FOR OFFICIAL USE ONLY Report No: PAD3521 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 1.5 MILLION (US$2 MILLION EQUIVALENT) TO THE REPUBLIC OF KIRIBATI IN SUPPORT OF THE STATISTICAL INNOVATION AND CAPACITY BUILDING IN THE PACIFIC ISLANDS PROGRAM, SERIES OF PROJECTS FOR THE STATISTICAL INNOVATION AND CAPACITY BUILDING IN KIRIBATI PROJECT JANUARY 21, 2020 Poverty And Equity Global Practice East Asia And Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective Oct 31, 2019) Currency Unit = U.S. dollars (US$) SDR 0.72496 = US$1 US$1.37939 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ANZ Australia and New Zealand Banking Group Limited CAPI Computer-Assisted Personal Interviewing CPF Country Partnership Framework DA Designated Account DHS Demographic and Health Survey ESS Environmental and Social Standards ESCP Environmental and Social Commitment Plan FM Financial Management GDP Gross Domestic Product GNI Gross National Income HIES Household Income and Expenditure Survey IAEG-GS Inter-Agency and Expert Group on Gender Statistics IFR Interim Financial Report IMF International Monetary Fund IPF Investment Project Financing IU Information Unit KDP Kiribati Development Plan KFSU Kiribati Fiduciary Services Unit KNSO Kiribati National Statistics Office KV20 Kiribati 20-Year Vision 2016–2036 LMP Labor Management Plan MFED Ministry of Finance and Economic Development NGO Nongovernmental Organization NSDS National Strategy for the Development of Statistics NSO National Statistics Office PDO Project Development Objective PICs Pacific Island Countries PIT Project Implementation Team POM Project Operations Manual PPP Purchasing Power Parity PSMB Pacific Statistics Methods Board PSSC Pacific Statistics Standing Committee RPF Regional Partnership Framework SCD Systematic Country Diagnostic SDG Sustainable Development Goal SEP Stakeholder Engagement Plan SCI Statistical Capacity Index SOP Series of Projects SPC Pacific Community SPC-SDD Statistics for Development Division, Pacific Community ToR Terms of Reference UNSD United Nations Statistics Division WAEMU West Africa Economic and Monetary Union Regional Vice President: Victoria Kwakwa Country Director: Michel Kerf Regional Director: Hassan Zaman Practice Manager: Rinku Murgai Task Team Leader(s): Kristen Himelein Kastelic, Taufik Indrakesuma The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) TABLE OF CONTENTS DATASHEET ........................................................................................................................... 1 I. STRATEGIC CONTEXT ...................................................................................................... 7 A. Country Context................................................................................................................................ 7 B. Sectoral and Institutional Context .................................................................................................... 8 C. Relevance to Higher Level Objectives............................................................................................. 13 II. PROJECT DESCRIPTION.................................................................................................. 15 A. Project Development Objective ..................................................................................................... 15 B. Project Components ....................................................................................................................... 15 C. Project Beneficiaries ....................................................................................................................... 21 D. Results Chain .................................................................................................................................. 22 E. Rationale for Bank Involvement and Role of Partners ................................................................... 23 F. Lessons Learned and Reflected in the Project Design .................................................................... 24 III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 24 A. Institutional and Implementation Arrangements .......................................................................... 24 B. Results Monitoring and Evaluation Arrangements......................................................................... 25 C. Sustainability................................................................................................................................... 26 IV. PROJECT APPRAISAL SUMMARY ................................................................................... 26 A. Technical, Economic and Financial Analysis (if applicable) ............................................................ 26 B. Fiduciary.......................................................................................................................................... 27 C. Legal Operational Policies ............................................................................................................... 28 D. Environmental and Social ............................................................................................................... 28 V. GRIEVANCE REDRESS SERVICES ..................................................................................... 29 VI. KEY RISKS ..................................................................................................................... 29 VII. RESULTS FRAMEWORK AND MONITORING ................................................................... 31 Annex 1: Implementation Arrangements and Support Plan ........................................... 40 Annex 2: Procurement Plan (July 1, 2020–December 31, 2021) ...................................... 44 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) DATASHEET BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name Pacific Islands, Kiribati Statistical Innovation and Capacity Building in Kiribati Project ID Financing Instrument Environmental and Social Risk Classification Investment Project P171380 Low Financing Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC) [✓] Series of Projects (SOP) [✓] Fragile State(s) [ ] Disbursement-linked Indicators (DLIs) [✓] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) Expected Approval Date Expected Closing Date 11-Feb-2020 30-Jun-2025 Bank/IFC Collaboration No Proposed Development Objective(s) To improve the quality and efficiency of welfare data collection, and accessibility to comparable welfare data in Kiribati. Components Component Name Cost (US$, millions) Page 1 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Innovation & capacity building in data collection 1,420,000.00 Institutional strengthening 355,000.00 Implementation support 225,000.00 Organizations Borrower: Republic of Kiribati Implementing Agency: Kiribati National Statistics Office, Ministry of Finance and Economic Development (KNSO) PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 2.00 Total Financing 2.00 of which IBRD/IDA 2.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 2.00 IDA Grant 2.00 IDA Resources (in US$, Millions) Credit Amount Grant Amount Guarantee Amount Total Amount Kiribati 0.00 2.00 0.00 2.00 National PBA 0.00 0.67 0.00 0.67 Regional 0.00 1.33 0.00 1.33 Total 0.00 2.00 0.00 2.00 Expected Disbursements (in US$, Millions) Page 2 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) WB Fiscal Year 2020 2021 2022 2023 2024 2025 2026 Annual 0.02 0.14 0.25 0.42 0.54 0.50 0.13 Cumulative 0.02 0.16 0.41 0.83 1.37 1.87 2.00 INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Poverty and Equity Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance  Moderate 2. Macroeconomic  Moderate 3. Sector Strategies and Policies  Low 4. Technical Design of Project or Program  Moderate 5. Institutional Capacity for Implementation and Sustainability  Substantial 6. Fiduciary  Substantial 7. Environment and Social  Low 8. Stakeholders  Low 9. Other  Moderate 10. Overall  Substantial Page 3 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No Does the project require any waivers of Bank policies? [ ] Yes [✓] No Environmental and Social Standards Relevance Given its Context at the Time of Appraisal E & S Standards Relevance Assessment and Management of Environmental and Social Risks and Impacts Relevant Stakeholder Engagement and Information Disclosure Relevant Labor and Working Conditions Relevant Resource Efficiency and Pollution Prevention and Management Not Currently Relevant Community Health and Safety Relevant Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant Biodiversity Conservation and Sustainable Management of Living Natural Not Currently Relevant Resources Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities Cultural Heritage Not Currently Relevant Financial Intermediaries Not Currently Relevant NOTE: For further information regarding the World Bank’s due diligence assessment of the Project’s potential environmental and social risks and impacts, please refer to the Project’s Appraisal Environmental and Social Review Summary (ESRS). Legal Covenants Sections and Description Page 4 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) The Recipient shall vest the overall Project management and implementation responsibilities in its KNSO. (Section I.A.1 of Schedule 2 to the Financing Agreement) Sections and Description The Recipient shall: (a) by not later than six months after the Effective Date, recruit or appoint a resident advisor within KNSO, with terms of reference, qualifications and experience satisfactory to the Association, who shall be responsible for, inter alia, carrying out technical aspects of Project implementation; and (b) thereafter maintain such position throughout the Project implementation period. (Section I.A.2 of Schedule 2 to the Financing Agreement) Sections and Description The Recipient shall: (a) by not later than three months after the Effective Date, recruit or appoint a Project manager and a Project assistant (and any other consultants and/or staff as may be necessary), each with terms of reference, qualifications and experience satisfactory to the Association to form a Project Implementation Team within KNSO and such team shall: (i) report to the Republic Statistician of Kiribati; and (ii) be responsible for, inter alia, carrying out fiduciary aspects of Project management and implementation, including procurement, financial management, accounting, disbursement, monitoring and evaluation, implementation of ESS measures, stakeholder coordination and compliance with reporting requirements, with support from the Kiribati Fiduciary Services Unit; and (b) thereafter maintain such positions throughout the Project implementation period, or until the Kiribati Fiduciary Services Unit is able to support KNSO by assuming the respective functions of the Project Implementation Team members in a manner satisfactory to the Association (Section I.A.3 of Schedule 2 to the Financing Agreement) Sections and Description The Recipient shall provide KNSO and the Kiribati Fiduciary Services Unit at all times with adequate funds and other resources, mandate/functions, and with qualified and experienced personnel in adequate numbers, as shall be necessary to accomplish Project objectives as further detailed in the Project Operations Manual. (Section I.A.4 of Schedule 2 to the Financing Agreement) Sections and Description The Recipient shall: (a) by not later than three months after the Effective Date, prepare and adopt a Project Operational Manual; and (b) thereafter ensure that the Project is carried out in accordance with the Project Operational Manual. (Sections I.B.1 and I.B.2 of Schedule 2 to the Financing Agreement) Sections and Description The Recipient shall prepare and furnish to the Association, by not later than September 1 of each subsequent year during the implementation of the Project, for the Association’s review and approval, an Annual Work Plan and Budget for the Project. The Recipient shall ensure that the Project is implemented in accordance with the Annual Work Plans and Budgets approved by the Association for the respective fiscal year. (Sections I.C.1 and I.C.2 of Schedule 2 to the Financing Agreement) Sections and Description The Recipient shall carry out, jointly with the Association, not later than three years after the Effective Date, or such other period as may be agreed with the Association, a mid-term review of the Project. (Section II.2 of Schedule 2 to the Financing Agreement) Page 5 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Conditions Page 6 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) I. STRATEGIC CONTEXT A. Country Context 1. Kiribati is one of the smallest, most remote, and most geographically dispersed countries in the world. Kiribati consists of 33 islands with a total land area of only 810 km2, spread over an ocean area of some 3.5 million km2. The population of about 114,000 lives on 21 of the islands (20 coral atolls and a single volcanic island) in the three island groups that make up Kiribati. Kiribati is extremely remote from its nearest markets—about 4,000 km from both Australia and New Zealand. Kiribati’s low-lying atolls rise little more than 1.8 m above sea level on average and, as such, are at the forefront risk from the impacts of climate change. Kiribati is highly exposed to the effects of sea-level rise, storm surge, coastal erosion, and saltwater intrusion. Access to fresh water is particularly challenging, as population growth, saltwater intrusion, and droughts increasingly jeopardize Kiribati’s very limited groundwater supplies. 2. Not much is known about the current level of poverty in Kiribati. The latest Household Income and Expenditure Survey (HIES) used to estimate poverty in Kiribati was conducted in 2006, and no other source of information is available to produce more recent estimates of poverty. In 2006, Kiribati had an international poverty rate (measured against a line of 2011 purchasing power parity [PPP] US$1.90 per person per day) of 12.9 percent. When measured against an international poverty line that reflects standards of living in lower-middle- income countries (2011 PPP US$3.20 per person per day), Kiribati’s poverty rate was 34.6 percent in 2006, lower than the global average for lower-middle-income countries of 60.8 percent in 2008. The national basic needs poverty rate produced by the United Nations Development Programme for 2006 was 21.8 percent. There was a high variation of poverty rates across island groups in 2006, with much higher poverty in South Tarawa (24.2 percent) and the rest of Gilberts (22.0 percent) than in the Line and Phoenix Islands (8.9 percent). Female-headed households and households headed by the elderly were slightly over-represented in the poorest quintiles, and children were disproportionately likely to experience poverty. A large proportion of the population was found to be vulnerable to falling into poverty. If the basic needs poverty line was 20 percent higher, the poverty rate would have been 34 percent. With a Gini coefficient of 0.39, inequality in Kiribati in 2006 was similar to other Pacific Islands. 3. Other deprivation measures suggest some improvement in living standards over the past decade. Between 2010 and 2015, census data indicate that the proportion of households with access to piped water or rainwater increased from 38 percent to 58 percent, and the proportion with access to a flush toilet or pit latrine increased slightly from 57 to 62 percent. Over the same period, maternal mortality is estimated to have declined to 90 per 100,000 live births and under-five mortality to have declined to 56 per 1,000 live births, rates that are still high by regional standards. Access to electricity for lighting increased significantly between the censuses, mainly due to donor-funded solar programs. According to the World Development Indicators, net primary school enrolment is relatively high, at 97 percent, but little historical data are available to identify trends. While there are no data to indicate trends in income distribution over the period since the HIES, real gross domestic product (GDP) per capita declined by just over 10 percent between 2006 and 2011, before rising again, finally exceeding its 2006 level in 2015. Meanwhile, gross national income (GNI) per capita has experienced a level shift since 2013, with a dramatic increase in government revenue from foreign fishing vessels harvesting tuna in Kiribati’s Exclusive Economic Zone. The 2018 GDP per capita was estimated at US$1630, while the GNI per capita was at US$3190, meaning that Kiribati will soon graduate from the United Nations least developed country status. Page 7 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) 4. With considerable economic geography challenges, prospects for economic growth and poverty reduction are limited. Private sector development opportunities are highly constrained by the lack of economies of scale possible in such a small and fragmented domestic market that is extremely remote from large markets abroad. Severe infrastructure deficits in utilities, transport, and communications compound these constraints. Reflecting these constraints, unemployment is estimated to exceed 30 percent and youth unemployment to exceed 50 percent. Economic activity is dominated by the public sector, agriculture and fisheries, and a service economy underpinned by the public sector in the capital of South Tarawa (where nearly half the population live). Government services directly account for nearly 30 percent of GDP and some 70 percent of formal sector jobs are in the public sector (formal sector employment represents only 20 percent of the labor force, however). Beyond agriculture and fisheries, the private sector remains small, mostly consisting of small firms in the wholesale, retail, and transport sectors. The most significant opportunities for private sector development exist in the fisheries sector, with potential opportunities also in tourism and in strengthening backward links from the public sector (for instance, maintenance work on public assets). Aside from domestic opportunities, labor migration opportunities—hence human capital development—are critical. 5. Significant gender gaps exist in some social and economic indicators in Kiribati. In education, for instance, school participation rates for girls exceed those for boys in primary and secondary schooling, and the transition rate from primary to secondary schooling is also higher for girls. While migration opportunities have historically been skewed in favor of males (as seafarers), that is changing with new opportunities in Australia and New Zealand. The formal labor force participation rate for women is below that for men and unemployment among women is also higher. One particularly significant employer of women is the public service. In health outcomes, obesity rates for women are significantly higher than for men, smoking rates are significantly lower, and overall men have a higher rate of premature death due to noncommunicable diseases. Women also have limited access to reproductive health.1 B. Sectoral and Institutional Context 6. Data deprivation in Kiribati hinders evidence-based policy making. Policy makers must consider a range of complex trade-offs regarding service delivery and investments at the national level and identifying priorities in the context of the challenges they face. The evidence base for these decisions, however, is thin. Data collection in the Pacific Island countries (PICs) lags many regions in the developing world in terms of data quality, frequency of collection, and the timeliness of results. Kiribati is among the most data-deprived countries in the region, with the latest available data point for poverty measurement over 10 years old. Although some significant data collections have occurred over the past two years, with the Population and Housing Census and Demographic and Health Survey in 2018 and an HIES in the field since April 2019 (scheduled for completion in March 2020), further investment is needed to understand the trends in poverty and inequality. 7. Public access to the collected data in Kiribati is another challenge facing policy makers and other stakeholders. Data collection in and of itself is not enough: to maximize the benefits of the data, it must be made accessible to various stakeholders in the Government, donor, academic, nongovernmental organizations (NGOs), and civil society sectors. This is reflected in the UN Fundamental Principles of Official Statistics, which is among the fundamental operating principles of the Kiribati National Statistics Office (KNSO). Of relevance are Principle 1: “…official statistics that meet the test of practical utility are to be compiled and made available on an impartial basis by official statistics agencies to honour citizens’ entitlement to public information” and Principle 6: 1 World Bank. 2016. Consolidated Country Gender Action Plan for the PIC-9, FY17–21. Page 8 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) “individual data collected by statistical agencies for statistical compilation, whether they refer to natural or legal persons, are to be strictly confidential and used exclusively for statistical purposes.” To meet these two principles, before data can be shared publicly, national statistics offices (NSOs) must first anonymize the datasets to protect the identities of the surveyed households and people. However, anonymization is much more complex in countries with small and highly dispersed populations, as it becomes easier to uniquely identify people based on a broader range of variables. This makes the process costlier and more time-consuming in countries such as Kiribati, and datasets are often only available several years after the surveys are conducted, if at all. 8. Data deprivation hinders Kiribati’s effort to track progress on gender inequality over t ime and design policies to address it. Gender data is important, because it helps stakeholders understand the extent of gender gaps and design interventions to address them. Gender statistics must reflect the many areas where women and men may not enjoy the same opportunities (for example, the labor market) or where the lives of men and women may be affected in different ways (for example, gender-based violence). The minimum set of gender indicators was prepared by the Inter-Agency and Expert Group on Gender Statistics (IAEG-GS) as a guide for the national production and international compilation of gender statistics. The United Nations Statistics Division (UNSD), as the Secretariat of IAEG-GS, is tasked to collect and compile data and metadata from leading agencies and make those data available online at http://genderstats.un.org. Many indicators in the Minimum List rely on multitopic household surveys as data sources. Therefore, a well-designed HIES would address gender data gaps in the country. However, collection and reporting of gender data in Kiribati, as well as the rest of the Pacific, is lacking. Sex-disaggregated data on labor force participation are not available in Kiribati but are available in some other PICs, as reported in table 1. In the context of Kiribati, although some sex-disaggregated indicators are reported based on HIES data, the number falls short of the Minimum List of gender indicators. Thus, any effort to improve the monitoring of gender outcomes and design of gender-specific policies must include improvements in data collection. Table 1. Presentation of Sex-disaggregated data in reporting based on latest HIESs Sex-disaggregated Indicator Latest Poverty Mobile Total Number Education Health Labor HIES/ Rate by Phone of Country and Access or Force Poverty Sex of Ownership Disaggregated Poverty, by Outcomes Stats, by Report Household or Use, by Indicators in Sex by Sex Sex Head Sex Document Fiji 2013/14 N N N N N 0 Federated 2013/14 States of Y N N N N 1 Micronesia Kiribati 2006 Y N Y Y N 5 Nauru 2012/13 Y Y Y Y N 6 Palau 2014 Y Y Y Y Y 17 Republic 2002 of the Y (income) Y N Y N 8 Marshall Islands Samoa 2012/13 Y Y N Y N 3 Solomon 2012/13 Y N N N N 1 Islands Tonga 2015/16 N N Y Y Y 5 Page 9 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Sex-disaggregated Indicator Latest Poverty Mobile Total Number Education Health Labor HIES/ Rate by Phone of Country and Access or Force Poverty Sex of Ownership Disaggregated Poverty, by Outcomes Stats, by Report Household or Use, by Indicators in Sex by Sex Sex Head Sex Document Tuvalu 2010 Y N N N N 3 Vanuatu 2010 Y Y N Y N 6 9. NSOs lack funding to meet the prohibitive costs of data collection in the Pacific. The per-interview costs of data collection in the Pacific (and particularly in Kiribati) are some of the highest in the world. These outcomes are partially the result of systemic issues, including sparse populations and high travel costs due to the island geography. However, these issues are compounded by outdated methodologies and inefficient use of technology. Although the systemic challenges will remain a significant factor in data collection costs in the Pacific, there is scope to substantially reduce costs by adapting and integrating proven methods from other parts of the world. One example is switching from a diary method for collecting consumption data to a recall method, which can reduce the number of days required at each location, thereby decreasing personnel costs, a significant component of the survey budget. In addition, integrating new technology, such as computer-assisted personal interviewing (CAPI), reduces the need to print and transport paper questionnaires, which has decreased the costs of data collection in certain contexts despite the up-front cost of hardware investment. 10. Low statistical capacity is another major challenge for Kiribati in addressing data deprivation. According to the World Bank’s statistical capacity index (SCI),2 Kiribati, like other PICs, ranks below the East Asia and Pacific’s developing country average. In particular, the scores for source data, which measures if a country meets international recommendations for collecting five key data sources (agricultural census, health survey, population census, poverty survey, and vital registration system coverage), are well below the East Asia and Pacific average (see 2The World Bank’s SCI is a composite score assessing the capacity of a country’s statistical system. It is based on a diagnost ic framework assessing the following areas: methodology, data sources, and periodicity and timeliness. Countries are scored against 25 criteria in these areas, using publicly available information and/or country input. The overall statistical capacity score is then being calculated as a simple average of all three area scores on a scale of 0–100. See datatopics.worldbank.org/statisticalcapacity for more details. Page 10 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) 11. Figure 1). Page 11 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Figure 1. Statistical Capacity Index (2018) 100 East Asia & Pacific* 90 Kiribati Marshall Islands 80 Micronesia, Fed. Sts. 70 Nauru 60 Palau Papua New Guinea 50 Samoa 40 Solomon Islands Tonga 30 Tuvalu 20 Fiji Vanuatu 10 0 METHODOLOGY PERIODICITY SOURCE DATA STATISTICAL ASSESSMENT CAPACITY INDEX * EXCLUDES HIGH INCOME Source: World Bank, datatopics.worldbank.org/statisticalcapacity. 12. There has been some improvement in statistical capacity over time in Kiribati, but there remains much room for improvement. Figure 2 shows the overall SCI rating for the 11 PICs from 2005 to 2018, where Kiribati has shown some progress but still lags several other PICs and is well below the East Asia and Pacific average. Because the measure depends on the periodicity of data collection, countries will improve immediately after completing a survey (with Kiribati having conducted some key surveys in recent years). As funding for data collection may be irregular and often sourced from development partners, if the periodicity cannot reliably be maintained, the SCI score will fall again as the data ages. To mitigate the risk of this in Kiribati and increase sustainability, data collection must become more affordable. Figure 2. Statistical Capacity Index (2005–2018) East Asia & 85 Pacific* Fiji 75 Kiribati 65 Marshall Islands 55 Micronesia, Fed. Sts. Nauru 45 Palau 35 Papua New Guinea 25 Samoa 15 * EXCLUDING HIGH INCOME 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: World Bank, datatopics.worldbank.org/statisticalcapacity. Page 12 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) 13. The KNSO is a small agency that faces many of the same challenges as other NSOs. Systemic issues common to the Pacific still lead to some of the highest per-interview costs of data collection in the world. Though half of Kiribati’s population of 100,000 live on Tarawa Atoll, the remaining people are dispersed across 32 atolls spread over 3.5 million km2 of ocean. The travel and logistics involved in producing a household survey that is nationally and regionally representative can be prohibitively expensive. This is exacerbated by the low capacity of the KNSO, which has 14 staff and very high demand from other agencies. As a result, Kiribati falls under the ‘extremely deprived’ category under the World Bank data deprivation definition, as the latest HIES conducted was in 2006. 14. There are opportunities for Kiribati to address data collection through technology, but large initial outlays are required. Although geographical challenges will remain a significant factor in data collection costs, there is scope to substantially reduce costs by using new technologies and integrating proven methods from other parts of the world. One example is switching from a diary method for collecting consumption data to a recall method, which can reduce the cost of fieldwork with no reduction to data quality. Another example is CAPI, which not only reduces the cost of printing and transporting paper questionnaires, but also improves the speed of data cleaning and processing after fieldwork concludes. However, these changes require large up-front investments in physical and technological infrastructure as well as staff upskilling. 15. Beyond cost and technical constraints, adapting international best practices in the Pacific is a significant challenge. While implementing harmonized methods and exploiting economies of scale have benefits in many parts of the world, the approach is particularly crucial in the Pacific context. Countries, including Kiribati, are small and NSO capacity is thin, limiting the opportunities for domestic initiatives. Countries are also relatively similar to each other while being very distinct compared to other contexts globally. This situation limits the applicability of importing international best practices without careful consideration and customization but creates conditions for rapid adoption and scale-up within the region once local best practices are identified. 16. This project will thus be part of a new IDA Regional Program that seeks to address the considerable challenges of data deprivation and poor quality of statistics across the PICs. In the first phase, the Pacific Community-Statistics for Development Division (SPC-SDD) will work with two IDA small states—Kiribati (also a fragile and conflict-affected situation) and Tonga—to initiate the IDA Regional Program. It is expected that additional countries will join the Program, with the ultimate objective of improving the comparability, accessibility, sustainability, and overall quality of statistics across the Pacific. 17. SPC-SDD is a key stakeholder in addressing the statistical capacity gap in the region. SPC-SDD’s primary goal is to ‘strengthen access to and use of development statistics in policy development and monitoring progress.’ SPC-SDD is charged with providing direct support to NSOs in conducting data collection, including household surveys, censuses, administrative statistics, price measures, and so on, for their 21 member countries and territories (12 of which are World Bank members).3 SPC-SDD has a six-member statistical collection team which provides technical assistance on household survey and census rounds, as well as in cleaning and compiling the data. 3 The PICs and territories that are Pacific Community (SPC) members include American Samoa, Cook Islands, Federated States of Micronesia, Fiji, French Polynesia, Guam, Kiribati, Marshall Islands, Nauru, New Caledonia, Niue, Northern Mariana Islands, Palau, Papua New Guinea, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu, Vanuatu, and Wallis and Futuna. Highlights indicate World Bank member states, with underlines indicating IDA countries. SPC membership also includes Australia, France, New Zealand, Pitcairn Islands, and the United States. Page 13 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) 18. The Pacific Statistics Methods Board (PSMB) has potential to accelerate the adoption of new methods for data collection and statistical analysis as well as promote regional harmonization and comparability. The PSMB was formed in 2017 as a technical body under the Heads of Planning and Statistics meeting and the Pacific Statistics Standing Committee (PSSC), reporting its key decisions, progress, and achievements to the PSSC during their annual meetings. The purpose of the board is to “ensure that relevant best practice standards are developed and are fit for purpose for use in Pacific Island countries and territories for a suite of core censuses and surveys.” The terms of reference (ToR) for the PSMB charge the group with promoting standardization and harmonization in the methodologies adopted by NSOs in the PICs, seeking out opportunities to incorporate the latest innovations in data collection, and conducting rigorous assessments of feasibility and suitability of these new methods to the Pacific context. The members include Statistics New Zealand (chair), the Australian Bureau of Statistics, UN agencies, and one NSO representative from each of the four Pacific regions: Micronesia, Melanesia, Polynesia, and the small island states, with the World Bank holding observer status. C. Relevance to Higher Level Objectives 19. This project will contribute to improving the monitoring of targeted outcomes of the Kiribati 20-year Vision 2016–2036 (KV20) and the medium-term Kiribati Development Plans (KDPs). Improved collection of household-level information is vital for monitoring the targets of KV20, including poverty reduction; improved access to vital services, infrastructure, and jobs; and improved outcomes for women, youth, and vulnerable groups. Poverty rates are a key data gap in measuring the KDP’s Key Priority Area 2 on ‘Economic Growth and Poverty Reduction’, and the ability to disaggregate indicators of access and quality of service delivery by poverty status would add much-needed depth to the monitoring of the other key priority areas. 20. Closing data gaps is a corporate priority for the World Bank Group and for the region. The World Bank Shared Strategy for Household Surveys in 2015 identified the need to address data deprivation globally and committed the World Bank Group to support the 78 IDA countries in the production of multitopic household surveys every three years between 2016 and 2030. In the region, Country Partnership Frameworks (CPFs) of Papua New Guinea (FY19-23 as discussed by the Board on May 21, 2019, report #128471), Fiji (FY20-24, under preparation), and the Solomon Islands (FY18-23 as discussed by the Board on August 2, 2018, report #122600) and the World Bank Group’s Regional Partnership Framework (RPF) for the remaining nine PICs (FY17-21 covering Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Palau, Samoa, Tonga, Tuvalu, and Vanuatu, and discussed by the Board on October 18, 2017, report #120479) highlight significant gaps in socioeconomic indicators in most of the PICs and emphasize the necessity to have a solid foundation for evidence-driven policy making. In addition, the fact that the nine PICs are evaluated together under a single Systematic Country Diagnostic (report #102803) underscores the need for increased comparability in addition to more frequent data to facilitate regional prioritization and decision making. 21. The RPF for the PIC-9 emphasizes the need to address persistent knowledge gaps. The RPF highlighted the lack of concrete information on the prevalence and severity of poverty and the specific nature of constraints faced by the poor, as well as the uneven quality and inconsistent methodologies in HIES implementation and poverty analysis. The RPF explicitly lists addressing knowledge gaps as Objective 4.3 and states the need to (a) provide technical assistance to NSOs and SPC to enhance their data collection and analysis capabilities and (b) develop and pilot low-cost survey approaches that are financially sustainable. 22. Operationalizing the World Bank Group Gender Strategy requires a data-driven approach. The World Bank Group Gender Strategy document for FY16–23 calls for improved country-level diagnostics on gender gaps Page 14 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) in SCDs and CPFs, to “highlight how closing the key gender gaps in endowments, economic opportunities, and voice and agency would boost the attainment of the twin goals.” Improving the quality of country-level data and regional-level data are prerequisites to that improvement. Not only should the frequency of data collection be improved for better tracking of progress over time, but the types of data collected and reported should also be improved on issues that disproportionately affect women and girls, such as land rights, access to education, family planning, or health care, and collected in such a way as to facilitate regional comparisons. Moreover, the project is consistent with the Consolidated Country Gender Action Plan for the PIC-9, FY17–21, which discusses key gender gaps and the need for sex-disaggregated data. IDA Regional Program 23. The project will be part of an IDA Regional Program comprising complementary national- and regional- level strategies to address the financial and capacity constraints to better data collection. The ‘Statistical Innovation and Capacity Building in the Pacific Islands’ Program constitutes an interdependent and overlapping Series of Projects (SOP) to multiple beneficiaries who are facing a common set of development issues and share common development goals. This program will include a combination of activities at the country and regional levels which benefit the whole region. Country-level support is provided to facilitate the collection of new harmonized datasets and to build NSO capacity. However, to ensure that the new methods are indeed fit for purpose for the unique context of the Pacific and that the gains at the country level are sustained, the series includes a project to build the capacity of the main regional partner, SPC-SDD. SPC-SDD is best placed to both provide timely support to countries that remain under-resourced and unable to conduct surveys on their own as well as serve as the focal point for innovation and experimentation in the region. The overall SOP has a program- level Project Development Objective (PDO): “to improve the quality and efficiency of welfare data collection, and accessibility to comparable welfare data in the Pacific Island Countries.” The PDO will be monitored at the project level through the following PDOs: (a) to improve the quality and efficiency of welfare data collection, and accessibility to comparable welfare data in the Recipient’s territory (country-level PDO) and (b) to improve the quality of welfare data collection, and accessibility to comparable welfare data in the Pacific Island Countries (SPC PDO). 24. The SOP model allows for considerable economies of scale and facilitates positive spillovers. A major challenge for the thinly staffed NSOs in the Pacific, including the KNSO, is that it is difficult to maintain the necessary in-house expertise, particularly in specialties that are required only once or twice every few years. By strengthening regional institutions, including the PSMB and the collections team in SPC-SDD, the SOP promotes increased consistency and continuity in national and regional data generation and analysis. The PSMB assists with this issue in that it focuses on issuing guidelines that incorporate best practice thinking in such a way that they can be readily implemented, for example, by providing worked examples for sample design and sample Stata/R code for Sustainable Development Goal (SDG) calculation or cited in the ToR of an international consultant. This service becomes more critical to ensure consistency and comparability in statistical products as SPC-SDD moves away from retail technical assistance and countries will need to recruit more consultants on their own. Additionally, through the PSMB, regional champions may be identified and South-South learning opportunities fostered. Overall, while there are considerable opportunities for economies of scale in implementation through SPC-SDD and the PSMB, the potential benefits to the innovation agenda provide the main opportunity for transformative change in the region. Even with cost savings resulting from improvements to collection methodologies, geography will be a constant structural challenge in sustainability. The innovation component of the regional project offers the financing and technical expertise to seek out even methods that represent a radical departure from the standard survey orthodoxy yet might work better in the unique context of the Pacific. This Page 15 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) level of innovation would not be possible by any individual country because they lack both financing and technical expertise, and therefore they are best initially undertaken through the regional organization, improved through implementation by individual countries, and then codified and scaled up through the PSMB. 25. Kiribati is a participant in Phase 1 of this SOP. The two participating countries in Phase 1 of this SOP are Kiribati and Tonga, with financing given under the respective IDA borrowing terms for each country. In addition to the country projects, a regional grant will be provided to the SPC. The expected lifetime of projects in Phase 1 of the SOP is five years beginning in FY20 and ending by FY26. 26. Phase 2 of the project will include countries that will come under IDA19 as well as potentially a follow- up project for SPC-SDD. Because the data collection and organizational constraints for countries in the region are similar, the program-level PDO would be appropriate for additional countries. Initial discussions have been held with the Solomon Islands, Fiji, and Samoa, but it is not possible to confirm a set list of Phase 2 participants until later in the IDA19 cycle. In addition, there is an option to include a Phase 2 expanded project for SPC-SDD if the regional organization is able to achieve the project activities and objectives in less than the originally programmed five-year calendar. II. PROJECT DESCRIPTION A. Project Development Objective PDO Statement 27. To improve the quality and efficiency of welfare data collection, and accessibility to comparable welfare data in Kiribati. PDO Level Indicators (a) Sub-national precision improved based on a constant per-survey cost (b) Number of survey datasets produced during the project lifetime using improved electronic data capture systems (c) Share of HIES datasets available for open access (d) Number of comparable regional indicators produced B. Project Components Component 1: Innovation and capacity building in data collection (US$1.42 million equivalent) 28. Under Component 1, the project will finance innovations and capacity building in data collection. The activities are divided into two subcomponents, as follows: Subcomponent 1.1: 2023/24 Household Income and Expenditure Survey Page 16 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) 29. The subcomponent will finance data collection using new methods as recommended by the PSMB. The project addresses short-term data deprivation by providing financing to conduct the next round of the HIES, scheduled for 2023/2024, using the agreed methodology. The project will also support the analysis of the data collected and public dissemination of the results of the survey. Specifically, the project will finance the operational costs of the survey, including hiring a resident advisor for statistics to manage the HIES, wages for supervisors and enumerators to conduct the survey, supervisor and enumerator training, travel and accommodation, procurement of hardware and software for data collection and analysis, the costs of publishing and disseminating the results, and any other associated logistics costs. In addition, the project seeks to address longer-term data deprivation by introducing new methods for the HIES that reduce the costs of data collection in terms of money and time, while at the same time improving the quality of the collected data. Countries are often reluctant to try new methods due to large up-front costs or complexity of implementation; this project addresses this challenge by covering the initial costs of innovation, including procurement of hardware and training of NSO staff and enumerators, to support the implementation of the HIES. In addition, because the recommendations will flow through SPC-SDD and the PSMB, innovation will not take place at the price of regional comparability. 30. The subcomponent will also support institutional and technical capacity building of the KNSO to analyze the data and publish the results. The project will build technical capacity of NSO staff on statistical software packages, HIES analysis, poverty measurement, and incorporating thematic/sectoral lenses to poverty analysis, such as tourism, agriculture, disability, and gender. The capacity-building activities comprise a combination of a resident advisor who remains in-house throughout the HIES implementation, just-in-time technical assistance from a roster of international and regional experts (which will be facilitated by the SPC in its emerging role as a regional ‘systems leader’), and peer-to-peer learning between NSOs. The subcomponent will finance the procurement of hardware and software for data processing and analysis, as well as any costs of publishing and disseminating the results. 31. Capacity building for the KNSO is based on an embedded international resident advisor. An important lesson learned from previous statistical capacity-building projects in other low-capacity or thin-capacity environments is the importance of having a daily presence in the KNSO to support the project preparation and implementation. In these types of organizations, many of the senior staff with the technical knowledge and experience necessarily have administrative responsibilities that limit the time that they can devote to technical tasks or to mentoring young staff. An international resident advisor means that there is always staff with the required technical skills and knowledge of the local context to continue moving the project forward. Resident advisors will be twinned with a KNSO staff member to facilitate skill transfer and backstopped by the statistics advisor hired under the SPC-SDD project to ensure consistent advice across countries. In other similar projects, the international advisor has provided hands-on training to local staff in important skills such as sample design, programming for electronic data capture, or analysis using software packages (Stata, R). The repeated nature of these interactions allowing for the natural building of knowledge and the strong links to daily activities have shown to be a much more effective approach to building lasting capacity than either brief intensive trainings or the fly- in fly-out model of technical assistance, and this model has been shown to be effective in an ongoing project supporting statistical capacity development in the Republic of the Marshall Islands. Therefore the resident advisor will be recruited in the KNSO not later than six months after the effective date of the Financing Agreement to work on the technical aspects of project implementation. 32. The funding of data collection closes an immediate data gap but is also a platform for improved methods. While the collection of the HIES data is considered a core responsibility of the NSO, there is rarely the opportunity for methodological improvements. The good practice of data collection and analysis requires Page 17 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) comparability between rounds to understand the trends in well-being and other socioeconomic statistics. The reluctance to break the series results in methodologies being ‘sticky’ or resistant to change. In addition, there is a risk associated with incorporating new methods such as CAPI or electronic data collection. The program focuses on leveraging the coordinating role of the regional organization to assist with decreasing the risk of breaking the trend to update the questionnaire design and data collection method. Having the endorsement of the regional organization and technical advisors in the international community generally bolsters the confidence of NSOs should they receive questions or pushback on the results generated by the new methods. In addition, the learning associated with implementing the HIESs using these improved methods has strong spillover effects on other NSO activities; for example, training and experience in CAPI data collection is transferrable to all other field activities. 33. This component also provides an opportunity to directly improve the collection of data on gender gaps. The questionnaire design updates above will include, at aminimum, the collection of data that enables sex- disaggregated analysis on poverty, welfare, and other information typically collected in the HIES, such as the collection of individual-level information on employment/labor market outcomes as well as some human capital indicators. These and other efforts will provide decision makers with better information about the nature and scale of the social and economic barriers holding back women and girls and will inform policies to close gender gaps and track progress on gender-related interventions. 34. Timely release of the report and dataset will boost policy relevance and open the opportunity for the national and international research community to contribute to the dialogue. The resulting dataset from the project-financed HIES round will be cleaned, compiled, analyzed, documented, and disseminated on time, ideally with the survey report and anonymized microdata being released no later than 12 months after the collection of the last interview. This focus on the timely release of results and the release of the microdata at the same time as the report is a marked change from the long delays common in the region. Subcomponent 1.2: Data collection for economic statistics 35. The project will also support the collection of price and economic data in identified outer islands (Makin, Abemama, Arorae, Kiritimati, Teeraina, and Tabuaeran) to close key data gaps in economic statistics. High- quality and timely economic statistics are integral to obtaining an accurate measure of the size and composition of the national economy. According to the International Monetary Fund (IMF) Article IV report on data gaps, “the authorities underlined that they are already stretched in their capacity to develop the main macroeconomic indicators and would appreciate assistance from international institutions and donors in compiling the needed statistics.” The IMF notes that GDP estimates have improved due to technical assistance from the Pacific Financial Technical Assistance Centre but that “further capacity building would be needed to continue to improve the quality of GDP estimates, particularly expenditure-based GDP estimates.” Financial sector statistics should be a priority. 36. The project will prioritize price data and economic data collection in the identified outer islands. Currently price data are collected only in South Tarawa, which covers roughly half of the national population. While in many contexts this coverage would be sufficient, particularly given the use of the Australian dollar as the national currency, the dispersed geography and reliance on imported goods mean that different islands can have price structures and economic activities that differ greatly from South Tarawa. The project will expand price and economic data collection to six additional islands (Makin, Abemama, Arorae, Kiritimati, Teeraina, and Tabuaeran), which cover an additional 15 percent of the population, and add the only other urban area in Kiritimati, thereby bringing the total coverage to 66 percent. These areas were also selected strategically as Makin is the furthest Page 18 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) island to the north and Arorae is the furthest island to the south, and therefore these locations would be where plane and ship transportation costs would be at a maximum. The Government has implemented a freight levy policy to maintain cost parity between locations, but price data are required to determine its effectiveness. These areas also contain a large share of the copra cutters and are therefore important to understanding the impact on the local economy of the Government’s decision to raise the price of copra. Finally, regular visits to these locations facilitate the collection of conversion factors for nonstandard units, which are a key input to accurately measuring and pricing home production and sales in the HIES. The project will finance quarterly visits to Kiritimati to collect data on prices and sector data relevant for national accounts and twice annual visits to the other outer islands. After the first 18 months of data collection, the project will assess the marginal gains of the additional collection rounds and modify (increase or decrease) the collection frequency or change the locations as appropriate. Component 2: Institutional strengthening (US$0.355 million equivalent) 37. Under Component 2, the project will support activities that strengthen the institutional and technical capacities of the KNSO to improve the enabling environment for data collection in Kiribati. Aside from financing, NSO capacity is often a binding constraint to the quality and frequency of data collection. This component will carry out activities to strengthen the institutional and technical capacity of the KNSO, including, but not limited to those described in the following paragraphs. (a) Institutional Review 38. An institutional review will identify constraints in the organizational structure of the KNSO. Oftentimes, the structure of NSOs evolves organically based on opportunistic funding from the Government and development partners. The organization chart and reporting structure can become dated and inefficient under this model, with staff and skill levels not always appropriately aligned to positions and requirements. An institutional review will examine the current and immediate future work programs of the NSO based on the upcoming National Strategy for the Development of Statistics (NSDS), which is currently being prepared with assistance from SPC-SDD. This review will identify areas where technology could improve efficiency and recommend staff reallocation or retraining based on a more streamlined structure, as well as serve as the basis for any new staffing requests made to the Ministry of Finance and Economic Development (MFED). (b) Review of Kiribati’s legal and regulatory framework on statistics 39. A regional and global comparative analysis of Statistics Acts and other legislation on NSOs for revising Kiribati’s Statistics Act will be carried out. A key component of institutional strengthening is to formalize and clarify the official mandate of the NSO, as well as the scope of its roles and responsibilities within the machinery of government. This objective is particularly relevant in determining the scope of the KNSO’s authority regarding the coordination and collation of data from other government agencies (see activity 2(c) below). The work under this subcomponent will proceed in two phases. First, the project will finance a consultant to carry out a comparative study of other Statistics Acts in the Pacific and other parts of the world. Following the complementary activities of 2(a) and 2(c), as well as a review of the activities proposed in the NSDS, the consultant will make a recommendation if new legislation is necessary and if so, propose a draft text that is appropriate to the scope of work of the NSO. It is expected that any new legislation would include relevant legal clauses on data sharing to support those activities described in activity 2(c). (c) Data Coordination Page 19 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) 40. The project will support the analysis of the KNSO’s role as data coordinator across government agencies. Line ministries in Kiribati collect their own data and use their own internal Information Units (IUs) for data archiving and analysis. This approach results in an environment where IUs and the KNSO do not share data openly and do not have interoperable systems. The project would fund technical assistance to assess how the KNSO can play a coordinator role across these IUs and to design an integrated system that could be used across agencies to improve the overall quality of evidence-based policy making. The initial activities will be supported by the resident advisor and will include a stocktaking of the data availability, an assessment of the ability to link datasets from IUs, and stakeholder engagement to build support for data sharing. Following these activities, the project will support the development of an appropriate internal data sharing platform for the Government of Kiribati and issue a set of recommendations on improving links between IUs. The resident advisor will then support the KNSO in providing training to counterparts in the relevant line ministries on the use of the data platform. Figure 3. Institutional Strengthen Activity Sequencing (d) Training on data analysis and dissemination 41. Beyond the long-term technical assistance provided by the resident advisor, the project will provide additional financing for specialized training on data analysis and dissemination. The model of the embedded resident advisor is designed to provide lasting capacity building in data analysis and dissemination to NSOs. The focus of this extended training program will be both theoretical, including basic statistics; the analysis of survey data with complex design elements; and introductory economics, nutrition, and other related disciplines, as well as visual statistics for dissemination. The bulk of the activity will center on providing hands-on training in data collection software (Survey Solutions, CSPro) and statistical analysis software (Stata, R). The instruction provided by the resident advisor will, however, be supplemented by the welfare economist and statistical advisor hired under the SPC-SDD component or external training, if necessary, for topics outside of the resident advisor’s realm of expertise. Possible topics for additional training include, but are not limited to, small area estimation, gender and disability statistics, data visualization and mapping (QGIS and ArcGIS software packages), and the calculation Page 20 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) of SDG indicators. 42. Part of the technical capacity-building program will include specific analytical training to improve the monitoring of gender gaps in Kiribati. Beyond improvements in collecting data to track gender gaps, it is important that NSO technical staff have the capacity to carry out data analysis and calculate gender statistics from the HIES. The capacity building will include methodology to calculate relevant gender indicators as well as gender analysis of the HIES data. This training will be delivered by the resident advisor, SPC-SDD, or another consultant hired under the project, as appropriate. 43. These project activities will promote increased data use among stakeholders. Collecting data does not automatically lead to an increase in data-driven policy making as data must be distilled and packaged for a nontechnical policy audience. The project targets three actors in promoting data use. First, the NSO will be supported in the analysis and dissemination of both large-scale and general statistical abstracts and shorter and less technical notes, infographics, and briefings, beginning with analysis of the 2019/2020 HIES (the data collection for which predates this project), continuing through the 2023/2024 HIES, and covering all data collection in between. Topics will be determined through a consultative process with line ministries and other stakeholders. Support for these activities will come through the resident advisors with backstopping from the SPC welfare economist hired under the project. Second, the NSO and resident advisors will host ‘data orientation’ workshops and data analysis trainings for those in line ministries and the local academic communities interested in primary data analysis. The objective of these workshops will be to make the microdata more approachable by describing dataset structure, the process for merging datafiles, and accounting for complex design features, as well as to promote the data sharing system developed under activity 2(c). Finally, the project will promote data use among the global academic community by supporting the HIES microdata-sets to be publicly released in a timely manner. (e) Office facilities 44. Finally, the project will improve office and IT facilities of the KNSO to enable the implementation of project activities. Moving to new technologies in data collection and dissemination will require updated hardware and software. A limited portion of the budget is allocated to the purchase of new hardware and software, as well as other office equipment and furnishing for the NSO, to support the implementation of the above activities. Items specifically highlighted as priority purchases are updated computers and laptops, a server, Internet and projection capabilities to facilitate videoconferencing, and Stata data analysis software. Component 3: Implementation support (US$0.225 million equivalent) 45. Under Component 3, the project will provide operational and technical assistance to Kiribati on project management and implementation. A Project Implementation Team (PIT) will be established within the KNSO and will consist of at least one full-time project manager and one part-time project assistant, as well as any other consultants as may be required. The full-time project manager will be responsible for, among other things, (a) preparing annual work plans and budgets, (b) carrying out all disbursements and any financial management (FM) and procurement-related activities in accordance with World Bank-approved procedures, (c) monitoring and evaluating project activities, (d) preparing and consolidating periodic reports, (e) coordinating with other stakeholders on issues related to the project, and (f) providing administrative support. The project assistant will be responsible for clerical and administrative support in executing the FM and procurement-related activities. The two positions are required to be in place by not later than three months after the effective date of the Financing Page 21 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Agreement and must be maintained throughout the project implementation period or until such time that the Kiribati Fiduciary Services Unit (KFSU) is in a position to assume these responsibilities. 46. Beyond the project manager and the part-time project assistant hired under the project, the KNSO will be supported by the KFSU in the fiduciary aspects of project implementation. In the initial stages of the project, the KFSU will assist the project manager in conducting his/her duties and build the capacity of PIT team members. A separate World Bank project is under development to strengthen the KFSU through the recruitment of additional staff. If and when that project becomes effective, and subject to the agreement of the World Bank, the responsibilities of the PIT may shift to the KFSU staff, eliminating the necessity to have dedicated procurement and FM staff and/or a PIT within the KNSO. Table 3. Indicative Project Budget, by Component Budget Component and Subcomponents (US$ equivalent) Component 1: Innovation and capacity building in data collection 1,420,000 1.1 2023/24 Household Income and Expenditure Survey 1.1.1 2023/24 round - fieldwork 600,000 1.1.2 HIES report dissemination 60,000 1.1.3 Resident advisor 630,000 1.2 Data collection for economic statistics 130,000 Component 2: Institutional strengthening 355,000 (a) Institutional Review 50,000 (b) Review of Kiribati’s legal and regulatory framework on statistics 50,000 (c) Data Coordination 50,000 (d) Training on data analysis and dissemination 70,000 (e) Office facilities 135,000 Component 3: Implementation support 225,000 (a) Project Manager 160,000 (b) Project Assistant 35,000 (c) Support to KFSU 30,000 To Total 2,000,000 C. Project Beneficiaries 47. The main direct beneficiaries of the project are the Kiribati NSO but there are positive externalities of better quality, more frequent, and more comparable data across a broad range of stakeholders. The project will provide funding for data collection for the next round of the HIES, directly benefiting the KNSO as the implementing agency and the Government of Kiribati. Beyond the direct beneficiaries, the open access aspect of the project will be transformative to the way development partners and other stakeholders use data. Previously, microdatasets were available only to a select group of partners, and even then, only with substantial delay and limited documentation. By facilitating the generation of guidelines for anonymization and documentation through the SPC project, and by including the public release of the microdata within 12 months of the completion of the Page 22 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) fieldwork in the country projects, timely information will become part of the public domain and discourse, democratizing analysis and broadening stakeholder engagement. D. Results Chain 48. The Theory of Change in figure 4 illustrates how this project fits into the larger set of expected outcomes to be achieved through the overall SOP. The country projects in Tonga and Kiribati (as well as potential additions in Phase 2 of the SOP) contribute directly to the targeted outcomes by directly funding data collection and building NSO capacity, while the SPC project complements that by improving the quality of regional support available to the NSOs. Figure 4. Theory of Change Critical Assumptions  A1: CAPI and PSMB-recommended innovations are viable and data collected meet acceptable statistical standards.  A2: Well-qualified international resident advisor is available to provide needed technical guidance.  A3: Nontechnical resources are deployed on schedule.  A4: Well-qualified expert staff is available in SPC on schedule and provides complementary support. Page 23 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380)  A5: New methods identified are viable and can be used to collect data more cheaply and frequently than the HIES.  A6: Innovations facilitate the expected improvements in time, cost, and quality of data.  A7: Easy access by staff to technical and nontechnical resources enhances job performance.  A8: Time, cost, and effort of data production processes are all reduced and contribute to greater efficiency. E. Rationale for Bank Involvement and Role of Partners 49. The World Bank has extensive experience and a global mandate to improve welfare statistics in developing countries. Under the monitoring agreement for the SDGs, the World Bank has taken on a role in setting standards for cross-country comparability. In addition, the World Bank has support similar efforts both technically and financially across the globe and in countries with comparable issues of low/thin capacity. In addition, the World Bank has a growing experience in working with regional organizations to strengthen statistics within groups of neighboring countries and can draw from this knowledge base to advise on making the most of positive peer pressure and economies of scale. 50. The World Bank is uniquely placed to bring together funding and technical assistance to assist countries in transitioning to new technologies and improved methods. Historically, funding and technical considerations have been separate decisions in the development of the HIES. The NSO compiles a budget, generally based on the previous round, which is then sent to the Government or development partners for funding. Only when the NSO receives final word on the budget are technical decisions finalized. This project merges those decisions, by letting the methodology drive the survey design rather than being strictly limited by cost considerations. 51. Other development partners can leverage the work under this SOP in their future support to the HIES and other survey data collection in the Pacific. Methodological innovations introduced in the country projects and the regional harmonization mechanism of the PSMB will eventually spread to other PICs outside the scope of this project. However, as it will take time for countries to apply these new methods, there is an opportunity for other development partners to build on this SOP and apply the PSMB-approved innovations in the future survey rounds that they fund. 52. SPC-SDD is a key stakeholder in addressing the statistical capacity gap in the region. SPC-SDD’s primary goal is to “strengthen access to and use of development statistics in policy development and monitoring progress.” SPC-SDD is charged with providing direct support to NSOs in the PICs in conducting data collection, including household surveys, censuses, administrative statistics, price measures, and so on, for their 21 member countries and territories (12 of which are World Bank members).4 SPC-SDD has a six-member statistical collection team which provides technical assistance on household survey and census rounds, as well as in cleaning and compiling the data. 4 The PICs and territories that are SPC members include American Samoa, Cook Islands, Federated States of Micronesia, Fiji, French Polynesia, Guam, Kiribati, Marshall Islands, Nauru, New Caledonia, Niue, Northern Mariana Islands, Palau, Papua New Guinea, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu, Vanuatu, and Wallis and Futuna. Highlights indicate World Bank member states. SPC membership also includes Australia, France, New Zealand, Pitcairn Islands, and the United States. Page 24 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) F. Lessons Learned and Reflected in the Project Design 53. The project draws upon lessons learned from two main sources: World Bank statistics projects in other regions and previous and ongoing regional project in the Pacific region. National-level statistics projects have been implemented in Africa and Latin America for decades, with a surge of IDA-funded projects beginning in 2015 in response to the Data Deprivation Agenda. These early national projects demonstrated the benefits of many key components of this design, including resident advisor technical assistance over a fly-in fly-out model, the benefits of leapfrogging technology in data collection, and a holistic view of the institutional barriers to the regular collection and dissemination of statistics. In addition, the IDA projects in the Africa region have demonstrated important economies of scale regarding regional integration. First, the cost of technological adoption is lower if countries can build on the experience of their neighbors. While each context has unique challenges, there are common themes of remoteness, lack of connectivity, and difficulties in charging and maintaining electronics. Also, by working through a regional body, the costs of diffusing these lessons learned are lower. The regional body can further lend support and political cover to NSOs if the new methods lead to changes in indicators that are disadvantageous to the ruling government. 54. The second source of lessons learned relate to the project structure and draw from the experience of the Western Africa Regional Program to Harmonize and Modernize Living Conditions Surveys (P153702) project, which was implemented through the West Africa Economic and Monetary Union (WAEMU). The objectives of the WAEMU project are similar to those of the Pacific regional project in that it supports eight countries in harmonizing and modernizing their national household expenditures surveys. The design, however, had the funding come directly to the WAEMU, which was then charged with on-granting the funding to participating NSOs. The administrative burden placed on the WAEMU related to monitoring compliance led to substantial delays in disbursement. While the Pacific is a different context, there are some similar weaknesses between the WAEMU central coordinating team and SPC-SDD, and therefore the project was designed to use an SOP model, with IDA funding directly provided to participating countries. 55. The Pacific Regional Statistics Project also draws lessons learned from other projects in the Pacific with a regional organization component. The Pacific Regional Oceanscape Project (PROP) and the Pacific Resilience Project (PREP) are two SOPs that include components where the recipient is a regional organization. The design of these projects includes substantial support for capacity building, both for the countries as well as the regional organization. III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 56. The implementing agency for this project is the KNSO, a division of the MFED. The fiduciary aspects of project implementation and management will be managed by a PIT that reports to the Republic Statistician of Kiribati. The PIT consists of a project manager and a project assistant (and any other consultants and or staff in the KNSO as may be required), and is tasked with, among other things, (a) preparing Annual Work Plans and budgets, (b) carrying out all disbursements and any FM and procurement-related activities in accordance with World Bank-approved procedures, (c) monitoring and evaluating project activities, (d) preparing and consolidating periodic reports, (e) coordinating with other stakeholders on issues related to the project, and (f) providing administrative support. Due to the importance of the PIT for the execution and management of project activities, Page 25 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) the project manager must be appointed within three months after the effective date of the Financing Agreement. The preparation and fieldwork of the 2023/2024 HIES round, the data coordination activities described in Component 2 and other technical aspects of project implementation will be led by the resident advisor to be recruited in the KNSO. 57. Implementation support to the project will also be provided by the KFSU. The KFSU is a project-funded unit under the MFED tasked with providing implementation support to World Bank-financed projects. The KFSU will provide direct support to the PIT on fiduciary aspects of project implementation, and build the capacity of the consultants and staff in the PIT. As indicated in paragraph 45, a separate World Bank project is under development to strengthen the KFSU through the recruitment of additional staff. If and when that project becomes effective, and subject to the agreement of the World Bank, the responsibilities of the consultants and staff in the PIT may shift to KFSU staff. Figure 5: Implementation Arrangements 58. A Project Operations Manual (POM) will be prepared and agreed with the World Bank no later than three months after the effective date of the Financing Agreement. The POM will include a project description; key project implementation staff; a detailed description of the modalities of project implementation; budgeting; Procurement Guidelines; FM procedures, including accounting and auditing; and the Monitoring and Evaluation (M&E) Framework, including the timeline for the production of annual reports. In addition, the KNSO will prepare an Annual Work Plan and accompanying budget, including staff costs, Operating Costs, and training and workshop costs. The Annual Work Plan and budget should be submitted to the World Bank not later than September 1 of each year for the World Bank’s review and approval. B. Results Monitoring and Evaluation Arrangements 59. The M&E plan for this project is based on the key indicators detailed in the Results Framework in Section VII. Overall achievement of the PDO is measured by indicators of (a) improvements in the cost of HIES collection, processing, and analysis; (b) improvements in the quality of data produced; and (c) improvements in open access Page 26 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) to HIES data. Detailed PDO-level and intermediate indicators are available in the Results Framework in Section VII. Semiannual progress reports will be prepared and presented to the World Bank no later than one month after the end of each calendar semester, and a midterm review will be conducted no later than three years after the effective date of the Financing Agreement. 60. Overall M&E of progress toward the objectives of this project is the responsibility of the implementing agency. Recognizing the lack of resources in the Kiribati NSO to adequately report on progress according to the Results Framework indicators, the project will include financing for a resident advisor, who will facilitate the collection and analysis of relevant M&E data during the project period in which they are working with the KNSO, as well as to provide training for the continued implementation of the M&E following their departure. C. Sustainability 61. Project sustainability revolves around (a) financial sustainability to continue carrying out harmonized surveys upon project completion and (b) technical sustainability, which is related to the ability to continue training, attracting and motivating staff to sustain improved capacity to implement HIESs. 62. Ensuring financial sustainability will be the most challenging aspect of this project because the current system is not sustainable. High per-interview costs and limited domestic resource mobilization lead most countries to rely on donor financing or endure long gaps in data collection. The project promotes financial sustainability in three ways. First there is a focus on technological innovation to reduce costs by replacing outdated and inefficient methods, which will in turn bring down per-unit costs. This extends beyond the HIES to explore alternatives that can deliver low cost just-in-time information to policy makers. Second the project will seek to expand domestic resources for surveys by promoting a virtuous cycle of data collection and use. A key obstacle to this in the past has been the long processing time for data. The third approach to strengthening financial sustainability is strengthening the capacity of SPC to provide timely, lower cost, and regional technical assistance. 63. To ensure technical sustainability, at the program level, the program will invest in capacity building at the NSOs—particularly by offering in situ technical assistance through resident advisors as well as regional building through the SPC-SDD activities. The program will invest seriously in quality control—by introducing CAPI systems and by supporting the PSMB in developing rigorous recommendations on methodology and data quality. As feedback loops are strengthened, in combination with friendly pressure from peers, a virtuous cycle of learning- implementation-quality control-learning may emerge, which will contribute to the technical sustainability of the program and this project. IV. PROJECT APPRAISAL SUMMARY A. Technical, Economic and Financial Analysis (if applicable) 64. Though the nature of the project does not lend itself to traditional cost-benefit analysis, there is a strong economic rationale for engagement in statistics. Official statistics, data production, and analysis are assumed to be public goods. As public goods, official statistics have historically been financed from government revenue and through contributions from partners and donors but with no expected direct financial return. The project outcomes, however, are expected to promote improved allocation of resources by enhancing the monitoring of the impact of government spending by providing more accurate information on socioeconomic activity to the Page 27 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) public at large. Increased evidence-based decision making related to the different sectors covered by the project will lead to the reduction of risks inherent to inadequate economic policy decisions. 65. Public investment in statistics has a strong economic rationale. Once they are produced, statistics can be used by different levels of government, citizens, and businesses to facilitate evidence-based decisions in their spheres of interest. Public investment in statistics therefore creates positive externalities. Moreover, the processes of planning, policy making, and M&E of government policies require a wide variety of development, social, and economic statistics, which only the public sector has an incentive to provide. While the private sector can and does collect specific statistics, it is unlikely to invest in multitopic living conditions surveys. Similarly, with macroeconomic statistics, while private companies may benefit from improved GDP or price information, they do not have the mandate or access to fund their production. Left to the market there would likely be significant underinvestment. 66. This project improves the quality and availability of data relevant to the measurement of poverty, living conditions, and many of the SDGs. They allow to better identify the drivers of poverty reduction and will facilitate the assessment of large-scale (public) programs. The availability of these data will certainly contribute to strengthening the regional integration process and lead to a better assessment of the socioeconomic situation in each country, better comparability among countries, and better understanding of the drivers of poverty reduction. It will improve targeting of public policies and the use of public resources, and it will facilitate regional integration, as better data are available to assess the (distributional) impact of the various potential policy reforms. By making the data publicly available, this project facilitates public accountability, another known route to improved service delivery and greater efficiencies in public spending. These benefits may be hard to quantify but it is evident that the opportunity costs of poor data are high. In the absence of reliable data, the likelihood that public spending is misallocated increases dramatically as does the ability to assess whether spending is used efficiently. B. Fiduciary (i) Financial Management 67. An FM assessment was carried out in accordance with the ‘Principles Based Financial Management Practice Manual’ issued by the World Bank Operations Policy and Country Services (OPCS) on February 4, 2015, and as further elaborated on in the World Bank Guidance ‘Financial Management in World Bank-Financed Investment Operations’ issued by the Director, Operations Risk Management, OPCS, on February 24, 2015. Under World Bank Policy Investment Project Financing (IPF) guidelines, with respect to projects financed by the World Bank, the borrower and the project implementing agencies are required to maintain FM arrangements—including planning and budgeting, accounting, internal controls, funds flow, financial reporting, and auditing arrangements—acceptable to the World Bank to provide reasonable assurance that the proceeds are used for the purposes for which they are granted. These arrangements are deemed acceptable if they are capable of correctly and completely recording all transactions and balances relating to the project. In addition, such arrangements are acceptable if they can facilitate the preparation of regular, timely, and reliable information regarding project resources and expenditures and safeguard the project assets and are subject to auditing arrangements acceptable to the World Bank. 68. The existing FM arrangements of the KFSU appear acceptable to meet the FM requirements as stipulated by World Bank Policy Investment Project Financing guidelines. The KFSU is located within the MFED and staffed by consultants financed by Asian Development Bank and World Bank-financed projects. The unit provides the day- Page 28 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) to-day FM support for all the World Bank-financed projects and employs two accountants who share the workload. The unit also provides some procurement support. 69. The main risk is potentially insufficient resources in the KFSU to manage the FM functions of the project and to mitigate this risk, a project manager will be employed in the KNSO, whose responsibilities include FM oversight, until such time that the KFSU can assume full responsibility for implementation support. In addition, the project will employ a project assistant to support the accounting requirements of the project. (ii) Procurement 70. The World Bank Procurement Regulations for IPF Borrowers, issued in July 2016 and revised in November 2017 and August 2018, will be followed for procurement under the project. The project will finance the procurement of goods, consultant positions for the KNSO and KFSU, and non-consulting services in the form of survey enumerators and supervisors. The detailed Procurement Plan for the first 18 months, dated November 14, 2019 was prepared based on the analysis in a short Project Procurement Strategy for Development. .C. Legal Operational Policies . Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No . D. Environmental and Social 71. Both the environmental and social risk ratings for the project are Low. The relevant Environmental and Social Standards (ESSs) that apply to the activities being considered are ESS1 (General Assessment), ESS2 (Labor and Working Conditions), ESS4 (Community Health and Safety) and ESS10 (Stakeholder Engagement and Information Disclosure), which are elaborated further in this section. An Environmental and Social Commitment Plan (ESCP) has been prepared by the Recipient and addresses how the requirements for each relevant ESS will be met. The ESCP was disclosed on the Bank’s website on October 21, 2019. 72. Under ESS1 (General Assessment), the project is not expected to result in any negative environmental and social issues. Impacts associated with the project are expected to be largely positive. Increased access to anonymized microdata will provide information and socioeconomic data to various stakeholders in the government, donor, academic, NGO, and civil society sectors, improving planning and decision making. 73. Under ESS10 (Stakeholder Engagement and Information Disclosure), the project will prepare a Stakeholder Engagement Plan (SEP) ahead of the commencement of any survey or data collection activities. While the project will have no adverse environmental and social impacts, outreach to stakeholders will be necessary to inform them of survey works, confirm voluntary participation, and communicate how the data will be used. The methodology and approach taken to data collection, analysis, and storage will need to be clearly communicated to all relevant stakeholders. An SEP, commensurate to the project risks, will be prepared a minimum of one month before the commencement of any survey or data collection activities, the largest of which is expected to take place in 2023–24. The SEP will take the needs of any vulnerable groups into consideration and Page 29 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) identify additional measures required to ensure their ability to participate. The SEP will also include a grievance mechanism. 74. A Labor Management Plan (LMP) will be prepared to meet the requirements of ESS2 (Labor and Working Conditions). The LMP will be prepared before hiring any workers or contractors on the project and will set out how the project will meet the requirements of ESS2. The number and type of workers is unknown and will depend on collection methodology, sample size, and analysis and distribution needs. This will be determined once the project is in implementation. The survey will not take place until 2023 at the earliest and thus it is considered appropriate to delay this requirement until further information is known. The ESCP describes the preparation of the LMP including required content, which will be incorporated into worker contracts and terms of conditions. 75. No additional documents are required to meet ESS4 (Community Health and Safety) needs. Community safety will be addressed in training provided to survey data collection contractors. The SEP prepared for ESS10 will also include provision of information on how the data will be collected, including how participants and others can seek information or advice, or make a complaint. No community health and safety issues are expected through project activities; nor will activities affect ecosystem services. V. GRIEVANCE REDRESS SERVICES 76. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of W B non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress- service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. VI. KEY RISKS 77. The overall risk rating is assessed as Substantial. Although the project is neither large nor complex, the team acknowledges the additional risk posed by the low capacity of the implementing agency. However, strong buy-in from technical counterparts, project financing allocated to a PIT for implementation support, and the availability of support from the KFSU mitigate some of this risk. A full breakdown of the Systematic Operations Risk-Rating Tool (SORT) ratings is available in the project datasheet, but further explanations of some of the key risks are provided here. 78. The institutional capacity and sustainability risks are Substantial. The KNSO as the implementing agency faces constraints in financial and human resources, and as with any initiative that starts off externally financed, there are inherent risks with sustainability. Although the project explicitly includes financing to build institutional capacity and meet short-term requirements for infrastructure and expertise, a lack of funding in the future may Page 30 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) hinder the sustainability of the gains, particularly given the high cost of the HIES and the historical difficulties experienced by PICs to access funding for data collection. The financial sustainability risk will be mitigated through strong outreach to the Government of Kiribati throughout the project lifetime to demonstrate the benefits of having more frequent and current data. 79. There are also substantial risks concerning the weak fiduciary capacity of the implementing agency. The KNSO, as a division of the MFED, shares its FM and procurement resources with the whole of the MFED, which means it does not have sufficient resources to manage the FM and procurement requirements of this project. However, this risk is mitigated through the role of the KFSU in providing direct support on project preparation and project implementation, as well as the hiring of the project manager and project assistant under the PIT. . . Page 31 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) VII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Kiribati Statistical Innovation and Capacity Building in Kiribati Project Development Objectives(s) To improve the quality and efficiency of welfare data collection, and accessibility to comparable welfare data in Kiribati. Project Development Objective Indicators RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Improve efficiency of HIES implementation Sub-national precision improved based on a constant No No No No Yes Yes per-survey cost (Yes/No) Improve quality of data production Number of survey datasets produced during the project lifetime using improved 1.00 1.00 1.00 2.00 2.00 3.00 electronic data capture systems (Number) Improve accessibility of welfare data Share of HIES datasets available for open access 0.00 0.00 0.00 0.00 0.00 33.00 (Percentage) Improve regional comparability Page 32 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) RESULT_FRAME_T BL_ PD O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Number of comparable regional indicators produced 0.00 0.00 5.00 5.00 5.00 14.00 (Number) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Innovation and capacity building in data collection Length of time between the completion of data collection and the publication of a 40.00 40.00 24.00 24.00 24.00 12.00 poverty report (Months) Sub-national price indices are available (Yes/No) No No Yes Yes Yes Yes Report is produced based on HIES data user feedback survey No No No No No Yes (Yes/No) Number of UNSD Minimum List gender indicators available using data collected within the 5.00 5.00 8.00 8.00 8.00 17.00 past 5 years (Number) Public consultation and awareness campaign conducted on the 2023/24 No No No No Yes Yes HIES questionnaire (Yes/No) Institutional strengthening Number of analytical products 0.00 1.00 2.00 2.00 2.00 3.00 Page 33 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) RESULT_FRAME_T BL_ IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 produced by NSO during project lifetime (Number) Number of guidance notes published on statistical 0.00 1.00 2.00 3.00 4.00 5.00 methods (Number) IO Table SPACE UL Table SPACE Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection The project will improve the survey precision, as measured by the standard error of the main indicator Calculations based on Sub-national precision improved based on of interest, at the sub- Annual HIES KNSO the HIES data a constant per-survey cost national level between the implementation of the 2019/2020 HIES (baseline) and the 2023/2024 HIES (end line). Survey datasets include the HIES as well as other price Number of survey datasets produced surveys and national Annual KNSO during the project lifetime using improved accounts surveys. electronic data capture systems "Improved electronic data capture systems" entails the Page 34 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) full utilization of computer- assisted personal interviewing (CAPI) technology, which includes automatic data quality checks programmed into the questionnaire. Review the number of This indicator measures the SPC data HIES datasets openly Share of HIES datasets available for open Annual KNSO accessibility to Kiribati HIES portal accessible in the SPC access datasets. data portal. The set of "comparable regional indicators" is defined based on the list of Pacific SDG indicators that can be produced using the HIES. The full list is as follows, with a total of 18 indicators: The project will establish a KNSO HIES KNSO (through SPC- Number of comparable regional indicators Annual 1.1.1. Proportion of core set of regionally reports SDD) produced population below the comparable indicators. international poverty line, by sex, age, employment status and geographical location (5 indicators) 1.2.1. Proportion of population living below the national poverty line, by sex and age (3 Page 35 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) indicators) 2.1.1. Prevalence of undernourishment (1 indicator) 2.3.2. Average income of small-scale food producers, by sex and indigenous status (3 indicators) 10.1.1. Growth rates of household expenditure or income per capita among the bottom 40 percent of the population and the total population (2 indicators) 10.2.1. Proportion of people living below 50 percent of median income, by sex, age, and persons with disabilities (4 indicators) ME PDO Table SPACE Page 36 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Baseline value: Fieldwork completed in November 2006, poverty report released in March 2010. Monitored Intermediate target: after each Fieldwork for 2019/20 HIES round HIES is anticipated to within the be completed in March This indicator measures the project 2020, and a report is time lag between the lifetime, anticipated to be Length of time between the completion of completion of HIES data which published, with KNSO KNSO data collection and the publication of a collection and the encompass assistance from the poverty report publication of a poverty es the project-financed report based on the HIES 2019/20 Resident Advisor, by data. HIES and March 2021. End the target: The 2023/24 2023/24 HIES will be conducted HIES. with project financing, and a HIES report is expected within 12 months of the completion of data collection. This indicator assesses the KNSO price Annual KNSO Sub-national price indices are available availability of sub-national index data price indices, which is the Page 37 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) objective of project component 1.2. Data on user feedback This indicator examines is collected on the SPC- whether the user feedback hosted regional data received on the HIES data KNSO portal. The indicator Report is produced based on HIES data sets are taken on board and Annual KNSO publications. measures whether this user feedback survey analyzed in the form of a data is compiled and user feedback report. This is analyzed in the form of a beneficiary feedback a user feedback report. indicator. Monitored once after each HIES The indicator measures the round number of gender indicators under the Review of published (drawn from the UNSD project reports by KNSO under Minimum List of Gender lifetime, Number of UNSD Minimum List gender KNSO HIES the project lifetime Indicators) that are reported which KNSO indicators available using data collected reports (HIES reports and other by the NSO using HIES data includes within the past 5 years thematic analytical collected before the project the reports). and comparing it to the 2019/20 number during the project HIES and lifetime. the 2023/24 HIES. This indicator examines Once, This indicator will Public consultation and awareness whether the 2023/24 HIES during the assess the extent of KNSO KNSO campaign conducted on the 2023/24 HIES round utilizes citizen 2023/24 citizen engagement in questionnaire engagement by announcing HIES the 2023/24 HIES. the HIES and holding public preparatio Page 38 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) consultations on the n and questionnaire. This is a implement citizen engagement ation. indicator. The baseline value is 0 because only reports within the project lifetime are counted. The end target is 3 as This indicator measures the the project anticipates number of analytical providing support on KNSO Number of analytical products produced products that are prepared Annual two reports using the KNSO publications by NSO during project lifetime using technical assistance 2019/20 HIES and one and other financing under report using the the project. 2023/24 HIES (due to the small window between the end of data collection and the project closing date). This indicator measures the number of guidance notes on statistical methods Count the number of KNSO Number of guidance notes published on produced by the Resident Annual guidance notes KNSO publications statistical methods Advisor during the project published. lifetime. The target is to produce one guidance note per year ME IO Table SPACE Page 39 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Page 40 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Annex 1: Implementation Arrangements and Support Plan COUNTRY: Kiribati Statistical Innovation and Capacity Building in Kiribati FINANCIAL MANAGEMENT ASSESSMENT Financial Management Risk and Mitigation Measures Budgeting arrangements. The project budget will be on a cash basis, formulated from the agreed work plans to cover the life of the project, broken down into each financial year which spans from January to December. The overall budget will be an aggregate of the activities whose costs will be estimated at the start of the project and updated annually. The MFED will liaise with the project manager and KFSU in the annual budget review and the KFSU will monitor actual expenditure against the budget. Budgeting capacity within the KFSU is limited and given the complexity of the project, some consideration may be given to employment of additional budgeting expertise at crucial stages of the budgeting process. Accounting/staff arrangements. The project will recruit a project assistant within three months of the effective date of the Financing Agreement and maintain the position for the lifetime of the project or until the KFSU is able to take on the functions of the position. This forms part of a legal covenant on the recruitment and maintenance of the PIT. It is highly desirable that the person has strong accounting skills. The project assistant will act as a bookkeeper and be tasked with preparing the accounting documentation for each transaction which will be authorized by the MFED, and the project manager will provide FM oversight. QuickBooks software will be used to record the project financial transactions through a separate company and accounts will be maintained on a cash basis. Internal controls. The Government of Kiribati accounting processes ensure that authorization and payment processes are clearly segregated; however there had been poor compliance with internal control procedures. Generally, the KFSU follows Government of Kiribati policies and procedures and the KFSU has also prepared an FM Manual which outlines additional FM requirements for World Bank-financed projects. While there has been some failure to comply with internal controls and more importantly failure to recognize issues that arise, for example, authorizations signed without adequate review, now additional migration measures need to be put in place. Flow of funds. This section will only address the flow of World Bank funds. An Australian dollar segregated Designated Account (DA) will be opened at the Australia and New Zealand Banking Group Limited (ANZ) Bank in Kiribati. The design of the project indicates there may be a high proportion of payments made from the DA. Withdrawal applications will be prepared by the project manager. The KFSU and MFED staff have experience in preparing and submitting withdrawal applications and no issues are expected that could cause delays in funds flow. Financial reporting. The project will be required to prepare quarterly unaudited interim financial reports (IFRs) in a format agreed upon with the World Bank. The IFRs will be required to be submitted not later than 45 days after the end of the reporting period. The IFRs will be prepared by the project manager in consultation with the MFED and KFSU. The KFSU has a good record of submitting IFRs within the Page 41 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) prescribed time frame and the risk of late submissions is low, however, there have been issues over the accuracy of the commitments register and failure to take action on issues identified by the reports. External audit. The Kiribati National Audit Office will conduct an annual audit of the project accounts and these will be received by the World Bank within six months of the end of each of the reporting periods. The Kiribati National Audit Office has extensive experience in auditing government departments and World Bank-funded projects and is an auditor acceptable to the World Bank. Disbursements To facilitate the incremental operating costs and local payments, a DA in Australian dollars will be opened at the ANZ Bank, the only banking facility available in Kiribati. The documentation required for the replenishment of the advance will be Statement of Expenditure. The project will be required to retain financial documentation for review by World Bank staff and substantiation by the auditors when conducting the annual project audit. The project manager will prepare all withdrawal applications which will be reviewed and signed by the authorizing officers at the MFED before submission to the World Bank. The project will have the following disbursement categories as outlined in table 1.1. Table 1.1. Disbursement Categories Percentage of Expenditures IDA (expressed in Category to be Financed US$) (inclusive of Taxes) (1) Goods, non-consulting services, consulting services, Operating Costs, and Training and Workshops for the 2,000,000 100% project Total Amount 2,000,000 FM Supervision Plan Table 1.2 shows the plan for supervision of the FM aspects of the project. Table 1.2. Supervision Plan of the FM Aspects of the Project FM Activity Frequency Desk reviews Unaudited IFRs - review Six monthly Annual audit report - review Annually On-site visits Formal supervision Half yearly initially, then annually based on risk and performance ratings Monitoring of actions taken on issues highlighted in As needed review of the IFRs and audit reports, auditors’ management letters, and other applicable reviews Page 42 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) FM Activity Frequency Transaction reviews (if needed) On an as-needed basis and in the case of any issue arising Procurement Procurement arrangements. Procurement activities for the project will be implemented by the KNSO through an integrated PIT with the technical support from the procurement officer in the KFSU. Procurement Regulations. Procurement for the proposed project will be carried out in accordance with the Procurement Regulations for IPF Borrowers issued in July 2016 (and revised in November 2017 and August 2018) and the provisions stipulated in the Procurement Plan. For each contract to be financed by the Grant, the different consultant selection methods, estimated costs, prior review requirements, and time frame will be agreed between the KNSO and the World Bank project team in the Procurement Plan. The Procurement Plan for the first 18 months is provided in annex 2. Procurement of goods (estimated at US$135,000). It would include office equipment and furniture. Procurement of consulting services (estimated at US$1.2 million). Consulting services will include recruitment of individual consultants to manage and oversee the project (resident advisor, project manager, project assistant, and so on). Procurement risk assessment. With the understaffing at the KFSU and the first-time experience and capacity of the KNSO to implement procurement activities for the project, the risk rating is ‘Substantial’. The procurement-related risks identified and mitigation measures agreed are as provided in table 1.3. Table 1.3. Procurement-related Risks and Mitigation Measures Risk Agreed Mitigation Action Responsibility Timeline Inadequate procurement The project will hire a project PIT Project capacity manager and a project assistant implementation under the KNSO and will share the phase time and contract cost for a procurement officer and FM PIT and World Bank Project officer under the KFSU. task effectiveness and Procurement training at project team/procurement during kick-off and operations clinics implementation organized by the World Bank and regular implementation support, as needed. Delays in selecting and Project manager (expert) engaged KNSO and KFSU TORs for key contracting the to support the KNSO to work positions have consultant and supplier closely with the KFSU starts the been prepared; the consultant selection process in remaining tasks advance, that is, create ToR, will be completed Page 43 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Risk Agreed Mitigation Action Responsibility Timeline advertising and request for by the project expression of interest/curriculum manager, whose vitae evaluation. hiring process will start immediately after Board approval Process governance risk. The PIT will keep complete KNSO Project Other than the KFSU, documentation of all implementation there is insufficient procurement-related activities. phase record keeping protocols which limits ability of any audit to identify nonconforming practices and purchasing decisions. Contract management. Employment of professional KNSO Project Limited capability and project management consultants implementation capacity in contract to support the project during phase management within the various stages of the project life KNSO will compromise timely execution of the contract. Frequency of procurement supervision. In addition to the prior review to be carried out by the World Bank, procurement supervision missions will visit the field once a year to carry out post review of procurement. Page 44 of 46 The World Bank Statistical Innovation and Capacity Building in Kiribati (P171380) Annex 2: Procurement Plan (July 1, 2020–December 31, 2021) Procurement Procurement Estimated World Bank Review Planned Start Description Reference No. Category Method Amount (US$) Financed % Type Date Consultant for ‘project CS/INDV-01 CS INDV 160,000 100 Post 03/01/2020 manager’ position Consultant for ‘project assistant’ CS/INDV-02 CS INDV 35,000 100 Post 03/01/2020 position Consultant for ‘resident advisor’ CS/INDV-03 CS INDV 630,000 100 Post 03/01/2020 position Consultant for ‘institutional CS/INDV-04 CS INDV 50,000 100 Post 01/01/2021 review’ Consultant for ‘statistics act CS/INDV-05 CS INDV 50,000 100 Post 06/01/2020 review’ Consultant for ‘data CS/INDV-06 CS INDV 50,000 100 Post 04/01/2021 coordination’ ICT hardware (laptops, server, GO/Goods-1 GO RFQ 20,000 100 Post 07/01/2020 VC equipment, and printer) ICT software (MS office, Stata, GO/Goods-2 GO DIR 5,000 100 Post 07/01/2020 and data management tools) Office facilities (desks and GO/Goods-3 GO RFQ 5,000 100 Post 07/01/2020 chairs) Note: ICT = Information and Communication Technology, CS = Consultant Services, GO = Goods Page 45 of 46