auditing Report on the Observance of Standards and Codes SDR Special Drawing Rights SENASBA Servicio Nacionalpara la Sostenibilidad de Servicios en Saneamiento Basico SME Small and Medium Enterprise STATCAP Strengthening Statistical Capacity and the Informational Base for Evidence-Based Planning Project StAR Stolen Asset Recovery TCF Trillion cubic feet UDAPE Unidad de Analisis de Politicas Sociales y Econ6micas/Economic and Social Policy Analysis Unit UN United Nations VIPFE Viceministerio de Inversion Publica y Financiamiento Externo WSP Water and Sanitation Program WBG World Bank Group YPFB Yacimientos Petroliferos Fiscales Bolivianos (the State Oil and Gas Company) COUNTRY PARTNERSHIP STRATEGY PROGRESS REPORT PLURINATIONAL STATE OF BOLIVIA TABLE OF CONTENTS I. IN TR O D U C TIO N ..................................................................................................................... 1 II. COUNTRY CONTEXT ...................................................................................................... 2 III. PROGRESS TOWARDS ACHIEVING CPS OBJECTIVES AND OUTCOMES......... 6 A. Results to Date ....................................................... 6 B. Program Implementation and Portfolio Performance ............................. 9 C. Lessons Learned and Innovations in Bank Group Engagement- the Untold Stories............... 11 D. Adjustments to the CPS Results Framework ................................. 12 IV. THE CPS PROGRAM GOING FORWARD.................................................................... 13 V. RISKS AND MITIGATING MEASURES ....................................................................... 16 ANNEXES Annex 1: Progress in Achieving CPS Outcomes and Revised Results Framework ... ...... 18 Annex 2: Summary of Changes to CPS Results Matrix Outcome Indicators... ................ 23 Annex 3: Status of Selected MDG Indicators ..................................... 26 Annex 4: Innovative Approaches to Community Engagement and Greater Partnerships Across Civil Society- The Untold Stories .................................... 27 Annex 5: Catalyzing South-South Exchange of Development Experiences .............. 28 Annex 6: Country at a Glance............................................. 29 Annex 7: Social Indicators ................................................31 Annex 8: Key Economic Indicators ................... ................. 33 Annex 9: Selected Indicators of Bank Portfolio Performance and Management .. ........... 35 Annex 10: Operations Portfolio (IDA) ........................................... 36 Annex 11: IFC Committed and Outstanding Portfolio........................ 37 Annex 12: IFC Investment Operations Program ................................. 38 I. INTRODUCTION 1. This Progress Report reviews the implementation of the 2012-2015 joint Bank-IFC Country Partnership Strategy (CPS) for the Plurinational State of Bolivia. The CPS consists of a program of lending operations and knowledge activities along four pillars: (i) sustainable productive development; (ii) climate change and disaster risk management; (iii) human development and access to basic services; and (iv) public sector effectiveness. It also incorporates gender, governance and anti-corruption as cross-cutting themes. The pillars reflect the priorities outlined in the National Development Plan (NDP). The first development strategy of the Morales Government since entering office in 2006, the NDP seeks growth through public investment, reduced inequality and greater inclusion in terms of resources and basic services. 2. Bolivia continues to show strong economic performance and its new priority is to reduce extreme poverty to zero by 2025, and to enhance mechanisms to share prosperity. Boosted by gas and mining exports and by public investment, annual GDP growth has averaged 4.7 percent over the last nine years and will likely remain above 5 percent in 2013 and 2014. From a poverty and shared prosperity perspective, the gains to date are even more impressive. However, the economy remains vulnerable to changes in commodity prices and future demand. While this vulnerability is mitigated by the accumulation of considerable fiscal and foreign exchange reserves, a longer-term growth horizon requires efforts to deepen and diversify the economy. With that in mind, and with a primary goal of eradicating extreme poverty and translating prosperity into local principles of well-being, the Government launched the 2025 Patriotic Agenda in 2013, and is now operationalizing it to replace the NDP. 3. The bulk of the interventions proposed in the CPS are underway, with increased policy dialogue on emerging priorities under the Agenda Patriotical, particularly those related to unlocking alternative sources of growth. All investment projects and Advisory and Analytical (AAA) work is in progress. In agreement with the government, a planned operation in water and sanitation was dropped given the expanded role of the Development Bank of Latin America (CAF). At the same time, Bank Group engagement is moving to more programmatic activities, both across sectors and development partners. For example, successful interventions with rural producers have been scaled up, with added focus on access to finance. IFC's overall program has focused on the investment climate and on simplifying procedures, as well as on Access to Finance (A2F) in agriculture, and training to SMEs through its Business Edge Program. On the investment side, IFC has engaged larger sized clients in the tourism and real estate industry, while it has engaged clients in small and medium enterprise (SME) banking, microfinance and trade finance, agribusiness and forestry. 1 The thirteen pillars of the Patriotic Agenda are: (i) eradication of extreme poverty; (ii) shared access to basic services and living well; (iii) health, education, and sports for the formation of complete human beings; (iv) scientific and technological sovereignty; (v) financial sovereignty from financial capitalism; (vi) productive development and diversification; (vii) sovereignty over natural resources, with nationalization, industrialization, and commercialization in harmony with the environment; (viii) food sovereignty for living well; (ix) environmental sovereignty; (x) complementary integration of sovereign peoples; (xi) transparency in governance; (xii) achievement of overall happiness and well-being; (xiii) recovery of access to the sea. 1 4. Until now and for the remainder of the CPS period, efforts involve more programmatic interventions, new instruments and innovative approaches, and will now include resources from the International Bank for Reconstruction and Development (IBRD). The portfolio for the remaining CPS period includes both IBRD and IDA resources, and seeks to minimize any significant drops in resources in the expected transition after IDAl7. In terms of more programmatic and transformative approaches, a new Andean Products Development Project will support a coherent policy framework for production and export of quinoa and other goods, and will invest in infrastructure and new sustainable production technologies to access local and export markets. It will also connect, both financially and operationally, three existing rural development projects. The IFC is exploring, in parallel, an investment to provide greater value-added in the quinoa production chain in the country. In terms of instruments, an upcoming Program-for-Results (PforR) in Road Rehabilitation seeks to underpin a multi-agency program to strengthen Bolivia's road network, along with the Inter- American Development Bank (IADB), the Development Bank of Latin America (CAF) and the Fondo Financiero para el Desarollo de la Cuenca del Plata (FONPLATA). Regarding transparency and open data, Bolivia was showcased at the 2013 Annual Meetings as among the first to place its regional project data on the Open Aid Partnership (OAP) website. This includes both Borrower and donor data, and fuses the public systems with the OAP so that all projects can be geocoded and publicly monitored. Other innovative approaches were introduced including Bank public-private sector initiatives to support youth in the arts, to develop eco-friendly municipal beautification schemes, and to introduce women to national sports events. 5. The overall strategic framework laid out in the CPS remains relevant, but the current portfolio and Results Framework need further alignment to prepare the groundwork for more transformative solutions to meet Bolivia's new Agenda Patriotica 2025 and its focus on shared prosperity and eradication of extreme poverty. The remaining CPS period will continue to focus on resolving remaining implementation bottlenecks, and on moving to a portfolio where products coalesce around a few areas of intervention that are both catalytic and aligned with Bolivia's own goals of extreme poverty eradication by 2025, and shared prosperity along the concept of 'Vivir Bien' (living well). This involves continued interventions along the four CPS pillars, but with a greater focus on: (a) supporting sustainable employment and production corridors, particularly in rural areas; (b) enhancing institutional capacity in decentralized areas to deliver basic and social services; and (c) enhancing country systems and procedures to promote and evaluate results-based development. The purpose over the medium-term is for future initiatives to be driven by their transformative potential along these three lines, and to go beyond sector considerations. II. COUNTRY CONTEXT 6. The Government of President Evo Morales Ayma, in power since January 2006, has continued to alter Bolivia's political and economic landscape over the CPS period. With an agenda to empower the indigenous population and promote a state-led economy, the Government has nationalized firms in hydrocarbons, electricity and telecommunications, and created new public firms in other sectors. Bolivia's 2009 constitution also changed the balance of power through new consultation mechanisms, resource ownership policies and a greater role of the state in the economy. This agenda and a positive economic context have contributed to President Morales' continued popularity since his reelection in 2010. The Government now seeks to 2 balance the demands of its support base with the realities of governance and the need for sustainable fiscal policies, long-range reforms and some form of public-private balance in the economy. Traditional allies, including labor and indigenous organizations, have been pushing for larger participation in gas proceeds, higher pensions, fuel subsidies, further nationalizations, etc. 7. Bolivia's strong economic performance over the CPS period- and over the past decade- is likely to continue in the medium term. Boosted by gas and mining exports and by public investment, annual GDP growth has averaged 4.7 percent over the last nine years and is likely to remain above 5 percent in 2013 and 2014. Over the last decade, gas exports to Brazil and Argentina substantially increased due to earlier investments, while mining output has doubled since 2006 due to the foreign-financed San Crist6bal project. Also, public investment has spurred growth in other sectors including construction, manufacturing, finance, transport, and communications. This context, and Bolivia's relative isolation from international financial markets, has helped the country withstand the crisis and continue accumulating buffers. 2 Assuming stable commodity prices and no new international crisis, Bolivia will likely maintain its strong economic growth and healthy macroeconomic balances for the coming years. 8. However, Bolivia faces risks to sustained long-term growth and development. The country remains vulnerable to changes in commodity prices and in the demand for gas by Argentina and Brazil. Increasing gas exports to Argentina due to recent exploitation investments may maintain growth over the next two years. However, this growth may converge to around 4 percent by 2015 due to stabilizing or declining commodity prices, and/or Argentina's and Brazil's greater use of their own reserves (see Table 1). Also, despite government efforts to increase public investment and services, demand is outpacing current electricity supply, road infrastructure, and logistics, which is likely to cap the growth potential in various sectors of the economy. In the coming period, this vulnerability is reduced by the accumulation of considerable fiscal and foreign exchange reserves. The past several years have witnessed solid fiscal and current account surpluses, growing international reserves, and reduced public debt. However, a longer-term growth horizon requires efforts to translate the current 'window of opportunity' to deepen the economy and minimize its vulnerabilities. Table 1: Key Economic Indicators 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP growth (%) 2.5 2.7 4.2 4.4 4.8 4.6 6.2 3.4 4.1 5.2 5.2 5.5 5.5 4.2 Inflation rate(%) 2.4 3.9 4.6 4.9 4.9 11.7 11.9 0.3 7.2 6.9 4.5 5.2 4.5 4.5 Devaluation rate (%) 9.8 4.5 2.8 -0.5 -0.9 -4.5 -7.9 0.0 -0.4 -1.2 0.0 0.0 0.0 0.0 Total investment (% ofGDP) 15.6 12.7 11.7 13.0 14.3 16.1 17.2 16.5 16.6 19.0 18.2 19.9 21.1 21.0 Private investment (% ofGDP) 10.1 7.5 5.1 6.1 6.2 6.7 7.5 7.0 7.1 8.4 7.8 7.9 8.4 8.5 Public investment (% ofGDP) 5.5 5.2 6.6 6.9 8.1 9.4 9.8 9.5 9.5 10.5 10.4 11.9 12.7 12.5 Fiscal balance (% ofGDP) -8.8 -7.9 -5.5 -2.2 4.5 1.7 3.2 0.1 1.7 0.8 1.8 0.9 -0.6 -1.3 Gross public debt (% ofGDP) 84.3 93.8 88.8 83.9 55.6 42.4 38.8 40.3 39.0 36.4 35.8 34.7 33.4 31.0 Public dep. at Central Bank (% of GDP) 7.6 8.1 8.6 9.5 13.5 14.1 17.3 17.7 21.2 22.1 25.4 27.0 27.8 26.5 Current account (% ofGDP) -4.4 1.0 3.7 5.9 11.3 11.5 11.9 4.3 3.9 0.3 7.9 6.1 5.9 5.9 International reserves (% of GDP) 10.8 12.1 12.8 18.0 27.7 40.5 46.3 49.5 49.5 50.2 51.5 53.3 54.4 54.8 Bank's loans (% ofGDP) 41.9 38.1 32.4 31.0 27.2 26.3 23.7 25.3 28.4 28.8 30.2 .. Dollarization (% of deposits) 90.8 90.3 86.6 84.1 78.9 70.5 67.1 57.4 45.1 35.6 26.1 .. M3' growth (%) 4.2 12.8 10.1 36.6 42.4 55.5 27.7 32.6 10.2 28.2 16.5 11.5 8.7 8.9 Source: National Institute of Statistics (INE) and World Bank staff assessments 2 The 2012 IMF Article IV Consultation concluded that the risk of debt distress is low even in severe scenarios while all risk agencies upgraded Bolivia's risk rating from highly speculative rating to speculative, a few notches below investment grade. 3 9. With the goal of eradicating extreme poverty and translating prosperity into local principles of well-being, the Government launched the 2025 Patriotic Agenda in 2013, and is now translating its long term policy objectives into medium-term plans and targets. The Patriotic Agenda establishes medium-term policy objectives under thirteen pillars with the goal of reducing extreme poverty to zero percent and translating growth into a country-specific measure of well-being, among others.3 The Patriotic Agenda also proposes to universalize access to basic services, and improve health and education services. Other pillars aim to spur productive capacities, export diversification, and food security through support to small producers, industrialization of natural resources, and scientific and technological sovereignty. By broadly following the 2006 National Development Plan,4 the new Agenda aims to strengthen the Government's role in key sectors of the economy and use the resources generated there to promote social progress and develop labor-intensive sectors to boost inclusive economic growth. 10. The Government's Agenda seeks to build on a decade of significant improvements on shared prosperity, poverty and inequality, and to reflect on lessons learned for the way forward. The improvements to date are substantial, both in their extent as well as breadth: a. Using national poverty lines, poverty decreased from 63 percent of the population in 2002 to 45 percent in 2011 and extreme poverty from 37 percent in 2002 to 21 percent in 2011. b. The Gini coefficient measuring inequality has decreased from 0.60 in 2002 to 0.47 in 2011. c. The average income of the bottom 40 percent of the population increased by 15 percent per year over the same period. d. Bolivia has reached the Millennium Development Goals on extreme poverty, malnutrition, literacy, gender equality, births attended by health staff, protected areas, and consumption of chlorofluorocarbons, and is likely to reach some more by 2015 (see Annex 3). e. Between 1994 and 2008, the Human Opportunity Index rose from 45 percent to 66 percent due to improvements in children's access to health, education and other basic services. 11. These gains are closely linked to the high levels of growth, which are tied to the exceptional external environment, and to increasing public investment. As mentioned earlier, GDP growth has been driven mostly by the boom in commodity prices and increased public investment which allowed real income to increase faster than real output. In effect, between 2002 and 2012, value added grew 4.3 percent on average per year while real gross domestic income grew faster at 5.7 percent. This mostly benefited rural areas where poverty is The thirteen pillars of the Patriotic Agenda are highlighted in footnote (i). 4 The 2006 NDP was built around four pillars: Bolivia Productiva seeks to increase the State role in the economy to control strategic sectors and support labor-intensive sectors; Bolivia Digna aims to increase the support to vulnerable groups to fight poverty and exclusion; Bolivia Soberana seeks greater country ownership of Bolivia's development process while eliminating external influences while ensure self-sufficiency in food and energy production; and Bolivia Democrctica y Participativa proposes a profound social and political reform through a new Constitution. 5 This is a preliminary assessment, which will be improved by new household surveys based on the sample framework defined by the 2012 population census, and adjustments of databases of previous household surveys to the new sample framework. As in other countries, the consistency of household surveys has been affected by methodological changes including changes in the survey design, questionnaires, and imputation methods, among other reasons. Improving the consistency of past household surveys can enhance the understanding of recent social developments, as shown in countries like Peru or Colombia. Using a set of harmonized Bolivian household surveys, Hernani-Limarino and Eid (2013) showed that urban poverty incidence fell from 60 percent to 43 percent and urban extreme poverty from 30 percent to 13 percent due mainly to labor market dynamic. 4 higher, as workers in labor-intensive cooperative mining and farmers benefited most from high mining and agriculture prices. In addition, the high commodity exports favored the non-tradable sectors, in particular non-skilled, labor intensive activities such as construction, commerce, and transport where the majority of the urban poor are employed. It must also be noted that the improved social outcomes are also linked to various broad social programs that were launched or scaled up, although their effects on poverty have been smaller than the growth and terms-of-trade effect. Over the last ten years, the government has scaled-up an existing cash transfer to the elderly, and launched one Conditional Cash Transfer (CCT) encouraging primary school attendance and another focused on mother and early child healthcare. However, the scale of these programs remains limited, with 1.1 percent of GDP, 0.3 percent and 0.1 percent respectively. 12. Taking a longer-term perspective, sustaining the Patriotic Agenda's objectives of eradicating extreme poverty and consolidating shared prosperity will require deep structural changes. The exceptional external context has masked the structural, long-term constraints that Bolivia traditionally faced to spur pro-poor growth. However, the extent to which these positive factors will endure becomes more uncertain in the longer time horizon. Similarly, Bolivia's ability to exploit its current window of opportunity to consolidate its gains also varies with time. In both cases, the need for early actions to address the economy's structural challenges remains relevant. Some of the main challenges include: * Addressing longer-term challenges to the current growth model, particularly related to the sustainability of hydrocarbon and mining exports and emerging infrastructure bottlenecks. The lack of considerable new exploration investments in mining and hydrocarbons may undermine the sustainability of commodity exports as the primary driver of current growth. Furthermore, despite government efforts to expand public investment and basic services, economic growth is outpacing infrastructure supply which may become a bottleneck to sustaining high growth rates over the medium term. Addressing these challenges would require a conducive investment environment to attract support from reliable and experienced credible partners in carrying out large-scale investment projects in these sectors. * Shifting the growth storyline to expanding productivity and diversifying the economy. In the face of uncertain external conditions in the future, locking in the progress so far requires alternative sources for growth, primarily through productivity gains and diversification in production. Productivity has added on average only 0.9 percent points to the 4.7 percent annual growth attained between 2002 and 2012. Enhancing productivity and diversifying the economy requires a broad reform agenda, yet the current levels of private investment (7 percent of GDP) are a limitation. While being cognizant of Bolivia's sovereign vision of a state-led economy, experience elsewhere nevertheless shows that private investments can play an important role in infusing new technologies, know-how, and high-quality jobs in an economy. Thus, the planned public investment program can be complemented by higher private investment across different sectors to trigger economic opportunities and reduce informality that still generates 59 percent of urban jobs. This does not conflict with Bolivia's constitutional framework- what is required is a clear investment law, established practices of protecting investor rights, and mechanisms of public-private dialogue and coordination. 5 * Enhancing opportunities through better and more equitable access to basic services and to good quality education. Bolivia's 2012 Human Opportunity Index6 shows that despite recent investments and advances, access to health, education, and other basic services remain very constrained in rural areas. Particularly worrisome is the lack of access to sewerage and adequate living conditions. Progress on the MDGs is delayed in a few areas, in particular child mortality, prevalence of chagas, AIDS and tuberculosis, primary school completion, and access to improved sanitation facilities. Bolivia also needs to continue investing to improve the targeting and progressivity of subsidies, tertiary education and, to a lesser extent, cash transfers. This is important to help increase intergenerational social mobility and lay the foundation for a more equitable and productive society. * Strengthening institutional capacity and efficiency of public institutions. As public investment has been and continues to be a key driver of growth, it becomes imperative to increase the quality of these investments, and to do so throughout the country's 339 municipalities. The challenge is to operationalize the 2010 Decentralization Law that devolves the bulk of public investment to decentralized levels. This will require stronger institutional capacity across regions and municipalities, and streamlined regulations to facilitate the participation of private contractors and providers of goods. III. PROGRESS TOWARDS ACHIEVING CPS OBJECTIVES AND OUTCOMES A. Results to Date 13. The World Bank Group has made satisfactory progress towards achieving the outcomes in the CPS, although progress is uneven across sectors. Outcome indicators, particularly in rural development, public sector effectiveness and disaster risk management show positive results. The human development and access to basic services pillar shows significant achievements in terms of expanded access to energy, and access and quality of education in areas supported by the Bank. Evidence on progress in reaching health and nutrition-related indicators is less clear, but will be provided in the coming months once the results of the impact evaluation of the Bank-supported Bono Juana Azurduy Conditional Cash Transfers are released. Under the sustainable productive development pillar, revenue and employment outcomes in the rural areas targeted are well on track, while outcomes aimed at addressing infrastructure needs and promoting economic integration are lagging behind due to implementation delays. The climate change agenda has also experienced implementation delays. Outcome indicators on access to water and sanitation were dropped since investment in the sector did not take place. A detailed description on progress towards CPS outcome indicators is presented in the revised Results Matrix in Annex 1. 14. Work under the Sustainable Productive Development Pillar of the CPS has been particularly successful in rural areas where investments have yielded clear results on 6 This was prepared by UDAPE and the World Bank. 7 Social programs reduce poverty, but their impact is diluted by their small amount and their lack of targeting. For instance, Lustig et al (2011) showed that fuel subsidies and tertiary education are highly regressive while cash transfers are only modestly progressive. 6 sustainable incomes of poor rural producers and their exit from poverty and extreme poverty. The Bank has six ongoing projects worth US$222 million in rural development, three of which were approved in this CPS period. While newer projects such as the Project on Community Investment in Rural Areas (PICAR) are beginning to yield results (i.e., a new law allowing communities to register as implementing agencies for Community Driven Development (CDD) operations, and over 20% in disbursements over six months), older interventions in building rural agricultural alliances are showing promising outcomes- 29,000 beneficiary families have seen their net income increase by an average 275 percent, and their sales increase by more than 460 percent. Of these beneficiaries, 90 percent are indigenous. 15. Despite the focus on addressing infrastructure needs and promoting economic integration, progress across various urban and national infrastructure projects has been variable. Bank investment operations focusing on decentralized infrastructure have supported successful applications of co-investment practices between 180 of Bolivia's 339 central, departmental and municipal governments to deliver basic services. In addition, urban upgrading investment plans have been successfully implemented in the Municipality of La Paz with key outcomes across 22 of the 46 poorer neighborhoods so far, but has been slower to deliver results in the Municipality of El Alto where institutional capacity is weaker, but is now moving forward. Conversely, progress under the National Roads and Airport Infrastructure Project is delayed due to the absence of an adequate number of construction firms able to manage contracts of this size. 16. IFC continues to support productive development by identifying and engaging in viable, private sector-led projects complemented by strategic advisory services, with a focus on SMEs in rural areas. IFC has strengthened its work in A2F in the agricultural sector (including soy and quinoa), and provided training to SMEs through its business advisory pillar (Business Edge Program). Its focus included projects in financial markets-small and medium enterprise (SME) banking, microfinance and trade finance- tourism and real estate industry, agribusiness and forestry. Within its agribusiness work, IFC has backed a regional Responsive Soy Program to improve crop productivity and the sales of small and medium soybean farmers, and promoting environmental and social standards to increase the acreage of sustainably managed land. Since FY11, IFC's non-trade finance commitments included only one project in the forestry sector with Empresa Forestal SL V. This project, which focused on working with local indigenous communities, became unviable in FY13 due mostly to delays in receiving time- sensitive annual forestry harvesting permits as well as export licenses from the authorities. 17. Under the Climate Change and Disaster Risk Management Pillar, several initiatives contributed to the Borrower's efforts to streamline these themes into the work of local institutions. An Emergency Recovery and Disaster Risk Management project has supported the borrower's efforts to rehabilitate weather-related damaged infrastructure, and to initiate a national program to identify and reduce vulnerabilities to future disasters. The Bank's Global Fund for Disaster Risk Reduction (GFDRR) has, through a multi-ministry initiative, enhanced national capacities through better hazard monitoring systems, a new methodology to assess risk at the municipal level, and a GIS-based disaster risk management information platform. All of these instruments have become components of a National Disaster Risk Management Program. 18. The climate change agenda- both at national and subnational levels- has also benefited from analytical work and grant financing to help internalize the issue within 7 Bolivia's public investment plans. However, the Bank's operational part is just now beginning. An environmental assessment was carried out during the CPS period, followed by concrete investments in vulnerable areas under the Trust Fund for the Adaptation to the Impact of Rapid Glacier Retreat in the Tropical Andes. These interventions helped created a modus operandi for current dialogue and future investments. Also, the first phase of the Pilot Program for Climate Resilience is now just beginning, and will support the preparation of a project to finance basin management infrastructure and address climate change effects in the Governorates of Santa Cruz and Cochabamba. This is done in partnership with the IADB. 19. Under the Human Development and Access to Basic Services Pillar, outcomes have been variable. Interventions in education and labor markets have had some initial results in enhancing quality and access, with measurable progress in enrollments and labor insertion. For example, the recently-completed Secondary Education Project helped the Municipality of La Paz to expand access to primary and secondary education in the most needed areas from 3,416 students in 2008 to 6,300 at project closing. Grant funds are also being used to identify child care constraints for unemployed young mothers with a focus on Early Childhood Development (ECD). In addition, Mi Primer Empleo Digno, a skills development project component for low income urban youth, achieved some key results in skills-building and labor insertion. However, it did also have low participation of young mothers, which led to the inclusion of a stipend to finance ECD services' costs. 20. Despite efforts to support health sector policies to reduce child malnutrition and infant and maternal mortality, implementation challenges have affected outcomes in the sector. Two ongoing investment operations in Health and Social Protection (Bono Juana Azurduy, a health CCT component) were restructured and credit proceeds partially cancelled after many efforts to resolve implementation obstacles, including high staff turnover and lack of policy continuity. Ultimately, the high turnover and insufficient focus on maintaining established systems proved to be significant challenges. Since the restructuring, the Borrower has continued financing of the Bono, though implementation problems remain. 21. Through grant funding, the Bank contributed to expanding sustainable access to energy in remote areas which has also contributed to HD outcomes. A Global Partnership for Output-Based Aid (GPOBA) grant for Decentralized Universal Access to Electricity has surpassed its objectives by providing solar home systems for residential and social use in five out of nine governorates, and photo-voltaic systems in seven governorates. Outcome indicators were surpassed as systems were provided for over 7,500 homes and 126 schools, among others. In water and sanitation, despite the decision to drop the proposed project in the sector as mentioned in paragraph 3 above, the Bank's Water and Sanitation Program (WSP) retains a close engagement in the sector through its Technical Assistance program with the authorities to support the implementation of new regulations and policies, including those for on-site sanitation systems which are predominant in Bolivia. 22. The Public Sector Effectiveness Pillar has had some initial accomplishments, particularly in strengthening implementation capacity at decentralized levels, and in capturing and using national data to monitor policy results and to identify priorities. Bank investment operations have helped rural municipal governments and indigenous autonomies to develop and execute their development plans. Another intervention has financed the 8 implementation of the National Demographic Census, and is currently helping to implement the Agricultural Census and two rounds of Household Surveys to provide information for the design and evaluation of public policies across all sectors. In support of these projects, the Bank and the borrower's research arm (UDAPE) co-authored the Bolivian Human Opportunity Index (HOI) that measures the status of some opportunities guaranteed by the 2009 Constitution. Public debt management was supported by tools and training that allowed the authorities to evaluate their debt management and construct a medium-term debt strategy (MTDS). Complementary to this, the IFC has collaborated with the public and private sectors to improve the investment climate by simplifying business registry procedures at the national and municipal levels. 23. The cross-cutting themes of gender, governance and anti-corruption have been embedded into World Bank operations as well as stand-alone parallel activities. In terms of governance and transparency, a pilot by WBI to geocode World Bank-financed projects has led to a joint activity with the borrower making Bolivia the first country to incorporate the Open Aid Partnership (OAP) platform into its own internal project financing database (SISIN). Bolivia was showcased at the 2013 Annual Meetings for providing open access to its project data at the municipal level. By making information publicly available, the OAP has led to empowered beneficiaries, responsive providers, and informed decision-makers. Other initiatives include support by the Stolen Asset Recovery (StAR) program to the Ministry of Transparency and Anti- Corruption leading to the recovery of approximately $120 million in recovered assets; and (b) TA that led to the revision of municipal-level procurement systems for more efficiency and transparency in contracting processes. In terms of gender, efforts to incorporate gender-specific components in the rural and urban development projects were matched by initiatives to capture more data on the topic. The Bank is supporting the second gender perception survey to inform Borrower and civil society discussions of public policies on gender issues. B. Program Implementation and Portfolio Performance 24. The Bolivia portfolio comprises eleven investment projects worth US$464 million, of which US$285 million remain undisbursed. While the number of projects in the portfolio has remained stable since FY2008, total commitments have increased by 27 percent- from US$365 million at the beginning of the current CPS period to the current amount of US$464 million. The average project amount has grown by 27 percent over this CPS period, reaching US$42 million. One of the goals of the CPSPR is moving towards a portfolio with fewer projects based on key selectivity criteria, each with larger amounts for greater development impact and lower transaction costs. This goal will continue to drive future decisions, with the restructuring or cancellation of problem projects, the exit of completed projects, and the greater use of bundled activities and additional financing. 25. Work during the CPS period has focused on adapting to an implementation environment with varying capacities and challenges, on expanding well-performing operations, and on taking proactive action on problem projects. Over the CPS period there has been a sustained effort to restructure problem projects. As a result, three out of four unsatisfactory projects were restructured, and one restructuring and partial cancellation is underway. Once restructuring is complete, three of the four problem projects would have been upgraded in status. The Realism Index is high as there remains only one potential problem project. Current commitments at risk represent 17 percent of total commitments. Bi-annual 9 Country Portfolio Performance Reviews (CPPRs) continue to identify and address challenges. In addition, the Country Office has carried out bi-annual trainings of counterparts on fiduciary, safeguards and project management to mitigate the effects of the high turnover in the ministries. 26. While portfolio performance has been below LCR and IDA standards, improvements have been made as relatively new projects are reaching the expected implementation pace. The disbursement ratio reached 17.7 percent in FY12 and 16.7 percent in FY13. As of November 2013, the disbursement ratio had already reached 10 percent. In terms of new commitments, the Bank has expanded in areas where the traction and development impact is highest. Three new investment projects in rural development were approved in the last two years, increasing the program in the sector from US$93 million to US$222 million. Including the Additional Financing for the successful Urban Infrastructure Project, the Bank has committed two-thirds of the IDA16 allocated resources, with the remainder to be committed in two new operations in FY14. Moving forward, the expected entry of five new operations and one additional financing totaling US$395 million in FY2014 will lead to a drop in the disbursement ratio given the average lag of 10 months between project approval and effectiveness dates. To mitigate these delays, the Bank will place increased emphasis on project readiness for implementation. On the implementation side, emphasis has been and will continue to be put into daily support to counterparts to help them respond to implementation challenges, and in some cases introduce innovations (such as a new regulation that allows public transfers to communities as 'entities', piloted by a World Bank Project, and the new Citizen Feedback mechanisms in urban and rural projects). While progress is being made, challenges remain and will need continued investments in human resources and in enhanced implementation support. 27. IFC's portfolio as of October 2013 includes eight investment projects with an outstanding balance of US$30.5 million, of which $19.5 million are trade finance guarantees with four institutions. IFC's outstanding portfolio in Bolivia has declined from its highs of around US$235 million in 2005, due largely to the lack of clarity on the government's stance on private sector development, the nationalizations in key sectors, and a lack of regulatory framework for foreign investment. Nevertheless, IFC has sought investments in clients with sustainable business models and the proven ability to operate efficiently under the regulatory framework of Bolivia's new Constitution. This includes projects primarily in financial markets- small and medium enterprise (SME) banking, microfinance and trade finance-agribusiness and forestry. In the agribusiness sector, IFC has maintained its focus on export-oriented clients that add value to locally produced raw materials, and that generate jobs in rural areas. It extended its agribusiness activities into forestry and worked with new partners such as cooperatives and indigenous groups, as is the case with the Empresa Forestal SL V operation mentioned above. 28. Stand-alone programs, such as the Water and Sanitation Program (WSP), have aligned their work with the CPS. Currently, WSP is assisting the Ministry of Environment and Water on the revision of policies and procedures for the Preparation and Appraisal of Projects (MPEP). By FY15 it is expected that the revised methodologies would have been put in practice. WSP is also working with the National Agency for the Sustainability of Water and Sanitation Services (SENASBA) to allow it to fulfill its mandate to provide technical assistance, social development and institutional strengthening at a national scale. 10 Table 2: Planned CPS Lending Program and Actual Delivery as of December 2013 Planned Program in the CPS US$ Status US$ million million Investment Financing (all projects are IDA-financed) Urban Infrastructure 11 24 Approved: Additional Financing 24 Urban Infrastructure Project (PO83979) Decentralized Infrastructure for Rural To be discussed in FY14: Access and 25 5 Transformation II (Access to Renewable Energy) Renewable Energy Project (P127837) Rural Alliances II 40 Approved (P) 50 Water and Sanitation 70 Dropped To be discussed in FY14: Improving Human Development 20 Employability and Job Quality Among 20 Vulnerable Groups Project (P143995) Trust Fund Program Pilot Program for Climate Resilience Phase II 36 To be discussed in FY14: Integrated 45.5 Basin Management Project (P129640) Ensuring Quality in the National Statistical 0.24 Approved (P126096) 0.24 System of Bolivia Early Child Development JSDF 2.9 Approved 2.9 Integrated Community Driven Territorial Approved but not yet active Development For Remote Communities in the 2.3 (P130664) 2.3 Amazon C. Lessons Learned and Innovations in Bank Group Engagement- the Untold Stories 29. Experience to date points to the need to focus on a few areas of greater potential results, and to direct significant resources towards implementation support in these areas. The World Bank's role is seen by Bolivia and partners as being particularly valuable in terms of institutional support, and in ensuring proper project management and execution practices in the face of limited capacity. This role requires adequate support on the ground to assist these institutions in internalizing these practices. Evidence shows that where local personnel increased missions and other resources were provided to augment local capacity and the standard 'implementation support model' of the World Bank, projects have shown better results. Similarly, where increased fiduciary and safeguards attention was given, project bottlenecks were resolved quicker and with greater ownership by counterparts, as World Bank requirements were seen as favoring institutional development rather than the funder's conditions. Reflecting these lessons requires greater selectivity in current and future interventions to make the best use of limited supervision resources. 30. Feedback from the authorities and civil society over the past two years also shows substantial benefits from the innovations on the ground, both within projects and in initiatives outside of the portfolio- the 'untold stories'. For example, Bank-sponsored South- South exchanges have proven to be a highly successful mechanism to contribute to homegrown solutions with strong ownership. The Bank has facilitated a South-South exchange with Bhutan, Mexico and Ecuador to build indicators of the Living Well concept (Vivir Bien) promoted by the Constitution. The Bank has also sponsored exchanges in science and technology, rural alliances and urban development (see Annex 5 for more details on the South-South exchanges involving Bolivia). Another initiative mentioned earlier, the Open Aid Partnership (OAP), is regarded as a particularly transformational engagement with Bolivia becoming the first country to incorporate 11 the OAP platform into its on-budget project financing database and to begin geocoding its own projects to include in the Open Aid map. Bolivia was also showcased at the 2013 Annual Meetings for its advances in providing access to its project database with information at the municipal level. Joint work is now underway to overlay thematic maps with 40 subnational socio-economic indicators. Also, WBI's electronic Citizen Feedback system is being integrated into the Rural Alliances (PAR) and the Bolivia Infrastructure projects through agricultural producers and neighborhood representatives. 31. Several non-project initiatives carried out by the Bank Country Office have mobilized partners across civil society, including neighborhood councils and action groups, the media, artists and private businessmen. These partners have played key roles in Bank-led initiatives promoting youth and the arts, and sports. The impacts of these initiatives have not only allowed the Bank Group to propel key social mobilization events, but to put in place sustainable systems to channel funds to areas not traditionally targeted by many donors and development partners (see Annex 4 for more information). D. Adjustments to the CPS Results Framework 32. Although the CPS results framework continues to broadly capture the contours of the World Bank's Group engagement, lessons learned and new areas of intervention have led to adjustments in certain indicators. These revisions reflect the entry of new activities in the portfolio, as well as the restructuring of problem projects. They also reflect greater insight by the Bank teams across projects, which allow for indicators with greater alignment to the borrower's goals and what can realistically be achieved in the CPS timeframe. Furthermore, the revised results framework represents an effort to better capture the Bank Group's focus on the twin goals of extreme poverty eradication and shared prosperity, which are already in place in Bolivia given the country's own priorities. 33. Delays in the effectiveness of certain projects, and challenges met in several problem projects, led to the removal of related indicators that are either no longer relevant or that will not be reached within the CPS period. The CPS results framework has also been revised to reflect implementation realities and experiences during the past two years. For example, indicators related to water and sanitation were removed given the decision to drop the planned project due to the expansion of the CAF's Mi Agua Water Investment Program nationwide, thus allowing the Bank to focus elsewhere. In the case of the indicators on health, these were dropped given the restructuring of the project in view of the inability to achieve traction with the authorities on policies and practices to ensure sustainability of the program. Other indicators, including one related to enhanced operations in Rurrenabaque Airport, were dropped due to delays in implementation whereby the outcome will be achieved but not in the CPS period. 34. Deeper dialogue and collaboration on the objectives of extreme poverty reduction, shared prosperity, and transparency and accountability has led to the inclusion of new indicators in these areas. Recent progress in supporting Bolivia's efforts to better capture poverty and its many dimensions, and to analyze inter-generational constraints facing the poor, had led to the inclusion of a new results indicator on this issue. Also, another set of indicators seek to monitor the recent achievements by Bolivia in enhancing transparency and accountability in their public investment plans, both through the Open Aid Partnership Platform and the 12 introduction of new Citizen Feedback mechanisms in two World Bank projects as a pilot for other internally and externally-financed development projects. See Annex 2 for a summary of revisions to the CPS results framework. IV. THE CPS PROGRAM GOING FORWARD 35. The remaining CPS period will be dedicated to implementing the current portfolio, resolving pending implementation issues, and transitioning into the new CPF cycle with the two goals of extreme poverty eradication and shared prosperity serving as the link between the Bank Group's program and the Agenda Patriotica 2025. The 2006 National Development Plan (NDP) continues to be the operative document of the Borrower, implying continued relevance for the CPS. The NDP will be the sole guidepost for development policy decisions until the Agenda Patriotica 2025 is operationalized. Once that occurs, it will guide Bolivia's development path. 36. The economic components of the Agenda Patriotica revolve around the eradication of extreme poverty and shared prosperity. As such, the CPS pillars and their objectives continue to be relevant. Within these pillars, the program will also seek to further position the World Bank Group according to its established value-added in the country. For the second part of the CPS period (FY14-15) the new pipeline will adhere to the pillars and objectives identified in the CPS, and will within that also focus on our comparative advantages in: (a) Supporting sustainable employment and production corridors approach, particularly in rural areas. For instance, a planned Andean Products Development project and a related IFC investment, under the Sustainable Productive Development Pillar, will also focus on regional approaches to build value-added chains in rural areas to access local and international markets; (b) Enhancing institutional capacity in decentralized areas to deliver basic and social services. In this case, a planned Public Sector Management Project, a Decentralized Electrification Project, and others across a number of pillars will focus on a number of Bolivia's municipalities and their efforts to deliver basic services and development projects; and (c) Enhancing country systems and procedures to promote and evaluate results-based development. Here, the planned Program-for-Results Project in Road Upgrading, and Additional Financing for the Statistical Capacity Building Project will also seek to enhance the borrower's capacity to disburse its own resources using evidence and results-based financing. 37. Existing and future lending, AAA and trust-funded activities will be bundled to the extent possible to increase efficiency and exploit the World Bank Group's established value-added. In order to focus on supporting sustainable employment and production corridors, particularly in rural areas, current rural development and infrastructure projects will be augmented with an upcoming Andean Products Development project, a related IFC investment in the sector and a Decentralized Electrification Project to help trigger sustainable growth in the Andean highlands area. This will allow for a more holistic development approach around very concrete areas. For instance, quinoa production and prices in the highlands have increased substantially over the past years given the rise in international demand. Thus, a holistic approach will involve new sustainable production methods, support to rural alliances for greater bargaining power, better infrastructure to access markets, and investments for more value-added quinoa product exports. In other sectors, a follow-on Youth Employment Project will promote access to labor markets under the 'Mi Primer Empleo Digno' initiative, and increase the quality 13 of youth employment opportunities. This will be complemented by a Tourism Strategy and Programmatic AAA in the area, as well as with other multi-year AAA on urban development, sources of growth, etc. In terms of enhancing decentralized institutional capacity, a planned Public Sector Management Project will be supported with the concrete cases under the Decentralized Electrification Project, as well as with the proposed CAF-IADB-World Bank Energy project in the La Paz Department. Supportive AAA includes Bolivia's first Reimbursable Advisory Services (RAS) program to strengthen the public sector management systems of the Department of Santa Cruz, among others. Lastly, enhancing country systems and procedures to promote and evaluate results-based development will require interventions ranging from the new Program-for-Results Instrument in Road Upgrading, to Additional Financing for the Project on Strengthening Statistical Capacity and Evidence-Based Planning to help inform and monitor policy decisions. In addition, planned work on a Science & Technology strategy will support systems to address links between skills and labor market needs. The cross cutting issues identified in the CPS will continue to apply. 38. The remaining CPS period will include both IBRD and IDA resources, and will involve the complementary work of other parts of the World Bank Group, as well as external partners. It is expected that Bolivia will continue to have access to concessional resources (IDA16 and IDA17), as well as new access to IBRD loans. Given the World Bank's commitment to ensure a smooth transition for countries eventually exiting IDA, the future portfolio will reflect a mix of concessional and non-concessional financing that will be agreed with Bolivia during the course of implementation. Also, IFC expects that its future engagement will be Advisory Services-driven in the short term, with increasing investment opportunities over time. On the Advisory Services side, IFC will focus on projects that support the CPS (Quinoa/Soy, Business Edge, Rural Access to Finance, Investment Climate). On the Investment Services side, IFC will work on potential investments in private banks such as BancoSol that are focused on MSME and rural finance; the financing of agribusiness companies; and the tourism real estate sector. As for the Multilateral Investment Guarantee Agency (MIGA) its current portfolio in Bolivia consists of one outstanding guarantee contract in the financial sector, with a gross exposure of US$11 million. Bolivia's business environment and need for further clarity on the role of the private sector restricts MIGA's involvement to small projects in non-regulated sectors of the economy. However, MIGA has received preliminary inquiries by investors with interests in the manufacturing and hydrocarbons sectors in Bolivia, and is in discussions on this. Lastly, the Bank's Treasury Operations have been and will continue working with the Central Bank of Bolivia (BCB), who joined the Reserve Advisory and Management Program (RAMP) on February 2013 for the purpose of upgrading its reserve management operations. Given the significant increase in its foreign exchange reserves, the central bank asked the World Bank to review its investment management objectives and framework, and agree on an action plan to address shortfalls. During FY13, the Bank's TRE department worked with the Central Bank on its strategic asset allocation framework, and the design of investment guidelines to manage the portfolio. For the remainder of the CPS period, TRE will focus on strengthening their investment, risk management and operational capabilities to implement the approved strategic asset allocation. In addition, extensive training has been provided through 20 slots to the annual multi-country workshops hosted by RAMP, which cover all aspects of the investment management process, and sponsorships to on-line finance courses and the Charter Financial Analyst (CFA) certification. 14 Tentative Lending Program for FY14-15 Amount Project Instrument (mu) (US$ mn) Access and Renewable Energy IPF 50.0 Pilot Program for Climate Resilience Phase II - Integrated Basin Management IPF/RETF 45.5 Improving Employability and Job Quality Among Vulnerable Groups IPF 20.0 Sustainable Production of Ancestral Andean Products IPF 100.0 AF Strengthening Statistical Capacity for Evidence-Based Planning AF IPF 24.5 National Road Sector Management Program PforR (Parallel financing with PforR 200.0 CAF) Total FY14 440.0 Strengthening Public Investment Efficiency IPF 25.0 Energy Project (Co-financing/parallel financing with CAF and IDB) IPF 150.0 Total FY15 175.0 Trust Fund Portfolio Amount (US$ mn) Active Strengthening of the Ministry of Development Planning in the Process of Decentralization (IDF) 0.28 Climate Change Resilience Management System in the Pilot Sub-basins (CSCFIA) 0.5 Pilot Program for Climate Resilience - Phase I (CSCFIA) 1.5 Ensuring Quality in the National Statistical System (TFSCB) 0.24 Early Childhood Care And Development in the Most Vulnerable Districts Of La Paz And El Alto 2.78 (JSDF) Integrated Community-Driven Territorial Development for Remote Communities in the Amazon 2.21 (JSDF) Pipeline Sustainable Management of Community Centers in El Alto Pilot Project (JSDF) 1.96 AAA Ongoing and Tentative Program FY14 and FY15 Product Report on Observance of Standards and Codes in Accounting ESW Sources of Growth Programmatic AAA ESW Urban Development Programmatic AAA ESW Multidimensional Poverty Phase III TA Multidimensional Poverty Phase IV TA TRE RAMP Support to the Central Bank of Bolivia TA Rapid Assessment and Action Plan for Santa Cruz RAS Improving Social Services TA Public Sector Governance IV TA Science and Technology Strategy TA Tourism Strategy and Private Sector Involvement TA 39. The Bank's program takes into account the work of key international partners, and balances between engaging in areas otherwise not fully covered- such as rural agricultural development- and complementing partners' work through new instruments or approaches. Of the total external debt of roughly $5 billion, the three largest lenders are the CAF ($1,554 million), IADB ($967 million) and the World Bank ($460 million). China has replaced Venezuela as the primary bilateral lender, with $429 million. The CAF's multi-sector portfolio 15 focuses largely on infrastructure in which transport is the biggest component, followed by energy. Social development is the second-largest component, with a focus on water and sanitation and solid waste management- CAF's Mi Agua is the most prominent water and sanitation program in the country. Other sectors include education and technical training, environmental management, etc. The IADB's program covers transport, water and sanitation, energy, early childhood development, health, education and public management. The EU's program focuses on: (a) the fight against poverty and social exclusion, and improving productivity, employment, and basic social services; (b) anti-narcotics production and trafficking; and (c) sustainable management of water resources. All these partners engage both in investment operations and budget support. Where the Bank is involved in the same sectors (with the exception of anti-narcotics production and trafficking activities), strong coordination takes place to ensure that Bank institutional development - such as the revision of highway maintenance contracting- is leveraged by others, and vice versa. The three priorities mentioned earlier are a way to identify our complementarity with these partners. V. RISKS AND MITIGATING MEASURES 40. The risks identified in the CPS continue to be relevant for the coming period. One systematic risk confronting the CPS outcomes in the longer term is the dependence of the economy on its natural resources, and its vulnerability to changes in commodity prices and in the demand for gas by Bolivia's neighbors. Another risk relates to the overall political economy environment, and the likelihood that increased social demands by Government supporters may delay or overturn policies, or favor policies that prioritize short-term gains in income distribution over longer-term investments in growth. This may be amplified in the run-up to the elections in 2014. Indeed, demonstrations and blockades by various unions and indigenous groups have had an influence on policy decisions, adding to uncertainty over future policies, particularly with regard to private and foreign investments in some sectors. To address these two systematic issues, a realistic mitigation strategy is to maintain policy dialogue with the government to help identify tradeoffs, and to support systems for informed policy-making. Specifically, this includes AAA in areas ranging from Debt Management and Multi-Year Budgeting to the Ministry of Economy and Finance, to the Sources of Growth analysis carried out with the Ministry of Development Planning. The government-led and Bank-supported efforts towards transparency of investment financing under the OAP will improve prioritization of projects with the highest poverty-reduction impact. 41. One major risk relates to the complexity of implementation arrangements, which is present at several levels. First, both the authorities and partners are facing a strained absorptive capacity for investment projects, particularly at decentralized levels. On the demand side, the massive increase in the public investment program (from US$630 million in 2005 to US$4.6 billion in 2013) has created stresses on institutions of delivery. On the supply side, the absence of a sufficient private sector response to these growing needs is felt by all agencies in Bolivia, as projects compete for contractors and consultant firms. On the public sector side, wages are too low to attract and retain skilled staff in the implementation units. At the national level, legal requirements placed on contractors, including restrictions on price adjustment clauses, make public investment projects relatively unattractive. This is compounded by a multi-layered system of approvals for extemally-financed projects between national and subnational governments, leading to an average effectiveness delay of ten months for Bank projects. Also, the 2010 16 Autonomies Law has devolved most project management responsibility to local governments, whose experience with international organizations is variable. To address this, the Bank is holding joint semi-annual Country Portfolio Performance Reviews (CPPRs) with the borrower to monitor implementation. The Bank has increased its staffing in the field to offer more implementation support, and is partnering with others (including CAF, IADB, IFAD, etc.) where possible to minimize the strain on existing structures. Bank teams have also restructured problematic projects in favor of simple project design reflecting the local context. Moving forward, the portfolio will transition to larger but fewer projects designed around local realities, and bundled with supportive AAA to optimize our presence in the field. The Bank will also place increased emphasis on project readiness for implementation. Future projects will also tailor contracts and procurement packages to the supply capacity in the local market. 42. The World Bank Group's engagement in Bolivia continues to hinge on recognizing that risks exist yet engaging where the returns are higher, on identifying specific challenges across projects, and on adopting mitigating measures. Bolivia is at a critical phase of its development. It has achieved considerable economic gains but needs to consolidate this into endogenous and sustainable growth that continues to pull the poor and vulnerable up, and ensures that the gains are shared. Institutional development is at the heart of this challenge. The World Bank Group, both in terms of where and how it engages, can contribute to solutions to help Bolivia turn what it now has into what it believes it needs in the future. 17 Annex 1: Progress in Achieving CPS Outcomes and Revised Results Framework Country Development Goals CPS Outcomes CPS Outcome Indicators Progress to Date World Bank Group Program (and partnerships) Pillar 1: Promote Sustainable Productive Development Reduce extreme poverty in rural Increase income generation Household income for families that Underway: Beneficiary family income Lending: areas by increasing agricultural capacity for excluded groups and have accessed to land increased increased by 25.8% (July 2013). * Land for Agricultural Development productivity rural producers through increased Baseline: 0% (2008) Project (Ongoing) access to productive land and Target: 50% increase (2015) * Rural Alliances Project and AF more predictable access to (Ongoing) consumption markets Income and volume marketed of rural Achieved: Volume marketed increased * Participatory Rural Investment II Project productive units allied increased by 79% (March 2013). Impact on (Closed) Baseline: 0 (2006) household income will be measured in * Agricultural Innovation and Services Target: 45% increase after three sales 2014. Project (Ongoing) under alliance (2015) * Rural Alliances II Project (Ongoing) * Sustainable Production of Ancestral Andean Products (Pipeline) TFs: 9 JSDF on Integrated Community Driven Support Government's efforts to Number of innovations led by INIAF Underway: Four varieties launched by Territorial Development for Remote increase agricultural technology and adopted by producers to increase INIAF, level of adoption to be measured. Communities in the Amazon (Onoing) and strengthen the institutions and theft productivity Integrating Gender into SD operations partnerships in charge of Baseline: 0 (2011) (Closed) agriculture innovation and Target: 2 innovations (2015) IF: extension o Empresa Forestal SL V a Regional Responsive Soy Program Co-financing: Agricultural Innovation and Services Project COSUDE (US$2.6MM) Kingdom of Denmark (US$2.3 MM) Address infrastructure needs and Reduce transportation costs by Transport costs to the San Limited progress: there has been a slow Lending: promote economic integration improving national and rural Buenaventura-Ixiamas road users start in the program. Supervision contract * National Roads and Airport roads to facilitate access to reduced for the road has just been signed. Infrastructure Project (Ongoing) markets Baseline: Construction contract expected to be * Community Investments in Rural Areas Buses: $4.41 cents/Km (2010) signed in early 2014. (PICAR, Ongoing) Large trucks: $2.05 cents/Kmn (2010) * Participatory Rural Investment Project Target: (PDCRII, Closed) Buses: $1.50 cents/Kmn (2015) * Lake Titicaca Local Sustainable Large trucks: $0.95 cents/Kmn (2015) 18 Country Development Goals CPS Outcomes CPS Outcome Indicators Progress to Date World Bank Group Program (and partnerships) Improve basic infrastructure in Social Capital Index9 in communities Underway: Sub-projects have started Development Project (Ongoing) small municipalities and poor benefiting from CDD projects implementation, M&E system is now in * Sustainable Production of Ancestral rural communities improved place and surveys will be carried out in Andean Products (Pipeline) Baseline: 0% (2011) the short term TFs: Target: 75% (2015) * Integrating Gender into SD operations Enhance coordination among Number of municipalities Achieved: 100% of municipalities have (Ongoing) government levels to better successfully applying co-financing co-financed productive investments, Co-financing: to the PDCRII provide productive infrastructure practices for productive investments putting in practice new concurrence COSUDE (US$4.5MM) Kingdom of Baseline: 0 (2007) financing policies Denmark (US$10.9MM) Target: 180 municipalities (2015) Promote labor-intensive Small Support private sector Cost savings from the Underway: At project completion in AAA: and Medium Enterprises (SME) development, particularly the implementation of simplified December 2012, estimates of private * FSAP SMEs, by reducing the costs procedures for obtaining construction sector direct cost savings are close to * Financial Sector Review associated to complying with permits in targeted municipalities US$ 2.6 million, exceeding US$1.18 IFC: business regulations generated million target * Financing to banks and microfinance Baseline: 0 (2009) institutions Milestone: US$ 1.2 million (2012) * Advisory services on the financial Target: US$ 3.5 million (2015) sector * Business Edge SME training program * Business licensing/permit simplification Co-financing: to the FSAP IMF Pillar 2: Support Climate Change and Disaster Risk Management Capacity Restore access to basic Streamline disaster risk Government has adopted a Underway: There is a proposal for a Lending: infrastructure and strengthen the management across sector comprehensive National Program on National Plan on Disaster Risk * Emergency Recovery and Disaster Government's ability for disaster institutions and levels of Disaster Risk Management focusing Management under MDP's consideration Management Project (Closed) risk management government on vulnerability reduction TF: * Comprehensive assessment of the socioeconomic impact, and recovery and reconstruction needs in Bolivia after heavy floods caused by La Nifia (Closed) * TA support for strengthening disaster risk reduction framework (Ongoing) * Integrating Gender into SD operations The Social Capital Index is a composite survey-based indicator. 19 Country Development Goals CPS Outcomes CPS Outcome Indicators Progress to Date World Bank Group Program (and partnerships) (Closed) Pillar 3: Promote Human Development and Enhance Access to Basic Services Support human development in Support Government's efforts to Increase access of pregnant women to Achieved: The ratio between the Lending: rural and urban areas expand access to maternal and health services in targeted areas, as percentage of institutional deliveries in e Expanding Access to Reduce Health infant health services and reduce measured by an index (0 to 1) of the the areas of project intervention and the Inequalities APLIII (Ongoing) gaps in access to health services ratio between the percentage of births rest of the count increased to 0.89 (July e Investing in Children and Youth delivered by skilled health staff in the 2013) (Ongoing) targeted areas, and the rest of the o La Paz Secondary Education count (as the index approaches 1, Transformation Project (Closed) the gap in the use of health services Improving Employability and Job closes) Quality Among Vulnerable Groups Baseline: 0.68 (2008) (Pipeline) _________________Target: 0.85 (2015) TFs: Expand access and improve Expand access to secondary Achieved: 6,300 students enrolled in * JSDF on Early Child Development quality of education education in the Municipality of La new and rehabilitated schools in La Paz AAA Paz, as measured by an increase in (March 2013) Social Safety Nets NLTA (Closed) enrollment Baseline: 3,416 students (2008) Target: 5,137 students (2015) Enhance quality of secondary Underway: Promotion rate increased to education in the Municipality of La 89.9% in 2011 Paz, as measured by an increase in the promotion rate Baseline: 86.2% (2008) Target: 90.3% (2015) Promote formal safety nets, Labor market insertion for low- Underway: Program is being particularly those that affect low income youth benefiting from Mi implemented satisfactorily. Impact income youth living in urban Primer Empleo Digno program evaluation, which will inform on areas, and women and children improved, as measured by the expected results, is currently underway. percentage of beneficiaries with regular employment and labor income four months after the end of the internship phase Baseline: 0% of all beneficiaries who completed the internship every year for the target population. (2008) Target: 50% (2015) Promote universal access to basic Strengthen Government's Sustainable electricity access in Achieved: 7,564 SHS for residential Lending: services capacity and coordination efforts beneficiary remote and dispersed users and 126 SHS in public schools 20 Country Development Goals CPS Outcomes CPS Outcome Indicators Progress to Date World Bank Group Program (and partnerships) to expand the coverage of basic rural areas expanded using solar were installed in five departments Decentralized Electricity for Universal services, particularly in rural home systems/photovoltaic systems Access (GPOBA, Closed) areas Baseline: 0 (2011) Community Investments in Rural Areas Target: more than 7,000 households, (Ongoing) micro-enterprises, schools and/or Lake Titicaca Local Sustainable health centers (2015) Development (Ongoing) Access to lighting solutions (pico Achieved: 5,705 Pico PV systems were * Urban Infrastructure Project and PV) for poor households targeted by distributed to adult students and rural Additional Financing (Ongoing) the GPOBA increased users in seven departments * Access and Renewable Energy (IDTRII Baseline: 0 (2011) Pipeline) Target: 1,650 households (2015) 9 Water and Sanitation (Dropped) Increase coverage of Total number of mobile phone Achieved: Total number of phone AAA: telecommunication services connections increased connections reached 9.4 million in June * TA by WSP Baseline: 7.1 million (2010) 2013 IC: Target: 9 million (2015) *Telecel Bolivia Loan (Ongoing) Pillar 4: Enhance Public Sector Effectiveness Implement the decentralization Support municipal governments Beneficiary municipalities that have Achieved: 260 municipalities have Lending: and autonomy agenda and to develop theft Cartas Organicas developed and approved theft Carta elaborated draft cartas organicas, of e Participatory Rural Investment 11 Project strengthen the national planning (municipal constitution) to Organica under the new Autonomies which 93 were approved by theft (Closed) system effectively put in place the Law municipal councils and 45 were already * Public Sector Investment (Pipeline) decentralization and autonomy Baseline: 0 municipalities with Carta presented to the Constitutional Tribunal AAA: regime Organica (2011) e Public Sector Governance 11 and III Target: 200 municipalities with Carta NLTA (Closed and Ongoing) Organica (2015) ( RAAP Regional Government of Santa Number of Autonomous Indigenous Underway: there are 9 draft statutes Cruz and Campesino communities that elaborated, of which 6 were presented to Co-financing: developed and approved theft the Constitutional Tribunal COSUDE (US $4.5 MM) Kingdom of Statutes under the Autonomies Law Denmark (US$10.9MM) Baseline: 0 (2011) Target: 11 (2015) Support institutional Update and increase the quality of Population census carried out, data Underway: population and demographic Lending: strengthening and capacity socio-demographic information disseminated and used for budget census was carried out, results will soon Strengthening Statistical Capacity and building to better plan, and agriculture data to better allocation to sub-national be published. Budget allocation to Informational Base for Evidence-Based implement, monitor and evaluate support decision-making and the governments to finance public municipal governments for 2014 has Planning Project (STATCAP, Ongoing) public policies with a focus on evaluation of public policies investment projects been made using preliminary census data. * Additional Financing STATCAP results Enhance Government's capacity Poverty maps at the municipal level Underway: population census data will (Pipeline) to collect, analyze and use using updated unsatisfied basic needs soon be released; this will serve as an * Road Sector Management Program poverty data to inform public (UBN) data from the population input to develop the poverty maps. (P4R, Pipeline) _____________________________ policy census and income data provided by Household surveys have already been 21 Country Development Goals CPS Outcomes CPS Outcome Indicators Progress to Date World Bank Group Program (and partnerships) household surveys developed and enhanced. AAA: used for public policy targeting 9 Multidimensional Poverty 11 Baseline: outdated poverty maps 9 Proposed Poverty Map Update (2013) 9 Proposed Poverty Assessment 9 ROSC in auditing and accounting Target: updated poverty maps at the (Ongoing) municipal level (2015) 9 Stolen Asset Recovery (StAR) 9 Open Aid Partnership (Ongoing) Enhance transparency and Enhance Government's capacity Open Aid Platform incorporating all Underway: Open Aid Partnership TFs: accountability to increase transparency and data on Government and externally- platform has been developed and is in Ensuring Quality in the National accountability to civil society on financed investment projects progress of being integrated into the Statistical System of Bolivia (Ongoing) public investment programs available for public use and Government's public investment system. sustainably updated All public investment projects have been geo-coded Government-owned Citizen Feedback Underway: EMPODERAR on track Platform receiving initial information platform has been developed and is from rural alliances (beneficiaries of receiving producer's feedback. A local the Rural Alliance Project) platform is being developed so that *sustainability is guaranteed 22 Annex 2: Summary of Changes to CPS Results Matrix Outcome Indicators Original CPS Results Matrix Revised CPS Results Matrix Pillar 1: Sustainable Productive Development Objective: Reduce Extreme Poverty in Rural Areas by Increasing Agricultural Productivity Household income for families that have accessed to land No change increased Baseline: 0 % (2008) Target: 50% increase (2015) Income and volume marketed of rural productive units allied No change increased Baseline: 0 (2006) Target: 45% increase after three sales under alliance (2015) Number of innovations led by INIAF and adopted by producers Number of innovations led by INIAF and adopted by Baseline: 0 (2011) producers to increase their productivity Target: 2 innovations (2015) Baseline: 0 (2011) Target: 2 innovations (2015) Value of sales generated under sustainable managed land Dropped (poor implementation of project) Baseline: 0 (2011) Target: to be defined (2015) Objective: Address Infrastructure Needs and Promote Economic Integration Transport costs to San Buenaventura-Ixiamas reduced No change Baseline: Buses: $4.41 cents/Km (2010) Large trucks: $2.05 cents/Km (2010) Target: Buses: $1.50 cents/Km (2015) Large trucks: $0.95 cents/Km (2015) Percentage of inbound and outbound flights operated at the Dropped (not a significant intervention in the sector) Rurrenabaque Airport per the published schedule increased Baseline: 65% of the total scheduled flights (2010) Target: 90% (2015) Social Capital Index in beneficiary communities improved Social Capital Index' in communities benefiting from CDD Baseline: 0% (2011) projects improved Target: 75% (2015) Baseline: 0% (2011) Target: 75% (2015) Number of municipalities applying co-financing practices for Number of municipalities successfully applying co-financing productive investments practices for productive investments Baseline: 0 (2007) Baseline: 0 (2007) Target: 180 municipalities (2015) Target: 180 municipalities (2015) Objective: Promote Labor-Intensive SME Decision-makers informed on the findings of the financial Dropped (input indicator rather than an outcome) sector assessments Access to finance for MSMES increased as measured by the Dropped (impact cannot be attributed to IFC since two number of loans in the banking sector projects in the advanced stage at the end did not materialize Baseline: 594,000 (2010) and conversations with other potential clients for MSME 1o The Social Capital Index is a composite survey-based indicator. 23 non-trade lines are just starting) Cost savings from the implementation of simplified procedures Cost savings from the implementation of simplified for obtaining construction permits generated procedures for obtaining construction permits in targeted Baseline: 0 (2009) municipalities generated Target: US$ 3.5 million (2015) Baseline: 0 (2009) Milestone: US$ 1.2 million (2012) Target: US$ 3.5 million (2015) Pillar 2: Support Climate Change and Disaster Risk Management Capacity Objective: Restore Access to Basic Infrastructure and Strengthen Government's Ability for Disaster Risk Management Disaster Risk Management framework focusing on vulnerability Government has adopted a comprehensive National Program reduction and infrastructure rehabilitation is adequately on Disaster Risk Management focusing on vulnerability implemented reduction Objective: Reduce Social, Economic and Environmental Vulnerability to Climate Change Climate resilience strategy at sector and territorial level Dropped (project was delayed and there will not be sufficient formulated (2015) time to achieve results during CPS period) Pillar 3: Promote Human Development and Enhance Access to Basic Services Objective: Support Human Development in Rural and Urban Areas Percentage of 2 year-old children with a height for age below Dropped (financing to health CCT was cancelled) 2Z score in the area of intervention of the ICY and APLIII projects reduced Baseline: 38% (2008) Target: 22% (2015) Coverage of institutional deliveries increased Increase access of pregnant women to health services in Baseline: 67% (2009) targeted areas, as measured by an index (0 to 1) of the ratio between the percentage of births delivered by skilled health staff in the targeted areas, and the rest of the country (as the index approaches 1, the gap in the use of health services closes) Baseline: 0.68 (2008) Target: 0.85 (2015) Enrollment in secondary education in the Municipality of La Expand access to secondary education in the Municipality of Paz increased La Paz, as measured by an increase in enrollment Baseline: 3,416 students (2008) Baseline: 3,416 students (2008) Target: 5,137 students (2015) Target: 5,137 students (2015) Promotion rate in secondary education in the Municipality of La Enhance quality of secondary education in the Municipality Paz increased of La Paz, as measured by an increase in the promotion rate Baseline: 86.2% (2008) Baseline: 86.2% (2008) Target: 90.3% (2015) Target: 90.3% (2015) Quality of childcare services improved in the pilot districts of Dropped (given the likelihood of progress but not in the the municipalities of La Paz and El Alto timeframe of the CPS) Baseline: 0 (2011) Target: 149 existing centers improved (2015) Low-income youth beneficiaries of Mi Primer Empleo Digno Labor market insertion for low-income youth benefiting from with regular employment and improved labor incomes four Mi Primer Empleo Digno program improved, as measured by months after the end of the internship phase increased the percentage of beneficiaries with regular employment and Baseline: 0% of all beneficiaries who completed the internship labor income four months after the end of the internship every year for the target population. (2008) phase Target: 50% (2015) Baseline: 0% of all beneficiaries who completed the internship every year for the target population. (2008) Target: 50% (2015) Objective: Promote Universal Access to Basic Services Sustainable electricity access in beneficiary remote and No change 24 dispersed rural areas expanded using solar home systems/photovoltaic systems Baseline: 0 (2011) Target: more than 7,000 households, micro-enterprises, schools and/or health centers (2015) Access to lighting solutions (pico PV) for poor households No change targeted by the GPOBA increased Baseline: 0 (2011) Target: 1,650 households (2015) Number of new households with access to drinking water Dropped (intervention in the sector has not materialized) increased Baseline: 0 (2011) Target: to be defined Number of new households with sanitation services increased Dropped (intervention in the sector has not materialized) Baseline: 0 (2011) Target: to be defined Total number of mobile phone connections Total number of mobile phone connections Baseline: 7.1 million (2010) Baseline: 7.1 million (2010) Target: 9 million (2015) Pillar 4: Enhance Public Sector Effectiveness Objective: Support the Decentralization and Autonomy Agenda and the National Planning System Municipal governments' Carta Organica (constitution) Beneficiary municipalities have developed and approved approved and put into practice their Carta Organica under the new Autonomies Law Baseline: 0 municipalities with their Carta Organica (2011) Baseline: 0 municipalities with Carta Organica (2011) Target: 200 municipalities with their Carta Organica (2015) Target: 200 municipalities with Carta Organica (2015) Indigenous and Peasant Autonomies with their Statutes Number of Autonomous Indigenous and Campesino self- approved at the local level governing communities that have developed and approved Baseline: 0 (2011) their Statutes under the new Autonomies Law Target: 11 (2015) Baseline: 0 (2011) Target: 11 (2015) Objective: Support Institutional Strengthening and Capacity Building Demographic and agriculture information through a population Population census carried out, data disseminated and used for census, an agricultural census and two household surveys budget allocation to sub-national governments to finance updated, including gender disaggregation public investment projects New: Poverty maps at the municipal level using updated unsatisfied basic needs (UBN) data from the population census and income data provided by household surveys developed and used for public policy targeting Baseline: outdated poverty maps (2013) Target: updated poverty maps at the municipal level (2015) Objective: Enhance Transparency and Accountability New: Open Aid Platform incorporating all data on Government and externally-financed investment projects available for public use and sustainably updated New: Government-owned Citizen Feedback Platform receiving initial information from rural alliances (beneficiaries of the Rural Alliance Project) 25 Annex 3: Status of Selected MDG Indicators Baseline Most recent 2015 year Goal Goal 1: Eradicate extreme poverty and hunger Extreme poverty rate (% of population) 41.2(1996) 21.6 24.1 (2012,p) Malnutrition prevalence, weight for age (% of children under 5) 13.2 (1989) 6.1 (2008) 6.6 Goal 2: Achieve universal primary education Primary completion rate (% of relevant age group) 74.0(2001) 90.0 (2011) 100 Literacy rate (% of population ages 15-24) 97.4 (2001) 99.5 (2012) 100 Goal 3: Promote gender equality and empower women Gender gap in primary completion rate 2.8 (2001) -1.2 (2011) 0 Gender gap in secondary completion rate 1.2 (2001) -5.3 (2011) 0 Ratio of literate female to male (population ages 15-24) 98.0(1997) 99.5 (2011) 100 Goal 4: Reduce child mortality Mortality rate, under 5 (per 1,000 live births) 129.4 (1989) 63.0 (2008) 43.1 Goal 5: Improve maternal health Maternal mortality ratio (per 100,000 live births) 416 (1989) 229 (2003) 104 Births attended by skilled health staff (% of total) 33 (1996) 70.8 (2012) 70 Goal 6: Combat HIV/AIDS, malaria, and other diseases Prevalence of AIDS (per million of inhabitants)* 2.5 (1996) 83.4 (2012) 80-85 Malaria Annual Parasitosis Index (per 1,000 inhabitants) 7.5 (1990) 2.2 (2012) 2.0 Municipalities with Chagas infestation rate > 3% (percentage) 56.0 (2003) 35.3 (2012) 0 TB cases cured (percentage of total notified cases) 71.2 (2000) 84.2 (2011) 95 Goal 7: Ensure environmental sustainability Protected areas (millions of hectares) 16.8 (2001) 17.1 (2011) 17.2 -Cnsumption of chlorofluorocarbons (tons of PAO) 80.3 (2001) 0 (2011) 0 Improved water source (% of population with access) 57.5 (1992) 74.6 (2008) 78.5 Improved sanitation facilities (% of population with access) 28.0 (1992) 48.4 (2008) 64.0 Source: Based on UDAPE, 2010. Sixth Progress Report on the MDGs in Bolivia. Note: (p) preliminary. *The cause of the sharp increase in AIDS cases per million inhabitants is uncertain, but Bank staff believes it likely is the result of improved measurement rather than a sudden spread of the epidemic. 26 Annex 4: Innovative Approaches to Community En$a$ement and Greater Partnerships Across Civil Society- The Untold Stories The "Arte Joven" initiative was initially conceived as a team-building activity of the World Bank Bolivia Country Office and the Municipality of El Alto to promote, through a contest, young talent in this predominantly poor area. The Arte Joven contest awarded young painters and sculptors a series of prizes, including monetary rewards and training workshops by internationally-renowned artists from Europe and the region. The eight finalists were chosen among 341 works presented. These finalists were provided resources and support to recreate their pieces on a large scale and permanent basis, and installed in a new Open Art Gallery located in El Alto, constructed for this purpose. This new Open Art Gallery was co-financed by the World Bank, private sector sponsors and the Municipality, and was constructed predominantly by the local neighborhood council and residents. To finance the World Bank portion, fifty art works from the most prestigious artists were auctioned in a benefit that included members of the international community. The Open Art Gallery is estimated to now serve as a common visiting place for nearly 200,000 residents of the sector. The "Concurso de Orquestas Juveniles" is a multi-institutional initiative that aims to encourage and reward youth orchestras in Bolivia through a high-profile contest through which five youth groups will be selected and awarded both financially and through a televised performance on December 13, 2013. Research confirms that musical education can increase children's IQ, verbal memory, speech, concentration and math skills. Thus, children that study music are likely to improve their school performance and increase the likelihood of moving towards higher stages of formal education. This was the first such initiative in Bolivia, and was organized by CAF, the World Bank, the Ministry of Culture and Santa Cruz' Private Sector Confederation. The "Vuelta a Bolivia" is a world class cycling competition endorsed by the International Cycling Union. In addition to the promotion of sports, this initiative supports the improvement of roads and their maintenance, creates temporary employment, promotes new tourism routes, and positions Bolivia in the cycling world map. In the case of Bolivia, the World Bank is promoting the first ever agreement to include women cyclists alongside men in an ICU-sponsored event. The overall is promoted by the World Bank, CAF, private banks and Government's Administradora Boliviana de Carreteras (ABC). The "Arte Joven II" project is an initiative of World Bank Bolivia Office and the Mayor of La Paz, and is a follow-up to the Arte Joven initiative carried out in 2012. It supports a campaign to raise awareness about garbage disposal and recycling, through a contest in which the citizens will design garbage cans and collection systems through the use of recycled materials. The winning design will be replicated throughout the whole city. 27 Annex 5: Catalyzing South-South Exchange of Development Experiences With the support of the South-South Trust Fund (SSTF) and internal resources, the Bank has focused on enabling the Bolivian Government to access development experiences of other developing countries, and to share its own. Under the SSTF Bolivia has spearheaded a multi-national exchange with Bhutan, Mexico and Ecuador to share experiences on multidimensional wellbeing measures. Based on this experience, Bolivia will develop its own operative measure of "Living Well" (Vivir Bien) as an umbrella concept for policy making, based on technical assistance and SS exchanges with the Bhutanese Ministry of Happiness. Also, under the framework of the STATCAP project, representatives from statistical agencies of various LAC countries provided technical guidance to the 2012 population census and the 2013 agricultural census. Moreover, the Bank has supported a visit by senior and technical Bolivian authorities to Uruguay and Argentina to reflect their experiences in Bolivia's science and technology policy. Bolivia has also exported its experiences abroad. Representatives from Vietnam, Bhutan and Guatemala visited Bolivia to learn about ongoing rural development initiatives, in particular the Rural Alliances Project. Authorities from Guatemala also visited the neighborhood improvement project in La Paz (Barrios de Verdad), financed by the Urban Infrastructure Project. Representatives from Ghana visited Bolivia to learn about the youth employability project (Mi Primer Empleo Digno), which is a component of the Investing in Child and Youth Project. Several South-South exchanges have led to concrete bilateral agreements and action plans between governments. In early 2013, Bank facilitated a visit by Palestinian authorities and investors, headed by the Chairman of the Palestinian Monetary Authority. As a result of the technical workshops and exchanges with counterparts from the Bolivian Central Bank and Financial Sector Superintendence, a multi-sector Memorandum of Understanding was signed by the Bolivian and Palestinian Governors to the World Bank during the 2013 Annual Meetings. This MOU envisions joint work on developing Anti-Money Laundering capacities at the Central Banks, supervision of banks, and twinning arrangements between the municipalities of La Paz in Bolivia and Jericho in the West Bank (the highest and lowest cities in the world, respectively). Similarly, Bank-promoted visits by the Bolivian General Attorney in a regional meeting in Quito on commercial disputes led to the signing of a Cooperation Agreement with Ecuadorian counterparts. 28 Annex 6: Country at a Glance Bolivia at a glance 1028 Latin Lower Key Development Indicators America middle Age distribution, 2012 Blivia & Carib. income {2012) Male(.) Female() Population, mid-year (millions) 10.5 581 2,507 7579 Surface area (thousand sq. km) 1,099 19,461 20,742 6064 Population growth (%) 1.7 1.2 1.5 Urban population (% of total population) 67 79 39 4 49 30,34 GNI (Atlas method, US$ billions) 23.3 5,232 4,710 GNI per capita (Atlas method, US$) 2,220 8,999 1,879 GNI per capita (PPP, international $) 4,960 12,008 3,913 0 - 10 5 0 5 10 GDP growth (%) 5.2 3.0 4.0 percentoftotal population GDP per capita growth (%) 3.5 18 2.5 (most recent estimate, 2005-2012) Poverty headcount ratio at $1.25 a day (PPP, %) 16 6 27.1 Poverty headcount ratio at $2.00 a day (PPP, %) 25 10 5 Under-5 mortality rate (per 1,000) Life expectancy at birth (years) 67 74 66 Infant mortality (per 1,000 live births) 33 16 46 140 Child malnutrition (% of children under 5) 5 3 24 12 1Aeo Adult literacy, male (% of ages 15 and older) 96 92 80 no Adult literacy, female (% of ages 15 and older) 87 91 62 40 Gross primary enrollment, male (% of age group) 191 115 107 40 Gross primary enrollment, female (% of age group) 99 111 104 20 Access to an improved water source (%of population) 88 94 87 0 1 1%5 2WO 2011 Access to improved sanitation facilities (% of population) 46 81 47 OBolivia DLatin America &the Caribbean Net Aid Flows 1980 1990 2000 2012 a (US$ millions) Net ODA and official aid 169 545 482 675 Growth of GDP and GDP per capita (%) Top 3 donors (in 2010): United States 40 84 97 86 8 Spain 0 20 22 69 6 European Union Institutions 1 26 25 65 4 Aid (% of GNI) 3.7 11.8 5.9 3.6 2 Aid per capita (US$) 32 80 57 66 1 Long-Term Economic Trends 4 95 05 Consumer prices (annual % change) 23.9 18.0 3.4 4.0 GDP implicit deflator (annual % change) 25.0 16.3 5.2 6.9 - - GDP - GDP percapit Exchange rate (annual average, local per US$) 0.0 3.2 6.2 6.9 Terms of trade index (2000 = 100) 401 160 100 154 1980-90 1990-2000 2000-12 (average annual growth %) Population, mid-year (millions) 5.4 6.8 8.5 10.5 2.4 2.2 1.8 GDP (US$ millions) 4,537 4,868 8,398 27,035 -0.2 4.0 4.0 (% of GDP) Agriculture 19.0 16.7 15.0 13.0 1.5 2.9 3.1 Industry 32.4 34.8 29.8 38.7 -2.2 4.1 5.3 Manufacturing 14.4 18.5 15.3 13.5 -1.1 3.8 4.5 Services 48.6 48.5 55.2 48.3 -0.4 4.3 2.9 Household final consumption expenditure 67.3 76.9 76.4 59.5 1.2 3.6 3.3 General gov't final consumption expenditure 13.8 11.8 14.5 13.5 -3.8 3.6 3.5 Gross capital formation 16.6 12.5 18.1 17.7 0.8 8.5 3.9 Exports of goods and services 24.5 22.8 13.3 47.3 1.0 4.5 7.7 Imports of goods and services 22.3 23.9 27.3 37.9 4.4 6.0 5.6 Gross savings .. Note: Figures in italics are for years other than those specified. . indicates data are not available. a. Aid data are for 2010. Development Economics, Development Data Group (DECDG). 29 Bolivia Balance of Payments and Trade 2000 2012 Governance indicators, 2000 and2012 (UIS$ millions) Total merchandise exports (fob) 1,246 11,233 Total merchandise imports (cif) 1,830 8,269 Vace and accountablity Net trade in goods and services -608 2,491 Poitcal stability Current account balance -446 2,127 as a % of GDP -5.3 7.9 Regulatory quality Workers' remittances andRueola compensation of employees (receipts) 127 1,043 Control ofcorruption Reserves, including gold 1,171 14,570 0.0 250 50 0 75.0 10.0 Central Government Finance emetilerank(-100) 02000 Ngsnrd 10050YIr Onerw (% of GDP) Current revenue (including grants) 25.0 34.7 Source: Worldwide Governance Indicatomr (www.govindicator.og) Tax revenue 18.7 31.8 Current expenditure 22.2 19.5 Technology and Infrastructure 2000 2011 Overall surpluskieficit -3.7 1.8 Paved roads (% of total) 6.6 8.5 Highest marginal tax rate (%) Fixed line and mobile phone Individual .. .. subscribers (per 100 people) 13 92 Corporate 25 25 High technology exports (% of manufactured exports) 40.0 13.7 External Debt and Resource Flows Environment (US$ millions) Total debt outstanding and disbursed 5,885 6,909 Agricultural land (% of land area) 34 34 Total debt service 641 650 Forest area (% of land area) 55.5 52.5 Debt relief (HIPC, MDRI) 1,908 2,095 Terrestrial protected areas (% of land area) 18.2 19.5 Total debt (% of GDP) 70.1 25.6 Freshwater resources per capita (cu. meters) 34,320 29,396 Total debt service (% of exports) 37.7 8.3 Freshwater withdrawal (billion cubic meters) Foreign direct investment (net inflows) 736 .. C02 emissions per capita (mt) 2 15 Portfolio equity (net inflows) 0 GDP per unit of energy use (2005 PPP $ per kg of oil equivalent) 7.9 5.9 rD, Energy use per capita (kg of oil equivalent) 440 746 Sra-tro.m,~ 7 I RDI&, 252 World Bank Group portfolio 2000 2011 (US$ millions) Prin , 2,315 O n, ti- Itata, 2,0 IBRD Total debt outstanding and disbursed 0 0 Disbursements 0 0 Principal repayments 12 0 ui-enru, o Interest payments 1 0 US$ millions IDA Total debt outstanding and disbursed 1,096 395 Disbursements 61 45 Private Sector Development 2000 2012 Total debt service 1 5 Time required to start a business (days) - 50 IFC (fiscal year) Cost to start a business (% of GNI per capita) - 74.1 Total disbursed and outstanding portfolio 81 38 Time required to register property (days) - 92 of which IFC own account 68 38 Disbursements for IFC own account 15 0 Ranked as a major constraint to business 2000 2012 Portfolio sales, prepayments and (% of managers surveyed who agreed) repayments for IFC own account 11 43 n.a. .. 303 n.a. .. 28.1 MIGA Gross exposure 77 11 Stock market capitalization (% of GDP) 20.7 16.4 New guarantees 0 11 Bank capital to asset ratio (%) 9.8 8.3 Note: Figures in italics are for years other than those specified. 102/13 .. indicates data are not available. -indicates observation is not applicable. Development Economics, Development Data Group (DECDG). 30 IF Millennium Development Goals Bolivia With selected targets to achieve between 1990 and 2015 (estimate closest to date shown, +/- 2 years) Bolivia Goal 1: halve the rates for extreme poverty and malnutrition 1990 1995 2000 2011 Poverty headcount ratio at $1.25 a day (PPP, % of population) 52 17.2 26.9 15.6 Poverty headcount ratio at national poverty line (% of population) .. .. 66.4 50.6 Share of income or consumption to the poorest qunitile (%) 5.6 20 0.8 21 Prevalence of malnutrition (% of children under 5) 9.7 12.6 5.9 4.5 Goal 2: ensure that children are able to complete primary schooling Primary school enrollment (net, %) 95 88 Primary completion rate(%ofrelevantagegroup) 71 .. 99 95 Secondary school enrolment (gross, %) 80 81 Youth literacy rate (% of people ages 15-24) 94 .. 97 99 Goal 3: eliminate gender disparity in education and empower women Ratio of girls to boys in primary and secondary education (%) 97 99 Women employed in the nonagricultural sector (% of nonagricultural employment) 35 36 39 37 Proportion of seats held by women in national parliament (%) 9 .. 12 25 Goal 4: reduce under-5 mortality by two-thirds Under-5 mortality rate (per 1,000) 123 101 78 43 Infant mortality rate (per 1,000 live births) 85 72 58 34 Measles immunization (proportion of one-year olds immunized, %) 53 58 84 84 Goal 5: reduce maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 10,000 live births) 450 360 280 190 Births attended by skilled health staff (% of total) 43 47 69 71 Contraceptive prevalence (% of women ages 15-49) 30 45 53 61 Goal 6: halt and begin to reverse the spread of HIV/AIDS and other major diseases Prevalence of HIV (% of population ages 15-49) 0.6 0.5 0.5 0.3 Incidence of tuberculosis (per 10,000 people) 251 215 184 131 Tuberculosis case detection rate (%, all forms) Goal 7: halve the proportion of people without sustainable access to basic needs Access to an improved water source (% of population) 69 74 79 88 Access to improved sanitation facilities (% of population) 28 33 37 46 Forest area (% of land area) 58.0 56.7 55.5 52.5 Terrestrial protected areas (% of land area) 8.8 14.3 13.2 18.5 C02 emissions (metric tons per capita) 0.8 1.2 1.2 1.5 GDP per unit of energy use (constant 2005 PPP $ per kg of oil equivalent) 7.8 6.7 7.9 5.9 Goal 8: develop a global partnership for development Telephone mainlines (per 10 people) 2.7 3.3 6.1 8.7 Mobile phone subscribers (per 100 people) 0.0 0.1 7.0 82.8 Internet users (per 10 people) 0.0 0.1 14 30.0 Households with a computer (%) .. .. 6.9 24.0 Education indicators (/) Measles immunization (% of 1-year olds) ICT indicators (per 100 people) 125 100 10 - 90 100 75 -s8 75 70 __ 60 50 50 50 25 30 2000 2005 2010 25 1990 1995 2000 2011 2000 2005 2010 ---- Primary net enrollment ratio -0- Rato ofgirls to boys in primary & secendary oBolivia OLatinAmerica &the Caribbean OFixed + mobile subscribers lInternet users education Note: Figures in italics are for years other than those specified. .. indicates data are not available. 10f28/13 Development Economics, Development Data Group (DECDG). Annex Annex 7: Social Indicators Latest single year Same region/income group Latin Lower- America middle- 1980-85 1990-95 2005-11 & Carib. income POPULATION Total population, mid-year (millions) 6.0 7.5 10.1 589.0 2,532.7 Growth rate (% annual average for period) 2.1 2.3 1.6 1.2 1.5 Urban population (% of population) 50.5 59.4 66.8 79.1 38.7 Total fertility rate (births per woman) 5.1 4.6 3.3 2.2 2.9 POVERTY (o qfpopulation) National headcount index .. .. 51.3 Urban headcount index .. .. 43.5 Rural headcount index .. .. 66.4 INCOME GNI per capita (US$) 860 870 2,020 8,574 1,772 Consumer price index (2005=100) 5 63 150 INCOMFICONSUMPTION DISTRIBUTION Gini index .. 53.6 56.3 Lowest quintile (% of income or consumption) .. 3.7 2.1 Highest quintile (% of income or consumption) .. 58.4 59.3 SOCIAL INDICATORS Public expenditure Health (% of GDP) .. 2.9 3.5 3.8 1.7 Education (% of GDP) .. 5.6 7.6 4.7 4.4 Net primary school enrollment rate (o qf age group) Total .. .. 88 94 87 Male .. .. 88 94 88 Female .. .. 88 94 86 Access to an improved water source (o qfpopulation) Total .. 76 88 94 87 Urban .. 93 96 98 93 Rural .. 50 71 81 84 Immunization rate (o ofchildren ages 12-23 months) Measles 21 58 84 93 78 DPT 33 64 82 92 73 Child malnutrition (% under 5 years) 13 13 5 3 24 Life expectancy at birth (years) Total 56 61 67 74 66 Male 54 59 64 71 64 Female 58 63 69 78 68 Mortality Infant (per 1,000 live births) 97 71 39 16 46 Under 5 (per 1,000) 144 100 51 19 62 Adult (15-59) Male (per 1,000 population) .. .. 221 178 240 Female (per 1,000 population) .. .. 164 96 170 Maternal (modeled, per 100,000 live births) .. 360 190 81 260 Births attendedby skilled health staff (%) .. 47 71 .. 57 Note: 0 or 0.0 means zero or less than half the unit shown. Net enrollment rate: break in series between 1997 and 1998 due to change from ISCED76 to ISCED97. Immunization: refers to children ages 12-23 months who received vaccinations before one year of age or at any time before the survey. World Development Indicators database, World Bank - 17 April 2013. 32 Annex 8: Key Economic Indicators Actual Bstimate Projected Indicator 200J8 2009 "2010 "2011 2012 2013 '~2014 2015 2016 National accounts (as % of GDP) Gross domestic product 100 100 100 100 100 100 100 100 100 Agriculture 13 14 13 13 13 13 12 12 11 Industry 38 36 37 39 39 35 35 34 33 Services 48 50 50 49 48 52 52 54 56 Total Consumption 76 80 76 75 73 73 72 72 73 Gross domestic fixed investment 17 16 17 19 18 20 21 21 21 Govemrnment investment Private investment Exports (GNFS)b 45 36 41 44 47 42 43 41 39 Imports (GNFS) 38 33 34 38 38 35 35 34 33 Gross domestic savings 24 20 24 25 27 27 28 28 27 Gross national savingsC 29 23 25 25 26 26 27 27 26 Memorandum items Gross domestic product 16674 17340 19650 23949 27035 .. (US$ million at current prices) GNI per capita (US$, Atlas method) 1460 1610 1760 1960 2220 .. rReal annual growth rates (%, calculated from 90 prices) Gross domestic product at market prices 6.1 3.4 4.1 5.2 5.2 5.5 5.5 4.2 3.9 Gross Domestic Income 7.5 0.1 8.2 7.4 6.2 5.7 6.1 4.4 3.4 rReal annual per capita growth rates (%, calculated from 90 prices) Gross domestic product at market prices 4.4 1.7 2.5 3.5 3.5 6.3 3.8 2.5 2.3 Total consumption 3.6 2.0 2.2 3.7 2.9 5.1 2.1 2.3 2.9 Private consumption 3.8 2.0 2.3 3.5 2.9 4.9 1.4 2.3 3.1 Balance of Payments (US$ millions) Exports (GNFS)b 7025 5476 7171 9238 12178 12550 13852 14444 14787 Merchandise FOB 6525 4960 6402 8358 11233 11611 12890 13466 13794 Imports (GNFS)b 5781 5269 6622 9176 9687 10353 11521 11917 12452 Merchandise FOB 5081 4545 5590 7927 8269 8829 9872 10157 10577 Resource balance 1244 206 548 62 2491 2198 2332 2527 2336 Net current transfers 1284 1213 1081 1175 1266 1267 1257 1247 1237 Current account balance 1991 746 766 77 2127 1806 1916 2095 1883 Net private foreign direct investment 508 426 672 859 1060 1100 1100 1100 1100 Long-term loans (net) 496 58 -16 418 702 739 443 115 139 Official 153 224 342 538 283 346 456 318 215 Private 343 -166 -359 -120 419 393 -13 -203 -76 Other capital (net, incl. errors & ommissions) -621 -904 -498 806 -2178 -2700 -2680 -2790 -2790 Change in reserves d -2374 -325 -923 -2160 -1712 -945 -779 -520 -333 Memorandum items Resource balance (% ofGDP) 7.5 1.2 2.8 0.3 9.2 .. .. eal annual growth rates ( YR90 prices) Merchandise exports (FOB) 17.0 -10.1 11.9 4.2 15.8 8.7 11.1 4.5 2.8 Primary 24.4 -8.1 10.9 6.7 9.3 .. .. Manufactures -14.6 -22.7 19.1 -13.3 71.0 .. .. Merchandise imports (CIF) 20.7 1.7 12.0 33.6 -1.9 11.8 12.7 3.9 3.8 (Continued) 33 Key Economic Indicators (Continued) Actual Estimte Projected Indicator 200>8 207) '2010 2011 " 02 21 01 05'21 Public finance (as % of GDP at market prices)e Current revenues 35.2 34.5 32.3 34.3 34.7 36.0 36.1 35.2 34.3 Current expenditures 19.3 21.5 19.9 20.1 19.5 19.6 20.2 20.3 20.4 Current account surplus (+) or deficit (-) 15.8 12.9 12.3 14.1 15.3 16.4 15.9 15.0 13.9 Capital expenditure 12.6 12.8 10.7 13.3 13.5 15.5 16.5 16.3 16.2 Foreign financing 1.3 1.0 1.0 1.8 2.3 3.5 1.7 1.0 0.5 Monetary indicators M2/GDP 60.1 66.7 67.6 68.7 73.8 75.2 74.3 74.6 74.9 Growth ofM2(%) 22.7 11.8 14.8 22.5 20.8 11.5 8.7 8.9 8.2 Private sector credit growth/ 139.9 160.1 329.8 110.3 120.4 .. total credit growth (%) 'Price indices( YR90 =100) Merchandise export price index 161.1 136.3 157.2 197.0 228.7 217.6 217.4 217.3 216.4 Merchandise iniport price index 218.9 192.5 211.4 224.3 238.4 227.6 225.9 223.8 224.5 Merchandise terms oftrade index 73.6 70.8 74.4 87.9 95.9 95.6 96.2 97.1 96.4 Real exchange rate (US$/LCU) 115.7 127.5 122.1 125.9 133.8 140.8 147.1 153.7 160.6 Real interest rates Consumer price index (% change) 11.8 0.3 7.2 6.9 4.5 5.2 4.5 4.5 4.5 GDP deflator (% change) 10.4 -2.4 8.8 14.6 6.9 3.8 4.2 4.2 3.8 a. GDP at factor cost b. "GNFS" denotes "goods and nonfactor services." c. Includes net unrequited transfers excluding official capital grants. d. Includes use of IMF resources. e. Consolidated central government. f. "LCU" denotes "local currency units." An increase in US$/LCU denotes appreciation. 34 Annex 9: Selected Indicators of Bank Portfolio Performance and Management As of 10/28/2013 Indicator 2011 2012 2013 2014 Portfolio Assessment Number of Projects Under Implementation a 11 13 13 12 Average Implementation Period (years) b 3.3 3.8 4.4 4.6 Percent of Problem Projects by Number a, a 27.3 30.8 23.1 16.7 Percent of Problem Projects by Amounta, 15.2 14.7 9.7 7.6 Percent of Projects at Risk by Number a, d 27.3 30.8 30.8 41.7 Percent of Projects at Risk by Amount a, d 15.2 14.7 17.6 29.2 Disbursement Ratio (%) e 26.0 14.4 16.2 8.6 Portfolio Management CPPR during the year (yes/no) Supervision Resources (total US$) Average Supervision (US$/project) Last Five Memorandum Item Since FY 80 FYs Proj Eval by IEG by Number 79 2 Proj Eval by IEG by Amt (US$ millions) 2,016.3 99.1 % of OED Projects Rated U or HU by Number 35.4 50.0 % of OED Projects Rated U or HU by Amt 28.1 21.5 a. As shown in the Annual Report on Portfolio Performance (except for current FY). b. Average age of projects in the Bank's country portfolio. c. Percent of projects rated U or HU on development objectives (DO) and/or implementation progress (IP). d. As defined under the Portfolio Improvement Program. e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: Investment projects only. * All indicators are for projects active in the Portfolio, with the exception of Disbursement Ratio, which includes all active projects as well as projects which exited during the fiscal year. 35 Annex 10: Operations Portfolio (IDA) As of 10/28/2013 Closed Projects 91 lBRD/IDA * Total Disbursed (Active) 185.18 of which has been repaid 0.00 Total Disbursed (Closed) 522.06 of which has been repaid 94.11 Total Disbursed (Active + Closed) 707.23 of which has been repaid 94.11 Total Undisbursed (Active) 287.93 Total Undisbursed (Closed) 2.05 Total Undisbursed (Active + Closed) 289.98 Active Projects Difference Between IUst PSR Expected and Actual Supervision Rating Original Amount in US$ Millions Disbursements t ' Project ID Project Name Development Implementation Fiscal Year IBRD IDA GRANT Cancel. Undisb. Orig. Frm Revd Objectives Progress P106700 BO Agricultural Innovation a MS MS 2012 39 29.702279 P101084 BO Investing in Children and MU U 2008 17 10.1636194 10.3114496 8.759005 P087925 BO Land for Agricultural Dev MS S 2008 15 3.44432997 3.42884251 1.4067993 P122007 BO Nat' Roads & Airport Infi S MS 2011 109.5 107.322292 41.3333333 P101298 BO Participatory Rural Invest S S 2008 20 1.39868745 1.66203897 1.662039 P107137 BO PICAR Cornin Investrn S S 2012 40 29.5540367 5.52811081 P083051 BO Rural Alliances S S 2005 58.4 0.13241451 -31.440377 -2.9403768 P127743 BO Rural Alliances Project I S S 2013 50 48.854686 0.86666666 P101336 BO Streng. Stat Capacity & Ir S S 2011 50 10.9613369 P083979 BO Urban Infrastructure Projt MS MS 2007 54 24.4975915 -0.8891616 -0.8850156 P101426 BO- Lake Titicaca Local Sust MU MU 2008 20 15.9747788 16.6640571 2.3280516 P101206 BO-Exp. Access to Reduc H1it MS MS 2008 18.5 7.325925 5.92601938 23.5949117 Overall Result 491.4 7.325925 287.932071 25.3693494 10.330503 36 Annex 11: IFC Committed and Outstanding Portfolio As of 10/31/2013 (In US Dollar Million) 1976/1990/199511996/ BISA - 199812012/2013/2014 4.31 4.31 4.31 4.31 2010/2011/2012/2013/2014 Banco Ganadero -5.54 5.54 5.54 5.54 200912010/2011/20121 BcodeCredito - - 2013/ 2014 4.35 4.35 4.35 4.35 1999 CBTI - - 0.85 0.85 0.85 0.85 1992/2002 Central Aquirre 0.35 0.00 0.35 0.35 0.00 0.35 1996/ 2006/ 2009/ 2010/ 2011/ 2012/ 201312014 5.15 5.15 5.15 5.15 2011 SLV - 6.00 6.00 5.47 5.47 2003 TDE S.A. 1.97 2.14 4.12 1.97 2.14 4.12 TRECO - 0.36 0.36 0.36 0.36 Total Portfolio 2.32 0.36 8.99 19.35 31.02 2.32 0.36 8.47 19.35 30.50 Out - IFC 37 Annex 12: IFC Investment Operations Program As of 10/1/2013 (In US Dollar Million) 2011 2012 2013 2014* Original Commitments (US$m) IFC and Participants 31.19 13.53 11.63 12.60 IFC's Own Accounts only 31.19 13.53 11.63 12.60 Original Commitments by Sector (%)- IFC Accounts only AGRICULTURE AND FORESTRY 19.24 FINANCE & INSURANCE 80.76 100 100 100 Total 100 100 100 100 Original Commitments by Investment Instrument (%) - IFC Accounts only Guarantee 80.76 100 100 100 Quasi loan 19.24 Total 100 100 100 100 * Data as of October 01,2013 38