RESULTS IN THE LATIN AMERICA & CARIBBEAN REGION 2018 Volume 11 RESULTS IN THE LATIN AMERICA & CARIBBEAN REGION Printed in: Washington, D.C., by The World Bank Group Produced by: The Latin America and Caribbean Regional Operations Services Unit in collaboration with the Latin America and Caribbean External Communications Unit Editor: Samantha Fien-Helfman Design: Miguel Barreto Cover photo: World Bank Photo Collection Inner cover photo: World Bank Photo Collection Country data: World Development Indicators / World DataBank 2016/2017 April 2018 TABLE OF CONTENTS i Foreword ARGENTINA 1 Tapping into Argentina’s Renewable Energy Potential: Private Sector Financing for Climate Action 6 Connecting the Hinterland: Lessons from Six Argentinean Provinces BRAZIL 12 Recovering Water: A Results-Based Approach to Water Supply and Sanitation in Brazil’s São Paulo State CHILE 17 Improving Chilean Tertiary Education by Strengthening Links Between Public Funding and Accountability for Results COLOMBIA 23 Strengthening Colombia’s Policy Framework on Productive, Sustainable, and Inclusive Cities DOMINICAN REPUBLIC 30 Improving Municipal Service Delivery in the Dominican Republic PAGE V HAITI 35 Understanding the Future of Haitian Cities MEXICO 41 Deepening Financial Inclusion in Mexico’s Rural Areas 46 Championing Adaptation in Mexico: Protecting Communities from the Impacts of Climate Change NICARAGUA 52 Transforming the Delivery of Social Protection Services and Improving Social Welfare among Nicaragua’s Poorest PANAMA 58 Utilizing Performance-Based Contracts to Enhance Public Services Delivery: A New Approach to Water Provision in Colón, Panama PARAGUAY 64 Ensuring Good Roads for All: Transforming Paraguay’s Road Maintenance Culture PERU 69 Fighting Malnutrition in Peru: Enhancing Health and Nutrition Services in Three Regions PAGE VI URUGUAY 75 Mitigating the Impact of Drought on Energy Production and Fiscal Risk Management in Uruguay OECS 80 Developing a Cost-Effective Strategy for Disaster Risk Financing to Increase Fiscal Resilience in the OECS Countries 87 Promoting Evidence-Based Policies for Inclusive Growth in OECS Countries: Sustainable Data Collection and Comparable Statistics in Small Island Developing States 93 Transitioning Toward a Blue Economy in Grenada and Other Eastern Caribbean States: Inclusive Growth and Poverty Alleviation Through the Sustainable, Innovative Use of Blue Assets REGIONAL 100 Stopping Crime and Violence in Latin America: A Look at Prevention from Cradle to Adulthood PAGE VII PAGE VIII FOREWORD The Latin America and the Caribbean region has turned the corner, growing again after six years of economic slowdown. Economic growth is key to continue making progress on the social front and return to the poverty reduction gains that the region achieved over the first one and a half decades of the new century, when poverty was nearly halved. Moreover, now that growth is picking up it will be possible to focus even more on other areas that are also critical for the development of the region over the long-run, such as human capital, disaster risk management, good governance, and ensuring that the most vulnerable groups in society also benefit from growth. The World Bank has deployed a broad range of innovative programs to promote sustainable development across Latin America and the Caribbean over the past year. We focused on supporting growth through higher productivity and competitiveness, while encouraging private investment to leverage public resources. We also continued to invest in education, in health and other aspects of human capital, and in countries’ abilities to better manage and withstand shocks like natural disasters. Our support also PAGE IX included efforts to enhance transparency and accountability. All the while, the World Bank prioritized the inclusion of groups that have traditionally faced exclusion, such as Indigenous Peoples. In this 2018 edition of Results in the Latin America and the Caribbean Region, we’ve gathered a number of examples that highlight how the World Bank has accompanied the countries of the region in their development efforts. Our work in Mexico is a good model of how providing new opportunities to traditionally disadvantaged groups improves not only the lives of the target population by building up human capital, but also the entire country’s economic strength. The World Bank helped millions of Mexican women, Indigenous Peoples, and underprivileged and rural residents get access to credit and savings institutions for the first time. Financial inclusion is an essential tool for reducing poverty and boosting prosperity, and has been one of Mexico’s foremost development challenges. In Nicaragua, we supported the government’s efforts to reach some of the poorest citizens with social programs, family counseling, community education workshops, family grants and school feeding, with a particular focus on the needs of the Indigenous communities. The program improved the lives of close to 18,000 families. PAGE X The Bank also helped improve health and nutrition services for the poor in Peru. The ongoing support has contributed to major progress in improving health and decreasing hunger. In fact, Peru more than halved malnutrition among children under five, from 28 percent in 2008 to 13.1 percent in 2016. Natural disasters like hurricanes are a constant threat in the Eastern Caribbean, and these are likely to get worse in the future due to climate change. Following the devastating 2017 hurricane season, the Bank helped affected countries conduct damage assessments, prepare emergency response projects, provide cash transfers to impacted farmers – like in Dominica-- and strengthen critical infrastructure to enhance resilience. Haiti provides another example of our efforts to improve the lives of the most vulnerable residents of the Caribbean. Much of the country’s population has moved from rural areas to cities in recent decades, but urban planning has lagged far behind and many city- dwellers lack access to basic services. There, we supported an Urbanization Review to help lay the roadmap for sustainable development of Haitian cities that we hope we can use in future interventions in the country. PAGE XI Last but not least, a crucial aspect of our work in the region is supporting a shift to clean, renewable energy. In Argentina, the World Bank set up a $480 million guarantee that helped create a new market for private investment in renewable energy that is expected to usher in $3.2 billion in financing over the next two years. The program aims to reduce greenhouse gas emissions by 4 million tons of carbon dioxide per year, helping Argentina to meet its renewable energy goals while leveraging private capital and avoiding public debt. I take great pride in presenting these examples of our work across Latin America and the Caribbean, which is helping reduce poverty and spread both shared prosperity and opportunities for all. Jorge Familiar Regional Vice President Latin America and Caribbean Region World Bank Group PAGE XII Photo: World Bank Collection IBRD The World Bank’s International Bank for Reconstruction and Development IBRD (IBRD) and International Development Association (IDA) are critical IDA sources of financing for middle-income and low-income countries respectively. World Bank administered trust funds, supported by generous IDA donations from a variety of Donors, also support project preparation, TF innovative pilots, and other initiatives. These tags are used to reflect the TF sources of project financing. Eolic farm. Photo: World Bank TAPPING INTO ARGENTINA’S ARGENTINA RENEWABLE ENERGY POTENTIAL: PRIVATE SECTOR FINANCING FOR CLIMATE ACTION The Argentine government sought to diversify its sources of energy, which before 2017 came predominantly from fossil fuels. By designing and structuring renewable energy bidding rounds, it planned to encourage private sector financing. A new legal framework for renewable energy, passed in 2015, put targets in place, created a government Renewable Energy Fund, and established fiscal incentives and competitive and transparent market rules to attract international investors. IBRD Population: 43,847,430 GDP (billions): US$545.46 GNI per capita: US$11,970 IBRD/IDA lending commitments approved in FY17: 1.53 billion New and supplemental Projects approved in FY17: 9 PAGE 1 CHALLENGE in the nation’s critical energy sector. The IFC Less than 2 percent of Argentina’s electricity comes developed documentation to set up an auction from renewable energy; 60 percent is generated and, to help ensure projects were bankable and from fossil fuels. The Argentine government is met international standards. It also identified two moving swiftly to change that. It declared 2017 bidders, each of whom was granted a project, and the year of renewable energy, and the Ministry of in December 2017, it provided a long-term credit Energy launched an innovative renewable energy to one of them. To reassure private investors, the bidding program called RenovAr. Its target: to World Bank structured a $480 million guarantee produce 20 percent of Argentina’s electricity using in support of FODER that reduces financial risks renewable sources by 2025, with intermediate for investors and helps create a new market in targets of 8 percent by 2018 and 16 percent by Argentina for private investment in renewable 2021. A new renewable energy legal framework, energy. Argentina is using these tools to meet its passed in 2015, established targets, initiated the renewable-energy goals while leveraging private government Renewable Energy Fund or FODER capital and avoiding public debt. (Fondo para el Desarrollo de Energías Renovables for its Spanish acronym), and established fiscal The International Bank for Reconstruction and incentives and competitive and transparent market Development (IBRD) guarantee, along with IFC rules to attract international investors. Financiers financing, represents a transformative opportunity were cautious in their expressions of interest to link Argentina´s renewable energy potential in these potential renewable energy projects, I however, given Argentina´s track record. ts target: to produce 20% APPROACH of Argentina’s electricity Under the Argentina Renewable Fund Guarantee, using renewable sources the International Finance Corporation (IFC) and by 2025, with intermediate the World Bank worked together to build a bridge targets of 8% by 2018 and between the Argentine government and the private 16% by 2021. sector—a collaboration that led to new investment PAGE 2 Eolic farm. Photo: World Bank to private investments, promote competitive new renewable energy projects, ended with bids electricity prices, and create innovative financial for more than six times that amount, signaling schemes that can be replicated and scaled up for confidence among local and international investors. use in other regions and sectors. Other achievements of the project included: • Ultimately, 59 renewable energy projects to IBRD RESULTS generate 2,423 megawatts were awarded by the The project creates a new market by leveraging government. The Bank guarantee covers 27 of private investment, which is particularly important those tenders, including 12 wind projects (721 for Argentina at a time when international investors MW), 10 solar projects (306 MW), four small- are interested in returning to the country. The scale hydro projects (4 MW), and one biogas two renewable energy auctions held in 2016, with project (1 MW). the aim of attracting 1,000 megawatts (MW) of PAGE 3 • As these projects come to a close, they are WORLD BANK GROUP CONTRIBUTION expected to usher in US$3.2 billion in financing The World Bank, through the International Bank over the next two years, or about 6.7 times for Reconstruction and Development, provided a the amount of the Argentina Renewable Fund $480 million guarantee for this project. If specific Guarantee. macroeconomic, sector, or other government- related risks materialize, this guarantee will serve to • The RenovAr Program is expected to reduce backstop the Argentine Renewable Energy Fund’s greenhouse gas (GHG) emissions by a total obligation to pay a predetermined price to the of 79.64 million tons of carbon dioxide over eligible renewable energy investors who gain the 20 years, or 4 million tons of carbon dioxide right to sell energy projects to FODER. per year, which corresponds to approximately 1 percent of the GHG emissions Argentina generated in 2015 and about four percent of PARTNERS its National Determined Contribution (NDC) The Bank and IFC worked together closely to target (109 million tons of carbon dioxide per attract private investment and maximize the year) by 2030. financing available through the combination of an IBRD guarantee and IFC financing and technical • Implementation of these renewable energy assistance. The World Bank Group supported the projects will go a long way toward helping government of Argentina’s Ministry of Energy Argentina reach its NDC goal of reducing GHG in designing the RenovAr program, based on its emission to 37 percent by 2030. estimated needs and available financing, and • Ultimately, the program will contribute several in developing standardized legal documents for environmental co-benefits, including reducing RenovAr auctions. The IBRD and IFC teams air pollution by decreasing fossil fuel use and provided advice to the government based on providing a safer, more secure energy supply international experience, with a focus on ensuring through technological innovation. fair and balanced project risk allocation between the private and public sectors. PAGE 4 “F MOVING FORWARD The International Bank for Reconstruction and or every 1,000 Development is currently preparing a second megawatts in guarantee of up to US$250 million under Round 2 renewable energy, of the RenovAr program. This additional guarantee the country saves US$300 will not only build on the success of the first, but million annually in liquid will also respond to the government´s increasing focus on leveraging public finance to attract fuel, it reduces carbon more private investment through public- private emissions by two million partnerships. tons, that’s roughly equivalent to taking one BENEFICIARIES million cars off the road.” Private developers, equity providers, and lenders repeatedly expressed the belief that Bank involvement was important to them when they were considering entry into the Argentine market. The project guarantee facilitated Argentina’s reentry into international finance markets, helping to rebuild its track record with industrial and financial investors. IBRD “For every 1,000 megawatts in renewable energy, the country saves US$300 million annually in liquid fuel,” said Sebastian Kind, Argentina’s Undersecretary for Renewable Energy. “It reduces carbon emissions by two million tons.” He added, “that’s roughly equivalent to taking one million cars off the road.” PAGE 5 CONNECTING THE HINTERLAND: LESSONS FROM SIX ARGENTINEAN PROVINCES ARGENTINA Argentina has rehabilitated more than 1,500 kilometers of provincial trunk and feeder roads. These improvements reduced transportation costs, thus enhancing agricultural productivity, competitiveness, and, ultimately, economic growth in six provinces. Population: 43,847,430 GDP (billions): US$545.46 GNI per capita: US$11,970 IBRD/IDA lending commitments approved in FY17: 1.53 billion New and supplemental Projects approved in FY17: 9 PAGE 6 CHALLENGE the institutional capacity to encourage efficient Roads are the main transportation mode in planning policies, adequate resource allocation, Argentina, carrying more than 95 percent and coordination mechanisms with the federal of domestic freight. Notwithstanding the level. Lack of road management capacity at the importance of the road sector in facilitating trade, provincial level in turn undermined the reforms Argentina’s road infrastructure operated under carried out in the early 2000s to decentralize the great challenges, including lack of capacity in DPVs’ expenditure and financing responsibilities trunk roads and low levels of road maintenance, and to encourage private sector participation in the particularly in provincial and municipal networks. transportation sector. In 2005, only 20 percent of the provincial road network was paved, compared to 81 percent of the APPROACH primary road network. The resulting infrastructure To address connectivity shortcomings at the bottlenecks imposed significant barriers to the provincial level and to further institutional productive sector, hindering regional development. development in the road sector, the Government At the same time, Provincial Roads Departments of Argentina sought the World Bank’s financial (Dirección Provincial de Vialidad, DPV) lacked and technical support to rehabilitate and maintain A priority feeder roads and to strengthen road sector rgentina’s road governance in six Argentinean provinces: Chubut, infrastructure Córdoba, Corrientes, Entre Ríos, Neuquén, and operated under Santa Fe. The resulting project, the Provincial Road Infrastructure Program (Programa Infraestructura great challenges, including IBRD Vial Provincial, PIVIP), included a civil works lack of capacity in trunk component to enhance the quality and performance roads and low levels of the road networks in the six participating of road maintenance, provinces, which together account for 30 percent particularly in provincial of national GDP: 38 percent of total agriculture and municipal networks. and livestock activity, 50 percent of total mining activities, 18 percent of manufacturing industries, PAGE 7 Malla 101 -finished section. Photo: World Bank and 28 percent of construction. A key project RESULTS objective was to replicate the success of private The PIVIP focused on supporting strategic sector firms in executing federal highway works, investments to both enhance regional productivity this time at the provincial level, by introducing and to modernize the road sector by building the performance-based road rehabilitation and DVPs’ capacity to implement and carry through maintenance contracts, known as CREMA projects for rehabilitating and maintaining their (Contrato de Recuperacion y Mantenimiento), road networks. Between 2005 and 2017, the as a means of ensuring efficiency in procuring following results were achieved. and executing civil works. Similarly, the project • Under the project, more than 1,500 kilometers proposed an institutional strengthening strategy to of key feeder roads were rehabilitated, using mainstream the CREMA modality and increase the both the CREMA modality (1,273 km) and more DPVs´ capabilities in planning, implementing, and traditional systems (443 km). Most of these managing the provinces’ road assets. roads constitute main lifelines for some of the PAGE 8 U administering, and supervising contracts, nder the project, monitoring and evaluation, social and more than 1,500 environmental management, and road safety. kilometers of • Transportation conditions were improved for key feeder roads were the more than 40,000 direct beneficiaries who rehabilitated. Most of use the roads each day for their intraregional these roads constitute mobility needs. More than one million indirect main lifelines for some beneficiaries in the project´s area of influence benefited from improved intraregional of the country´s primary connectivity, access to markets and services, value chains, including soy and more reliable and safer feeder roads. bean production, cattle raising, and mining. WORLD BANK GROUP CONTRIBUTION The World Bank, through the International Bank country´s primary value chains, including soy for Reconstruction and Development, provided a bean production, cattle raising, and mining. loan in the amount of US$150 million to finance Reduced transport costs and improved riding this project. Additional financing in the amount conditions resulting from the project enhanced of US$175 million was processed in 2009 to agricultural productivity and job access. cover financing gaps resulting from unforeseen • The DPVs in the six provinces targeted— construction costs. Córdoba, Corrientes, Neuquén, Santa Fe, IBRD Entre Ríos, and Chubut—improved their PARTNERS technical capabilities for providing road While the project had no cofinancing with sector management through tailor-made development partners, the Inter-American institution-building activities, including Development Bank and the Development Bank of trainings, consultancies, and equipment Latin America (Corporación Andina de Fomento) purchases. Emphasis was placed on planning, were both active partners and have also supported PAGE 9 other large-scale infrastructure programs to who benefited from improved intraregional improve accessibility, road safety, and productivity connectivity, access to markets and services, and in provincial areas. more reliable and safer feeder roads. Finally, the project targeted the productive road segments considered the most vital for the proper functioning MOVING FORWARD of key agro-industrial value chains (among them, The Bank has identified the road sector as a soy beans, cattle raising, and dairy) as well as other priority in its four-year transport engagement important sectors, such as mining and tourism. The strategy with Argentina. The Bank will continue rehabilitation of the mallas (corridors) in Córdoba, to provide financial and technical support to Entre Ríos, and Santa Fe were deliberatively develop programs in support of the government´s selected to provide connectivity to the port of US$12 billion investment plans for the road Rosario, the second-largest container port in sector. Moving forward, a holistic approach to Argentina, thus enhancing the region’s agricultural the road sector that identifies direct measures to productivity, competitiveness, and economic improve both federal and provincial road agencies’ growth opportunities. management capacity will be crucial. Efforts toward these ends began with the PIVIP, and have T continued under subsequent projects, including he project directly the Córdoba Provincial Road Infrastructure improved travel Project, approved in 2006, and the Norte Grande Infrastructure Project, approved in 2010. conditions for the more than 40,000 daily users of the prioritized BENEFICIARIES The project directly improved travel conditions for road segments in the six the more than 40,000 daily users of the prioritized provinces. road segments in the six provinces. In addition, the project’s area of influence improved conditions for more than one million indirect beneficiaries, PAGE 10 IBRD Finished road. Photo: World PAGEBank 11 RECOVERING WATER: A RESULTS-BASED APPROACH TO WATER SUPPLY AND SANITATION IN BRAZIL BRAZIL’S SÃO PAULO STATE Participating water and sanitation operators in the state of São Paulo, Brazil, were paid for verified results in recovering water. Operators recovered water either by using it more efficiently, thus increasing the quantity of water, or by treating wastewater, thus reducing pollution and improving water quality. Overall, 47 million cubic meters of water per year have been recovered, equivalent to the yearly consumption of 800,000 people. Population: 207,652,865 GDP (billions): US$1,796.19 GNI per capita: US$8,840 IBRD/IDA lending commitments approved in FY17: 73.3 million New and supplemental Projects approved in FY17: 1 PAGE 12 CHALLENGE the quality of the water sources, largely because Brazil, a country rich in water resources, possesses currently only 60 percent of sewerage collected between 12 and 14 percent of the world’s water. is treated. Other factors contributing to water Its water is not evenly distributed, however: scarcity include high levels of water losses and 70 percent is found in the Amazon River, and the inefficient use of water. With an increasing only 1.6 percent in the state of São Paulo, where population and ongoing climate change, São one-fourth of the nation’s population resides. Paulo’s water situation, if not addressed, will only Brazil’s achievements over the past fifty years worsen. have been closely linked to development of its water resources and to its expansion of water and sanitation services, but many challenges APPROACH have yet to be addressed, such as water scarcity, In a densely urbanized state like São Paulo, pollution control, and universal access to water and increased availability of water, through both sanitation services. augmented quantity and enhanced quality, is of crucial importance for sustainable growth. The With 95 percent of its 41 million people living in São Paulo Water Recovery (REÁGUA) Project was urban areas, the state of São Paulo is one of the designed to respond to the state’s water scarcity world’s most urbanized areas and is emblematic problem by increasing clean water availability of Brazil’s broader urban challenges. In spite of in the state’s five most critical watersheds. Plans São Paulo’s relatively large water supply and wide included (i) increasing the volume of recovered sewerage coverage, the state faces significant water water by reducing real water losses and promoting scarcity and water pollution problems. Half of its the rational use of water in public schools, and (ii) IBRD 22 water basins face critical shortages, particularly enhancing water quality by improving wastewater those within the São Paulo metropolitan area, systems. The project took an innovative approach, where water demand exceeds water availability, disbursing funds to participating water services and half of the state’s water supply is brought from providers (whether state or municipally owned) neighboring basins. Water shortage problems are against agreed and independently verified results. By explicitly linking funding to the results achieved, TF compounded by a continuous deterioration in PAGE 13 the project shifted performance and financial risks is equivalent to the entire annual water supply from the government of São Paulo to selected required by a city of 800,000 people. The resulting service providers. average discount unit cost for the saved water was about US$0.12 (at a 10 percent discount rate), less W than 10 percent the marginal unit cost of supply ater shortage (US$1.8). problems are compounded by At project closing, in May 2017, key stakeholders a continuous deterioration expressed full satisfaction with the result-based in the quality of the water approach. They also acknowledged the critical role the project played in contributing to knowledge of sources, largely because the new approach by developing and testing it in currently only 60% of the context of addressing water losses, one of the sewerage collected is most complex and difficult challenges facing the treated. water industry worldwide. WORLD BANK GROUP CONTRIBUTION The World Bank, through the International Bank RESULTS for Reconstruction and Development, provided Project achievements clearly show that the results- a loan of US$64.50 million toward the total cost based approach is an appropriate mechanism of the project. A US$180,000 trust fund grant for supporting activities not requiring intensive from the Global Partnership on Output-based Aid, capital investments, in this case, activities related administrated by the World Bank Group, supported to reducing and controlling real water losses and project preparation and provided analytical tools promoting rational water use. Under the project, for the design of the project’s normative and approximately 47 million cubic meters of water operational processes. per year were recovered, an amount exceeding the revised target by 50 percent. This volume PAGE 14 Maria Teresinha Prezoti, 58 years old, and one of the key players who helped to disseminate information related to the rationale use of water in public schools. Photo: Mariana Kaipper Ceratti PARTNERS MOVING FORWARD Project implementation was led and coordinated by Many lessons and positive prospects have the São Paulo State Secretary for Water Resources emerged from São Paolo’s experience, and the and Sanitation. Municipal governments and water results achieved there have been assessed as supply and sanitation operators implementing sustainable. State authorities praised the project the project on the ground included CODEN (Nova and its contributions, some of which have already IBRD Odessa), SAAE (Indaiatuba), SABESP (Campo expanded beyond the project’s original bounds. Limpo, Varzea Paulista, Franca, Botucatu, Francisco Morato, Itaquacetuba, Osasco, São The methodology implemented was widely Bernardo do Campo, Tatuí, Conchas, Alumnínio, acknowledged by all project stakeholders as a Boituva, Anhembi, Araçariguama, Sarapuí), success, and many elements are being used in SANASA (Campinas), SAAE (Guarulhos), DAEV new programs, such as the expanded promotion TF (Valinhos), and SAAE (Sorocaba). of rational water use to all municipal schools PAGE 15 in Campinas. It is worth mentioning that this about changing the faucets at their house, so they project’s methodology and procedures—that is, its could save water at home. Our school was able to results-verification methodology—were considered save water just with the awareness created and a reference point for the Bank’s financing changes in the students’ behavior.” instrument Program-for-Results, which uses a country’s own institutions and processes and links funds disbursement directly to achieving specific program results. BENEFICIARIES The project directly benefited 97,400 people living in the vicinity of the five critical watersheds in São Paulo State. Maria Teresinha Prezoti, a 58-year-old beneficiary living in Campinas, was a key player, helping to replicate and disseminate information supporting the implementation of water-saving activities and promotion of rational use of water in public schools. At project closing Prezoti said: “[By] participating in the REÁGUA Project, I have learned about the importance of water. I am teaching the students not to waste water in the school. One example is pushing the faucet just once when they wash their hands. The awareness has spread to the community too. Students’ families came to the school looking for more information PAGE 16 IMPROVING CHILEAN TERTIARY CHILE EDUCATION BY STRENGTHENING LINKS BETWEEN PUBLIC FUNDING AND ACCOUNTABILITY FOR RESULTS Chile’s tertiary education institutions enhanced the quality of their programming and its relevance to students. Achievements include increased numbers of faculty members with PhDs, improved student retention rates, and redesigned teacher and vocational training curricula. These successes have led to positive outcomes for students, including reduced time to graduate and improved employment and wage prospects. IBRD Population: 17,909,754 GDP (billions): US$247.03 GNI per capita: US$13,540 IBRD/IDA lending commitments approved in FY17: 80 million New and supplemental Projects approved in FY17: 1 PAGE 17 CHALLENGE theoretical content with the skills-based training Chile’s efforts to expand tertiary education in required by employers. Many of Chile’s tertiary the late 1990s and early 2000s yielded increases education institutions (TEIs) lacked sufficient in student enrollment, and its efforts to expand resources to fund these initiatives, however. tertiary education while maintaining the system’s Further, the Chilean government recognized the level of quality has been widely recognized. need to bolster the TEIs’ planning and management Challenges to the nation’s tertiary education capacity to ensure any initiatives’ success. system persisted, however, including gaps in R quality and relevance. In addition, educators faced calls to replace teaching based on mandatory elevance gaps would theoretical content with a skills-based approach be addressed by favored by employers. This required first hiring redesigning academic a large number of professors qualified to develop programs to replace and deliver such curricula and, second, shifting policy to encourage students to seek shorter degree theoretical content with programs more closely aligned with employment the skills-based training prospects. required by employers. APPROACH The Tertiary Finance for Results Project III Chile’s policy makers planned three approaches to (MECESUP 3) supported these plans. Building closing the gaps in the quality of tertiary education: on learning from earlier MECESUP (Programa (i) increasing the percentage of PhD holders in the de Mejoramiento de la Calidad y la Equidad de la professorate, (ii) developing more rigorous and Educación Superior, or Program for Improving effective curricula and teaching practices, and (iii) Higher Education Quality and Equity) iterations, raising academic readiness to better ensure the MECESUP 3 sought to allocate competitive funds success of new students from the lowest income based on merit and results, using the Performance quintiles. Relevance gaps would be addressed by redesigning academic programs to replace PAGE 18 Agreement financing approach. Performance Agreements aided the government by fostering stronger TEIs while preserving its right to choose investments reflecting its tertiary education goals, and they benefited TEIs through their focus on these institutions unique shortcomings. Performance Agreements were competitively awarded to TEIs for 60 “Institutional Improvement Plans” in three categories: Teacher Training University students in Santiago de Chile Improvement, Technical/Professional Training Photo: Minedu Chile Improvement, and Academic Innovation. • Full-time faculty members holding PhDs Performance Agreements were also awarded for 119 increased from 5,109 at project appraisal in “Improvement Plans” focused on targeted activities 2011 to 8,332 at project close in 2016. The to enhance teaching, learning, and management at presence of more highly trained teachers TEIs. boosted the quality of instruction for TEI students. RESULTS MECESUP 3 Performance Agreements funded • First-year student retention increased from improvement plans designed by the TEIs to address 68.4 percent in 2011 to 73.8 percent in 2016. issues within their institutions. The resulting Increased retention rates resulted in larger numbers of professionals joining the workforce IBRD improvements in quality and relevance remedied acknowledged weaknesses in the TEIs, which are and attaining higher living standards. now better prepared to sustain and build on their • The percentage of students pursuing teaching gains. Chile’s TEIs are more likely to succeed as degrees in programs with redesigned curricula a result of the strengthened institutional capacity increased from 25 percent in 2015 to 70.5 gained through implementing Performance percent in 2016. Agreements under MECESUP 3. PAGE 19 T • Credit transfer systems were a component of all he percentage of redesigned curricula. In 2016, TEIs that refined students pursuing their curricula with MECESUP 3 support teaching degrees in reported that 245,788 students had earned credit units based on previous coursework and programs with redesigned employment, thus shortening their time to curricula increased from graduation. 25% in 2015 to 70.5% in 2016. • Pontificia Universidad Católica de Chile redesigned its engineering curricula to eliminate duplicative course material and • The percentage of students in vocational unnecessary testing, and the percentage of training programs with redesigned curricula students graduating on time rose from 17.5 had reached 89.4 percent at project close, up percent to 30 percent during the three-year from 50 percent in 2015. Improved curricula Performance Agreement implementation allowed more students to complete their period. Since redesigning its pedagogy degrees on time and to graduate with skill sets and curricula, the university has seen the aligned with labor market needs. percentage of students graduating on time rise from 75 percent to 88 percent. The Performance Agreements resulted in several additional positive outcomes for students. For WORLD BANK GROUP CONTRIBUTION example, students completing study programs The World Bank, through the International Bank with redesigned curricula graduated more quickly for Reconstruction and Development, provided a and with more relevant skill sets, allowing them loan in the amount of US$40 million dollars toward to work and earn sooner. The following selection the US$160 million project cost. The Chilean of Performance Agreement data illustrates this government’s Institutional Development Fund outcome: financed the remaining US$120 million. PAGE 20 The majority of the Bank’s lending (US$38 contributing technical assistance, policy analysis, million) helped finance the award of Performance and cofinancing. Together, the Bank and the Agreements to TEIs, which were used to implement government of Chile have designed, appraised, initiatives to increase the quality and relevance implemented, and cofinanced three projects under of tertiary education. The other US$2 million the MECESUP program umbrella: MECESUP 1 provided by the Bank helped supply policy support (1998–2005), MECESUP 2 (2005–2010), and and execution of studies to inform the design of MECESUP 3 (2012–2016). tertiary education reforms. MOVING FORWARD PARTNERS The Bank recently approved a follow-up project The government of Chile has been a valuable to continue its support for Chile’s higher partner in the tertiary education sector since 1997, education system: The Strengthening of State IBRD University students in Santiago de Chile. Photo: Minedu Chile PAGE 21 Universities in Chile Project. The objectives of methods, (iii) administrators who received training this proposed project are to improve quality and to improve their management skills, and (iv) equity in Chile’s state universities (SUs) and to employers who profit from hiring more qualified strengthen their institutional capacity to address job candidates prepared to perform the work the regional and national development challenges. labor market demands. The project reached a total Actions supported by the proposed project are of 279,883 beneficiaries by closing, 51 percent of expected to (i) reduce drop-out rates, especially whom were female. for socioeconomically disadvantaged students, (ii) improve the qualifications of SU institutional staff, and (iii) increase the quality of SU-produced research. Direct beneficiaries will include an estimated current and future population of 382,000 students and 17,000 faculty at state universities nationwide. Indirect beneficiaries will include regional governments, local stakeholders from the productive sector, and other national and international universities. BENEFICIARIES MECESUP 3’s main beneficiaries include TEI stakeholders awarded Performance Agreements. Among them are (i) current and future students enrolled at TEIs, who benefit from more coherent curricula delivered by better-qualified instructors, shorter degree programs, and expanded remedial support targeting students from less advantaged backgrounds, (ii) lecturers who pursued advanced study and improved their credentials and teaching PAGE 22 STRENGTHENING COLOMBIA’S COLOMBIA POLICY FRAMEWORK ON PRODUCTIVE, SUSTAINABLE, AND INCLUSIVE CITIES Colombia has established a new national urban policy promoting changes to (i) increase access to water, housing, and public spaces for the urban poor, (ii) increase road safety and reduce congestion, (iii) improve coordination and connectivity among cities, and (iv) increase funding for sustainable transportation infrastructure. IBRD Population: 48,653,419 GDP (billions): US$282.46 GNI per capita: US$6,310 IBRD/IDA lending commitments approved in FY17: 1.6 billion New and supplemental Projects approved in FY17: 4 PAGE 23 CHALLENGE relied on investment operations. The DPL was The efficiency and productivity of Colombia’s urban chosen as the financing instrument because it could system have been considered essential components provide the government with flexible financial in the country’s transition from a middle-income, support and foster the sector reforms essential for commodity-driven society to a higher-income catalyzing investment and reducing the negative economy rooted in knowledge and manufacturing. externalities of urban life (among them, pollution, The efficient management of Colombia’s cities and congestion, and lack of affordable housing). DPLs urban areas is recognized as central to reducing were seen as complementary to knowledge services poverty and inequality. Although poverty rates and technical assistance engagements. are higher in rural areas, most of Colombia’s poor live in urban areas. In 2013, about 7 in 10 The 2012 World Bank report “Colombia poor individuals in Colombia lived in an urban Urbanization Review: Amplifying the Gains from area (defined as metropolitan, medium, or small the Urban Transition” provided the government urban areas), and 6 in 10 were in the bottom with concrete policy guidance on maximizing 40 percent of national income distribution. efficiency in urban governance. The report’s Seventy-seven percent of Colombians live in diagnostic analysis served as direct input into the cities, where unemployment has reached around National Development Plan 2014–2018. Moreover, 12 percent. Policies to improve productivity and each project-supported policy area was backed living conditions in the nation’s cities thus have the by analytical work under the Sustainable and potential, by focusing on urban areas, to contribute Productive Cities Programmatic Approach. significantly to nationwide improvements in poverty reduction and shared prosperity. Using a number of knowledge and convening services, the Bank supported formulation of the Congestion Charging Decree and the fourth- APPROACH generation policy document of the Council of The Productive and Sustainable Cities Development Economic and Social Policy (El Consejo Nacional Policy Loans (DPL) provided an innovative de Política Económica y Social). In addition, the instrument for use in the urban development and Bank’s Global Facility for Disaster Risk Reduction transportation sectors, which have traditionally PAGE 24 Jenny Palacios, a beneficiary of intra- household connections. Photo: Life stories of beneficiaries of intra-household connections, Ministry of Housing, Cities and Territory supported Colombia’s Ministry of Housing, RESULTS Cities and Territory (Ministerio Vivienda, Ciudad The Productive and Sustainable Cities DPLs y Territorio, MVCT) through the preparation, supported the Colombia National Development validation, and dissemination of a standardized Plan 2014–2018, the first structured using a methodology for the National Inventory of territorial/regional approach recognizing the Settlements in High Risk Areas. These programs System of Cities framework and new National contributed to closing the gap in the availability of Urban Policy and using regional-level indicators to IBRD affordable housing. Finally, Bank studies on access track progress. Results achieved during the life of to affordable housing, carried out in association the project (2013–2015) included: with the Macroproyectos Social Interest Program • In cities with populations greater than 100,000 Project, determined the supply- and demand-side residents, an additional 30,159 households constraints contributing to Colombia’s persistent gained access to neighborhood water and housing deficit. sanitation networks. PAGE 25 • Eleven private-public partnerships (PPP), with • A differentiated housing policy providing signed contracts and financing frameworks, different subsidies depending on the implemented the ambitious 4G Roads Program household’s degree of vulnerability helped under planning by the National Infrastructure alleviate poverty. MVCT programs provided Agency (Agencia Nacional de Infraestructura, affordable housing to around 100,000 ANI) to construct or rehabilitate roads, bridges, households, and around 130,000 low-income and tunnels to connect the country’s regions. families gained affordable and safe housing solutions under the 2012 Public Housing Law • Under the 4G Roads Program, 912 kilometers and the Voluntary Savings Program (Programa of principal road network are now under de Vivienda de Interés Prioritario para integral maintenance contracts. Ahorradores, VIPA) introduced with support • Conceptual design studies for congestion- from the project. charging schemes for Bogotá and Medellin were • Eight memoranda of understanding were completed as of 2015. signed between the national and regional • Available public space in cities with populations or local governments for cofinancing or for greater than 100,000 increased from 3.30 to strategic infrastructure projects. 3.6 square meters per capita. WORLD BANK GROUP CONTRIBUTION A The World Bank, through the International Bank differentiated for Reconstruction and Development, financed two housing policy loans totaling US$850 million (US$150 million for providing different DPL I and US$700 million for DPL II). subsidies depending on the household’s degree PARTNERS of vulnerability helped The DPLs were designed and implemented during alleviate poverty. the two administrations of President Santos, providing continuity for the high-level policies in PAGE 26 the National Development Plans for 2010–2014 costs, and benefits. and 2014–2018. Improved coordination across • The Ministry of Transportation prioritized different institutions and levels of government also traffic safety and travel-demand management, contributed to project success, including efforts by supporting municipalities in designing and the following: implementing options. It also initiated work • The National Planning Department under the Road Safety Agency (Agencia de (Departamento Nacional de Planeación, DNP) Seguridad Vial), to the extent possible, given monitored progress of the policy framework budget and political constraints. and action plan. • ANI demonstrated leadership and technical • The MVCT conducted surveys of affordable capacity in forging new PPP contracts for housing beneficiaries and other relevant infrastructure investment and in addressing projects. In collaboration with the DNP, it pending challenges from previous PPP helped evaluate the water and sanitation generations. connection program, assessing its impact, Highway construction: Cartagena - Barranquilla and Prosperity beltway IBRD Photo: Transforming Colombia’s Infrastructure, National Infrastructure Agency PAGE 27 MOVING FORWARD against natural disasters. Contracts under third- Colombia’s national policy on sustainable and wave 4G are currently underway. productive cities is defined by its urbanization guidelines, the System of Cities, and the National BENEFICIARIES Development Plan (NDP). The NDP highlighted Through MVCT, the government implemented the importance of formulating a long-term policy several programs to increase access to quality to consolidate a System of Cities that leverages the affordable housing, including the Social Housing benefits of urbanization while increasing regional Program (Programa de Vivienda Gratuita, PVG) integration. and VIPA. The VIPA program aimed to increase access to affordable housing for low-income The Ministry of Transportation (MoT) and the families with saving capacity. Beneficiaries of the transportation sector more broadly have been program were families with two legal minimum working on guidelines to expand the use of salaries seeking to buy a house equivalent to electronic payment, particularly in the areas of seventy legal minimum salaries. The program infrastructure, transit, and transportation. MoT benefited 80,000 households between 2014 and successfully regulated the interoperability system 2016. In addition to contributing to the closing for toll roads with an electronic payment system costs for buying a home, the program also enabled and is currently working to expand that system households with formal and informal incomes to to parking garages and gas stations. Additional gain access to the financial system. resources are required to continue strengthening these initiatives. ANI reached agreements with Colombia Humanitaria and the Fondo de Adaptación to support the most affected corridors. It renegotiated contracts with concessionaires to adapt to the new reality, and it defined new technical and insurance standards for the 4G infrastructure to protect PAGE 28 IBRD Salto del Tequendama, Cundinamarca, Colombia. Photo: World PAGEBank 29 IMPROVING MUNICIPAL SERVICE DELIVERY IN THE DOMINICAN REPUBLIC DOMINICAN REPUBLIC Twenty-eight local governments in the Dominican Republic’s poorest provinces transformed their approaches to managing the planning, technical, financial, and organizational aspects of public service delivery. The resulting service improvements directly benefited residents through the construction of public parks, sports facilities, cemeteries, sidewalks, and fire stations. Population: 10,648,791 GDP (billions): US$71.58 GNI per capita: US$6,390 IBRD/IDA lending commitments approved in FY17: 0.7 million New and supplemental Projects approved in FY17: 2 PAGE 30 CHALLENGE APPROACH In 2009, the government of the Dominican Strengthening municipalities’ management Republic was highly centralized, with most public functions and their capacity to provide poor services, investments, and resources managed communities with at least escential levels of directly by the National Administration. At municipal services became a high priority for that time, although local governments would the Dominican government. The Dominican occasionally step in to provide basic services, Republic Municipal Development Project (MDP) administration of these efforts was fragmented, used a performance-based approach to address discretionary, and inefficient. Most municipalities, the challenge of low capacity. Targeting local especially small ones, did not have functioning governments in the poorest provinces, the project organizational structures; they lacked effective undertook a comprehensive capacity-building financial and administrative systems; and they program and provided municipal investments as used few, if any, technical or economic criteria in rewards for good performance. The project was allocating public resources. thus structured to provide (i) technical assistance in core municipal management functions, such as To tackle these challenges, the national participatory planning and budgeting, procurement, government identified good governance and finance, and human resources (HR) management, decentralization as key approaches to reducing and (ii) matching grants for investment subprojects poverty and improving social cohesion. The identified through a participatory process to be resulting governance and decentralization part of the MDP. Using this design, the project agenda led to the passage of six public sector established a mechanism for financing municipal administration reform laws. These laws provided investments following successful achievement of IBRD a new legal framework for local governments, individual localities’ institutional strengthening assigned new responsibilities to municipalities targets. Community participation was included for improving residents’ access to basic services, to enhance the accountability of local officials for established new planning functions, and laid the providing municipal services and to increase the framework for allocating expenditures. sense of community ownership of local investments. PAGE 31 T he project established The project’s key achievements include: a mechanism for • Enhanced Infrastructure for municipal financing municipal services delivery: Through 85 community investments following civil works, 202,738 people, 47 percent of successful achievement whom were female, directly benefited. More of individual localities’ than 80 percent of the beneficiaries reported institutional strengthening satisfaction with the executed infrastructure works. targets. • Expanded development planning and RESULTS budgeting: Municipal development plans Over its course from 2010 to 2017, the Dominican were adopted by 31 local governments Republic Municipal Development Project helped as the main instrument for promoting improve the financial and technical capacity of development planning, and 65 percent of local governments to program, finance, and deliver the local governments’ budgets responded minimum municipality services. (This target, as to the priorities established in Municipal defined under the national Municipal Law (2007), Development Plans. included provision of cemeteries and funerary • Developed citizen engagement: The MDPs services; collection, processing, and disposal of were produced in the individual municipalities urban and rural solid waste; street cleaning; access through their Municipal Development Councils, to populated areas; repair and maintenance of furthering the participatory planning process. streets, sidewalks, curbs, and rural paths; squares and public parks; public libraries; sport facilities; • Improved financial, procurement, and HR slaughterhouses; markets; civil protection; management: Transparent, standardized, and fire prevention and extinction; environmental efficient financial management, procurement, protection; urban planning; and basic social and HR management procedures were adopted services.) and are now in place in 28 local goverments. PAGE 32 • Greater transparency and accountability: Financial reports in accordance with acceptable accounting standards are now being issued by 28 local governments. • Upgraded technical and institutional capacity: The Dominican Republic’s Dirección General de Ordenamiento y Desarrollo Territorial (DGODT, General Directorate for Territorial Planning and Development) has created a Public infrastructure works in Polo, Dominican Republic. Photo: World Bank Municipal Management Unit charged with continuing to support improvements in councils in the targeted municipalities. The Bank municipal service delivery. team also partnered with the Food and Agriculture Organization, which funded experts who served as part of the project supervision team, providing WORLD BANK GROUP CONTRIBUTION intensive support to the DGODT in increasing its The World Bank, through the International Bank internal organization and in training its staff to for Reconstruction and Development, provided a manage and supervise civil works projects. loan in the amount of US$17 million to help finance technical assistance, capacity-building activities, and infrastructure works under this Municipal MOVING FORWARD Development Project. Under the project, procedures for providing and managing municipal services were designed IBRD and engineered based on the local context PARTNERS and capacities and manuals delineating these Strong leadership from the DGODT, the agency approaches were prepared. Moving forward, clearly within the Ministry of Economy, Planning, and documenting the methodology used in the project Development charged with implementing the will assist the DGODT and other institutions in the project, helped ensure the project’s success, as did Dominican Republic to employ them effectively the ownership taken by the mayors and municipal PAGE 33 when scaling this program nationally or across other regions. Such expansion is all the more desirable given that many local governments have expressed strong interest in building on the project’s achievements to further enhance institutional capacity in their communities. BENEFICIARIES The mayor of the municipality of Matayaya commented on the impact of the public service works supported by the project, noting that conditions in the targeted neighborhood had “improved practically 100 percent.” He continued, “we could say that there was a ‘before’ and ‘after’. We provided sidewalks in a neighborhood where they were not there before, and the people could not leave their houses during rains. Today they walk freely, today there is a tremendous level of satisfaction. This includes people that before these works went out with their shoes in their hands, and today they can leave with their shoes on.” Public infrastructure works in Baoruco, Dominican Republic. Photo: PRODEM PAGE 34 UNDERSTANDING THE FUTURE OF HAITI HAITIAN CITIES Haiti faces the challenge of having a large urban but impoverished and underserved population. For Haitian cities to generate urbanization benefits for its increasingly urban population, prompt attention is needed to link people to jobs and businesses to markets; fill gaps in financing for capital investment; and strengthen governance and institutions by addressing planning and management constraints. Population: 10,847,334 GDP (billions): US$8.02 GNI per capita: US$780 TF IBRD/IDA lending commitments approved in FY17: 186.2 million New and supplemental Projects approved in FY17: 8 PAGE 35 CHALLENGE and accessibility are essential to ensuring that Today, more than half of Haiti’s population lives people can reach their work places and that firms in the country’s cities and towns, a major shift can access markets, and poor connectivity within from the 1950s, when approximately 90 percent Haiti’s cities limits both job access and economic of Haitians lived in the countryside. Worldwide, opportunities. In fact, 60 percent of households do urbanization is usually paired with economic not use motorized transport, and public transport growth, increased productivity, and higher living in urban areas remains unaffordable to many. standards, but this has not yet been the case Resilient urban growth in Haiti has also been in Haiti. The potential benefits of urbanization hindered by wide gaps in basic services, increasing have been hampered by the country’s immense exposure to natural disasters with resulting challenges of connecting, planning, and financing, increases in vulnerability, and ineffective land-use all of which require immediate action. Connectivity planning. Emmanuel Wilkinton studying his science homework in Delmas 32, Haiti. Photo: Dominic Chavez / World Bank PAGE 36 T RESULTS oday, more than half To better understand the factors constraining the of Haiti’s population sustainable, inclusive development of Haitian cities, lives in the country’s the Review organized the challenges along three dimensions: planning, connecting, and financing. cities and towns, a major shift from the 1950s, • The review of planning determined that when approximately 90% resilient urban growth in Haiti is hindered by of Haitians lived in the wide gaps in basic services, increasing exposure to natural disasters, and ineffective land-use countryside. planning. A key finding for Port-au-Prince, developed using older and new data sources, APPROACH was that an estimated 66 percent of land in the The Haiti Urbanization Review was undertaken administrative area and 78 percent of built-up to better understand the factors constraining the land is exposed to high seismic risk and that the sustainable, inclusive development of Haitian cities. city continues to grow intensively in high-risk The review focuses on three main issues: planning, areas. connecting, and financing. • The connectivity review summarized spatial The specific objectives of the Haiti Urbanization pattern mapping for residential and job Review were to (i) create an improved knowledge locations, providing data and analysis to and analytical base on urban development in Haiti underpin a discussion of the key access for use by the Government and other stakeholders; challenges limiting economic opportunities in (ii) provide technical and policy advice for policy Port-au-Prince and Cap Haïtien. An effective makers, partners and key stakholders to inform analysis of accessibility challenges depends on urban planning and service delivery in Haiti’ cities; accurate information on where the jobs are in and (iii) provide evidence to enhance the design relation to where people live. Because Haiti’s and implementation of World Bank financed latest census was carried out in 2003 and it has TF operations and strategies in Haiti. no business registry, the team turned to cell PAGE 37 A phones, partnering with Digicel, Haiti’s largest cell phone provider, and to Flowminder, an n estimated 66% NGO with vast experience on cell phone data of land in the analysis for development purposes that had the administrative area trust of the private sector regarding its handling and 78% of built-up land of sensitive data. Individuals’ use of their cell is exposed to high seismic phones, combined with machine learning techniques, provided the team with a rich data risk and the city continues set of key information on where people live to grow intensively in and work. The team then traced the flows of high-risk areas. people within the urban network, including the main job centers and the most common trips • The financing review explored the effect people take. Combining this with information of limited municipal-level resources on on natural hazards, such as flooding, helped to local governments’ planning, services, and identify the transport links that, if damaged, interconnections. Strengthening municipal would have the most disruptive effect on the finances is essential to closing the urban people and economy. infrastructure and services gap and to accommodating Haiti’s growing urban population. Closing this gap will require consolidating, harmonizing, and enforcing existing frameworks; building capacity and expanding financial opportunities; and widening and leveraging the local revenue base. • The dissemination of the report in Port Au Prince (January 23, 2018) and in Cap Haïtien (January 25, 2018) sparked a vibrant Grand Dessalines, Haiti. conversation in the two cities and extensive Photo: UNICEF/Marco Dormino PAGE 38 media coverage showed how these issues Facility for Disaster Reduction and Recovery resonate across all levels of government, the (GFDRR); (ii) a grant from the World Bank’s private sector and with Haitian citizens. There Jobs Umbrella Trust Fund, supported by the is a sense of optimism and urgency to generate Department for International Development/ inclusive and efficient urbanization of Haiti’s UK AID, governments of Norway, Germany, and cities. The issue continues to be covered in Austria, Austrian Development Agency, and by the media five months after the launch and the Swedish Development Agency SIDA; and (iii) follow-up articles on urban resilience have been a grant from the Innovations in Big Data Analytics published by the World Bank team. program under the Global Data and Text Analytics Operations unit in the Global Themes Vice • The findings from this study will inform Haiti’s Presidency of the World Bank. growing urban portfolio, which provides a unique opportunity to apply these diagnostic tools, particularly in preparing the US$37.5 MOVING FORWARD million Municipal Development and Urban The study proposed three options for Haiti to Resilience Project for the Cap-Haïtien strengthen resilience in its cities and improve metropolitan area and in discussions on the opportunities for its urban dwellers. National Urban Policy. It is already informing • Tackle infrastructure gaps and prepare for discussions on urban transport needs and future urban growth by investing in basic related necessary policy changes. services, improving data to help assess and minimize Haitian cities’ risk exposure, The Haiti Urbanization Review is available in the strengthening propriety rights, and fostering Bank’s Open Knowledge Repository in French and cooperation between municipalities. English, including an executive summary in Creole. • Address transport efficiency and affordability in coordination with land-use planning and WORLD BANK GROUP CONTRIBUTION transport systems. The Haiti Urbanization Review was made possible TF by three grants: (i) support from the Global • Strengthen municipal financing to close PAGE 39 infrastructure and services gaps and to accommodate the growing urban population. As cities expand in size and population, the challenge is to finance sustainable, inclusive urban development growth. This requires building capacity, developing accountability and expanded financial opportunities, and leveraging local revenues. BENEFICIARIES Findings and recommendations resulting from the study are expected to support resilient and sustainable Haitian cities, thereby promoting opportunities for all. “The need is now to focus on meeting the growing demands for services and job opportunities, as well as affordable transport and housing in cities,” noted World Bank Country Director for Haiti, Anabela Abreu. World Bank Director for Social, Urban, and Resilience Global Practice, Sameh Wahba, points out: “Closing the gap in infrastructure, services, and improving land-use planning will be key to reduce risks faced by Haitian urban dwellers. The report aims at promoting a debate on the future of Haitian cities and identifies priority areas for action that Les Cayes hit by Hurricane Mathew, Haiti. Photo: UN/Logan Abassi can generate better services and opportunities for Haitians.” PAGE 40 DEEPENING FINANCIAL INCLUSION MEXICO IN MEXICO’S RURAL AREAS Mexico improved the performance of its credit and savings institutions and expanded their financial services to target women and underprivileged and indigenous populations in rural areas. As a result, 3.4 million people were mainstreamed into the formal financial sector; more than one million people (60 percent women) gained financial inclusion in rural areas; 9.5 million people are now protected by deposit insurance; about 1.8 million people received financial education; and 4.5 IBRD million people have 3,800 new points of access to financial services. Population: 127,540,423 GDP (billions): US$1,047.00 GNI per capita: US$9,040 IBRD/IDA lending commitments approved in FY17: 350 million New and supplemental Projects approved in FY17: 3 PAGE 41 CHALLENGE APPROACH Financial inclusion, an essential tool for reducing The strategy underlying the Mexico Savings and poverty and boosting prosperity, has been one Credit Consolidation and Financial Inclusion of Mexico’s foremost development challenges. Project had five main strategies, which were In 2011, about 71 million Mexicans—65 percent applied by the National Bank for Savings and of the nation’s population of 112 million—lacked Financial Services (El Banco del Ahorro Nacional access to formal financial services. This was a y Servicios Financieros, BANSEFI) during project particularly serious issue in rural areas, where implementation: 78 percent of municipalities did not have even • Help unauthorized savings and credit entities one point of service for residents wishing to (SCEs) to become certified to enable members make deposits, withdraw money, check balances, to enter the formal financial sector and benefit or make payments. Only 13.6 percent of the from it. adult population had a formal savings account, compared to the regional average of 33.6 percent. • Strengthen the capacity of the authorized SCEs Moreover, mostly in rural areas, a significant to better serve their members. number of the service providers available operated • Work with financial entities in rural as unauthorized, nonregulated savings and credit municipalities to include people, especially entities; with no deposit insurance, these entities’ women, in the formal financial sector. savings were at risk, and they offered only limited These entities include the Regional Rural access to proper and sound financial services. Microfinance Technical Assistance Program O (Programa de Asistencia Técnica a las nly 13.6% of the Microfinanzas Rurales, PATMIR), a program adult population specifically focused on expanding financial had a formal inclusion in rural areas, and L@ Red de la savings account, compared Gente, a network of entities offering a range to the regional average of of financial services, such as international and national remittances, third-party payments, 33.6%. and micro-insurance, among others. PAGE 42 • Provide financial literacy education for people living in rural areas, particularly to women, so they can make better decisions in managing their limited budgets. • Create partnerships with the private sector to expand access to financial services in rural areas and to develop instruments for making deposits, withdrawing money, checking balances, and/or making payments faster, easier, and cheaper. Jaime Ugalde, beneficiary. Photo: BANSEFI • More than 1.8 million people, 90 percent of RESULTS whom are women, received financial education, The project, initiated in 2012 and closed in 2017, including the following: achieved the following results: ◦◦ Approximately 139,000 people received financial education from SCE training • Deposit insurance now protects 9.5 million SCE representatives and subsequently passed members (compared to 6.1 million in December the training on to their members. 2011). ◦◦ Training reached 114,000 students in 332 • In the SCE sector, 91 percent of total assets and schools in 10 states, resulting in short-term 87 percent of total clients are managed by 202 positive impact on the financial culture and authorized SCEs. entrepreneurship of these elementary and IBRD secondary school children. • Financial inclusion now extends to 1.3 million ◦◦ The Social Inclusion Program benefited 1.6 new members, of whom 59 percent are women, million individuals. 29 percent come from indigenous regions, 57 percent live in high and very marginalized • The number of service points providing areas, and 50 percent live in rural towns with financial services for BANSEFI’s clients fewer than 2,500 inhabitants. increased threefold, from 1,800 in October 2011 PAGE 43 to 5,600 in July 2017. Of these, 2,400 represent WORLD BANK GROUP CONTRIBUTION new banking agents. The World Bank, through the International Bank for Reconstruction and Development, provided a • The number of banking agents increased from loan of US$100 million for this project. Additional 95 in 2011 to 2,496 in July 2017. Agents now funds were also leveraged via cofinancing from the cover 951 municipalities, 69 percent of whom government of Mexico and from participating SCEs, are in areas with no BANSEFI branches and 58 for US$82 million and US$21 million, respectively. percent of whom are in areas with no L@ Red de la Gente presence. PARTNERS • About 4.5 million people have new points of The main partner and implementing agency for access to financial services available to them. the project was BANSEFI. A multidisciplinary ◦◦ The number of transactions through team from BANSEFI led the design, development, banking agents performed by the implementation, execution, and monitoring population in rural areas underwent of the work program. BANSEFI has been the exponential growth, from 2,500 implementing agency for two prior Bank-financed transactions per month in 2016 to an projects, and the implementation teams were average of 20,000 transactions per month strongly committed to implementing and in the first semester of 2017. monitoring the project. SCEs also played a central role in the project, contributing to the inclusion of more than 1 million people in the formal financial sector and the expansion of financial services T access in rural areas. These results were primarily he number of banking achieved through participation in programs such as agents increased from PATMIR and L@ Red de la Gente. 95 in 2011 to 2,496 in July 2017. Agents now cover 951 municipalities. PAGE 44 BENEFICIARIES Maricela Cardona Ruiz lives in Tlapa, a city in the mountain region of the Mexican state of Guerrero. Before the project, Maricela did not have access to credit from the formal financial system, but thanks to PATMIR, she became one of the 1.3 million people newly included. “My family members told me about this program. I received $5,000 with my first credit. Now, I run my street food business, and Nohemí Vázquez, beneficiary. Photo: BANSEFI I’m independent. I can buy the products I need—oil, rice, beans—and the profits I make allow me to operate my business and pay my credit. Now, I am MOVING FORWARD member of a Savings and Credit Entity. As such, I Since the project’s closing in 2017, BANSEFI have many advantages. They trust me! I’m feeling has continued to support the consolidation good, I’m truly happy!” of the savings and credit institutions and to deepen financial inclusion in marginal areas. Among its ongoing efforts are the following: (i) nonauthorized SCEs continue to receive support to become authorized or to start an organized exit proceeding, (ii) 720 new banking agents have been incorporated through a new private network IBRD expanding financial services, (iii) L@ Red de la Gente continues to provide its services and has developed a mobile app for its users, (iv) BANSEFI now offers financial education courses online, and (v) PATMIR has expanded its strategy for mobilizing diaspora remittances for productive purposes in rural areas. PAGE 45 CHAMPIONING ADAPTATION IN MEXICO: PROTECTING COMMUNITIES FROM THE IMPACTS MEXICO OF CLIMATE CHANGE Mexico has addressed its continuing vulnerability to climate change impacts by promoting measures to enhance climate resilience in the coastal wetlands of the Gulf of Mexico. Measures included devising and implementing wetland management plans, developing climate change impact scenarios, and designing adaptation measures and providing technical assistance to strengthen technical coordination and data generation and analysis. Population: 127,540,423 GDP (billions): US$1,047.00 GNI per capita: US$9,040 IBRD/IDA lending commitments approved in FY17: 350 million New and supplemental Projects approved in FY17: 3 PAGE 46 CHALLENGE Mexico is particularly vulnerable to the impacts of global climate change, many of which may be irreversible. These impacts include continuous sea- level rise affecting coastal areas and inland basins, an increase in the sea surface temperature in the Gulf of Mexico, intensified hurricanes, changes in the hydrological cycle leading to increasingly heavy rains and strong storms, longer and more frequent droughts, and net decreases in water run-off. Wetlands in the Gulf of Mexico. Photo: INECC APPROACH At a regional scale, the ecosystems likely to be The Adaptation to Climate Change Impacts on the most affected by climate change impacts are the Coastal Wetlands in the Gulf of Mexico Project was coastal wetlands along the Gulf of Mexico. Mexico’s the first attempt by the World Bank and the Global National Communications to the United Nations Environment Facility to support climate change have identified its Gulf wetlands as an immediate adaptation measures in Mexico. The project had its priority for adaptation. Located in the lower reach origins in the country’s strategy for coping with the of the Gulf’s main water tributaries, these wetlands consequences of climate change and constituted an constitute a very productive ecosystem for Mexico. important element in the government’s adaptation They also provide many environmental services, strategy. Because Mexico’s approach to climate including hydrological regime regulation; human change was at a very early stage when the project settlement protection through flood control and was prepared, the project design concentrated on buffering storm impacts; erosion control; coastal developing a set of pilot activities in different areas groundwater conservation and replenishment; along the country’s vulnerable Gulf Coast. pollutant reduction; water quality regulation and protection; and habitats for fish, crustaceans, Pilot areas in the states of Tamaulipas, Veracruz, waterfowl, and wild life, including migratory birds. Tabasco, and Quintana Roo were selected TF to conserve and recuperate marine, coastal, PAGE 47 and water-dependent ecosystems. (Activities coastal wetlands of the Gulf of Mexico through the proposed for the pilot site in Tamaulipas were implementation of pilot measures in three sites: the later withdrawn due to ongoing crime and states of Veracruz, Tabasco, and Quintana Roo. Key insecurity in the state.) The project focused on achievements include: actions that would contribute to local populations’ • Land use plans incorporating climate change adaptation to floods, lack of clean water, and food adaptation activities were developed and insecurity and to mangrove conservation. Project applied in Alvarado Lagoon in Veracruz and in implementation was strongly rooted in the active Tabasco. The protected area management plan participation of local stakeholders, with subprojects of Sian Ka’an was also revised and reviewed and complementary activities at all three pilot with local stakeholders to include climate sites selected with stakeholders’ input and active change considerations. decision making. Particular emphasis was placed on empowering local women. • As part of the adaptation measures implemented in the three pilot sites, (i) more T than 50 hectares of mangrove ecosystems and he project focused 10 hectares of riparian zones were reforested in on actions that would Veracruz and Tabasco, (ii) at least 70 hectares contribute to local of water fluxes in the El Playón mangrove populations’ adaptation to ecosystem in Sian Ka’an and at least 3 square floods, lack of clean water, kilometers in Papaloapan were rehabilitated, and food insecurity and to and (iii) coral reefs in Sian Ka’an were mangrove conservation. repopulated in six areas with temperature- resistant coral genotypes. These measures each contribute to climate change adaptation. RESULTS Mangrove development mitigates the negative Over its five-year implementation period (2011– impacts of extreme weather episodes, and 2016), the project helped promote adaptation controlling water fluxes minimizes impacts of to the consequences of climate impacts in the potential flooding. Repopulating coral reefs PAGE 48 also contributes to mitigating negative potential impacts from extreme weather episodes. • Climate change impact scenarios were developed for selected basins and for coastal wetlands, supporting the knowledge base required to mainstream climate change into the planning for and management of water resources and wetlands. Assessments were made under three different climate change scenarios with respect to surface runoff Workshop with local communities. Photo: INECC nationwide, and a model was devised to analyze PARTNERS implementation of an adaptation measure In addition to PHRD funding, the Japanese related to water availability in the Alvarado government provided approximately US$350,000 Lagoon (Veracruz). Hydrological flow models from its Meteorological Research Institute and were also developed for the three pilot projects about US $190,000 from the Japan Aerospace in Quintana Roo, Tabasco, and Veracruz. Exploration Agency to support hydrological monitoring. WORLD BANK GROUP CONTRIBUTION The World Bank, through the Global Environment Mexico made significant contributions to project Facility, provided US$4.2 million toward the cost financing, amounting to US$17.14 million. of the operation. In addition, the government of Borrower resources of US$350,000 were Japan, through the Bank-administered Policy channeled through PEMEX’s Environmental and Human Resources Development Trust Fund Protection Strategy for 2008–2009 to develop (PHRD), provided US$510.000 in 2007 to support the baseline for Alvarado’s wetlands, and a US$15 project preparation. million contribution from Mexico’s National Water Commission (CONAGUA) supported water quality improvements in the pilot sites. These activities TF PAGE 49 concluded in 2008 and 2009, respectively. The Institute of Water Technology, the National National Institute of Ecology (INECC) and the Commission of Protected Areas, CONAGUA, National Water Technology Institute (IMTA) made the National Development Banking Institution in-kind contributions of infrastructure and human (Nacional Financiera, NAFIN), and the Secretariat resources equivalent to US$1.25 million and of Environment and Natural Resources. US$540,000, respectively. INECC, in coordination with international INECC’s participation as implementing body was organizations, organized the 2016 International of paramount importance. Its head closely followed Meeting on Ecosystem-Based Adaptation in Mexico the development of the project, substantially to present the results and lessons from the project strengthening the participation of other agencies to more than 70 representatives from government and the lobbying effort. Other agencies actively agencies, academia, NGOs, civil society, and involved in the project included the Mexican international specialists and agencies (from Wetlands in the Gulf of Mexico. Photo: INECC PAGE 50 Germany, Peru, Brazil, Costa Rica, Colombia, the from the resulting added-protection against the Philippines, South Africa, Thailand, and Cuba) increasingly negative impacts of climate change– working on adaptation issues. related extreme weather events. Institutionally, the main project beneficiaries MOVING FORWARD were INECC and IMTA, together with National This was Mexico’s first consolidated, integrated Commission of Protected Natural Areas (Comisión effort to address climate change adaptation issues Nacional de Áreas Naturales Protegidas) and the and measures, and all institutions involved learned municipalities in which the pilot sites were located. and evolved in their overall approach to addressing These agencies and municipalities benefited these key challenges. While no concrete follow- through equipment, financing, and enhanced on activities had been defined at project close, technical and operational capacity to identify and discussions among the Bank, Mexico’s Ministry of implement adaptation measures. Finance, INECC, IMTA, and NAFIN are ongoing, with a view toward providing continuity for the pilots already developed and scaling up the lessons garnered from this project. BENEFICIARIES The project’s main beneficiaries are the local coastal communities of the Gulf region where pilot activities took place: residents in and around the Sian Ka’an Punta Allen Biosphere Reserve in Quintana Roo, the Carmen-Pajonal-Machona wetlands in Tabasco, and the Papaloapan river shed wetlands in Veracruz. Beneficiaries actively participated in selecting the adaptation measures to be implemented at each site, and they benefited TF PAGE 51 TRANSFORMING THE DELIVERY OF SOCIAL PROTECTION SERVICES AND IMPROVING SOCIAL WELFARE NICARAGUA AMONG NICARAGUA’S POOREST Nicaragua’s Ministry of Family, Children, and Youth implemented a community-based social welfare model in 26 municipalities that increased school enrollment among children traditionally outside the education system to 90 percent, promoted 91 percent of these children to the next school level, and improved school retention rates for preschool and primary students from 85 to 90 percent. Population: 6,149,928 GDP (billions): US$13.23 GNI per capita: US$2,100 IBRD/IDA lending commitments approved in FY17: 194.9 million PAGE 52 New and supplemental Projects approved in FY17: 5 CHALLENGE improve human development, and coordinate Despite making progress toward achieving several various social sectors at the national and local Millennium Development Goals between 2001 and level. The objective of the CAR program, which 2010, particularly in health and education, around reached around 11,000 at-risk children, was to get 300,000 Nicaraguan families were still living in them back into school by improving their families’ extreme poverty in December 2010, and 100,000 practices and socioeconomic condition by offering of these families had at least one child working parenting skills training and by using a strong and/or not attending school. These families also referral system to integrate families into existing faced huge gaps in the use of social services. At services. the same time, the Ministry of Family, Children, and Youth (Ministerio de la Familia, Adolescencia APPROACH y Niñez, MIFAN) was developing a new model The Nicaragua Social Protection Project aimed to improve its delivery of social welfare services. to foster behavior change among extremely poor Specifically, the ministry undertook responsibility families in 26 of the nation’s poorest municipalities, for administering the Child at Risk (CAR) program, change that would lead to rapid improvements in its flagship program designed to reduce poverty, those families’ basic welfare and social well-being. The project provided technical assistance to A MIFAN for improving its organization, structure, round 300,000 and operational capacity to implement the new Nicaraguan families model and enhance the CAR program. The model were still living provided an array of services to increase the use in extreme poverty in of social programs, family counseling, community December 2010, and educational workshops, family grants, and school 100,000 of these families feeding. It also culturally adapted the educational IDA had at least one child workshop materials for indigenous populations. working and/or not A condition of the program’s Conditional attending school. Cash Transfer required that a family member TF participate in educational workshops. Through PAGE 53 these workshops, families received training in new • The percentage of families in selected localities patterns of parenting and family relationships and whose children had not been but now were in preventing risky behaviors; they also received attending school increased from 63 percent to support in the use of public services, including 95 percent. referrals and counter-referrals made using a • Public primary school retention rates increased coordinated multisectoral approach. from 85 to 90 percent. • The percentage of children in primary school RESULTS who were promoted to the next school year Under the project, 17,992 families in the 26 targeted reached 91 percent. municipalities benefited from project-supported services and subsequently graduated from the • The percentage of families using local services program. The project achieved the following results and programs increased from 0 percent to 98 between 2012 and 2017: percent. Rosa Herrera, head of family who used to be a street peddler, became an entrepreneur after participating in the community educational workshops. Photo: Cynthia Flores Mora, World Bank PAGE 54 • The percentage of families enrolled in MIFAN’s programs and registered in the management information system increased from 0 percent to 100 percent. In addition, participation in the model reduced the presence of child labor among boys and girls ages 6 to 14, by 6.6 percentage points and overall child Marta Alfaro, representative for MIFAN, coordinated the community poverty rates declined 4 percentage points in the educational workshops in Jinotega. Photo: Cynthia Flores Mora, World Bank regions in which the project was active. UNICEF, Japan International Cooperation Agency, and Canada) facilitated the harmonization of WORLD BANK GROUP CONTRIBUTION efforts on the ground and improved transparency The World Bank, through the International and accountability in national systems. Development Association, provided a credit of US$19.5 million to support implementation of the Nicaragua Social Protection Project. Funds were MOVING FORWARD also leveraged from the Rapid Social Response MIFAN has institutionalized all project Multi-Donor Fund to finance US$2.75 million components, including expanding the model for program preparation and initial project to the Caribbean coast, requiring the use of the implementation. management information system and Unique Registry of Beneficiaries in all MIFAN programs, and incorporating family educational workshops PARTNERS and counseling-service delivery. Due to public Development partners in Nicaragua’s social budgetary restrictions, family grants cannot protection sector have formed a strong partnership. IDA continue; instead, MIFAN is graduating targeted During project implementation, technical meetings families to other productive inclusion programs. between the MIFAN and core partner institutions The Bank’s current dialogue involves two (including the Inter-American Development Bank, TF additional activities: (i) the Gender Trust Fund: PAGE 55 Tackling Teenage Pregnancy by Enhancing Youth computer to manage my finances. I send my kids to Socioeconomic Opportunities, to be implemented school and respect them.” in 2018 and 2019, with a commitment of US$120,000, and (ii) the Central America Teresa Vargas, 58 years old and the mother of Employability and Jobs study on developing jobs six, was a project beneficiary and now volunteers strategies, with a commitment of US$250,000. teaching community educational workshops. She remarked, “If your attitude, your thoughts, your 17,992 mentality has been defeatist, negative, pessimistic, you have to change it to obtain a better future. I advise families to turn each difficulty into a strength and, thus, they will be amazed at what they can families in the 26 targeted accomplish in their lives.” municipalities benefited from project-supported services and subsequently graduated from the program. BENEFICIARIES Rosa Herrera, 27 years old, lives in Jinotega with her three children. She commented on the program: “Before participating in the community educational workshops, I used to sell food in the streets with my children, who didn’t go to school. I was an aggressive mother, and didn’t have a decent home. Today, I own a store and even know how to use the PAGE 56 Ruth Orué developed leaderships and business skills with the help of a community based-counselor. Photo: Cynthia Flores Mora, World Bank IDA TF PAGE 57 UTILIZING PERFORMANCE-BASED CONTRACTS TO ENHANCE PUBLIC SERVICES DELIVERY: A NEW PANAMA APPROACH TO WATER PROVISION IN COLÓN, PANAMA Panama improved the quality of water service for 80,382 beneficiaries in Colón and provided the National Water and Sewer Agency with a replicable model, using performance-based contracts, for effectively piloting and implementing new methods of doing business. Population: 4,034,119 GDP (billions): US$55.18 GNI per capita: US$12,140 IBRD/IDA lending commitments approved in FY17: 365 million New and supplemental Projects approved in FY17: 2 PAGE 58 CHALLENGE reported 18 to 24 hours of service per day (far At the time of project design, Panama’s National below the national average of 70 percent). The Water and Sewer Agency (Instituto de Acueductos Colón Business Unit was one of IDAAN’s worst- y Alcantarillados Nacionales, IDAAN) faced serious performing units. Tariff collection rates totaled capacity issues. IDAAN had not raised tariffs only about 40 percent of billing, and nonrevenue since 1982 (representing a 50 percent decline water was estimated at 54 percent. in the tariff’s real value), and by 2008 IDAAN’s operational deficit had reached US$34 million. APPROACH Rather than focusing on improving the efficiency The Panama Metro Water and Sanitation and quality of service across urban areas, IDAAN Improvement Project took shape in response had largely concentrated its efforts on maintaining to IDAAN’s capacity issues and the significant the status quo and responding to emergencies. operational challenges in Colón. The World Bank IDAAN faced particular challenges ensuring Team suggested utilizing a performance-based service quality in low-income neighborhoods. contract (PBC) for the construction, rehabilitation, In Colón, approximately 30 percent of the city’s and repair work required to improve both the 165,000 residents lacked access to reliable water commercial and the operational efficiency of the service. Only 38 percent of Colón’s neighborhoods Colón Business Unit and the continuity of water service in Colón. Because IDAAN lacked experience I with PBCs, the Bank Team, with the support of a n Colón, approximately US$70,000 Public-Private Infrastructure Advisory 30% of the city’s 165,000 Facility Grant, convened international experts residents lacked access IBRD to support the design and implementation of the to reliable water service. contract and facilitated a knowledge exchange event Only 38% of Colón’s with Honduras’s National Water and Sanitation neighborhoods reported Services Utility. The PBC transferred virtually 18 to 24 hours of service full responsibility to the contractor for results on per day. three key indicators. Fixed payments covered 70 TF percent of the contract value, with the remaining PAGE 59 30 percent going toward variable payments based at the project close (June 2017), significantly on the contractor’s progress toward achieving key improving the quality of service. The performance indicator targets. An international contractor achieved this result by developing engineering supervision firm was hired to monitor a real-time pressure and flow monitoring PBC implementation and to independently verify system, organizing the water network’s district achievement of the three key indicators by the metering area into well-defined areas, and contractor. making other investments. • Increased volume of Colón’s water billed using RESULTS meter reading. In October 2014, IDAAN billed The PBC developed under the Panama Metro 430,000,000 gallons of water based on meter Water and Sanitation Improvement Project led reading. By the close of the project, the Colón to improvements in Colón’s water service quality, Business Unit was billing 1,590,390,024 gallons efficiency, and coverage. Specific results included: based on meter reading, and it had become the IDAAN business unit with the highest collection • Continuity of water supply. The project rates in the country. The PBC supported the resulted in increased continuity in the water installation of over 10,000 water meters in supply, from 13 percent in 2014 to 71 percent Colón. • Coverage. The PBC supported the extension of piped water to 2,115 households (just over 1 percent of Colón’s population, representing approximately 11,632 residents) and rehabilitated water connections benefiting 12,500 households (approximately 68,750 residents). • Payment collection. The PBC currently has the Informal water connections in Colón best payment collection indicators in Panama. Photo: Jessica Belmont, World Bank PAGE 60 T PARTNERS he Colón Business IDAAN, through its External Project Unit, led Unit was billing the implementation of the project. The PBC 1,590,390,024 gallons worked closely with the IDAAN’s Colón Business Unit, which played an active role in overseeing based on meter reading, implementation of the PBC. and it had become the IDAAN business unit with MOVING FORWARD the highest collection rates Although IDAAN officials recognize the success of in the country. the PBC model, no concrete plans are in place to follow up on Colón’s performance-based contract. In addition to these achievements, the project A follow-up project, Metro Agua II, was discussed provided IDAAN with a functional model, replicable to secure long-term sustainability of the results in its other business units, of a contract capable of effectively addressing system inefficiencies. BENEFICIARIES Prior to the project, many Colón residents relied WORLD BANK GROUP CONTRIBUTION for water on tanker trucks and rainwater collection. The World Bank, through the International Bank Project beneficiaries gained access to continuous for Reconstruction and Development, provided sources of potable water in their homes, resulting a loan in the amount of US$24.5 million toward in tremendous improvements in their quality the total project cost of US$29.9 million. The of life. Thus far, more than 150,000 individuals IBRD project also received US$5.4 million in counterpart have benefited from the project, and 75 percent of financing. Grant financing from the Public-Private Colón’s population now has water access 24 hours Infrastructure Advisory Facility in the amount of a day. US$70,000 was also utilized. Colón resident Maria Martinez now has a water meter installed. She lives in the Valle Verde TF PAGE 61 neighborhood and had gone without access to clean water for the past 20 years. “Before this project, we had no water at all. We used to stand in lines of more than 20 people just to get two or three buckets of water. Those were hard times. For me, water is like gold. Without water, it was almost impossible to live.” “F or me, water is Maria Martinez, beneficiary of the project like gold. Without Photo: Jessica Belmont, World Bank water, it was almost impossible to live.” “It’s much better than it used to be,” says Bertha de Vitola, a resident in Colón’s Davis neighborhood. “We now have the collection facilities in a central location that provides easy access to all the communities. Now all we have to do is make sure we pay our bill on time. We now have water access Yimitzia , beneficiary of the project Photo: Jessica Belmont, World Bank 24 hours a day, and good water pressure, too.” PAGE 62 IBRD TF Aerial view at Guna Yala, Panamá. Photo: World PAGEBank 63 ENSURING GOOD ROADS FOR ALL: TRANSFORMING PARAGUAY’S ROAD MAINTENANCE CULTURE PARAGUAY Paraguay has successfully introduced new approaches to road management and, in so doing, has strengthened its road agency’s capacity to plan and execute works. These efforts have led to improved effectiveness in road maintenance, thus reducing travel times and costs, and to enhanced road access for the beneficiary communities in the departments of San Pedro, Caaguazú, and Caazapá in central and southern Paraguay. Population: 6,725,308 GDP (billions): US$27.42 GNI per capita: US$4,060 IBRD/IDA lending commitments approved in FY17: 100 million New and supplemental Projects approved in FY17: 1 PAGE 64 CHALLENGE with the three departments of San Pedro, Caaguazú, Paraguay is a small, open, land-landlocked and Caazapá, through improved planning country dependent on increasing external and implementation effectiveness; enhanced trade for future economic growth. Good road transparency and accountability of operations; and infrastructure is a vital ingredient of expanding better access for excluded rural communities. The trade by reducing logistics costs. As of 2005, new Road Sector Strategy was adopted in December road sector management was seen as ineffective 2006 and provided the framework for interventions at delivering the required results. The main road supported by the project through closure in June agency, responsible for 10 percent of the national 2016. During implementation, the Bank provided investment budget, lacked capacity, especially in substantial assistance to support capacity building. planning and strategic management. It favored Introducing “level of service” road maintenance new investment over maintenance of existing contracts made the most significant impact. Under roads, leading to deteriorating road conditions this system, contractors are paid for achieving and higher costs to users. In addition, the needs of specified standards of performance rather than for rural communities were not being met; insufficient their inputs. resources were devoted to upgrading poor quality roads in remote areas, thus constraining access to services and opportunities. APPROACH The Paraguay Road Maintenance Project was rooted IBRD in an agreement with the Paraguayan government on a road management strategy addressing the interrelated requirements of increased resources for the road sector and better allocation of those resources between new investment and maintenance. In addition, the strategy focused on Road paving in Paraguay TF strengthening road management capacity, starting Photo: Ministry of Public Works and Communications PAGE 65 RESULTS • Improved roads benefiting 34,100 residents. Over the course of project implementation, between • Satisfaction with the quality of the 2008 and 2016, improvements were achieved in the improvements among 77 percent of road users, national- and department-level road networks and according to a May 2016 survey. in the national road agency. Major results included: For Paraguay’s main road agency: For Paraguay’s main road network: • Creation of a road strategic planning unit, • Successful completion of 623 kilometers of road including a five-year investment plan. maintenance contracts based on level of service. • Implementation of a new communication • A 93 percent compliance rate for all level- strategy, including a governance and of-service indicators for the maintenance accountability improvement program. contracts. • Introduction of an enhanced road monitoring • A new integrated road toll system covering the system, including regular road inventories and most trafficked roads. traffic counts. For the three departments of San Pedro, Caaguazú, and Caazapá: • Upgrades made on 144 kilometers of secondary roads. • Development of six new microenterprises to carry out road maintenance. • Construction of three multiuse community centers, with specific attention paid to the needs of the indigenous community. Road maintained in Caaguazu, Paraguay Photo: Ministry of Public Works and Communications PAGE 66 WORLD BANK GROUP CONTRIBUTION San Pedro, Caaguazú, and Caazapá. The main The World Bank, through the International Bank road agency, Ministry of Public Works and for Reconstruction and Development, provided a Communication (Ministerio de Obras Públicas y loan in the amount of US$74 million toward the Comunicaciones, MOPC), was the pivotal internal US$107 million total project cost. An amount of partner in carrying forward all aspects of project US$930,000 was also provided through a Policy implementation. National Indigenous Institute and Human Resource Development (PHRD) grant (Instituto Nacional del Indigena) helped elaborate to assist in the preparation of the project. the plans proposed by indigenous peoples and for the development of the multiuse community centers. PARTNERS The World Bank worked closely with the Inter- American Development Bank (IDB) to introduce MOVING FORWARD output-based maintenance through level-of-service Project results are likely be sustainable. More than contracts, which enhanced the impact of the road 50 percent of Paraguay’s main road network is maintenance reform and supported sustainability now maintained under level-of-service contracts. efforts. The IDB financed an additional 629 New roads are being contracted, including a kilometers of improvements, and the International further 317 kilometers under IDB funding. MOPC Labor Organization provided technical assistance has improved its effectiveness, resulting in an 89 in developing the microenterprise program that percent rate of budget execution, as compared helped establish road maintenance capacity in to 68 percent in 2014. A follow-up Bank loan of US$100 million for the Transport Connectivity M IBRD Project has been approved; the new project will ore than 50% of extend the geographical scope of interventions Paraguay’s main beyond that of the Paraguay Road Maintenance road network is Project, and it will increase the focus on road now maintained under safety. level-of-service contracts. TF PAGE 67 Restoration of Route 1 with better signage, Paraguay. Photo: Ministry of Public Works and Communications BENEFICIARIES Traffic increased, on average by 7 percent annually during the life of the project, well beyond the expected 2.5 percent increase. As a result of improved roads and regular road maintenance, however, road users experienced the benefits of lower operating costs (per kilometer costs decreased by about 40 percent in the project areas, according to reports) and reduced travel times. Public transport service in the three project departments are more frequent, and residents enjoy better access to services and opportunities, thanks to the new multiuse centers. PAGE 68 FIGHTING MALNUTRITION IN PERU PERU: ENHANCING HEALTH AND NUTRITION SERVICES IN THREE REGIONS Using a multisectoral approach in the Amazonas, Cajamarca, and Huánuco regions, Peru stimulated demand for health and nutrition services among the poor, increased the coverage and quality of these services, and improved nutrition-related budgetary planning and results monitoring. Through these efforts Peru has more than halved malnutrition among children under five, from 28 percent in 2008 to 13.1 percent in 2016. IBRD Population: 31,773,839 GDP (billions): US$192.20 GNI per capita: US$5,950 TF IBRD/IDA lending commitments approved in FY17: 165 million New and supplemental Projects approved in FY17: 4 PAGE 69 B CHALLENGE By the mid-2000s, despite a decade of high y the early 2000s, economic growth and declining poverty, Peru’s approximately half human development outcomes, especially a million Peruvian children’s chronic malnutrition, continued to children were starting life lag. After stagnating throughout the 1990s, the at a large disadvantage, stunting rate began to decline in the early 2000s, falling from 30 percent to a still worrisome 23.8 as malnutrition can cause percent in 2009. In parallel, between 2005 and permanent damage 2009, an alarming increase in stunting in urban to a child’s intellectual areas was recorded, from 13.5 to 16.2 percent. development. Great variations in chronic malnutrition rates continued to exist across regions, and a lack of APPROACH awareness of the problem among parents, a lack of The Results in Nutrition for Juntos SWAp was a health provider accountability, and weak incentives pioneering intervention—the first of its kind in to improve services contributed to high rates of Peru’s social sectors—that recognized malnutrition chronic malnutrition. as a complex problem related to a high prevalence of infectious disease, inadequate feeding and caring By the early 2000s, approximately half a million practices, and low birth weight. The preexisting Peruvian children were starting life at a large Juntos program provides cash to poor mothers disadvantage, as malnutrition can cause permanent in exchange for regularly taking their children damage to a child’s intellectual development and to health, growth, and nutrition check-ups and irreversible losses of human capital formation. ensuring that their children attend school. By Peru was putting at risk its ability to make further extending Juntos affiliation to children younger progress toward reducing poverty and inequality. than 12 months and improving the verification Action was clearly needed. process for children younger than 36 months already in the program, Results in Nutrition was able to focus its benefits on the most crucial period PAGE 70 of a child’s development. Results in Nutrition, part of a long-standing engagement between the World Bank and the Peruvian government, tackled chronic malnutrition through analytical work on the country’s health system, reforms supported under the Results and Accountability Development Policy Loan (REACT DPL), and lessons learned during the Scaling Up Handwashing Project, a Bank- coordinated partnership with 50 organizations in Peru fighting malnutrition and promoting Child health counseling. behavioral change in hygiene. Photo: Juntos Peru children younger than 12 months, (ii) stimulated Experiences from other countries have shown improvement in the coverage and quality of health that malnutrition can be reduced through a and nutrition services in selected geographic multisectoral combination of demand-side areas, and (iii) supported improvements in the interventions (e.g., Conditional Cash Transfer government’s budgetary planning and monitoring programs, such as Juntos) and measures aimed at of results regarding nutrition services. increasing the coverage and quality of health and nutrition services. Promoting mothers’ behavioral RESULTS changes with respect to child health, hygiene, The operation is widely seen as highly successful. and care and feeding practices also proved to be Among its many significant contributions to cost-effective in achieving results and preventing IBRD improving health and nutrition among poor malnutrition in new generations of children. Using children in Amazonas, Cajamarca, and Huánuco are these proven methods, this operation aimed to the following: reduce child malnutrition in Peru’s Amazonas, Cajamarca, and Huánuco regions. Specifically, the • Malnutrition rates decreased in all three operation (i) stimulated the demand for health and regions between 2011 and 2016. The reductions TF nutrition services by extending Juntos affiliation to observed in Amazonas (10 percentage points), PAGE 71 Cajamarca (8.2 percentage points), and • The percentage of Juntos beneficiaries below Huánuco (11.7 percentage points) were higher 24 months old registered in the program’s than the national average of 6.3 percent during information system with a birth certificate the period. and a National Identity Number and affiliated with the country’s Integral Health Insurance • In the areas of intervention, the share of increased dramatically, from 18 percent in 2011 children under 12 months fully vaccinated to 74 percent in 2016. and whose families received support in tracking the children’s growth, health, and • The percentage of health clinics endowed nutrition indicators and counseling to foster with the equipment necessary to deliver the behavioral changes through community-based complete CRED package and vaccines increased demonstration sessions (i.e., Control de significantly, from 0 in 2011 to 91 percent Crecimiento y Desarrollo or CRED packages), in 2016, in the three areas targeted by the reached 86.4 percent in 2016, up from 63.9 operation. percent in 2011. The percentage of children under 36 months that received complete CRED WORLD BANK GROUP CONTRIBUTION packages settled at 70 percent in 2016, up from The World Bank, through the International Bank 67 percent in 2012. for Reconstruction and Development, provided a loan in the amount of US$25 million to contribute to the costs of this operation. Further support was provided by the Japanese Social Development Fund and the Japan Scaling Up Nutrition Trust Fund, which provided grants (US$180,000 and US$80,000, respectively) to finance technical assistance activities. Conditional cash trransfer beneficiary. Photo: Juntos Peru PAGE 72 PARTNERS in recent years, however, malnutrition continues to The Bank collaborated with the Inter-American be a challenge; 38 percent of indigenous children Development Bank, which supported the Juntos are malnourished, attesting to the need for program through a budget support loan and further interventions. Anemia, a growing concern, a technical assistance grant. The Bank also affects 59 percent of children between 6 and 11 collaborated with the European Commission, months. Both issues remain among the Peruvian which financed the EUROPAN, a budget support government’s top policy priorities. grant of €60 million to the Peruvian government to support the goal of reducing child malnutrition. BENEFICIARIES Strong coordination with bilateral and multilateral Edith Zambrano Reyes and her 17-month old son, agencies took place through participation in Yharif, have benefited directly from Peru’s drive to donor thematic roundtables. These included give children the best possible start in life. Germany’s Gesellschaft für Internationale Zusammenarbeit, the United States Agency for “He’s up to date with all his check-ups. He had a International Development, the UK’s Department few problems with being underweight in the first for International Development, and the Japanese few months of life but not now. The nurses are very International Cooperation Agency. In addition, good at explaining how to look out for possible coordination on the nutrition-related aspects of illnesses, like measles or tuberculosis or flu,” said parallel operations included the Gates Foundation Reyes. “During my pregnancy, I got a lot of advice and the Nutrition Initiative (a coalition of NGOs, from the nutritionist about what to eat and what the United Nations, and bilateral agencies). to avoid.” IBRD MOVING FORWARD Peru’s success in reducing malnutrition has been admired by countries around the world. Delegations from foreign countries regularly visit Peru to learn how to adapt the Peruvian approach TF to their contexts. Despite Peru’s accomplishments PAGE 73 PAGE 74 Children in Andoas, Peru. Photo: Juntos Peru MITIGATING THE IMPACT URUGUAY OF DROUGHT ON ENERGY PRODUCTION AND FISCAL RISK MANAGEMENT IN URUGUAY To guard against exposure to droughts and high oil prices, the Uruguayan electric power company acquired US$450 million of climate insurance protection. More than 80 percent of the country’s electric power is produced hydraulically so when water levels drop, the company must generate electricity using fossil-fuel-consuming thermal methods. The insurance, covering 18 months beginning in December 2013 was not triggered, but the transaction insulated the Uruguayan government and, ultimately, consumers, the most vulnerable in particular, against the adverse impact of reduced rainfall and IBRD oil price volatility. Population: 3,444,006 GDP (billions): US$52.42 GNI per capita: US$15,230 IBRD/IDA lending commitments approved in FY17: 110 million New and supplemental Projects approved in FY17: 2 PAGE 75 CHALLENGE fiscal deficits are also negatively affected. In 2012, Uruguay is highly exposed to weather-related for example, the fiscal deficit increased to 2.8 shocks. Droughts, in particular, have a strong percent of gross domestic product, up from 0.9 in direct negative impact on growth of the nation’s 2011, partly due to drought-related deterioration in gross domestic product (GDP), electricity UTE’s financial balance. production, and fiscal and trade balances. In M addition to its effect on agriculture, drought can have a devastating effect on electricity generation. ore than 80% More than 80 percent of the country’s electric of the country’s power is hydraulic; when lack of rainfall lowers electric power water volume in reservoirs, the state-owned is hydraulic; when lack hydroelectric power company (Administración of rainfall lowers water Nacional de Usinas y Transmisiones Eléctricas, volume in reservoirs, the UTE) must turn to higher-cost thermal generation, state-owned hydroelectric which requires oil purchases. This leaves Uruguay vulnerable to oil price volatility. High oil prices power company must turn increase the cost of electricity generation, creating to higher-cost thermal a financial burden both on consumers and on the generation, which requires national budget, since the state supports UTE oil purchases. financially. In 2012, the costs of meeting the nation’s demand for electricity reached a record US$1.4 billion, far exceeding UTE’s original APPROACH projections of US$953 million. In 2009, three years before the 2012 crisis and as part of a long-term strategy to diversify Uruguay’s Increased costs for electricity generation and/ energy matrix to include alternative energy sources, or electricity imports profoundly affect UTE’s such as wind and biomass, the World Bank initiated balances, and because of UTE’s importance to a dialogue with the Uruguayan government Uruguay’s consolidated public sector, national and UTE to anticipate and find solutions to the PAGE 76 Building of power generators of the Salto Grande dam on the Uruguay river, Uruguay. Photo: Dario Alpern country’s vulnerability to volatile energy production framework approved by the government of costs. Uruguay to reduce UTE’s vulnerabilities, including stabilization funds and contingent financing with In December 2013, while the diversification private banks. strategy was being developed, the Bank announced Drought Events’ Impact Mitigating Investment RESULTS Project Financing, a US$450 million weather and The Drought Events’ Impact Mitigating Investment oil-price insurance transaction. The project insured IBRD Project Financing was the largest transaction in the UTE for the following 18 months against drought weather risk management market, and it was the and high oil prices. Although never triggered, the first use by a public utility company of this type of insurance insulated the Uruguayan government risk management tool. Bank intermediation offered and, ultimately, consumers against adverse impacts UTE several advantages in lowering coverage costs, from drought and oil price rises. including the following: The contract was part of a broader legislative PAGE 77 • The Bank’s experience, market presence, market participants who took the risk. These international standing, and convening power included the hedge fund Nephila, the insurance (as demonstrated in similar transactions, such company Allianz, and the re-insurance company as the Malawi weather derivative, Mexico’s Swiss Re. Both sides of the transaction had CAT Bond, the Caribbean Catastrophic Risk contracts that operated on a back-to-back basis, Insurance Facility, and the Pacific Catastrophe with financial terms that mirrored each other. Risk Insurance Pilot), which brought in a crowd of investors interested in this innovative MOVING FORWARD transaction. The Uruguayan government perceived the weather • Strengthened market confidence in the derivative as a tool for strengthening energy sector transaction and associated data collection resilience in the short to medium term while it protocols. embarked on a long-term plan to diversify its production base by investing in wind and natural • Improved market terms due to the Bank’s AAA gas. Notwithstanding Uruguay’s progress in credit rating and ability to reduce credit risk diversifying its energy matrix, a significant hike and its transmission of the benefit of those in oil prices could still force the government to terms to UTE. respond to immediate needs by diverting financial resources from priority areas. WORLD BANK GROUP CONTRIBUTION The World Bank, through the International Bank With this operation in 2016, the International Bank for Reconstruction and Development, provided a for Reconstruction and Development executed loan of US$200 million for this project. its first sovereign oil-hedging transaction, and Uruguay became the first sovereign to execute a commodity hedge with the Bank. PARTNERS The World Bank (Treasury) acted as intermediary This transaction is replicable in other countries for this project. In this sense, the Bank partnered facing similar challenges. The Bank can execute both with UTE and with the competitively selected such transactions to cover risk management PAGE 78 for energy, agriculture, or other sectors and Estimates put the cost of a drought today as severe for sovereigns, subnationals, or state-owned as the one Uruguay suffered in the 1950s at over enterprises, in both IBRD and IDA countries. US$1 billion. The insurance provided by the project assured Uruguay that it would not be exposed T to such costly fiscal liabilities, allowing space for he Uruguayan proper and responsible fiscal management. In government perceived addition to providing budget stability and cost certainty to the state-owned electric utility, by the weather derivative buffering the fiscal impact of sudden price rises, as a tool for strengthening the insurance protected electricity consumers, energy sector resilience in especially the most vulnerable. the short to medium term while it embarked on a long-term plan to diversify its production base by investing in wind and natural gas. BENEFICIARIES IBRD Measuring the full scope of beneficiaries is challenging, as indirect benefits may not always be clearly reflected: Benefits may only become clear when insurance is triggered. Low rainfall and high oil prices in 2008–2009, for example, cost the Uruguayan government more than US$450 million (more than 1 percent of Uruguay’s GDP at the time). PAGE 79 DEVELOPING A COST-EFFECTIVE STRATEGY FOR DISASTER RISK FINANCING TO INCREASE OECS FISCAL RESILIENCE IN THE OECS COUNTRIES Caribbean countries are highly vulnerable both physically and fiscally to natural hazards, and as these events intensify due to climate change, past development progress can be jeopardized. Grenada and St. Lucia have been working to improve their fiscal resilience through greater understanding and quantification of their sovereign contingent liabilities to natural disasters and by developing an integrated disaster risk financing strategy. Population: 7,245,472 GDP (billions): US$66.70 GNI per capita: US$8,965 IBRD/IDA lending commitments approved in FY17: 36.3 million New and supplemental Projects approved in FY17: 3 PAGE 80 CHALLENGE with the highest poverty levels, including Anse- Grenada and St. Lucia are exposed to high levels La-Raye and Soufriere, where 44.9 percent and of risk from meteorological and geophysical 42.4 percent of the population, respectively, live in hazards that can have significant negative poverty. In addition, among the productive sectors, impacts on their economic stability. In Grenada agriculture suffered the greatest damage (13 in 2004, for example, Hurricane Ivan caused percent of the total), placing vulnerable families, damages estimated above US$900 million—over dependent on agricultural production, at even 200 percent of GDP. Between 1980 and 2014, greater risk of falling below the poverty line. hydro-meteorological disasters and earthquakes in Grenada and St. Lucia led to losses estimated at As the frequency and severity of disasters US$1.098 billion and US$879 million, respectively increase due to climate change, the intensified (according to the DesInventar loss database). shocks will likely push people back into poverty, create debt burdens on future generations, and Disasters can have a large, direct impact on erode development progress. The need to help economic conditions through reduced productivity governments understand their fiscal risk and create and increased national debt due to reconstruction cushions against adverse economic impacts is more costs. After Hurricane Ivan, Grenada’s economy urgent than ever. contracted, as evidenced by a drastic drop in annual GDP growth from 10 percent in 2003 APPROACH to -1 percent in 2004. Compounding this, the Evidence shows that when countries have a government incurred high reconstruction costs, comprehensive disaster risk management (DRM) resulting in the need to restructure its debt to meet framework, including a disaster risk financing its payments. Meanwhile, the impact of disasters is (DRF) component, the impact of direct damages sometimes disproportionately felt by low-income and subsequent losses can be reduced. The World IDA families. Rapid damage and loss assessments of Bank Group established the Caribbean Resilience conditions in St. Lucia following the 2013 trough Initiative Programmatic Approach and Caribbean disaster, which caused flooding and landslides, Disaster Risk Finance Program to build more TF showed the greatest impact in geographical areas resilient societies through better risk management, PAGE 81 forward-looking strategies, and comprehensive investment programs. Four strategic pillars provide a guiding framework: (i) understanding disaster risk, (ii) disaster risk reduction, (iii) financial protection against disasters, and (iv) resilient disaster recovery. To support Grenada and St. Lucia in increasing their fiscal resilience in the face of natural disasters, the following integral components were developed: (i) quantification of fiscal risk from disasters, (ii) resilience in the domestic catastrophe insurance market to risks from natural hazards, (iii) adoption of a disaster risk-layering approach combining different financial instruments, and (iv) integration Hurricane Maria near peak intensity, moving north towards Puerto Rico, on September 19, 2017. of disaster risk into a comprehensive DRM Photo: By The Naval Research Laboratory/ NOAA framework (such as public finance reform). • The Regional Caribbean Risk Information Program supports all OECS member states in In addition, the Bank’s standalone technical creating and using risk information for physical assistance (TA) has helped in the following ways: and infrastructure planning to adequately • Disaster Risk Financing TA supported Grenada inform DRM investment implementation with and St. Lucia in quantifying government risk analyses. contingent liability from natural disasters, • Hazard and Disaster Risk Assessment identifying financial and nonfinancial options Framework TA supports the development in to reduce vulnerability to disaster-induced St. Lucia of a Climate Adaptation Financing fiscal shocks, and developing disaster risk Facility, a private sector–directed initiative financing strategies. under the Disaster Vulnerability Reduction PAGE 82 Program. This initiative aims to increase the non-OECS countries Belize and Jamaica) on the resilience of private housing and private sector design and implementation of DRF strategies to assets and government capacity building reduce fiscal vulnerability to natural disasters. for watershed-level flood hazard modeling Other aspects of this achievement include: to further the development of watershed • Throughout 2016, in partnership with their management plans. MoFs, the Bank team worked with Grenada • TA for Measurable Reduction of Public Sector and St. Lucia to complete the development of Disaster Risk in St. Lucia (“Vision 2030”) historical disaster loss databases and Country helped provide a methodological framework to Disaster Risk Profiles. support prioritization of investments in specific • The Bank has undertaken further in-depth public assets, based on their contribution to analysis of the public financial management overall risk, and to ensure continuity of risk- of natural disasters in Grenada and St. Lucia development monitoring over time. and of the capacity of their private property • St. Lucia Study to Measure the Impact insurance markets in relation to natural of Disaster Events on Poverty and Social disasters. Vulnerability aims to improve understanding • In-country analysis and reports completed of the varying effects of disasters on different in fall 2017 include recommendations for groups in society. The resulting insights will T inform policies and programs to efficiently support those groups prior to, during, and after he DRFTA program disasters. produced an ongoing integrated disaster risk RESULTS financing strategy, with IDA The DRFTA program produced an ongoing strong engagement from integrated disaster risk financing strategy, with the Ministries of Finance of strong engagement from the Ministries of Finance Grenada and St. Lucia. TF (MoF) of Grenada and St. Lucia (as well as the PAGE 83 building national DRF strategies, with the WORLD BANK GROUP CONTRIBUTION central aim of improving governments’ The World Bank, through the International ability to understand, quantify, and manage Development Association, supported the OECS disaster-related contingent liabilities. Outputs countries in building their physical and fiscal of technical assistance to St. Lucia already resilience to natural disasters and the impacts inform the design of that nation’s Catastrophe of climate change through more than US$210 Deferred Drawdown Option, currently under million in investment lending, 46 percent of which preparation. represents grants and concessional loans from the Climate Investment Fund’s Pilot Program for • Technical assistance in Grenada has opened the Climate Resilience. These funds are being used to way to ongoing dialogue with the government strengthen critical infrastructure as well as to build on potential next steps for DRF strategies. the countries’ technical and project management Hurricane Maria destruction along Roseau road, Dominica. Photo: Creative Commons/Roosevelt Skerrit PAGE 84 capacity. The Bank has also mobilized over US$4 PARTNERS million in standalone technical assistance to pilot DRFTA is funded by the ACP-EU and implemented innovative solutions to the ongoing challenges by the Bank’s Social, Urban, Rural, and Resilience posed by natural disasters and climate change in Global Practice, in partnership with the Bank’s the region. Moreover, following the 2017 hurricane Disaster Risk Financing and Insurance Program, season, the Bank supported the OECS countries and jointly with the MoFs in Grenada and St. by (i) working with partners to support the Lucia. This TA is anchored in, and will benefit governments in conducting damage assessments, from, ongoing dialogue under the Bank’s Disaster (ii) preparing emergency response projects, and Risk Management and Climate Change Adaptation (iii) disbursing US$7 million in cash transfers to projects in Grenada and St. Lucia. The program, Dominica’s farmers. implemented in collaboration with the Caribbean Catastrophe Risk Insurance Facility Technical The Caribbean Disaster Risk Financing Program, Assistance Program, also benefits from current financed by the Trust Fund of the Africa, Caribbean, risk financing initiatives in the Pacific region and Pacific Region–European Commission (ACP-EU) Indian Ocean Islands. for an aggregate amount of US$1.2 million, is one of the region’s many Bank-executed DRM trust MOVING FORWARD funds. Technical assistance also complemented DRFTA was completed in February 2018, following Bank operations in the OECS countries, including a decision review meeting held in November the Regional Disaster Vulnerability Reduction 2017. Given the quality and depth of the technical Program (RDVRP). The current total value of the analysis conducted, the team will prepare, Bank’s DRM engagement in the eastern Caribbean in addition to its final reports, an Executive exceeds US$430 million and addresses disaster Summary for each country highlighting its main risk reduction, disaster preparedness, disaster risk findings, results, recommendations and a 2-page IDA financing, and resilient recovery. summary note and short video clip addressing a wider audience. Most importantly, the Bank is following up with each government to identify TF immediate next steps and priorities based on the PAGE 85 recommendations outlined under the TA. The management. In addition, the team introduced DRFTA team will also continue to work closely an innovative, participatory post-disaster risk with groups both inside and outside the Bank to financing simulation that enables stakeholders and share and disseminate the knowledge created. attendees to appreciate the importance of building a disaster risk financing strategy. As these strategies In the meantime, the Bank will leverage the DRFTA are more widely adopted and implemented in findings to inform other Bank lending and TA the OECS countries, the MoFs will become more projects, such as a Development Policy Loan with financially prepared for and resilient against future a Catastrophe Deferred Drawdown Option and natural disaster and climate shocks. Subsequently, eGovernance, and will hold strategic dialogue with in post-disaster relief and recovery, governments other OECS countries to extend implementation of should have the resources and means at their DRFTA work to Dominica and St. Vincent and the disposal to not only finance their direct contingent Grenadines. liabilities more efficiently, they should also be better able to provide additional aid to small businesses and low-income farmers, who are disproportionally BENEFICIARIES impacted by disasters. The DRFTA team organized and facilitated South- South knowledge exchange through a regional workshop on disaster risk financing, held in Barbados in October 2017. Delegates from MoFs of Grenada and St. Lucia and representatives from development partners, including the Caribbean Development Bank, the Caribbean Regional Technical Assistance Center (CARTAC), the UK’s Department of International Development, and an EU delegation, attended. The workshop presented DRFTA’s main findings and recommendations on quantifying pre- and post-disaster contingent liabilities to governments and public financial PAGE 86 PROMOTING EVIDENCE-BASED OECS POLICIES FOR INCLUSIVE GROWTH IN OECS COUNTRIES: SUSTAINABLE DATA COLLECTION AND COMPARABLE STATISTICS IN SMALL ISLAND DEVELOPING STATES The Commission and members of the Organisation of Eastern Caribbean States have developed policies to improve statistical capacity and produce comparable statistics for evidence-based policy making by addressing the limited capacity typical of small island developing states. Under a regional approach, member countries have benefited from economies of scale and South-South knowledge exchanges to build statistical capacity and to develop innovative, timely, cost- effective methods for data collection and data analysis. IDA Population: 7,245,472 GDP (billions): US$66.70 GNI per capita: US$8,965 TF IBRD/IDA lending commitments approved in FY17: 36.3 million New and supplemental Projects approved in FY17: 3 PAGE 87 CHALLENGE interventions therefore lack current poverty data. The member nations of the Organisation of Eastern Caribbean States (OECS) are highly susceptible Weak statistical capacity is common among to external and climate shocks. While the OECS OECS members, especially human, technical, and countries experienced high levels of growth in the financial resources. Several countries, including 1980s, they have experienced significant growth Antigua and Barbuda and St. Vincent and the slowdowns since the 1990s, with annual growth Grenadines, have recently conducted their first rates of 2 percent or less on average. Natural labor force surveys. The latest Household Budget disasters are estimated to have cost an average of Survey (HBS) for many OECS countries was 3 percent of gross domestic product (GDP) in the carried out in mid-2000s, financed by the CDB. twenty years through 2015. Preliminary estimates Frequently, data documentation and storage of damages in Dominica from Hurricane Maria in systems are lacking. These and other deficiencies 2017 have reached as high as 200 percent of GDP. result in substantial data gaps, and many Vulnerability and low levels of growth threaten Caribbean countries thus rank low on the Bank’s the region’s path to reduced poverty and shared Statistical Capacity Indicator. prosperity. G OECS members neither collect nor monitor iven resource poverty indicators on a regular basis. The latest constraints, poverty estimates were produced by the Caribbean Development Bank (CDB) Country Poverty updated poverty Assessment (CPA) between 2005 and 2009. The assessments have not limited data suggests that over the past decade been completed. Targeted poverty declined less than in the Caribbean poverty-reduction than in the Latin America and the Caribbean interventions therefore (LAC) region overall. Moreover, given resource lack current poverty data. constraints, updated poverty assessments have not been completed. Targeted poverty-reduction PAGE 88 APPROACH RESULTS The World Bank adopted the Caribbean: Poverty Bank lending, trust fund financing, and analytical and Equity Programmatic Approach and related support between 2014 and 2017 helped achieve the initiatives for tackling the limited statistical following results: capacity typical of the small island developing • Increased cost-effectiveness and timeliness of states. These efforts include: data collection: OECS member states received • An innovative, cost-effective approach to data training and technical assistance in the use collection and analysis that requires fewer of CAPI methods for data collection. The human resources than traditional approaches; advantages of using CAPI include (i) reduced for example, computer-assisted personal turnaround time between survey collection and interviewing (CAPI) methods were used for production of analysis, (ii) ability to program data collection and automated economic question checks and skips in questionnaires, analysis software was used for data analysis. and (iii) decreases in data errors previously generated by the scanning process. St. Lucia • A regional approach that standardizes the and Grenada, early adopters of CAPI, now run statistical system, allowing OECS countries the LFS on a quarterly basis. to benefit from economies of scale and South-South knowledge exchanges, using, for • Adoption of harmonized statistics and example, the OECS Regional Strategy for the statistical practices: The Bank and other Development of Statistics. development partners’ support for a regional approach to building and strengthening • A systematic approach that gradually builds institutional, organisational, and human capacity from a simple survey, such as the capacity for statistical development across Labor Force Survey (LFS), to more complex the OECS region was expressed in the OECS efforts, such as the Household Budget Survey, IDA Regional Strategy for the Development of and that improves systems sequentially from Statistics (RSDS). The OECS countries have the initial steps of data collection to the final adopted the standardized Labor Force Survey steps of data dissemination. TF and Household Budget Survey. Labor market PAGE 89 statistics are now comparable, helping to Barbuda, St. Kitts and Nevis, and St. Vincent inform regional economic planning. Poverty and the Grenadines are preparing their first assessments and a multidimensional poverty labor briefs. index were also developed at the regional level. • Enhanced economies of scale and South-South WORLD BANK GROUP CONTRIBUTION knowledge exchanges: Integration of the OECS The Bank, through the Trust Fund for Statistical countries into an economic union allowed them Capacity Building, oversaw the distribution of to share fixed infrastructure costs and to rely on project financing in the aggregate amount of country connections to achieve some economies US$500,000. of scale in adopting new forms of technology, training, capacity building, and knowledge In addition, credits from the International dissemination. Several Bank trainings were Development Association financed the St. Vincent conducted in regional workshops. Some and the Grenadines Household Budget Survey and OECS countries more advanced in adopting enhanced Country Poverty Assessment (eCPA). innovative approaches and producing Under this project, the harmonized HBS will be statistics, such as St. Lucia, led the South- conducted using a cost-effective approach, CAPI. South knowledge exchange in workshops and The new HBS and eCPA will help identify the poor consultations with other OECS members. The and vulnerable, improving the targeting of social follow-up workshop on using CAPI for data protection policies. collection, for example, was conducted by the Statistical Office of St Lucia. • Use of data for evidence-based policy making in some OECS countries: Grenada presented employment numbers in presenting its budget and used the LFS to monitor labor market trends. St. Lucia regularly uses LFSs for labor market monitoring and analysis. Antigua and St. Lucia. Photo: OECS.org PAGE 90 PARTNERS informs regional economic planning. The Bank Several project activities have been implemented will also continue to leverage its expertise and help jointly or in close coordination with other donors mobilize other development financing to achieve and development partners. The Caribbean sustainability and regional development, with Development Bank approved an enhanced these particular goals foremost: (i) to increase the 2015–2019 eCPA and is expected to finance the frequency of data collection and poverty estimates, collection of the Household Budget Surveys and (ii) to produce comparable and timely statistics, the eCPA for each member state. The Bank and and (iii) to support the design and formalization of the CDB cofinanced St. Lucia’s 2015–2016 HBS, the OECS Regional Statistical System. which is expected to become a model for other member states under the CDB eCPA project. The BENEFICIARIES Bank is financing St. Vincent and the Grenadines’ National Statistics Offices in the OECS have moved 2018–2019 HBS and eCPA and, jointly with from paper to electronic environments, facilitating the United Nations Development Programme data collection processes. Edwin St. Catherine, (UNDP) under the Department for International Director of St. Lucia’s Central Statistics Office, Development Externally-Financed Output (DFID has commented on this transition: “It assists us in EFO), it supported the development of the collecting interviews … and also allows us to collect OECS RSDS, which emphasizes the need to pilot better data... What we are doing here today is innovative methods to collect, document, and sharing experiences in a South-South cooperation. disseminate data in the region. UNDP and CDB Hopefully, [other member states] can take a lot of have also supported CAPI methods by supplying information back to their individual countries so hardware. data collection is done in a more effective way.” MOVING FORWARD Regular availability of current poverty and labor IDA The Bank will continue its partnership with the market statistics allows governments to make OECS Commission and member states to promote more effective policy decisions. The Honorable evidence-based policy making that fosters inclusive Oliver Joseph, Grenada’s Minister for Economic TF growth, builds resilience and sustainability, and Development, Trade, Planning, Cooperatives, and PAGE 91 International Business, stated at the official launch of the OECS Regional Strategy for the Development of Statistics, “These are the factors that have us, the policy makers, juggling scarce resources among demanding and competing public services. How much do we spend on roads? How much do we allocate to health services? To education? I can certainly attest to this daily challenge, having a portfolio for Economic Development, Trade, and Planning. My decisions and policy proposals are Training in Computer Assisted Personal Interviews in St. Lucia. hindered without evidence: timely and relevant Photo: OECS.org data.” PAGE 92 TRANSITIONING TOWARD A BLUE OECS ECONOMY IN GRENADA AND OTHER EASTERN CARIBBEAN STATES: INCLUSIVE GROWTH AND POVERTY ALLEVIATION THROUGH THE SUSTAINABLE, INNOVATIVE USE OF BLUE ASSETS The blue economy, defined as a sustainable ocean economy that balances economic activity with preserving the long-term capacity of healthy coastal and marine ecosystems, has provided a means of addressing the Eastern Caribbean region’s poverty and unemployment challenges through sustainable financing mechanisms and enhanced capacity for effective management and protection of the environmental base needed for future economic growth. In addition, coastal and marine spatial planning throughout the Eastern Caribbean countries has created opportunities for better decision making and equitable growth. IDA Population: 7,245,472 GDP (billions): US$66.70 GNI per capita: US$8,965 TF IBRD/IDA lending commitments approved in FY17: 36.3 million New and supplemental Projects approved in FY17: 3 PAGE 93 D CHALLENGE The small island countries of the Organization espite recent of Eastern Caribbean States (OECS) face serious improvements development challenges, coupled with low growth, in the region’s natural disasters, high debt, unsustainable unemployment rate, approaches to resource management, and limited joblessness remains higher fiscal space in which to maneuver around these problems. OECS countries have not reduced among youth, exceeding poverty and unemployment rates to levels 30% in most countries. compatible with their per capita income levels. Despite recent improvements in the region’s unemployment rate, joblessness remains higher APPROACH among youth, exceeding 30 percent in most A series of blue economy initiatives support the countries. Furthermore, central elements for sustainable, integrated management of coastal closing the poverty and unemployment gap and marine assets so fundamental to the region’s (seafood production, tourism and recreation, economic growth. These include the following: shipping, and nature-based solutions to absorbing • Sustainable finance mechanisms, such as shocks from natural disasters) are undermined the Caribbean Biodiversity Fund (CBF) and by unsustainable anthropogenic practices, associated National Protected Area Trust Funds including poorly planned coastal development and (NPATF). overexploitation of marine resources. • The successfully completed Grenada—Blue To combat unsustainable practices, continue Growth Coastal Master Plan (2016), the reaping the benefits of the ocean economy, and region’s first, paving the way for dialogue and maximize returns to eradicate poverty and catalyze replication across OECS countries. sustainable development, OECS countries must • The Caribbean Regional Oceanscape Program, focus on adaptive, fully collaborative, integrated providing nonlending technical assistance for management approaches. developing the blue economy; enhancing shared PAGE 94 learning, capacity, and conceptualization of of US$2.4 million, surpassing its US$0.25 strategies, visions, and action; and fostering million target. investment and innovation. • Protecting the marine environment: The • The Caribbean Regional Oceanscape Project marine protected area network for participating (2017), the successful first investment project OECS countries was strengthened through addressing the OECS blue economy, providing training and sensitization workshops, held aid for developing coastal and marine spatial between 2014 and 2016, on using drone plans across OECS countries, enhancing technology to manage and monitor marine capacity, and raising awareness. protected areas. One result was Antigua and Barbuda’s national policy on drone use in protected areas. RESULTS Driven by client demand, efforts by the World Bank • Building overall support for the blue economy on behalf of the Caribbean’s blue economy have as a way to address the region’s poverty gap delivered various concrete results, including the and unemployment challenges: Addressing following: the 38th Caribbean Community (CARICOM) Heads of State Meeting in July 2017, the • Safeguarding the protection of coastal and Bank’s Vice President for Latin America and marine assets through sustainable financing the Caribbean, Jorge Familiar, reiterated the and enhanced capacity: Sustainable finance importance of support for the blue economy. plans were prepared for each participating The multisectoral platform for engagement OECS country and mechanisms were and new investments in the Caribbean set successfully adopted for generating additional out in “Toward a Blue Economy: A Promise resources. The primary outcome was the for Sustainable Growth in the Caribbean,” a establishment of the Caribbean Biodiversity IDA Bank report published in 2016, guided the Fund (CBF), now fully operational, with a discussions. board, secretariat, asset manager, and work program. The CBF has built an endowment of • Grenada’s plans for integrated ocean TF US$32 million, generating investment income governance and shared prosperity: In 2016, PAGE 95 Underwater World Coral Reef. Photo: Fascinating Universe /Wikimedia Commons with the Bank’s technical support, Grenada for the blue economy: The Caribbean Regional became the first OECS member country to Oceanscape Program, the Bank’s regional develop a vision for protecting its “blue space” programmatic instrument, and specific related and to map its road toward blue growth. projects facilitated use among the OECS Grenada’s Blue Growth Coastal Master Plan countries of integrated, fully collaborative was designed to generate new jobs, foster management approaches. Guided by “Toward alternative livelihoods, and expand the a Blue Economy” and by pioneering spatial economy, all while preserving the natural planning work done in Grenada, integrated environment. The pioneering work in Grenada coastal and marine spatial plans for individual has become a model for other OECS member OECS countries have been embraced as central countries to replicate and enhance. to ensuring sustainable management and equitable distribution of projected growth. • Supporting Caribbean country governments in Taken together, the national plans support their dialogue, vision, strategies, and solutions PAGE 96 a regional vision and strategy for ocean Grenada, for example, encouraged stakeholders governance with support across all OECS to engage with, support, and protect the countries. In addition, a strategy for enhancing nation’s marine protected areas. capacity at all levels and raising awareness among the region’s population will ensure WORLD BANK GROUP CONTRIBUTION proper execution and future support for the The World Bank Group partnership with the OECS resulting spatial plans. has been scaled up in recent years and now includes G various forms of support for countries transitioning renada became the to a blue economy. The Bank has delivered two investment operations, and blue economy policy first OECS member reforms are incorporated in the upcoming fiscal country to develop 2018 “Grenada—Blue Growth Development Policy a vision for protecting its Credit.” Along with financial assistance, the Bank “blue space” and to map its has provided high-quality technical assistance and road toward blue growth. cutting-edge knowledge, as detailed above. PARTNERS • The Sustainable Financing and Management Bank partners in the region include the OECS of Eastern Caribbean Marine Ecosystems Commission and its member states, which Project: Between June 2015 and closing in have supported these initiatives through both December 2016, this project provided 375 in-kind contributions and matching finance. The Ministry of Finance and Ministry of Fisheries Global Environment Facility, another important staff with face-to-face training and webinars contributor to blue economy initiatives in the that strengthened their knowledge of protected region, supports projects such as the Caribbean IDA area management and the use of drones to Regional Oceanscape Project and learning and monitor illegal construction on floodplains and capacity development activities. The Caribbean in other protected areas. Survey results show Community has also been a great supporter and TF that training on water improvement planning in PAGE 97 partner in endorsing the Bank’s report “Toward Nature Conservancy, aims to establish new a Blue Economy.” Other partners include Virtual marine managed areas while providing improved Educa, supporting capacity development activities, livelihood opportunities to the people living in the particularly those relating to innovation in ocean Eastern Caribbean. education, through both in-kind and financial contributions, and The Nature Conservancy, a MOVING FORWARD strong supporter in the region providing in-kind In line with the Regional Partnership Strategy technical expertise and developing analytical FY2015–2019 Framework, the Bank will continue products for biodiversity conservation. its partnership with the OECS. The blue economy approach fits directly into the Bank’s overarching Other partnerships have been established with the goals of eradicating extreme poverty and GEF-funded Caribbean Large Marine Ecosystem promoting shared prosperity by working toward Project implemented by the United Nations longer-term objectives of food security, jobs for Development Programme to improve assessment coastal populations, and resilience to climate of the status of the ecological systems and the variability among those dependent on marine region’s natural capital and to support policy resources, who are currently among the region’s recommendations for conservation. The Caribbean poorest and most vulnerable. Supporting the Challenge Initiative aims to support effective blue economy aligns well with regional policies conservation and management of at least 20 and priorities, particularly the Eastern Caribbean percent of the marine and coastal environment by Regional Ocean Policy and the associated Strategic 2020, including sustainable financing mechanisms Plan, which provides the framework for enhanced linked to the Caribbean Biodiversity Fund to cover coordination and management of ocean resources long-term operating costs. in the Eastern Caribbean, where OECS plays a key role in regional ocean governance. Cross-collaboration and knowledge sharing with the Climate Resilient Eastern Caribbean Marine Managed Areas Network Project, managed by the OECS Commission in partnership with The PAGE 98 IDA TF PAGE 99 Caribbean beach. Photo: Creative Commons STOPPING CRIME AND VIOLENCE IN LATIN AMERICA: A LOOK AT LATIN AMERICA PREVENTION FROM CRADLE TO ADULTHOOD The report “Stop the Violence in Latin America: A Look at Prevention from Cradle to Adulthood” identifies novel approaches that have been used in Latin America and elsewhere to reduce antisocial behavior committed by individuals at different life stages. Effective prevention can start before birth, the report shows, and, contrary to common perceptions, well-designed policies can be successful later in life, even with offenders and at-risk individuals. The report emphasizes taking a comprehensive approach to tackling violence, and it highlights the benefits and cost effectiveness of redesigning existing policies with crime prevention in mind. Population: 637,664,490 GDP (billions): US$5,320.00 GNI per capita: US$8,272 IBRD/IDA lending commitments approved in FY17: 5.9 billion New and supplemental Projects approved in FY17: 66 PAGE 100 CHALLENGE withdraw, hide behind closed doors, and avoid Crime and violence, particularly violent crime, public spaces, weakening the interpersonal and are pervasive and costly in Latin America and the social ties that bind communities. Caribbean, which has the undesirable distinction The region’s history of elevated homicide rates of being the world’s most violent region, with and the latest uptick in violence contrast sharply 23.9 homicides per 100,000 inhabitants in 2012, with the significant social progress made over the compared to 9.4, 4.4, 2.9, and 2.7 for Africa, North last decade. Between 2003 and 2011, the countries America, Europe, and Asia, respectively. of Latin America and the Caribbean have made The magnitude of the problem is staggering, and it important strides toward broader social equity, is stubbornly persistent. The region is home to only as reflected in sizable reductions in poverty (from 8 percent of the world’s population, but 37 percent 45 percent to 25 percent) and income inequality of the world’s homicides occur there. In 2013, 8 and rising numbers of people in the middle class. of 10 of the world’s most violent countries and 42 This contrast between increasing violence and of the world’s 50 most violent cities, including the major improvements in social equity highlights the top 16, were in Latin America and the Caribbean. complexity of the relationship between economic Every 15 minutes, at least four people in the region development and crime and violence. become victims of homicide. The Latin American and Caribbean countries have experienced persistent high levels of violence LAC for several decades. Over the last 15 years, the homicide rate has hovered stubbornly around 24 accounts per 100,000. Although the trend declined slightly for only IBRD in the first half of the 2000s, the deteriorating 8% of situation in Central America reversed these gains. the world’s population, Unsurprisingly, the number of Latin Americans but for 37% of the world’s citing crime as their top concern tripled during homicides. those years. The effects are pervasive throughout TF the region’s societies. Violence makes people PAGE 101 APPROACH causal links between interventions pursued and The grant-financed Knowledge Agenda on Crime outcomes achieved. Clear causality is important and Violence in Latin America and the Caribbean because better understanding of the underlying encompassed a region-wide study and a series social and economic processes leads to well- of dissemination events. The study results were designed, more effective policies. The complex published in “Stop the Violence in Latin America: nature of crime and violence, the high stakes, and A Look at Prevention from Cradle to Adulthood”, the potential risks of unintended consequences a report identifying novel policies, validated from well-intentioned but faulty policies require by rigorous empirical evidence, for reducing this evidence-based approach. violence. The report considers a broad range of policy interventions, deployed both in the Latin RESULTS America and Caribbean region and elsewhere, that “Stop the Violence in Latin America: A Look have reduced antisocial behavior early in life or at Prevention from Cradle to Adulthood” was altered patterns of criminal offending in youth and published in 2016, and its formal launch took adulthood. Further, it highlights the mechanisms place at the Woodrow Wilson International underlying the success of these interventions. Center for Scholars on February 7, 2017. The By combining several data sources, utilizing document, available to the public from the World econometric techniques, and highlighting a number Bank’s Open Knowledge Repository, takes a new of background studies produced for the report, and comprehensive look at much of the current the study sheds light on the complex landscape understanding of how to prevent crime and of violence in the region, credibly identifying violence. causal links between policy and reductions in or prevention of crime and violence. The report did Overall, research suggests that potential offenders not undertake an exhaustive review of all existing respond to incentives set by the criminal justice literature on crime (criminological, psychological, system (in the form of sentence lengths and and economic), an overwhelming task beyond its certainty of sanctions). Some combinations of scope. Instead, it focused on a selection of recent, incentives may yield bigger reductions in crime innovative studies offering credible evidence of than others, however, and some may even be PAGE 102 Photo: World Bank counterproductive. For any given level of expected operate through deterrence or incapacitation is punishment, shorter, more certain sentences critical to understanding their social costs. When appear to have the largest deterrent effect. law enforcement agencies deter potential criminals, IBRD the social cost is relatively low. If, instead, Evidence suggests that efforts to increase police heightened police presence simply increases arrests resources as a crime-prevention strategy are and subsequent incarcerations, the resources incomplete without detailed consideration of how involved might be more efficiently used for crime the resources will be employed. Furthermore, prevention strategies. TF establishing whether these policing strategies PAGE 103 Approaches emphasizing hot-spots and problem- WORLD BANK GROUP CONTRIBUTION oriented police-deployment strategies have shown This report benefited from a US$186,000 some encouraging results, but their efficacy seems Bank-executed grant from the Spanish Fund for to depend on context. Evidence thus far, for Latin America (SFLAC), a regional trust fund example, comes largely from developed countries. administered by the World Bank. SFLAC is the It is reasonable to assume that the crime-reducing only region-specific trust fund program and a effects of police actions depend heavily on the quality of local institutions, both law enforcement and the criminal justice system, and on the degree of trust people hold toward those institutions, especially where trust in police themselves may be compromised. The findings in “Stop the Violence in Latin America: A Look at Prevention from Cradle to Adulthood” have been presented at a variety of events, among them the World Bank’s Fragility, Conflict, and Violence Forum (February 2016); Organization of the Americas (November 2016); AL CAPONE (America Latina Crime and Violence Network); and UC Berkeley Development and Institution Seminars. They have also been used to inform the systematic country diagnostics and country partnership strategies for Honduras and El Salvador and to inform the design of new randomized control studies carried out by the impact evaluation unit housed in the Bank’s development research group. Cover of the published report. Illustration: World Bank PAGE 104 critical instrument of the Bank’s engagement in Latin America and the Caribbean, and the World Latin America and the Caribbean. Established in Bank, the series works to convey the excitement June 2009, the program has financed activities and complexity of the region’s most topical issues. across priority sectors and themes, identified in Titles in this peer-reviewed series are selected for consultation with Spain’s Ministry of Economy and their relevance to the academic community and Competitiveness, including (i) infrastructure, (ii) represent the highest-quality research output of governance and accountability, (iii) private sector each institution involved. development, (iv) environmental sustainability, and P (v) “smart” cities. olicy designs that carefully identify and PARTNERS This regional study is the product of a broader take into account analytical effort by the World Bank’s Latin America incentive effects can and the Caribbean Region that focuses on crime, therefore be exploited to violence, and security. In additional to Bank staff, discourage criminal acts. members of the AL CAPONE Network (America Latina Crime and Policy Network) provided insightful feedback and guidance for the report. MOVING FORWARD The study was also solicited by the Latin American The study’s organizing framework adopts Development Forum Series and underwent a a lifecycle perspective and argues that, as individuals progress through the life stages from IBRD blind peer-review process before being approved for publication June 2016. This series promotes birth to old age, different risk factors arise, shift debate and disseminates knowledge and analysis in prominence, and vary in interdependency. on economic and social development issues in While long-term approaches to prevention may Latin America and the Caribbean. Sponsored by begin before birth, yielding successful results the Inter-American Development Bank (IDB), in adolescence and adulthood, effective policy TF the United Nations Economic Commission for interventions with shorter-term horizons are also PAGE 105 available. Importantly, and contrary to popular succeed in its goals of eradicating extreme poverty belief that it is “impossible to fix a crooked and boosting prosperity the region’s unrivaled tree,” a wide range of later-life crime-prevention levels of crime and violence must end. interventions can be effective. Based in part on the increasingly better-understood substantial BENEFICIARIES plasticity humans exhibit at older ages—including Other multilateral institutions, NGOs, research brain functioning critical to regulating risk-taking organizations, and member governments have behaviors, especially during adolescence and young expressed their interest in, and appreciation for, adulthood—these interventions create greater this study. Some specific feedback is highlighted margin for affecting behavior to avoid crime and below: violence. Offenders and at-risk individuals respond to incentives, including those set by labor markets “We were very pleased to see Stop the Violence and the criminal justice system. Policy designs come out lately and were really impressed by what that carefully identify and bring to bear these you put together. We’ve started incorporating your incentive effects can help discourage criminal report into some of the trainings we’ll be doing acts. Furthermore, improved understanding of with USAID.” —Ben Struhl, Abdul Latif Jameel brain function and physical and socioemotional Poverty Action Lab, J-PAL North America, Policy development serves to expand the menu of Manager available policy options. Behavioral, nutritional, and even mindfulness interventions, as well, all of “Congratulations for the massive effort you’ve which are known to affect the brain’s structures put into pulling together this vast amount of data, and chemistry, are proving effective at helping to analysis, and evidence-based literature. The report build positive habits and self-control. is full of rich analytical insights and extremely valuable summaries of impact evaluations and Economic and social development do not studies.” —R. Serrano, IDB necessarily reduce crime and violence, but high levels of crime and violence take a toll on development. The Bank is thus fully aware that to PAGE 106 Latin America and Caribbean Region The World Bank 1818 H Street, NW Washington, DC 20433, USA http://www.worldbank.org/results/ This book was produced by the Latin America and Caribbean Regional Operations Services Unit in collaboration with the Latin America and Caribbean External Communications Unit April 2018