PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: PIDA561 Public Disclosure Copy Project Name Public and Social Sector Transformation Project (PSST) (P126791) Region LATIN AMERICA AND CARIBBEAN Country Antigua and Barbuda Sector(s) General public administration sector (45%), Other social services (55%) Lending Instrument Specific Investment Loan Project ID P126791 Borrower(s) Government of Antigua and Barbuda Implementing Agency Ministry of Finance, the Economy and Public Administration Environmental Category B-Partial Assessment Date PID Prepared/Updated 25-Mar-2013 Date PID Approved/Disclosed 25-Mar-2013 Estimated Date of Appraisal 22-Mar-2013 Completion Estimated Date of Board 30-May-2013 Approval Decision Public Disclosure Copy I. Project Context Country Context Antigua and Barbuda holds upper middle income status, and has comparatively better economic indicators when compared to some of its OECS neighbors. The country has a population of 89,610 (2011), with GNI per capita at US$13,170 per annum in 2010. Social indicators are satisfactory, including a literacy rate of 99 percent (2008) and life expectancy of 75 years (2002). The country’s poverty headcount is 18.3 percent. Antigua and Barbuda experienced its worst recession in decades in 2009-11 as tourism revenues collapsed following the global financial crisis. GDP contracted by a cumulative 20 percent for the period 2009-2011 with tourism receipts, labor remittances, construction and foreign direct investment with double-digit declines. The collapse of the Stanford Group of Companies in 2009 left over 1,200 workers unemployed (approximately 3 percent of the workforce). Following this, the strains of economic crisis also led to the collapse of one of the largest domestic banks, Antigua and Barbuda Investment Bank (ABIB) in July 2011. As a result of economic and financial crisis, the country faces decreasing levels of employment, particularly in the tourism sector. According to the latest figures available from the Social Security Board, the estimated unemployment rate in 2011 was 10 percent (four times higher than 2008). These unemployment pressures are likely to have adverse effects on economic hardship and consequently, poverty. The crisis, combined with the Government’s own budget pressures due to a public sector wage bill that accounts for 40 percent of recurrent expenditures, has left the country faced with Page 1 of 4 difficult choices for moving forward. The economy started to recover in 2012, but economic activity remained below potential. II. Sectoral and Institutional Context Public Disclosure Copy The Government of Antigua and Barbuda (GOAB) has embarked on a National Economic and Social Transformation (NEST) Plan, of which public and social sector transformation are critical components. The economic crisis underscored the importance for the Government of Antigua and Barbuda to manage its public resources more efficiently. Government spending and decision- making regarding allocation of resources has been made in an inconsistent and loosely accountable manner. As such, the GOAB has embarked on a major public sector restructuring. Currently, Government is in a process of developing its Medium-Term Strategic Development Plan (MTSDP), the successor of NEST. The Government’s intention is to develop institutionalized procedures and regulations detailing the preparation and coordination of policy proposals consistent with the country’s priorities and resource framework to guide the policy process. A Cabinet policy directive has also been issued to create a unified civil service, and modernize and regularize the public service by integrating the established and non-established streams of the public service and implementing a principle of equal pay for equal work. Additionally, NEST includes a Social Transformation Program that seeks, among other objectives, to strengthen the social protection policies through a rationalization of social assistance programs and enhancement of intermediation and training programs. The GOAB has requested financial and technical assistance from the World Bank to support achievement of the objectives of the country's NEST plan, including helping the country achieve targeted improvements in public sector performance, social sector performance and ALMPs. The requested support will enable the Government to implement key objectives of the NEST plan, and its successor, the MTDSP. III. Project Development Objectives The Project Development Objectives are to: (i) strengthen government capacity in managing public policies and the public service; (ii) improve the efficiency of social protection spending through an integrated monitoring and targeting system; and (iii) improve the income and employability of Public Disclosure Copy vulnerable population through temporary employment and training programs. IV. Project Description Component Name Component 1 – Building effective institutions for strategic management of government policies Component 2 - Human Resource Management Modernization Component 3 – Improve the efficiency of social protection spending Component 4 - Support ALMPs Component 5 – Project Management V. Financing (in USD Million) For Loans/Credits/Others Amount Borrower 0.00 International Bank for Reconstruction and Development 10.00 Total 10.00 VI. Implementation The principal implementation agency for the project would be the Ministry of Finance, the Economy Page 2 of 4 and Public Administration (MFEPA), with day-to day support provided by a Project Management Unit (PMU), and with oversight by a Project Steering Committee, established during project preparation. Additional participating agencies will be the Ministry of Health, Social Transformation Public Disclosure Copy and Consumer Affairs (MOHSTCA), the Ministry of National Security and Labor (MNSL), the Cabinet Office, the Establishment Department, and the Public Sector Transformation Unit. The PMU will be responsible for the day-to-day management of the technical and logistical aspects of the Project, including the work program, coordinating with the relevant ministries and departments, and sending the Terms of References to the World Bank after they have been developed by the relevant technical counterparts. The PMU will also be responsible for monitoring the implementation and providing timely reports to the Government, the Bank and donor partners. The PMU will also be responsible for the financial management and procurement aspects of the project, including the procurement of all goods and services financed by the Project and the processing of all disbursement requests. This PMU will be financially supported by the Project through Component 5. VII. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 ✖ Natural Habitats OP/BP 4.04 ✖ Forests OP/BP 4.36 ✖ Pest Management OP 4.09 ✖ Physical Cultural Resources OP/BP 4.11 ✖ Indigenous Peoples OP/BP 4.10 ✖ Involuntary Resettlement OP/BP 4.12 ✖ Safety of Dams OP/BP 4.37 ✖ Projects on International Waterways OP/BP 7.50 ✖ Public Disclosure Copy Projects in Disputed Areas OP/BP 7.60 ✖ VIII.Contact point World Bank Contact: Gaston Mariano Blanco Title: Sr Social Protection Specialist Tel: 473-7245 Email: gblanco@worldbank.org Borrower/Client/Recipient Name: Government of Antigua and Barbuda Contact: Title: Tel: Email: Implementing Agencies Name: Ministry of Finance, the Economy and Public Administration Contact: Honorable Minister Harold Lovell Title: Page 3 of 4 Tel: (268) 462-4861 Email: Harold.lovell@ab.gov.ag IX. For more information contact: Public Disclosure Copy The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop Public Disclosure Copy Page 4 of 4