RESULTS IN THE LATIN AMERICA & CARIBBEAN REGION 2020 VOLUME 14 RESULTS IN THE LATIN AMERICA & CARIBBEAN REGION 2020 VOLUME 14 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 Abigail Fien-Helfman with support from Susan Boulanger Design: Miguel Barreto Cover photos: Guna Yala, Panamá: Jessica Belmont / World Bank Photo Collection Rainbow in Dominica: Emily Olivia Bartels Bland / World Bank Photo Collection Belize: Hannah McDonald Moniz / World Bank Photo Collection Country data: World Development Indicators / World DataBank 2018/2019 April 2020 TABLE OF CONTENTS FOREWORD ................................................................................................ vii BRAZIL Fostering an Integrated Approach for Improved Water Management ...... 1 Strengthening Conditional Cash Transfers and the Single Registry.......... 9 COLOMBIA Implementing a Green Growth Agenda....................................................... 17 Preparing for a New Wave of Technological Change................................... 23 DOMINICAN REPUBLIC Realizing Sustainable Development Goals for Water and Sanitation......... 33 HAITI Providing Opportunities for All Haitians ................................................... 41 Improving Financial Inclusion to Drive Small Business Growth............... 53 HONDURAS Promoting Growth, Fostering Inclusion, and Building Local Capacities............................................................................................ 59 Achieving Safer Municipalities..................................................................... 73 Providing Conditional Cash Transfers to Improve Access to Health Services and Education for Honduras’s Extreme Poor................... 83 PAGE V MEXICO Conserving Mexico’s Megadiverse Ecosystems through Biodiversity Friendly Sustainable Agriculture............................................ 91 Integrating Coastal Watershed Conservation.............................................. 99 NICARAGUA Using the Sustainability Chain to Move Toward Universal Access to Rural Water Supply and Sanitation Services........................................... 109 PARAGUAY Drawing the Roadmap for Universal Sustainable Water and Sanitation............................................................................................... 119 PERU Protecting and Managing a Unique Resource: Conserving the Guano Islands, Islets, and Capes of Peru’s Coast.............. 127 PAGE VI FOREWORD When this booklet was prepared, COVID-19 was not part of our lexicon. Our concerns were more related to the low GDP growth of the region (close to zero) and the social unrest that we had been observing in a good number of countries. Today, however, the region is fully focused on managing the health emergency created by the COVID-19 crisis and on planning a response to the economic recession that we are entering. The World Bank Group is supporting the countries in the region. We are working on 13 COVID-19 health response operations (five of which have already been approved) using the newly-created US$6bn Fast Track Facility; and we are also engaging with governments to design appropriate economic recovery programs. If the three pillars of our strategy (promoting inclusive growth, investing in human capital and building resilience) were already relevant, they are PAGE VII now even more so. Following an expected GDP contraction of close to five percent this year, the region will need to grow fast to recover from the economic and social impact of COVID-19, all while continuing to support human capital. And let me add that, after these months, resilience will be central to the agenda. This book provides an overview of the many ways we supported these goals, and the concrete results we’ve seen across the region to improve people’s lives. In terms of promoting inclusive growth, we continued to push the envelope in deploying innovative projects in challenging environments. For example, in Honduras the Rural Competitiveness Project helped boost productivity and competitiveness among small-scale producer organizations by facilitating their engagement in productive alliances. The results were clear - an estimated 28 percent increase in incomes among producer organizations, benefiting 7,200 rural families. In Colombia, the Bank supported policy reforms that decreased air pollution in major cities by 24 percent, boosted clean rural energy production and improved access to clean water for half a million people. Investing in human capital means ensuring that everyone has access to the health and education they need to prosper and take advantage of the opportunities provided by inclusive growth and a rapidly changing jobs market due to disruptive technologies. PAGE VIII For example, Haiti improved education and health services. That resulted in expanded access to quality primary education for 240,000 children, increased access to maternal and child health services for more than 1.2 million people and significant interruption in cholera transmission, with no laboratory-confirmed cases recorded since January 2019. Brazil strengthened its Bolsa Família conditional cash-transfer program, reaching a record of almost 47 million people. School attendance by beneficiary children also set a new record of 91 percent. The third pillar, resilience, is fundamental in our region. LAC is challenged by the highest levels of natural disasters in the world, and this will only become more of a challenge as climate change exacerbates our vulnerability. We need to build better and infrastructure will need to be designed to weather these storms and other disasters. With our help, Mexico improved Coastal Watershed Conservation management, protecting more than 1.7 million hectares of forested area, strengthening watershed socioecological resilience to climate change and boosting sustainability of agricultural practices in adjacent areas. Mexico also implemented biodiversity monitoring of productive systems that helped to create 42 business alliances with buyers and established standards and biolabels for biodiversity friendly goods. The Dominican Republic improved the quality of sanitation services for 142,952 people through investments in new sewerage, wastewater treatment and disposal infrastructure. PAGE IX In Haiti, we supported infrastructure improvement and disaster preparedness, helping expand access to electricity for more than 233,000 people and building and all-weather roads benefiting more than two million people. Access to and quality of water improved for more than 60,000 people. I thank everyone who worked tirelessly each day to help improve the lives of all Latin-Americans and I know that, in the new context, they will continue to do so with more emphasis. The challenges are huge, but we are committed to support the efforts of the region to manage and recover from the current crisis. Humberto López Acting Regional Vice President Latin America and Caribbean Region World Bank Group PAGE X Water treatment plant in Brazil. Photo: Interaguas IICA Brazil PAGE XII BRAZIL FOSTERING AN INTEGRATED APPROACH FOR IMPROVED WATER MANAGEMENT IN BRAZIL Brazil improved the coordination and strengthened the capacity of key federal water sector institutions, including the Ministry of Environment, through the Secretariat for Water Resources and Environmental Quality and the National Water Agency, the Ministry of National Integration, and the Ministry of Cities. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 1,868.63 US$ 9,140 209,469,333 8,515,770 IBRD/IDA lending commitments approved in FY19: 625.7 million PAGE 1 New and supplemental projects approved in FY19: 4 CHALLENGE Proper water resources management (WRM) is essential for Brazil to achieve sustainable development. Despite past accomplishments, improved WRM remains a challenge: in the Northeast, water scarcity continues to increase; the severity of droughts and flooding are expected to increase due to climate change; water pollution plagues most large cities, causing environmental damage and increasing the cost of water treatment for downstream users; and water supply and sanitation (WSS) services remain uneven. Furthermore, Brazil’s freshwater resources are unequally distributed across regions and within the population. The sparsely populated Amazon region holds about 73 percent of the water resources, while the semiarid Northeast region has only 4 percent of the water but 28 percent of the population, and the South and Southeast regions, with 56 percent of the population and large urban metropolises and robust industrial development, confront continuous water scarcity due to mismanagement, over-exploitation, and pollution. BRAZIL HAS ABOUT 12% OF THE WORLD’S FRESH WATER Brazil has about 12% of the world’s fresh water . Photo: Eric Gaba – Wikimedia Commons PAGE 2 Regional inequities in water endowments are mirrored by unequal access to WSS services, with coverage lowest in the country’s poorest regions. While urban areas have better WSS access, pollution of urban rivers and streams is Brazil’s biggest water quality challenge and continues unabated: only about 61 percent of urban wastewater is collected and only 43 percent is properly treated. Moreover, dumping untreated wastewater into water bodies further exacerbates the already critical problem of water scarcity. APPROACH Brazil has made remarkable progress over the last decades, including defining legal frameworks for WRM, WSS, and irrigation; establishing and/or strengthening federal and subnational institutions; implementing management and planning instruments; and making relevant investments in multiuse and WSS water infrastructure. Although Bank-financed sectoral projects provided important contributions, improved further coordination and integration among water sector institutions was required to better respond to increasing challenges. Through the Federal Integrated Water Sector Project (INTERÁGUAS), the federal government sought to integrate the water sector by improving coordination among and strengthening the capacity of the sector’s key federal institutions. In an ambitious innovation, the World Bank supported the government by helping to bring together the most important federal water sector agencies: the Ministry of Environment (Ministério do Meio Ambiente, MMA) and the National Water Agency (Agência Nacional de Águas, ANA), jointly responsible for WRM; the Ministry of National Integration (Ministério da Integração Nacional, MI), charged with water infrastructure, irrigation, and natural disaster management; and the Ministry of Cities (Ministério das Cidades, MCid), responsible for urban WSS. PAGE 3 The federal government sought to integrate the water sector by improving coordination among, and strengthening the capacity of, the sector’s key federal institutions. The project consisted of five components. The first three were designed to continue Bank support to ongoing water sector reforms and institutional strengthening in individual sectors at the national level, with investments focused on: (i) planning and management, (ii) studies and project assessments, and (iii) institutional development. The fourth component was cross-sectoral and designed to improve implementation performance and coordination of sector policies and Water treatment plant. Photo: Interaguas IICA Brazil capture PAGE 4 activities in selected federal river basins. This effort promoted multiple uses for water in two (or three) priority river basins and dealt with the complex challenges of allocating water across competing uses (hydropower, navigation, environmental sustainability, WSS, and irrigation). Basins selected were required to have an integrated planning process and a critical mass of plans and studies and to present opportunities for improved coordination across sectors, government levels, and other relevant stakeholders. The fifth and final component covered project management, monitoring, and evaluation. RESULTS Almost half of total project expenditures were channeled to integrated activities, surpassing initial targets. Strategic outputs completed during implementation of INTERÁGUAS include: • The National Water Security Plan (Plano Nacional de Segurança Hídrica, PNSH), which prioritized 114 multiple use works, involving total investments of around US$ 6.75 billion, to expand and improve the quality of the country’s water supply. • The National Sewage Atlas, the first national diagnosis of sewage collection and treatment in all of the country’s urban areas; the atlas defines investment planning, totaling roughly US$ 40.4 billion for sewage infrastructure. • Diagnosis update of the Ecological-Economic Macro-zoning (Macrozoneamento Ecológico-Econômico, MacroZEE) of the São Francisco River Basin, the strategic basin in the Northeast region, involving seven states. The study forms the basis of the basin MacroZEE, which will be a strategic territorial management tool for the basin’s development. PAGE 5 • An Action Plan Proposal to establish a National Reuse Policy, which defined the road map and subsidies for the relevant federal policy and will have increasing relevance as recurrent water scarcity events affect the country in different locations. • The Dams Restoration Plan (PLANERB), which defined the strategic action plan for the rehabilitation of 164 federal dams, involving total investments close to US$ 45 million for legal, land tenure, environment, dam safety activities, and infrastructure works. • The Regulasan Project, which focuses on capacity building for WSS regulation as an important tool for strengthening service provision and informing the Brazilian public regarding WSS. One important unexpected Project result was the consolidation of the MI and MCid under the command of the new Ministry of Regional Development (MDR), also including the competences of the SRHQ and linking ANA. The positive experience of INTERAGUAS contributed to this decision which placed the most important Federal WRM and WSS responsibilities and activities under a single strengthened Ministry. Almost half of total project expenditures were channeled to integrated activities, surpassing initial targets. PAGE 6 Agricultural irrigation in Brazil . Photo: Interaguas IICA Brazil capture BANK GROUP CONTRIBUTION The World Bank, through the International Bank for Reconstruction and Development (IBRD), financed US$ 19.8 million toward the total project expenses of US$ 26.8 million. The Bank’s contribution was critical to promoting and facilitating integration among the different water sector institutions at both the activity and the project levels. The Bank also shared international practices, including study tours to the United States and Spain in 2009, 2013, and 2014. PARTNERS The commitment to the project of the implementing agencies — SRHQ/MMA, ANA, MI, and MCid — was essential to achieving its results. Implementation was guided and supervised by a high-level Interministerial Management Committee with the support of the Project Technical Secretariat linked to ANA. Subnational institutions at the state, municipal, and river-basin levels also played important roles in implementation of strategic activities. PAGE 7 BENEFICIARIES Project beneficiaries included both the poor living in densely populated urban and peri-urban poverty pockets of metropolitan areas and the agencies responsible for formulating policy and planning, implementing, and monitoring WSS projects for the urban poor. INTERÁGUAS made significant contributions to improving the planning and structure of Brazil’s water sector. The integrated actions collaborated in, or at least facilitated, the formation in early 2019 of a new ministry in the federal administration that brought together the project’s executors. As one project staff member mentioned, “INTERÁGUAS has become the MDR.” Through its implementation, other institutions at the municipal, state, regional, and federal levels have also benefited from the project, including subnational water resources management secretariats and utilities. MOVING FORWARD INTERÁGUAS represents the seed for future coordination and integration efforts. Mechanisms to be fostered include further efforts within the new MDR and coordinated and integrated activities to involve other relevant institutions (such as the Ministry of Mines and Energy or the Ministry of Agriculture, Livestock, and Supply) in the water sector. Integration and coordination permeate the next phases of the main studies prepared under the project (i.e., implementation of actions planned under PNSH and PLANERB). The Regulasan study has gained even more relevance in the context of ongoing discussions regarding the new regulatory framework for the WSS sector. PAGE 8 BRAZIL STRENGTHENING CONDITIONAL CASH TRANSFERS AND THE SINGLE REGISTRY IN BRAZIL A SECOND-GENERATION PLATFORM FOR SERVICE DELIVERY FOR THE POOR Brazil strengthened its conditional cash-transfer program, Bolsa Família, its main delivery system; the Cadastro Único, the National Social Assistance Network; and complementary services, such as early childhood development. Improvements followed in beneficiaries’ incomes and participation in schooling and health services. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 1,868.63 US$ 9,140 209,469,333 8,515,770 IBRD/IDA lending commitments approved in FY19: 625.7 million PAGE 9 New and supplemental projects approved in FY19: 4 CHALLENGE Before the 21st century, Brazil faced one of the world’s highest levels of income inequality and a steep gap between the poor and nonpoor in access to basic human development services. These inequalities, in turn, resulted in gaps in human development outcomes, such as education achievement and nutrition. In 2003, the Brazilian government merged several social programs into one unified conditional cash transfer program: Bolsa Família (BFP). Remaining concerns included the need for (i) further systematization of conditionality monitoring, delivery at the municipal level, and customization to local conditions and special populations; and (ii) a platform to connect beneficiaries with additional services, such as rural and urban productive inclusion, early childhood development, and financial inclusion. APPROACH The World Bank supported the inception of Bolsa Família and helped build the capacity of its delivery institution. The Second Bolsa Família Project aimed to improve BFP’s overall governance by enhancing basic program management, as well as through oversight and control functions, in three axes: the registry of beneficiaries (Cadastro Único), management of benefits, and electronic monitoring of compliance with education and health conditionalities. To this end, project financing was used (i) to train and provide technical assistance to state and municipalities to support the use of Cadastro Único as the main mechanism for selecting BFP’s target population; (ii) to create municipal- and state-level delivery units to support BFP design and monitoring and to interact with social service providers, including transfer of dedicated resources to serve the BF population; and (iii) to configure Cadastro Único to allow multiple public agencies to select beneficiaries from its database of low-income families. PAGE 10 Beneficiaries of Bolsa Familia, Waldemiro and Roseneide Santana with their children Gustavo (15) and Flavia (7). Teofilandia. Photo: © Ubirajara Machado/ Ministry of Social Development RESULTS The project’s main objective was to strengthen the BFP’s ability to achieve its objectives of reducing poverty and inequality and promoting human capital development. The following outcomes were observed: • Estimates show that social transfers, including both Bolsa Família and Social Pensions (Benefício de Prestação Continuada, BPC), accounted for a 58 percent decline in extreme poverty, a 30 percent decline in poverty, and a 41 percent fall in inequality between 2004 and 2014. • BFP increased its coverage and improved its monitoring of conditionalities. By the project’s closing in December 2018, BFP was reaching its highest number of beneficiaries to that date: a total of 46.9 million people. • Furthermore, by the end of the project, all states harmonized their own cash transfers with Bolsa Família. PAGE 11 • By the end of the project, in addition to Bolsa Família, 24 other federal programs used Cadastro Único to identify poor or vulnerable beneficiaries. School attendance by BF beneficiary children (a condition for receiving the benefit) reached 91 percent during the project’s life, the highest level since the program’s introduction. Social transfers, including both Bolsa Família and Social Pensions, accounted for a 58% decline in extreme poverty, a 30% decline in poverty, and a 41% fall in inequality between 2004 and 2014. An array of external studies validated the positive impact of the project on human capital outcomes: • BFP conditionalities (implementation of which the project strengthened) were shown to have positive effects on education indicators, such as higher levels of school enrollment and school progression and lower dropout rates. • Evidence indicates positive impacts on the health, nutrition, and survival of targeted individuals, including significant reduction in the under-five mortality rate and decreases in the incidence of low birth weight among beneficiary children. PAGE 12 BANK GROUP CONTRIBUTION The World Bank, through the International Bank for Reconstruction and Development (IBRD), provided a loan in the amount of US$ 200 million. This loan covered two components: (i) US$ 185 million in co-financing for a small share of the Bolsa Família cash transfers to poor families (BFP transfers more than US$ 10 billion per year); and (ii) technical assistance and project implementation (US$ 15 million). PARTNERS The Government of Brazil provided Jeone Jesus de Morais at the Ligia Vilas Boas municipal school in the city of Firmíno Alves. Photo: © Otavio de US$ 7.5 million to co-finance technical Souza/Ministry of Social Development assistance activities. In addition, to complement the Bank-financed project, the Ministry of Social Development (MDS) independently took advantage of other partnerships, particularly with the UN system (Food Agriculture Organization, United Nations Education, Social, and Culture Organization, and United Nations Children’s Fund), to conduct specific technical assistance activities in areas such as agricultural development programs and early childhood development intervention design. The World Bank also partnered with MDS, the United Nations Program for Development, and the Institute for Applied Economic Research to run the Brazil Learning Initiative for a World Without Poverty, a parallel activity to showcase for other countries Brazil’s innovations and experience with BFP design and implementation. PAGE 13 BENEFICIARIES Bolsa Família, the primary program supported by the project, benefits more than 42 million citizens, most of whom are children living in the bottom income quintile. About a third live in rural areas and more than half in the Northeast Region, which exhibits the nation’s highest poverty rates. Women represent about 88.8 percent of direct cash transfer recipients, since transfer payments are made directly to the mother of beneficiary children whenever possible. The transfer represents only 13 percent of the average income of beneficiary families. In addition, about half the Brazilian population is enrolled in Cadastro Único, which was strengthened in design and roll-out through the project. Cadastro Único families have per capita incomes below half of the minimum wage; by registering, they can access a suite of means-tested programs. MOVING FORWARD By December 2018, 24 social programs, both within and outside MDS, relied on the enhanced Cadastro Único to identify vulnerable families at different income eligibility thresholds. This includes not only complementary cash transfers, but, more importantly, services and in-kind transfers, such as utility tariff discounts and other forms of fee waivers. Based on the results achieved with the project, the government is now working to develop real interoperability between Cadastro Único and other public registries to facilitate updating information and to provide real-time beneficiary status information across services. Bolsa Família reached full institutionalization within Brazil’s social protection system. While specific design elements and eligibility criteria continue to be intensely debated by the public, the program’s existence is broadly accepted and Bolsa Família now serves as a platform to deliver complementary interventions. The Ministry of Citizenship (Ministério da Cidadania former MDS) is the institution continuing with this agenda. PAGE 14 Children at the Ligia Vilas Boas municipal school in the city of Firmíno Alves. Photo: © Otavio de Souza/Ministry of Social Development PAGE 15 Sustainable Forest Landscapes Project in Colombia. Photo: Jessica Belmont/World Bank PAGE 16 COLOMBIA IMPLEMENTING A GREEN GROWTH AGENDA IN COLOMBIA Building on technical support provided across several sectors, Colombia implemented policy reforms that, among others, decreased air pollution in major cities by 24 percent, boosted clean rural energy production, and improved access to clean water for half a million people. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 331.05 US$ 6,180 49,648,685 1,141,749 IBRD/IDA lending commitments approved in FY19: 888.5 million PAGE 17 New and supplemental projects approved in FY19: 3 CHALLENGE Colombia’s growth had been sustained by rising wealth and by a relatively important, albeit declining, stock of natural capital. Natural capital represented 10 percent of Colombia’s total wealth, but it was under threat from air and water pollution in urban areas, forest and land degradation, and growing vulnerability to natural disasters and climate change effects. Colombia’s adjusted net saving rate fluctuated around zero, well below the Organisation for Economic Co-operation and Development and regional averages, implying an unsustainable growth model. Continuing degradation of the country’s natural capital would threaten its medium- and long-term human, economic, and ecological health. Environmental problems, such as urban air pollution, indoor air pollution from household burning of solid fuels, and inadequate access to improved water sources and sanitation imposed high costs in terms of human illness and premature death. In 2013, deaths due to pollution were estimated at more than 15,000. Jointly, pollution issues accounted economic costs equivalent to 2 percent of GDP. Combined natural resource losses and pollution damages were estimated at about 3.7 percent of GDP in 2007. Colombian Amazon. Photo: Jairo Bedoya/World Bank PAGE 18 APPROACH With the goal of conserving natural resources, improving environmental health, and enhancing resilience to natural disasters and climate change, the government made green growth a central crosscutting element of its 2014–2018 National Development Plan. By greening growth, Colombia aimed to reduce negative impacts of pollution on human and man-made capital, on the one hand, and, on the other, to reduce natural resource depletion and environmental degradation. The Green Growth Strategy was developed with Bank support in a process called the Green Growth Mission, later refined as the Green Growth Policy. The government requested an inter-sectoral operation to leverage the Bank’s assistance in enhancing alignment of sector strategies around common sustainability objectives. The Sustainable Development and Green Growth Development Policy Loan (DPL) series sought to support the strategy, building on a long-standing dialogue with the government and a previous, three-part sustainable development DPL series financed by the Bank between 2005 and 2009. By greening growth, Colombia aimed to reduce negative impacts of pollution on human and man- made capital, on the one hand, and, on the other, to reduce natural resource depletion and environmental degradation. PAGE 19 RESULTS The Sustainable Development and Green Growth DPL series supported several reforms. • The DPL series operationalized Colombia’s only public fund for nonconventional and energy efficiency measures, Fondo de Energías No Convencionales y Gestión Eficiente de la Energía (FENOGE). As a result, FENOGE received Col$ 62.1 billion from the national budget and is implementing 14 projects expected to increase energy efficiency by reducing consumption by 11,874 kilowatt hours per year and installing a nonconventional renewable energy capacity of 341 kilowatt peak (kWp), with an expected savings of 6,800 tons CO2-equivalent per year. Another 15 projects have already been approved and are expected to reduce emissions by another 6,800 tons CO2 equivalent per year. While these amounts are not large in absolute terms, their relative scale is important in rural areas disconnected from the national grid. • The project has facilitated electricity provision to 19,837 beneficiaries in areas not covered by the national grid. • Through the Forests for Peace program and the new system for environmental services payments, 27 projects involving environmental authorities and territorial entities benefited 17,555 families and preserved or restored a total of 7,405 hectares. In addition, 22 subnational environmental authorities and 28 territorial entities implemented three payment for ecosystem services programs between 2015 and 2018. These programs provided incentives for the conservation of ecosystems, particularly forests, covering an area of almost 115,000 hectares and benefited 10,560 families. PAGE 20 The project has facilitated electricity provision to 19,837 beneficiaries in areas not covered by the national grid. • Project-related efforts reduced the mean annual concentration of fine particulate matter in the monitoring stations in the cities of Medellín, Itagüí, and Bogotá, which fell on average by 24.4 percent compared to 2014 baselines. • Access to improved water sources in rural areas was facilitated for 589,107 people. • Solid waste disposal improved in 40 municipalities. Bicycle path in Bogotá, Colombia. Photo: Jairo Bedoya/World Bank PAGE 21 BANK GROUP CONTRIBUTION The World Bank, through the International Bank for Reconstruction and Development (IBRD), financed two development policy loans totaling US$ 1.2 billion. PARTNERS The loan was coordinated with parallel like-minded policy loan operations from the governments of Germany and France, as well as the Corporación Andina de Fomento (CAF). BENEFICIARIES Colombia’s population of 49 million benefited from the policies implemented as part of the DPL series. These benefits include the positive health effects generated by reduced air pollution and improved access to sanitation and clean drinking water. Furthermore, reforms to improve solid waste management reduced the risk of illness and injury from soil and water pollution stemming from landfilling. The living standards of waste pickers were also improved through regularized tariff schedules. MOVING FORWARD The DPL supported the government’s green growth agenda, with parallel technical assistance provided for formulating its green growth strategy. These efforts found expression in the government’s green growth policy, which the new administration incorporated into its 2018–2022 National Development Plan. PAGE 22 COLOMBIA PREPARING FOR A NEW WAVE OF TECHNOLOGICAL CHANGE IN COLOMBIA PROGRAMS FOR ENTREPRENEURSHIP, SCIENCE, TECHNOLOGY, AND INNOVATION Firm growth is crucial for generating jobs and driving structural transformation. However, firms can face key market failures that prevent them from adopting better technologies, innovating, increasing productivity, and creating jobs. Most countries rely on a range of policies and instruments to support entrepreneurship and innovation, yet these policies can be difficult to define and complex to implement. Colombia’s policy makers are striving to better align their policy mix with the most prominent challenges and opportunities facing the nation’s firms and to use global good practices in policy design and implementation. These efforts are expected to result in better preparedness to meet market challenges and prepare for a new wave of technological change. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 331.05 US$ 6,180 49,648,685 1,141,749 IBRD/IDA lending commitments approved in FY19: 888.5 million PAGE 23 New and supplemental projects approved in FY19: 3 CHALLENGE The potential gains from bringing existing technologies into a country like Colombia are vast. Differences in technology adoption can account for up to 75 percent of the income gap across countries. Despite the potential benefits, a 2017 World Bank report, “The Innovation Paradox,” argues that developing economies are often unable to reap the potentially large gains from innovation and technological catch-up due to institutional failures and missing complementary factors. The array of available instruments and the quality of policy implementation for entrepreneurship and innovation vary significantly across countries, and in low- and middle-income countries such instruments and policies tend to be highly fragmented. Very often, new instruments are introduced to enhance the quantity and quality of private sector innovation despite limited evidence for their impact. Often, responsibility for implementation of the policy mix is spread across several government agencies, resulting in problems of duplication, incomplete access, and information asymmetry across policy practitioners. Cacao farm in La Paz, Colombia. Photo: Dominic Chavez/World Bank PAGE 24 APPROACH In 2015, Colombia’s policy practitioners sought advice from the World Bank Group to improve their policy mix of programs supporting science, technology, and innovation (STI). Together with counterparts from the National Department of Planning (Departamento Nacional de Planificación, DNP), the World Bank implemented a methodology to identify ways to improving the design, implementation, and effectiveness of Colombia’s STI programs. The Public Expenditure Review (PER) for Science, Technology, and Innovation methodology, first envisioned in 2014 by the World Bank’s Trade and Competitiveness global practice, has evolved to include a broad set of public programs supporting private sector development, some of which target entrepreneurship and SMEs. Using policy instruments as the unit of analysis (in stark contrast to the traditional aggregate budget headings used for PER), the methodology proceeds in four stages: 1. Mapping and evaluation of the quality of policy mix 2. Functional and governance analysis 3. Efficiency analysis 4. Effectiveness analysis In Colombia, the first two stages were piloted in collaboration with DNP in 2015– 2016, with assessments of 129 STI programs managed by eight agencies. The policy practice analysis employed a public management scorecard that assessed performance across 27 dimensions of good practices in design, implementation, and governance. In 2018, the first two stages were adapted for implementation at the subnational level, with the subject of analysis set as the portfolio of projects in the Science, Technology and Innovation Fund (Fondo de Ciencia, Tecnología e Innovación, PAGE 25 FCTeI), which by constitutional mandate receives 10 percent of royalties from non-renewable resources. The implementation of these exercises led to significant changes in government agencies’ program designs and in policy strategy coordination across stakeholders. Through guided interviews and focal groups, a rich set of information was gathered from portfolio managers and project implementers. In the first stage, 166 projects in 12 project portfolios (corresponding to 12 departments) were mapped and analyzed according to 10 areas, among them, budget, partnership types, economic activity, intervention mechanisms, economic results, STI objectives, and beneficiaries. The portfolios were also evaluated for functional performance based on 25 variables in three dimensions (design, implementation, and governance). The efficiency analysis, PER’s third phase, was later incorporated and implemented in 2017 at the national level, enabling policy practitioners to understand how well programs were employing their financial and human resources to deliver results. The efficiency analysis, was later incorporated and implemented in 2017 at the national level, enabling policy practitioners to understand how well programs were employing their financial and human resources to deliver results. PAGE 26 Simon Bolivar Park in Bogotá, Colombia. Photo: Dominic Chavez/World Bank Overall, the analytical framework enables policy makers to identify opportunities for improving delivery based on metrics in the following categories: (i) use of inputs; (ii) materialization of outputs; (iii) achievement of outcomes; and (iv) beneficiary satisfaction, which incorporates a user-centric perspective on the performance of programs’ selection, delivery, and results. RESULTS • Policy decisions were better informed: Policy mapping enabled agencies to realize that goals and beneficiaries of some programs significantly overlapped, with little coordination occurring between them. Following the recommendation to simplify the project portfolio and provide further transparency, the Government of Colombia created a digital platform, termed the Innovation Portal, to provide detailed information about different instruments supporting STI and entrepreneurship and about overall policy strategy at the national level. PAGE 27 • The portfolio concept was adapted to total public investment planning: Based on the PER methodology applied at the national (2015) and subnational (2018) levels, DNP developed its Articulation for Competitiveness (Articulación para la competitividad, ArCo) methodology, which takes a portfolio approach to ex-ante (instead of ex-post) evaluation of instruments financed by the National General Budget. DNP expects that implementing this methodology will lead to measurable efficiency gains in the investment national budget. A pilot will be implemented in 2020. In addition, at the subnational level the portfolio concept was incorporated into the FCTeI project cycle to accomplish the following: (i) incorporate a portfolio vision for the definition of investment priorities in departmental STI councils (Codectis); (ii) define terms of reference for calls for projects; (iii) update the STI sector guide for departments; and (iv) adjust department-level decrees on STI strategic plans. • STI policy at the subnational level was strengthened: Some recommendations of the subnational PER led to changes in STI policy strategies. For instance, the Article 165 of the National Development Plan Law enables the use of FCTeI resources toward credit lines for STI activities through second-tier banking and development of Catedra CTI (a STI curricula) by the STI ministry, which seeks to strengthen territorial capacities by training project managers in CTI. • Programs were rationalized: Reducing the number of instruments allowed agencies to sharpen the focus of their programs, thus reducing administrative costs. For example, INNpulsa, an agency responsible for supporting private sector development, consolidated previously overlapping instruments into one program (ALDEA) organized by stages in firms’ life cycles. Colciencias, a government agency responsible for many STI programs, has established a PAGE 28 committee charged with adopting good practices in instrument design. The number of instruments has been reduced from approximately 60 in 2010– 2014 to approximately 20 in 2019. To support agencies in estimating costs, an efficiency analysis provided capacity building for estimating programs’ economic costs from design to implementation. • As countries grow increasingly concerned with leveraging entrepreneurship and innovation as drivers of productivity growth, and as our engagements enable us to build a rich database, the WB expects that cross-country comparisons will help clients broaden their perspective on what is possible when it comes to formulating and advancing effective entrepreneurship and innovation policy. The success of the collaboration between the WBG and Colombia’s DNP has led to new instruments assessing entrepreneurship, science, technology, and innovation programs in several countries in other regions and at other income levels. BANK GROUP CONTRIBUTION AND PARTNERSHIPS Colombia’s successful implementation of PER for entrepreneurship, SMEs, technology, and innovation was possible because the World Bank and its counterparts were strongly committed to the process. The partnership included PAGE 29 DNP and several other agencies, such as Colciencias, the National Training Service (Servicio Nacional de Aprendizaje, SENA), iNNpulsa, and many other ministries and departmental governments. By providing access to information collected to manage the programs, the WB worked together with clients to determine how to make the best use of this information and to generate systematic monitoring indicators that can be used to enhance programs and investment in general. BENEFICIARIES The rationalization of the policy mix to support STI and entrepreneurship can lead to significant direct and indirect benefits. In Colombia, to take only one example, the program supporting scholarships for PhD students domestically and abroad A computer class at a rural secondary school in La Ceja del Tambo, Antioquia Colombia. Photo: Charlotte Kesl / World Bank PAGE 30 has more than 3,000 beneficiaries. Thousands of firms benefit from the other 128 programs, but more importantly, many firms and researchers not yet benefiting from Colombia’s STI programs may become beneficiaries following further improvements in the programs’ design, implementation, and governance. In addition, adoption of the portfolio framework has strengthened STI policy practice at the subnational level, with higher uptake, more balanced risks, economies of scale, and common development goals. More importantly, adaptation of the portfolio concept for planning public investment will lead to measurable efficiency gains in the investment of Colombia’s national budget. MOVING FORWARD The methodology has proven scalable across regions and countries: The success of the collaboration between the WBG and Colombia’s DNP has led to new instruments assessing entrepreneurship, science, technology, and innovation programs in several countries in other regions and at other income levels, including in Latin America and the Caribbean, East Europe and Central Asia, South Asia, South East Asia, and Sub-Saharan Africa, including some beneficiaries of the International Development Association. These adoptions have varied by scope of program (e.g., a focus on evaluating SME support policies) and levels of government implementation (national and subnational). The team will continue improving and expanding the use of these instruments to support countries to get prepared for a new wave of technological changes through more effective policies to support entrepreneurship and innovation. PAGE 31 New Wastewater Pre-treatment Plant. Photo: Romelio Montero/Presidencia República Dominicana PAGE 32 DOMINICAN REPUBLIC REALIZING SUSTAINABLE DEVELOPMENT GOALS FOR WATER AND SANITATION IN THE DOMINICAN REPUBLIC The Dominican Republic has improved the quality of sanitation services for 142,952 people through investments in new sewerage, wastewater treatment, and disposal infrastructure based on an innovative submarine outfall. Expansion of the sewerage network specifically benefited 3,679 people in the poorest neighborhoods of the city. In addition, the project enhanced the operational and financial performance of three regional water utilities working toward better service delivery. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 85.55 US$ 7,760 10,627,165 48,670 IBRD/IDA lending commitments approved in FY19: 80 million PAGE 33 New and supplemental projects approved in FY19: 1 CHALLENGE The Dominican Republic has impressive coverage of basic water and sanitation service: 95 and 82 percent, respectively, mirroring regional statistics. Yet high coverage does not translate into high quality services. Only 15 percent of the inventoried water systems practiced chlorination, and discontinuity of water supply and rationing is reportedly common, ranging from 1.5 to 10.5 hours per day. Only 53 percent of the water treatment plants and 26 percent of the wastewater plants are operating adequately. Only 15% of the inventoried water systems practiced chlorination, and discontinuity of water supply and rationing is reportedly common, ranging from 1.5 to 10.5 hours per day. The poor quality of services derives to an extent from lack of clarity in the institutional and legal framework with respect to policy making, financing, tariffs, and service provision. Despite some modernization efforts intended to create a lead agency and a new water law, benefits have been slow to materialize. Additionally, the lack of wastewater treatment poses a threat to water resources used for human and agricultural consumption and for recreation in tourist areas. APPROACH The Water and Sanitation in Tourist Areas Project built on a previous World Bank-financed intervention to introduce deepwater submarine outfalls for small PAGE 34 towns as a solution for wastewater treatment and disposal. Through financing and knowledge, the project is helping the city of San Felipe de Puerto Plata realize the SDG parameters of “safely managed” sanitation. Beyond the expansion of sanitation infrastructure, the project financed technical assistance to help the regional water and sewerage corporations of the Puerto Plata Aqueduct and Sewer Corporation (Corporación de Acueductos y Alcantarillados de Puerto Plata, CORAAPLATA), Moca Aqueduct and Sewer Corporation (Corporación del Acueducto y Alcantarillado de Moca, CORAAMOCA), and La Romana Aqueduct and Sewer Corporation (Corporación del Acueducto y Alcantarillado de la Romana, CORAAROM) improve their commercial and operational performance working toward improved service delivery. New Wastewater Pre-treatment Plant. Photo: World Bank PAGE 35 RESULTS The project is leading to improved provision of efficient, reliable, and quality water and sanitation services in the Dominican Republic. Specific results include: • High-quality wastewater treatment and disposal (2018). The civil works are 100 percent complete, including 3.3 kilometers of a sanitary submarine outfall and a new wastewater pretreatment plant. These works helped 142,952 people gain access to improved wastewater treatment and disposal meeeting the SDG standards of safely managed sanitation. • Expanding sanitation access to poor people (2016–2018). The project expanded access to the sewerage network in the poorest neighborhoods of San Felipe de Puerto Plata to 3,679 people. • Improving the operational performance of utilities (2014–2017). The technical assistance provided to the utilities helped expand their consumer database, expand metering coverage, and reduce non-revenue water. For example, in CORAAPLATA, between 2015 and 2017, metering expanded from 10 to 25 percent and non-revenue water decreased from 57 to 45 percent. Similarly, Micro meters in CORAAMOCA. Photo: World Bank PAGE 36 between 2013 and 2017, CORAAMOCA and CORAAROM increased metering from 5 to 43 percent and from 8 to 13 percent, respectively. CORAAROM observed a fall in non-revenue water from 83 to 68 percent over the same period. • Improving utilities’ financial performance (2013–2017). While the road to full financial autonomy covering 100 percent of operating costs, including energy, is a work in progress, the CORAAs made impressive strides in increasing their revenues from sales and improving their ratio of total own-source revenue to total operating costs. With a ratio of 1 indicating that own-source revenues cover total operating costs, the facilities achieved the following between 2013 and 2016: CORAAMOCA’s ratio improved from 0.45 to 0.68, CORAAROM’s from 0.30 to 0.65, and CORAAPLATA’s from 0.33 to 0.37. If energy costs are removed, these ratios for 2016 increased to 0.95, 0.91, and 0.52, respectively. The civil works are 100% complete, including 3.3 kilometers of a sanitary submarine outfall and a new wastewater pretreatment plant. BANK GROUP CONTRIBUTION The World Bank Group, through the International Bank for Reconstruction and Development (IBRD), provided a loan of US$ 27.5 million toward total project costs of US $35.4 million. The Bank supported project preparation and provided analytical tools for the design of the project’s normative and operational processes, providing advice to the government based on international experience and previous lessons learned. PAGE 37 PARTNERS The project received US$ 7.9 million in counterpart financing, which came from the national government. The project was led and implemented by the Ministry of Economy Planning and Development (MEPyD) and its executing unit. In addition to MEPyD, the main implementing partners for utility improvements and infrastructure works were the regional water and sewerage corporations, including CORAAPLATA, CORAAROM, and CORAAMOCA. The National Drinking Water and Sewerage Institute (INAPA) also played a coordinating role on sector reform efforts. BENEFICIARIES Direct and indirect beneficiaries of the project include: • A total of 142,952 beneficiaries in San Felipe de Puerto Plata received access to improved wastewater treatment and disposal infrastructure. • A total of 3,679 beneficiaries in Puerto Plata’s poorest neighborhoods of Aguas Negras, Nuevo Renacer, and Playa Oeste received access to sewerage systems. • CORAAMOCA has 196,000 and CORAAROM has 183,000 people in their service areas who benefited indirectly from operational improvements. MOVING FORWARD The water supply and sanitation sector in the Dominican Republic is undergoing a gradual transition. Continued support to the sector is needed as the country contemplates reform efforts to transition INAPA, the country’s single largest service provider, to a regulatory entity and to decentralize service delivery to autonomous regional utilities similar to CORAAPLATA, CORAAMOCA, CORAAROM, and others. The experience provides excellent opportunities for PAGE 38 peer-to-peer learning in which service providers share their experiences with others elsewhere in the country. In coastal areas receiving heavy tourism, utilities similar to CORAAPLATA, such as Boca Chica Aqueduct and Sewer Corporation (Corporacion de Acueductos y Alcantarillado de Boca chica), are interested in sanitation solutions such as deepwater submarine outfalls to help protect coastal recreational water bodies from pollution. The World Bank’s Water Global Practice envisions continued engagement with the sector to support continuing improvements in the efficiency and quality of water supply and sanitation services in the Dominican Republic. Street pavement in one of the neighborhoods after works. Photo: World Bank PAGE 39 School in Haiti. Photo: Chantal Rigaud/GPE. PAGE 40 HAITI PROVIDING OPPORTUNITIES FOR ALL HAITIANS The Government of Haiti has maintained and improved education and health services, resulting in expanded access to quality primary education for 240,000 children, increased access to maternal and child health services for more than 1.2 million people, and significant interruption in cholera transmission, with no laboratory-confirmed cases recorded since January 2019. Similarly, major gains were achieved in improving infrastructure and disaster preparedness, including expanded access to electricity for more than 233,000 people and all-weather roads benefiting more than two million people. Access to and quality of water has improved for more than 60,000 people. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 9.66 US$ 800 11,123,176 27,750 IBRD/IDA lending commitments approved in FY19: 110 million PAGE 41 New and supplemental projects approved in FY19: 3 CHALLENGE Haiti’s geography, people, and history provide it with many opportunities. A history of political instability, social unrest, and natural disasters, however, has prevented the country from realizing its potential, keeping it one of the poorest and least equal countries in the world. About 60 percent of Haiti’s population, or 6.3 million people, remain poor, and 24 percent, or 2.5 million people, are considered extremely poor, with poverty highest in rural areas. Haiti’s economic growth has been weak, with GDP growth averaging only 1.3 percent between 2015 and 2018. Besides ongoing political instability and insecurity, key development constraints for Haiti include low physical and human capital, poor governance and institutions, and a weak contract between the Haitian State and its citizens. Recurrent shocks, natural and man-made, have compounded Haiti’s many development challenges and exacerbated the underlying drivers of poverty. One of the latest major natural disasters, the category 4 hurricane Matthew in 2016, led to about 600 deaths, impacted 2.1 million people, and caused considerable damage to the southern peninsula and the northwest of the country. This resulted in a 32 percent loss of the country’s GDP. Prior to that, in 2010, an earthquake killed an estimated 230,000 people, displaced 1.5 million, and resulted in 120 percent loss of GDP. Persistent political instability and social unrest have hindered the country’s efforts to develop the institutional mechanisms and policy fundamentals needed to support economic and social progress, thus perpetuating the cycle of fragility and violence. PAGE 42 APPROACH The focus of resources made available to Haiti by the International Development Association (IDA) has been response to emergency needs and strengthened service delivery. Simultaneously, IDA supports efforts to tackle some of the key institutional and policy challenges that must be overcome to build a more inclusive, resilient, and sustainable path to development. IDA-supported reconstruction following major shocks deploys tailored emergency operations using grants and IDA Crisis Response Window funding. Reconstruction activities have been complemented by operations aimed at building long-term resilience while also supporting private sector actors and removing key infrastructure bottlenecks to market access. IDA support has focused on building human capital through increased access to education and health services and controlling the cholera outbreak. In parallel, to sustain development outcomes, IDA has supported the government to improve transparency, accountability, and effectiveness in public investment while strengthening institutional capacity to produce key data, manage sectors, set evidence-based policy priorities, and build fiscal sustainability. School in Port-au-Prince, Haiti. Photo: World Bank PAGE 43 RESULTS World Bank Group (WBG) support has been pivotal to Haiti following the last two major disasters, the 2010 earthquake and 2016 hurricane, and has achieved significant results. Human Development The WBG engagement contributed to improvements in basic service delivery in education and health, with attention to closing geographical and income gaps. In addition, significant achievements were made in combatting cholera through combined support to the health and water sectors. • Expanded access to quality primary education was provided for 240,000 children, 50 percent of whom are girls. IDA financed 456,000 tuition waivers and set up a school feeding program that provides hot meals and snacks to more than 23,000 students in public basic schools. The tuition waiver mechanisms developed by the World Bank have been so successful and effective that they have been adopted by the government and other donors. Government capacity to improve the quality of education has been strengthened, mainly by establishing quality assurance standards and information management systems. The tuition waiver mechanisms developed by the World Bank have been so successful and effective that they have been adopted by the government and other donors. PAGE 44 • Cholera transmission was significantly interrupted, with no laboratory- confirmed cases since January 2019 (compared to over 350,000 new infections in 2011). More than three million people received cholera education and prevention training. Two hundred centers and oral rehydration stations received staff and equipment, and 312,000 people in rural and small towns benefited from increased access to safe drinking water. • Essential health, nutrition, and population services benefited more than 1.2 million people. Expansion of vaccination coverage resulted in immunization of 640,000 children. Levels of prenatal care increased, with at least four visits for 40 percent of women living in the Nord-Est, Centre, Nord-Ouest, and Sud departments. Student at school in Port-au-Prince, Haiti. Photo: World Bank PAGE 45 Resilience Significant achievements were also made toward strengthening infrastructure and reducing vulnerability to disasters. IDA used technology to become more agile in its work across sectors and has been using satellite data and spatial approaches. • More resilient infrastructure. About 226,000 people now have expanded access to electricity, and more than two million people benefited from all- weather access to markets and services following rehabilitation of over 100 kilometers of critical road networks and 122 small and large bridges. • Enhanced capacity to respond to disasters. Four hundred engineers and 15,000 masons were trained to build safe housing, and 450,000 buildings were assessed for structural damage to enhance disaster preparedness. A National Hydrometeorological Unit was created and strengthened for improved hydrometeorological and climate information and other services tailored to the needs of the civil protection organization. Increased resources are now available to assess disaster risks; for example, high-resolution maps provide assessments of flooding risk and community vulnerabilities. Increased resources are now available to assess disaster risks; for example, high-resolution maps provide assessments of flooding risk and community vulnerabilities. • Technology has helped with assessment of disaster risks and planning. IDA supported establishment of the open-data platform HaitiData, which has PAGE 46 helped share Geographic Information System (GIS) and cartographic data. It has been used by partners involved in risk and disaster management, urban planning, agriculture and food security, spatial planning, environmental management, infrastructure, statistics, tourism, topographic mapping, and thematic mapping. Governance and Accountability • Strengthened efficiency, sustainability, and transparency in public services has been a crosscutting element of the World Bank’s work in Haiti. IDA has been instrumental in supporting institutional development by expanding evidence- based data that can serve as a foundation for policy dialogue on sectoral organization, resource use, and effectiveness. Following major disasters, the government’s basic payment functions were restored, and equipment and capacity building were provided to government entities to enable their continued functioning. Health services, Haiti. Photo: World Bank PAGE 47 BANK GROUP CONTRIBUTION The ongoing World Bank portfolio in Haiti comprises 20 active projects for a total committed amount of US$ 866.46 million. The sectors covered include energy, education, health, agriculture, water and sanitation, private sector, tourism and culture, infrastructure and institutional strengthening, urban community-driven development, and disaster risk management. This is complemented by nearly US$ 150 million from trust funds that support implementation of these operations. The International Finance Corporation’s (IFC) portfolio comprises 11 projects, with an initial commitment of US$ 116 million (including US$ 45 million in mobilization), and a current outstanding balance of US$ 42.7 million (including US$ 11.7 million in mobilization). IDA collaborates closely with IFC to support renewable energy, agribusiness, and financial services. Together, the WBG is leveraging the IDA Private Sector Window (PSW) to de-risk the private sector and promote investments in Haiti. Three IDA PSW projects were approved in Fiscal Year 2019, including Ayiti Leasing, Sogesol, and Caribbean Bottling Company, Improved roads in Haiti. Photo: World Bank PAGE 48 totaling US$ 14 million in the financial services and beverage industries. The Multilateral Investment Guarantee Agency (MIGA) is exploring opportunities to support the country both with its traditional political risk insurance guarantees and through the IDA PSW, as private sector demand materializes. Despite challenges, the WBG has been able to maintain a strong program in Haiti. Allocation of additional IDA resources has helped enhance the ambition and scale of our support. The operations pipeline includes new initiatives, including a Catastrophe Deferred Drawdown Option (CatDDO) and the Regional Aviation Operation, to provide Haiti with an expanded range of WBG instruments. PARTNERS The WBG works closely with development partners in Haiti to align engagements and financing with country priorities. Partnerships with United Nations agencies as well as with the United States Agency for International Development, the Centers for Disease Control and Prevention, the World Health Organization, and Canada yield positive outcomes in health and education. Similarly, close collaboration with the Inter-American Development Bank is helping to reduce gaps in education access and quality as well as to extend water and sanitation service coverage. The disaster response agenda is seeing some positive developments thanks to close collaboration with Japan, the United Kingdom, and the United Nations Development Programme. BENEFICIARIES The newly paved road linking Cap Haitien to the village of Labadie was finalized in February 2018. Merline Pierre lives in Labadie and commutes to high school in Cap Haitien. “Before the rehabilitation of the road, the trip took more than an hour. The road was in bad condition, with lots of rocks, and passengers would often get sick. Now, with the new road, the trip only takes 20 to 25 minutes.” PAGE 49 Jean Oril drives a tap-tap, a large van used for public transportation, and is president of the transport operators’ union of Labadie. “I have been working on this route for 12 years. I drive people working at Labadie, students, workers. . . . Before, we could only drive 15 or 16 people and make a maximum of three trips a day. However, with this new road, we can make six to eight trips per day. Prior to the rehabilitation of the road, it was impossible to find a tap-tap after 4 p.m. If one needed to get to the hospital, he or she would have to find her own means of transportation, because there was none available to get you there.” MOVING FORWARD The World Bank Group will continue to support Haiti through its ongoing programs, which align closely with the government’s priorities and focus on the following objectives: (i) inclusive growth through support for development of greater economic opportunities beyond Port au Prince; (ii) human capital development, aimed at supporting poverty reduction through investments in education and health; and (iii) strengthened resilience to help Haiti prepare for and prevent natural disasters. The World Bank Group has been deploying new operational mechanisms, such as working with third party implementers, to achieve faster and better results while continuing to build local capacity. PAGE 50 Going forward, the World Bank will focus on engagements with high potential for long-term, sustainable impact. The approach will be driven by selectivity, an integrated territorial approach, and simplification of design and delivery mechanisms to adapt to Haiti’s fragile context. The WBG has been deploying new operational mechanisms, such as working with third party implementers, to achieve faster and better results while continuing to build local capacity. Similarly, the WBG is taking institutional capacity building to the decentralized, community level, stepping up local engagement for much more direct impact for beneficiaries; the Bank also promotes local small and medium enterprises and local firms in its contracting processes. To improve the effectiveness of the state, the WBG will continue to support transparency and accountability, including in public financial management. The WBG will seek to strengthen institutions and government capacity to produce key data and set evidence-based priorities. The WBG also aims to improve fiscal sustainability by strengthening fiscal reporting and accountability and increasing the capacity to finance basic service delivery. Focus also remains on promoting a productive dynamic between the state and its citizens to contribute to reducing fragility. A combination of financial and knowledge services and instruments will be used to implement the program, including IDA financing, trust funds, guarantees, analytical work, just-in-time advice, short-term technical assistance, IFC investments, and advisory services, leveraging the IDA PSW, regional IDA lending within the Caribbean, and a CatDDO for strengthening resilience in Haiti. PAGE 51 Workers taking a break in Tin Tanyen, Port-au-Prince. Photo: United Nations PAGE 52 HAITI IMPROVING FINANCIAL INCLUSION TO DRIVE SMALL BUSINESS GROWTH IN HAITI Private sector development in Haiti has been constrained by poor access to finance: in 2010, just 35 percent of small businesses had sufficient access to credit. Recognizing that financial leasing — renting equipment with the option to buy at the end of the contract — could supply an effective means of providing businesses with much-needed equipment while reducing the risk for lenders, Haiti worked to create such a structure to unlock finance for small businesses in one of the poorest countries in the western hemisphere. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 9.66 US$ 800 11,123,176 27,750 IBRD/IDA lending commitments approved in FY19: 110 million PAGE 53 New and supplemental projects approved in FY19: 3 CHALLENGE Small- and medium-sized enterprises (SMEs) account for 80 percent of employment in Haiti. Yet most struggled to raise resources to invest in capital improvements because lenders are reluctant to finance businesses with limited credit history and little collateral. In countries facing similar constraints, leasing has proven to be a successful lending facility. Until recently, however, unfavorable regulations and a lack of expertise among financial institutions hindered the emergence of a functioning leasing market in Haiti. APPROACH The World Bank and International Finance Corporation provided joint comprehensive support to the Government of Haiti to establish a legal and regulatory framework for leasing and to build the Central Bank’s capacity to supervise the new sector, resulting in the issuance of its first leasing license. The Entrance to Banque de l’Union Haïtienne Alternative Insurance Company Ayiti Leasing. Photo: World Bank PAGE 54 Leasing Haiti Project engaged in extensive capacity building to develop technical understanding and knowledge of leasing in the public and private sectors, training over 300 SMEs across the country. In addition, the project led the creation of a greenfield leasing entity, the first Bank-financed project to do so. The project supported the Alternative Insurance Company in creating a new subsidiary, Ayiti Leasing (AL), which launched operations as the first licensed entity in Haiti specialized in leasing. The Bank helped AL to develop its organizational structure, products, systems, and procedures and to adapt international best practices to local conditions and provided extensive on-the-ground support to build AL’s in-house capacity. RESULTS The Leasing Haiti Project helped build a private sector solution to address the lack of access to finance faced by Haiti’s SMEs, and it facilitated the necessary public sector interventions to enable a private sector solution. The following are some of the key results observed during the project’s implementation: • AL successfully launched operations in December 2016, and as of December 2018, AL had developed a client base of more than 70 local businesses — all of which are SMEs — providing more than US $6.6 million worth of equipment that will contribute to raising these businesses’ productivity and expanding their operations. Examples include the country’s first five-dimensional ultrasound machine, which will help doctors detect fetal illnesses and malformations during pregnancy. AL is expected to provide US$ 15 million worth of equipment by May 2020 (project completion). • This success has generated considerable interest in Haiti’s financial sector, yielding a clear demonstration effect: two financial institutions have already indicated their intent to enter the previously nonexistent leasing market. PAGE 55 • The Central Bank, recognizing the contribution of leasing to the development of Haiti’s SMEs, agreed to provide a five-year loan to AL that would target specific sectors. • The Haiti leasing projects also created a potential investment opportunity: International Finance Corporation has approved an investment with AL and is discussing a potential investment with Banque BUH, an affiliate of AL. As of December 2018, Ayiti Leasing had developed a client base of more than 70 local businesses providing more than US $6.6 million worth of equipment. BANK GROUP CONTRIBUTION The World Bank Group, through the International Development Association and International Finance Corporation, administered trust fund grants to support the project, including grants from the Spanish Fund for Latin America (approximately US$150,000), the Netherlands-IFC Partnership Program (US$ 18,000), and USAID (approximately US$ 240,000). PARTNERS A collaborative approach between the World Bank and the International Finance Corporation (IFC) was critical to creating a new market for leasing in Haiti. Jointly, the World Bank and IFC were able to push the boundaries of prior advisory engagements in leasing that had been implemented in other regions PAGE 56 to help Haiti create a greenfield leasing entity that has already begun to have an important demonstration effect in the country. BENEFICIARIES “One of the most significant constraints facing Haiti’s private sector is the lack of access to finance. Many entrepreneurs simply can’t get an affordable loan to buy equipment. Leasing offers an innovative solution to help small and medium businesses. Our goal is to become the strategic partner for a new generation of dynamic Haitian entrepreneurs, who are critical to transforming our economy.” — Olivier Barrau, President of the Board of Ayiti Leasing MOVING FORWARD Additional financial entities have already contacted IFC to request assistance with the development of leasing operations in Haiti. Strong demand from the market for leasing, evidenced by the fact that equipment suppliers have expressed interest in becoming AL’s strategic partners, indicates promising prospects for the company and for the growth of Haiti’s leasing industry. A young girl washes her face at Croix-des-Bouquets, 13 km from Haiti’s capital, Port-au-Prince. Photo: United Nations PAGE 57 La Ceiba y Corozal, Honduras. Photo: Jessica Belmont /World Bank PAGE 58 HONDURAS PROMOTING GROWTH, FOSTERING INCLUSION, AND BUILDING LOCAL CAPACITIES IN HONDURAS Despite Honduras’s multiple strengths, its progress in poverty reduction has been marked by considerable volatility over the past 30 years. The nation has undertaken a social and economic development agenda to improve basic public services and enhance competitiveness for the rural poor and Indigenous peoples, with important results in agricultural productivity, gender empowerment, water and sanitation, and key drivers of migration. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 23.97 US$ 2,350 9,587,522 44,720 IBRD/IDA lending commitments approved in FY19: 155 million PAGE 59 New and supplemental projects approved in FY19: 3 CHALLENGE Honduras is Central America’s second-largest country, with a population of more than 9.2 million and a land area of about 112,000 square kilometers. Honduras possesses multiple strengths that can propel the country toward faster growth and shared prosperity, including its strategic location, a growing industrial base, ongoing efforts to diversify its exports, and a young and growing population. Over the past 30 years, however, Honduras has experienced modest economic growth marked by considerable volatility. The country has the third lowest per capita income in Latin America and the Caribbean. It is among the poorest countries in the Western Hemisphere, and a large share of its population is vulnerable and exposed to regular shocks. Although modest gains were made during the global economic expansion of the mid-2000s, these were wiped out during the final years of the decade, when the impact of the global financial crisis was magnified by Honduras’s domestic political instability. This represented one instance of an unfortunate pattern: it was the fourth time since 1990 that sudden shocks have undone years of progress toward reducing poverty. The country has the third lowest per capita income in Latin America and the Caribbean. It is among the poorest countries in the Western Hemisphere, and a large share of its population is vulnerable and exposed to regular shocks. PAGE 60 Nearly one in six Hondurans (16.5 percent) live on less than US$PPP 1.90 per day, one of the highest poverty rates in Latin America. In 2018, using national official poverty lines, 48.3 percent of the population of more than 9.2 million lived below the poverty line, and 22.9 percent lived below the extreme poverty line. Official data for 2018 shows that rural poverty increased, with 60.1 percent of the rural population living below the rural poverty line. The rural poor rely largely on low-productivity agricultural activities for income, have limited access to basic services, and are highly vulnerable to natural and macroeconomic shocks. APPROACH In response to these challenges, World Bank Group (WBG) programs in Honduras have focused on targeting the vulnerable poor in rural areas by supporting activities that boost competitiveness and foster inclusive growth. The WBG has been a major partner in increasing social protection targeting and coverage; supporting local communities with social and economic opportunities, particularly A fisherman fixing his net, La Ceiba y Corozal, Honduras. Photo: Jessica Belmont /World Bank PAGE 61 in the agriculture sector; and improving access to markets and credit as well as to basic infrastructure services. The WBG has also advocated for strengthened development roles for women and Indigenous peoples, including managing agribusinesses and leading citizen security initiatives. Engagement in Honduras also includes efforts by the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), which work closely with the Bank to explore synergies and deepen the impact of ongoing and future programs in the country. The Corredor Seco Food Security Project (Proyecto de Seguridad Alimentaria en el Corredor Seco, PROSASUR), funded by a Global Agriculture and Food Security Program (GAFSP) grant, is mainly aimed toward the extreme poor and subsistence farmers, supporting them in increasing productivity, diversifying into higher value crops, pursuing off-farm income-generating activities, and improving nutrition and hygiene in their households. It also trains and strengthens local producer groups to obtain the necessary scale to integrate more competitively into markets. Afrodescendant at La Ceiba y Corozal, Honduras. Photo: Jessica Belmont /World Bank PAGE 62 RESULTS Enhancing Rural Productivity and Competitiveness The Rural Competitiveness Project (COMRURAL) has helped to increase productivity and competitiveness among small-scale producer organizations by facilitating their engagement in productive alliances. The project has contributed toward making value chains not only more competitive, but also more inclusive for vulnerable groups such as youth, women, and Indigenous groups, creating new and higher-skilled employment opportunities. From 2008 to 2020, this WBG- financed project has supported 89 business plans, strategic investments needed to improve competitiveness, and linkages in productive alliances. These investments have resulted in an estimated 28 percent increase in incomes among producer organizations, benefiting 7,200 rural families, of which 49 percent are Indigenous to the Lenca and Maya-Chorti ethnic groups. The COMRURAL Project goes beyond improving production, however. Other results achieved include the following: • Sixty percent of project-supported rural producer organizations now export their products; 89 percent implement gender strategies; 89 percent implement generational strategies for sustainability; and 80 percent have designed Social Responsibility Plans. Each dollar invested by COMRURAL as part of a productive alliance has leveraged US$ 1.5 from private financial institutions (around US$12.5 million in total), increasing the financial inclusion and creditworthiness of small-scale farmers. COMRURAL- supported producers grow around 30 percent of all specialty coffee exported by Honduras to the United States, Europe, and Asia. • Since initiating implementation in October 2018, as many as 6,462 households (54 percent of the target) have directly benefited from project activities; 2,339 PAGE 63 of these households (36 percent) are led by women. The project helps 3,949 households to implement their food security plans (66 percent of the total target); 2,073 households to implement hygiene plans (52 percent of the target); and 2,469 children under the age of two (82 percent of the target) to attend the monitoring program. By encouraging producers from the Food Security project to transition to commercial farming operations, such as those supported by COMRURAL, the World Bank Group continues to promote the sustainable development and scaling-up of family-based agriculture. Strengthening Key Infrastructure and Improving Access to Basic Infrastructure Services From 2006 to 2016, the Rural Infrastructure Project improved access, quality, and sustainability of basic infrastructure services, including 113 water and sanitation projects and 4,893 latrines, benefiting 20,751 families in 112 communities. In addition, 8,550 rural electrification projects were financed, of which 98 percent were solar photovoltaic energy systems, and 844 kilometers of power lines were rehabilitated, benefiting 282 communities (approximately 84,220 people). The project also contributed to the rehabilitation of 666.93 kilometers of rural roads and provided adequate routine maintenance mechanisms for 593 kilometers. Since initiating implementation in October 2018, as many as 6,462 households have directly benefited from project activities. PAGE 64 Afrodescendents at La Ceiba y Corozal, Honduras. Photo: Jessica Belmont /World Bank Disaster Risk Management In supporting the government’s efforts to strengthen capacity for integrated disaster risk management at the municipal and national levels, from 2013 to date the Disaster Risk Management Project has benefited more than one million people and contributed to the design and adoption of disaster risk management and emergency response plans by 18 participating municipalities. The project also supported 34 cities in improving livability, sustainability, or management. Strengthening Land Rights • By supporting the government’s efforts to improve governance and transparency in land administration, from 2011 to 2017 the Second Land Administration Project worked to strengthen property rights and secure land tenure by upgrading the Unified Registry System for land titling, reducing the processing time for registration of land titles, and issuing more than 50,000 PAGE 65 land titles in rural areas. Setting a historic precedent, three collective land titles were granted to territorial councils of the Miskito people (Katainasta, Auhya Yari, and Finzmos), securing the property rights of 78 Miskito Indigenous communities. • In addition, 117 Indigenous community leaders, of whom 48 were women, were trained on alternative conflict resolution mechanisms, and 109 Indigenous community leaders, of whom 40 were women, were trained on territorial and natural resource management. Enhancing the Capacity of Local Governments to Deliver Services • The WBG has continued to support Honduras in its efforts to strengthen decentralized structures for water and sanitation. The Water and Sanitation Sector Modernization Project (Proyecto de modernización del sector de agua y saneamiento, PROMOSAS) supported the decentralization of water and sanitation services in eight municipalities, with populations between 40,000 and 300,000, by establishing autonomous municipal water and sanitation service providers that collect revenue and provide increased coverage. • Infrastructure works financed by PROMOSAS directly benefited 13,167 families with improved water services and 3,786 families with improved sanitation. Overall, these utilities improvements indirectly benefited about 650,000 people (108,000 families) with improved water and sanitation services. In addition, the project supported the development of five-year business plans to guide municipal service providers, including activities aimed at protecting watersheds to ensure continued access to quality water. This is especially important as the impact of climate change on water resources has become increasingly acute in Honduras. PAGE 66 Overall, these utilities improvements indirectly benefited about 650,000 people (108,000 families) with improved water and sanitation services. BANK GROUP CONTRIBUTION As of November 2019, the active World Bank Group portfolio in Honduras equaled US$ 1.07 billion. The International Development Association (IDA) portfolio consists of six projects, totaling US$ 258.95 million (including US$ 228.95 million in IDA commitments, plus US$ 30 million from the GAFSP). The portfolio spans a number of sectors, including social protection, rural competitiveness, and disaster risk management and is complemented by trust funds and analytical and advisory services focused on governance, education, and climate-change resilience. The IFC’s active committed portfolio totals US$ 403.54 million (US$ 190.07 million from IFC’s own account, and US$ 213.47 million mobilized from other lenders and investors, including IFC’s asset management company). Most of IFC’s activities have focused on the financial and infrastructure sectors, particularly in renewable energy. MIGA has US$ 265.42 million in gross exposure in three projects, focusing on renewable energy and transport. PARTNERS The WBG has established productive relationships with other donors in the country to address key development challenges. A number of partnerships foster close collaboration in various sectors, including: (i) coordinating with PAGE 67 the Inter-American Development Bank (IDB) to support the conditional cash transfer social protection program Bono Vida Mejor, which benefits more than 270,000 extreme poor households nationwide; (ii) leveraging with USAID and partnering with the GAFSP to implement a trust fund benefiting 12,000 households as part of the Alliance for the Dry Corridor; (iii) partnering with Swiss Cooperation and the Food and Agriculture Organization to finance and support COMRURAL in strengthening agricultural value chains and diversifying rural economies; (iv) supporting Open Government Initiatives, particularly the Construction Sector Transparency Initiative and Open Government Partnership, to work with government, civil society, and USAID; and (v) partnering with the Global Partnership for Education in developing the 2017–2030 Education Sector Strategy. The WBG also engages with the donor community to examine how best to support the government’s initiatives to strengthen protection of Indigenous peoples’ rights. “I was born in a generation where most of the producers studied until the sixth grade. Today, many of our children reach high school. We have to continue working so that in the future they can make the leap to university.” PAGE 68 BENEFICIARIES Omar Rodríguez is from the municipality of Las Capucas, Copán, where one of the best-known coffee cooperatives in the country, recognized not only for the quality of its product but also for its export capacity, is located. For many small producers like Omar, the improvements made thanks to COMRURAL’s support have changed their lives. “All of this is a dream come true.” The coffee cooperatives participating in COMRURAL have increased exports by 12.8 percent (equivalent to US$ 6.2 million); and with the support of the project in obtaining Fair Trade certification, investments in social responsibility activities, such as medical care, schooling, and reforestation of forests and watersheds, have increased by over US$ 620,000. “Coffee improves producers’ incomes, quality of life, and education,” comments Omar. “I was born in a generation where most of the producers studied until the sixth grade. Today, many of our children reach high school. We have to continue working so that in the future they can make the leap to university.” The World Bank, through its support to COMRURAL, will continue to work toward this goal. Rita Batres, beneficiary of the Disaster Risk Management project in Honduras. Photo: COPECO PAGE 69 Rita Batres lives in San Francisco de Yojoa, in a neighborhood that experienced flooding with every rainfall. “It was really worrisome whenever it rained here—because our houses would flood every time.” The work of the Disaster Risk Management project and its implementing unit, the Permanent Contingencies Commission (Comisión de Permanentes Contingencias, COPECO), supported the town’s community-led Local Emergencies Committee in designing and executing a plan to construct a protective barrier on the banks of the Chiquito river. The project directly benefited 1,500 people and indirectly benefited an additional 1,000 people. As Rita declared, “We’ve never had a project like this . . . and now we’re happy that we achieved what we set out to achieve. Now we can sleep peacefully every time it rains.” The World Bank through its support to COPECO will continue to help Honduras’s most vulnerable communities prepare for and mitigate the effects of disasters. “We’ve never had a project like this . . . and now we’re happy that we achieved what we set out to achieve. Now we can sleep peacefully every time it rains.” María Eulogia Izaguirre lives in San Miguelito, in the department of Francisco Morazán. Before participating in PROSASUR, she and her neighbors had little knowledge or resources to improve their children’s growth and nutrition. As she describes, “The household hygiene plan is a really nice program; the volunteers come on the 13th of every month to weigh the babies, to see if our children are gaining weight or staying the same, to make sure they’re growing. It might seem insignificant, but that has a huge impact because none of us have scales in our PAGE 70 homes; we don’t have any way to know. The project is quite necessary. They also teach us how to make sure our children keep growing, how to give them fluids if they need them, how to prepare their food the right way, and it’s really beautiful.” MOVING FORWARD The WBG will continue its partnership with Honduras in line with the Country Partnership Framework 2016–2020 to support government efforts to foster social inclusion, improve conditions for growth, reduce vulnerabilities, and enhance resilience, with crosscutting themes of building institutions and gender equity. The current and new IDA portfolio will continue to address development priorities through investments that build on successful operations in rural competitiveness, water and sanitation, disaster risk management, social protection, and education. This support will be complemented by technical assistance, advisory services, and knowledge products across sectors. The IFC will continue to support the financial and infrastructure sectors, particularly renewable energy, and MIGA will continue its engagement in the renewable energy and transport sectors. The WB, IFC, and MIGA will continue to coordinate closely with each other to explore synergies and catalyze solutions for key development issues, such as renewable energy, transport, and competitiveness. PAGE 71 Local team working on a school in one beneficiary community. Photo: World Bank PAGE 72 HONDURAS ACHIEVING SAFER MUNICIPALITIES IN HONDURAS TACKLING CRIME AND VIOLENCE THROUGH SOCIAL INCLUSION The Government of Honduras has acted to address the nation’s high levels of crime and violence by moving to reduce local pockets of urban violence. Focusing on selected municipalities, the government has engaged in new approaches to improving the violence prevention capacity of national and local authorities and to ameliorating risk factors for crime and violence in targeted communities. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 23.97 US$ 2,350 9,587,522 44,720 IBRD/IDA lending commitments approved in FY19: 155 million PAGE 73 New and supplemental projects approved in FY19: 3 CHALLENGE From 2008 to 2016, Honduras had the highest homicide rate in the world. Its national homicide rate hovered around 80 to 85 per 100,000 inhabitants, more than 13 times the global average (6.2) and nearly three times the average for the Latin America region (28.5). San Pedro Sula, a city in northwestern Honduras, was ranked the most violent metropolitan area in the world, with a peak homicide rate of 187 per 100,000 inhabitants in 2014. Children and youth were recruited by gangs, and the value of disability-adjusted life years lost to crime and violence was estimated at 1.3 percent of GDP. In 2013, poverty and extreme poverty levels soared (reaching 65 percent and 43 percent, respectively), and the economic costs of violent crime were estimated to be about US$ 900 million (about 10 percent of the country’s GDP). Gender inequality — manifested in lower female economic participation (34 percent) relative to other countries in the region and high levels of femicide — indicated a high prevalence of gender-based violence. Residents gathering in one beneficiary community . Photo: World Bank PAGE 74 APPROACH The Safer Municipalities Project (SMP), the first standalone Bank-financed operation globally with the specific objective of violence prevention, acknowledged that Honduras’s crime and violence was a national-level problem that tended to manifest locally in pockets of urban violence. Since the incidence and drivers of crime and violence differ substantially across municipalities and communities, the program called for a differentiated response at the local level. Building on national and international good practice, the program was based on the belief that municipal governments and communities are best equipped to develop customized responses to the specific risk factors for crime and violence present at the municipal and community levels. It further aimed to strengthen the capacity of municipal governments to plan and manage citizen security in an integrated manner using evidence-informed practices. Managed by the Sub-Secretariat of Prevention, the program sought to serve as an “umbrella” to guide, coordinate, promote, oversee, and learn from integrated approaches to citizen security at the municipal level. The project pioneered community involvement in building infrastructure, which both provided short-term jobs for communities facing high rates of unemployment and conferred a sense of ownership, fostering the willingness to maintain resulting infrastructure in good condition. It strengthened the capacity of local governments by having them include a violence prevention component in their Municipal Coexistence and Citizen Security Plans. PAGE 75 SMP built on lessons learned from the Bank-financed Honduras Barrio- Ciudad Project (2005–13), which incorporated a Crime Prevention Through Environmental Design (CPTED) approach, while also adding several new features. First, SMP strengthened the capacity of the national government to coordinate violence prevention activities across ministries and with local governments. Second, it strengthened the capacity of local governments by having them include a violence prevention component in their Municipal Coexistence and Citizen Security Plans, basing decisions on high-quality and geo-referenced data as well as multi-stakeholder governance structures. Third, it strengthened the menu of subprojects available for funding by adding social development interventions that either were not included in or were carried out in a more ad hoc manner under the Barrio Ciudad Project. Examples include small-scale development Local team and residents in one beneficiary community. Photo: World Bank PAGE 76 projects such as street lighting and municipal roads. “Safety walks” helped officials identify insecure areas and crime patterns to determine the infrastructure and social interventions needed. Because building social capital was a crosscutting theme for this project, with a strong focus on gender and social inclusion, the project structure was heavily weighted toward local teams. In all targeted communities, psychosocial support, school-based violence prevention, family support, situational violence prevention, and community-based interventions were implemented. In all targeted communities, psychosocial support, school-based violence prevention, family support, situational violence prevention, and community-based interventions were implemented. The focus on engaging women as active and effective change agents and leaders in SMP was important to creating space for several of the social interventions, including the Strong Families/Familias Fuertes program, addressing family power dynamics, and the adaption of SASA!; both efforts address the drivers and behavioral manifestations of gender-based violence. RESULTS The project benefited more than 30,000 people in nine communities, reducing crime rates, improving safety in schools, and building trust within communities. Project investments in integrated urban upgrades, social development, and access PAGE 77 to justice were aimed at reducing individual, family, school, and community risk factors for violence. A significant reduction in crime rates, including homicides, robbery, theft, sexual assaults, and drug trafficking, was observed during the project implementation of March 2013 to December 2018. Other key results included: • The Ruta Segura (Safe Passage) now connects three beneficiary neighborhoods in Choloma, the third largest city in Honduras. It is a rare example of large infrastructure that intentionally facilitated collective action and social contact, which positively affected residents’ perceptions regarding safety. Before the ruta segura was paved, people did not travel between the three communities: outsiders were regarded with suspicion and risked violent assault, taxis would not enter, and travel at dusk or night was impossible. • Overall, 37 small infrastructure projects were carried out, and more than 22,000 people participated in social prevention programs. As the local teams gained more trust locally, they were able to address topics that would otherwise have been deemed too sensitive, such as gender relationships and masculinity. • In selected communities, 300 at-risk youth reported improved self-esteem after receiving temporary jobs and psychosocial support. • A perception study in the three beneficiary communities reported that between 89 and 98 percent of residents felt the project had helped improve security. Satisfaction with infrastructure improvements was high; on a scale of 1 (totally unsatisfied) to 10 (very satisfied), ratings ranged from 8.7 to 9.7. Students in the fourth to ninth grades at the targeted schools reporting an improved school climate increased from 42.5 percent at the baseline in 2015 to 76.6 percent in 2018, significantly surpassing the target of 51 percent. PAGE 78 Local team and residents in one beneficiary community. Photo: World Bank BANK GROUP CONTRIBUTION The World Bank, through the International Development Association, provided a US$ 15 million loan to finance this project. The government’s 2014 decision to limit its public debt by establishing budget ceilings for externally financed projects significantly affected the capacity to commit and disburse the full amount. (The final amount disbursed was US$ 9.77 million.) PARTNERS As responsibility for violence prevention does not sit exclusively with one ministry, it was necessary to coordinate across different institutions with varying mandates. Honduras’s Ministry of Finance, Ministry of Security (Instituto de Desarollo Comunitario, Agua y Saneamiento – Fondo Hondureño de Inversión Social, IDECOAS-FHIS) which had gained valuable experience and established strong relationships during the previous Barrio-Ciudad project, was chosen as project’s implementing agency. The Secretariat of Security (Secretaría de Seguridad, SEDS) PAGE 79 oversaw coordination at the national level. External partners also stepped in to support the planning and prioritization processes put in place by SMP. In El Progreso, for example, World Vision supported participatory planning that now feeds into the annual budgeting process for the municipality. As an entry point for promoting violence prevention, the SMP task team also partnered with the Honduran Ministry of Education. This collaboration further expanded to German Development Cooperation for school renovations and teacher educations. BENEFICIARIES In the beneficiary community Choloma, youth leader Bryan Argueto said his community, 11 de Abril, used to be a no-go zone: Our neighborhood was a very violent place. We had a homicide rate in the 90s here, and with the prevention projects it has gone down a lot. So many of us were in the gangs, living off of extortion or even as assassins. You would see people using drugs, or mistreating their children, out in the open. They [SMP] worked a lot with us on our attitudes, especially the Strong Families program. Now our community has a much better image. Before, we were a remote, abandoned place. Now people from other neighborhoods want to know how we achieved what we did here. Palermo community leader Sandra Bardales underscored how involving some of the more excluded groups — older residents, disengaged youth, and people with disabilities — in small works made them feel part of the community in a way they hadn’t experienced before: You could see that the señoras [and] people with disabilities were so happy to be working. They felt so good. There is a boy who doesn’t have any arms and he worked a whole month. He got paid and is so content that he did that. PAGE 80 Local team and residents in one beneficiary community. Photo: World Bank MOVING FORWARD The leaders of the communities in El Progreso continue to mobilize partnerships with donors and with the municipality. Leaders who worked with SMP are now seen as points of reference in their neighborhoods and continue to advocate on their behalf. World Vision has begun supporting participatory processes to prepare ten-year community development plans that can orient municipal investments, and it is providing training in microenterprise development and parenting classes through local churches. The municipality has also institutionalized the SASA! program that uses community activism to change the harmful social norms associated with violence against women and girls. SASA! now sits under the national Department of Social Development and will soon be active in all neighborhoods in El Progreso. PAGE 81 Bono Vida Mejor Conditional Cash Transfer Program Beneficiaries in the Department of Intibucá. Photo: Secretariat of Development and Social Inclusion. PAGE 82 HONDURAS PROVIDING CONDITIONAL CASH TRANSFERS TO IMPROVE ACCESS TO HEALTH SERVICES AND EDUCATION FOR HONDURAS’S EXTREME POOR Honduras established a new delivery system for its Conditional Cash Transfer Program, providing cash transfers to 234,000 extremely poor households in rural areas, 90 percent of which are headed by women. The new system helped reduce the nation’s poverty gap and increased school enrollment. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 23.97 US$ 2,350 9,587,522 44,720 IBRD/IDA lending commitments approved in FY19: 155 million PAGE 83 New and supplemental projects approved in FY19: 3 CHALLENGE Honduras’ modest economic growth over the past 40 years could not keep pace with population growth, resulting in high levels of poverty and inequality. In 2010, Honduras was deemed one of the poorest and most unequal countries in the region, and it was threatened by global financial and internal political crises that exacerbated poverty levels and further affected poor households’ ability to smooth consumption and invest in human capital. Between 2005 and 2009, poverty rates were reduced from 65 to 59 percent, and extreme poverty rates were reduced from 45 to 36 percent, but high levels of poverty continued. Households in extreme poverty faced difficulties smoothing consumption, leading them to use negative coping strategies, such as taking children out of school and encouraging them to work or reducing health care visits, which affected their human capital development. Similarly, stark inequities were observed in children’s health and education indicators: 43 percent of children under five in the poorest quintiles experienced malnutrition, while only 5 percent of children under five in the richest quintiles did so; school enrollment among children ages 12 to 14 was 65 percent for the poorest quintiles, but 92 percent for the richest. Between 2005 and 2009, poverty rates were reduced from 65 to 59 percent, and extreme poverty rates were reduced from 45 to 36 percent, but high levels of poverty continued. PAGE 84 Bono Vida Mejor Conditional Cash Transfer Program Beneficiaries in the Department of Intibucá. Photo: Secretariat of Development and Social Inclusion. APPROACH Under the Social Protection Project, the World Bank supported the establishment of Honduras’s conditional cash transfer program as well as the Unique Registry of Participants. The Conditional Cash Transfer Program (initially named Bono 10,000 and later renamed to Bono Vida Mejor), provides cash to extremely poor households, with the amount provided dependent on the number and age of children in the household. As of 2015, the estimated transfer received per household was L 5,500 (US$ 225 equivalent) per year, with a maximum of L 10,000 (approx. US$ 500 equivalent). Health grants were provided to children ages newborn to five years old who completed childhood immunizations, and education grants were provided to children to attend primary and lower secondary school. The program also established systems essential for its successful delivery, including a management information system (MIS); a compliance verification PAGE 85 mechanism; the social registry for poverty targeting, known as the Unique Registry of Participants; a grievance redress mechanism; and an improved payment mechanism. RESULTS Establishment of the robust social registry known as the Unique Registry of Participants led to the registration of 4.6 million individuals by December 2019, surpassing the target of 4.3 million registrations. The creation of that registry helped support the following results over the project’s implementation period from 2010 to 2018: • As of June 2018, the conditional cash transfer program has been firmly established as the Government of Honduras’s flagship social assistance program, providing cash transfers to 234,000 households. During the highest point of coverage, the program covered 8,700 households among Indigenous and Afro-Honduran communities, and more than 90 percent of all program grantees were women. • Although the program was not explicitly designed to empower women, female beneficiaries, relative to female nonbeneficiaries, were more likely to make decisions with respect to health, education, daily purchases, and asset purchases for their homes. Given that 90 percent of the grantees were women, it is expected that the program also served to increase their empowerment within the home. • Randomized impact evaluations conducted in 2013 and 2017 showed significant positive results in reducing poverty and improving the health and education outcomes of children in beneficiary households. Measured by the national poverty line, the 2017 impact evaluation found that the poverty rate PAGE 86 Bono Vida Mejor Conditional Cash Transfer Program Beneficiaries in the Department of Intibucá. Photo: Secretariat of Development and Social Inclusion. of cash transfer beneficiaries was reduced 17 percent below the poverty rate of 71.8 percent among non-participating poor households; the poverty gap was reduced by 27 percent. Of children under five benefiting from the program, only 9 percent were classified as underweight; of children in the same age group not receiving transfers, 35 percent were underweight. Primary school enrollment among program beneficiaries increased by 7 percent, and enrollment in upper secondary school (sixth to ninth grades) increased by 10 percent. In addition, the number of children engaged in child labor declined by 20 percent. PAGE 87 BANK GROUP CONTRIBUTION The World Bank, through the International Development Association (IDA), provided credits totaling US$ 72.72 million. The original Social Protection Project, approved on June 29, 2010, was financed by IDA credit in the amount of US$ 35.82 million. That project received two additional credits from IDA: the first for US$ 11.9 million, approved on August 8, 2013; and the second for US$ 25 million, approved on March 31, 2015. PARTNERS The Program is implemented by the Sub-Secretary of Social Integration under the Ministry of Development and Social Inclusion, while the Unique Registry is managed by the National Center for Information on the Social Sector. In addition, the Bank collaborated very closely with the Inter-American Development Bank (IDB), which co-financed the program. All recommendations, policy discussions, and technical assistance provided by the World Bank was developed jointly with the IDB, leading to an effective and impactful engagement with the government. BENEFICIARIES Regarding the impact of the conditional cash transfer program on their living conditions in Paraíso Zamorano, Cortes y Comayagua, participants in focus group discussions offered the following comments: “We now have a better life; we have improved our living conditions.” Participant in a focus group in Cortes “Before, the floor of my house was made of mud, but now we have a ceiling, a floor made of cement, as well as a latrine.” Participant in a focus group in Comayagua PAGE 88 MOVING FORWARD Hondurans continue to experience the impact of rural poverty on human development outcomes. Honduras has a Human Capital Index (HCI) of 0.49, a ranking of 103 out of 157 countries, among the lowest in the Latin America and Caribbean region. This HCI means that a child born in Honduras today is expected to achieve only 49 percent of his or her full potential productivity by age 18. In November 2018, the Government of Honduras issued an executive decree committing to annually allocate 10 percent of the Solidarity and Social Protection Fund for the Reduction of Extreme Poverty (Fondo de Solidaridad y Protección Social para la Reducción de la Pobreza Extrema) to the program, an amount expected to cover approximately one-third of the annual cash transfers. (The amount of this allocation is proportional to the value-added taxes collected, so the annual amount is not fixed; 10 percent of the fund is estimated to be approximately US$ 20 million to US$ 25 million a year). In November 2019, the IDA-financed Social Protection Integration Project in the amount of US$ 30 million became effective. This new project aims to unify rural and urban components of the conditional cash transfer program and to standardize the procedures, rules, and delivery systems of the national conditional cash transfer program. PAGE 89 Sustainable Production Systems and Biodiversity Project. Photo: Jessica Belmont/World Bank. PAGE 90 MEXICO CONSERVING MEXICO’S MEGADIVERSE ECOSYSTEMS THROUGH BIODIVERSITY FRIENDLY SUSTAINABLE AGRICULTURE Mexico increased the connectivity of its biological corridors, succeeding in conserving more than 81,000 hectares of land through biodiversity friendly practices and benefiting 182 producer groups and 12,000 producers (28 percent of whom are female). This first effort by Mexico to conduct biodiversity monitoring of productive systems helped to create 42 business alliances with buyers and established standards and biolabels for biodiversity friendly goods. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 1,220.70 US$ 9,180 126,190,788 1,964,375 IBRD/IDA lending commitments approved in FY19: 500 million PAGE 91 New and supplemental projects approved in FY19: 1 CHALLENGE Mexico is classified as one of the top five most megadiverse countries, representing 12 percent of global biodiversity in just 1.5 percent of global land surface. Mexico’s Mesoamerican Biological Corridor, consisting of some of the country’s southern states, is considered a global biodiversity hotspot that provides habitat for many species either threatened or at risk of extinction. About 50% of Mexico’s land was under agricultural production, and over half of all species were found in productive landscapes. In 2012, a top government priority was to align agricultural production and environmental conservation objectives. Scope had been demonstrated for working with producers to help reduce fragmentation of habitats, increase socioeconomic connectivity, and ensure long-term sustainability of productive landscapes. Roughly 70 percent of forests belonged to rural communities lacking access to markets and with insufficient knowledge and capacity related to drivers of deforestation and land degradation. About 50 percent of Mexico’s land was under agricultural production, and over half of all species were found in productive landscapes. APPROACH The Sustainable Production Systems and Biodiversity Project (SPSB) aimed to conserve and protect nationally and globally significant biodiversity in Mexico by mainstreaming biodiversity friendly management practices in productive landscapes in priority biological corridors. To this end, technical groups provided PAGE 92 Honey bee producers, Chiapas, México. Photo: Jessica Belmont/World Bank. trainings and technical assistance to participating producer associations and their linked producer groups. Associations also received matching grants for approved business plans to finance investments in subprojects, including the adoption of biodiversity friendly (amigables con biodiversidad AB) practices and/or processing of AB good and services. Additionally, Technology Transfer Units (UTTs) were established to conduct research, development, and innovation in sustainable production practices, with one UTT for each productive system, transferring knowledge to technical service providers responsible in turn for building producer associations’ capacity. The project also fostered business alliances between buyers and associations for bio-labeled products, including establishing AB product standards for the design and use of market differentiation tools and for third-party verification of forestry, coffee, honey, and cocoa bio-labels. Efforts to promote collaboration and knowledge sharing across institutions in the Mesoamerican Biological Corridor PAGE 93 countries (including Belize, Costa Rica, El Salvador, Guatemala, Honduras, some of Mexico’s southern states, and Nicaragua) contributed to the development of a Mesoamerican regional program for sustainable rural production. RESULTS Between August 2012 and April 2019, the program achieved the following results: • 81,462 hectares of land were brought into productive landscapes under AB production. • 182 producer groups participated in AB business plans, and 12,956 producers applied AB production practices. • Six differentiated bio-label instruments were developed, responding to positive market demand and consumers’ willingness to pay more for products with AB attributes. • Approximately 42 business-buyer alliances were established for marketing differentiated products. • As of April 2019, 24.4 percent of all sales were for products produced under AB practices; cacao, coffee, and honey reported the highest gains as they had better market opportunities. • 51 targeted subareas (classified by vegetation types, habitat types, and species) within territories of the project received high-level biodiversity monitoring, and five pilot producer associations (communities) received equipment and trainings for mammal (including jaguar) and avian monitoring, a first for Mexico in terms of biodiversity monitoring. PAGE 94 Coffee producers, Chiapas, México. Photo: Jessica Belmont/World Bank. In addition, an exhibition at the Museum of Sciences at Universidad Nacional Autonoma de Mexico was held from November 2018 to April 2019, reaching 60,000 visitors, including school children, university students, and many other groups (http://www.universum.unam.mx/exposiciones/t/producir-conservando). The exhibit demonstrated how the project developed AB practices in Mexican communities, and it informed the wider public on the value of knowledge about and conservation of national biocultural diversity and on practices and productive activities constituting viable options for promoting sustainable development. BANK GROUP CONTRIBUTION The World Bank, through the International Bank for Reconstruction and Development (IBRD), administered a grant totaling US$ 10.8 million from the Global Environment Facility (GEF) to finance this project. PAGE 95 PARTNERS The project followed up previous Bank-financed operations in Mexico, initiated in 1996, focused on mainstreaming biodiversity conservation in productive landscapes. In addition to the IBRD contribution, other project financing included US$ 7.18 million from the Government of Mexico and private sector financing from (i) Fomento Social Banamex (approximately US$ 1 million); and (ii) the Financial Institution for Rural Financing (Financiando el Desarrollo Del Campo, FINDECA) (US$ 1.63 million). The experience, capacity, and commitment of the implementing agency, the National Commission for the Knowledge and Use of Biodiversity (Comisión Nacional para el conocimiento y uso de la Biodiversidad), were key factors in the project’s success, as was the partnership between the Bank, the GEF, and government entities, including the Ministry of Environment and Natural Resources (Secretaría del Medio Ambiente y Recursos Naturales), the Ministry of Agriculture and Rural Development (Secretaría de Agricultura y Desarrollo Rural), Farmers, Chiapas, México. Photo: Jessica Belmont/World Bank. PAGE 96 and others. The private financing provided by Fomento Social Banamex and FINDECA was also critical to enabling the Producer Associations to obtain credit. More than 10,000 producers completed at least one training program on AB practices, and pilot communities gained knowledge and equipment required to monitor biodiversity. BENEFICIARIES The project had a positive impact on public and private entities working to protect biodiversity throughout the Mesoamerican Corridor. Smallholder producers, primarily rural communities, including women and Indigenous Peoples, particularly benefited, as their establishment of AB business plans and investments in AB practices translated to higher profits for their products and/or services. More than 10,000 producers completed at least one training program on AB practices, and pilot communities gained knowledge and equipment required to monitor biodiversity. MOVING FORWARD The objectives of the project remain aligned with Mexico’s National Biodiversity Strategy on “productive use and sustainable management” and its Action Plan 2016–2030. Several recently approved Bank-financed projects, including the Sustainable Productive Landscapes Project (approved March 30, 2018) and the Strengthening Entrepreneurship in Productive Forest Landscapes Project PAGE 97 (approved January 28, 2018), build on the SPSB’s goals of strengthening sustainable management of productive landscapes and increasing economic opportunities for rural producers in priority areas of Mexico. The Bank continues to play a key role in fostering integrated landscape management for sustainable rural economic development in Mexico. Ecoturism El Jorullo, México. Photo: Jessica Belmont/World Bank. PAGE 98 MEXICO INTEGRATING COASTAL WATERSHED CONSERVATION IN MEXICO A COLLABORATIVE EFFORT TO CONSERVE BIODIVERSITY, MANAGE LAND SUSTAINABLY, AND BUILD CLIMATE-CHANGE RESILIENCE Mexico brought about effective collaboration among participating institutions to improve Coastal Watershed Conservation management throughout these sensitive areas of the country. Government efforts included protecting more than 1.7 million hectares of forested area; improving management of productive landscapes in watersheds covering 35,784 hectares; strengthening watershed socioecological resilience to climate change and other potential future environmental and social perturbations; developing six Integrated Watershed Action Plans (IWAPs) to inform conservation activities and sustainable agricultural practices; and guiding six local partners toward incorporating better land management into their practices. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 1,220.70 US$ 9,180 126,190,788 1,964,375 IBRD/IDA lending commitments approved in FY19: 500 million PAGE 99 New and supplemental projects approved in FY19: 1 CHALLENGE Mexico’s rich biodiversity and livelihoods derived from healthy watershed ecosystems were under threat by changing practices in land-use, including unsustainable slash-and-burn agriculture, rapid coastal development, and other human activities. The National Geographic and Statistics Institute (Instituto Nacional de Estadística y Geografía, INEGI) of Mexico has estimated that 35 percent of the country’s forests have vanished over the past two decades, contributing to the endangerment of 2,606 species. Across the country’s Gulf of Mexico and Gulf of California regions, unsustainable land-use practices undermined aquatic ecosystems, with increased runoffs and wastewater contaminating these vital natural resources. Compounding these challenges for Mexico were severe changes in climatic patterns, notably strong and increasingly unpredictable storms and winds. In 2013, the National Water Commission (Comisión Nacional del Agua) considered 38 percent of Mexico’s rivers to be highly polluted. Coffee cultivation in the coastal watershed. Photo: © Santiago Gibert./World Bank. PAGE 100 APPROACH The Coastal Watersheds Conservation in the Context of Climate Change Project in Mexico pioneered a “landscape approach” to watershed ecosystem management to help build resilience to climate change and curb ecosystem degradation. A landscape approach signifies a wholistic view of watersheds, from the mountains in which they originate to the coasts where they meet the sea, and involving communities and institutions that call these watersheds home. Achieving harmonious collaboration among the four institutions implementing the project’s watershed activities was critical for success and a testament to the Bank’s convening power to drive application of the landscape approach. This smooth collaboration paved the way for the successful deployment of two endowment funds that together financed conservation of protected areas and, through subprojects, adjacent sustainable agribusinesses. RESULTS Employing the landscape approach, the Coastal Watersheds Conservation in the Context of Climate Change Project achieved several key outcomes between December 2013 and June 2019: • It strengthened the management and monitoring of 1,748,204.73 hectares of protected area across watersheds in the Gulf of California and in the Gulf of Mexico. • Two mutually supporting endowment funds—the Fondo para Cuencas Costeras (FCC) and the Biodiversity Endowment Fund—were established, the accruing interest from which will finance conservation and livelihood activities beyond the life of the project. PAGE 101 • The project helped raise $28.6 million for a permanent endowment fund for protected areas (achieving 100 percent of its target). • It supported the sustainable management of 35,784 hectares within watersheds, including through Payment for Ecosystem Services (PES, a management tool for conservation coupled with strategic compensation to further incentivize best practices) and agroecosystem and sustainable forest management subprojects, in accordance with IWAPs, surpassing the end- target of 18,696 hectares. • Thirty-two agroecosystem subprojects, covering a total area of 23,572 hectares, were developed. These subprojects, 90 percent of which continued operations beyond the life of the project, engaged ventures such as honey production, shade-grown coffee production, and sustainable cattle ranching. • The project established one new Protected Area in the Gulf of California, totaling 354,849 hectares. • Enhanced watershed management prevented a total of 5.53 metric tons of CO2 from entering the atmosphere and saved an estimated 11,743 hectares from deforestation. • The Jaguar’s Western Corridor along the Gulf of California was established, spanning 12,212 hectares of protected habitat. • Training sessions between 2014 and 2019 enabled community members to monitor biodiversity via 104 sample points, using remote sensing imagery for flora and fauna identification. • The project delivered 171 water-quality training workshops, employing the Global Water Watch methodology, resulting in 106 certified monitors and PAGE 102 3,433 registries on physical, chemical, and biological variables related to water quality, including E. coli levels. • In total, the project financed 1,669 workshops, attended by 16,173 participants (6,585 women and 9,588 men), 22.2 percent of whom were Indigenous peoples. Training sessions between 2014 and 2019 enabled community members to monitor biodiversity via 104 sample points, using remote sensing imagery for flora and fauna identification. Community biodiversity and water monitoring. Video: Cooperativa AMBIO Programa Scolel’te. PAGE 103 BANK GROUP CONTRIBUTION The World Bank, through a Global Environment Facility (GEF) grant, provided financing in the amount of US$ 39.52 million. The grant was successfully executed in the following manner: Creation and Consolidation of Protected Areas (US$ 20.349 million, 51.4 percent of the total grant); Promoting Sustainability within Watersheds (US$ 17.096 million, 43.2 percent of the total grant); Enabling Adaptive Management by Strengthening Monitoring Capacities (US$ 439,000, 1.1 percent of the total grant); Innovative Mechanisms for Inter-Institutional Collaboration and Promoting Social Participation (US$ 979,000, 2.7 percent of the total grant); and Project Management (US$ 655,000, 1.8 percent of the total grant). C6 Project Partners and the landscape approach: Where they operate along a watershed and what they do. PAGE 104 PARTNERS Mexico’s Watershed Conservation efforts are built on strong partnerships. From the project’s onset, the Technical Project Committee — composed of members from all four implementing partner agencies: the National Commission of Protected Areas (Comisión Nacional de Áreas Naturales Protegidas), the National Forestry Commission (Comisión Nacional Forestal), the National Institute of Ecology and Climate Change (Instituto Nacional de Ecología y Cambio Climático), and the Mexican Fund for the Conservation of Nature (Fondo Mexicano para la Conservación de la Naturaleza) — led an active fundraising and awareness campaign that ultimately proved successful in securing matching finance for the endowment funds (the FCC and Biodiversity Funds) in the amount of US$ 28.6 million. This matching finance included contributions from the Packard Foundation (US$ 4.71 million); the Helmsley Foundation (US$ 1.086 million); the German Development Bank (US$ 12.601 million); the Hydraulic Infrastructure Fund of Sinaloa (US$ 486,000); the Resources Legacy Fund (US$ 100,000); and a few private sector donors, including US$ 189,000 from Braskem-Ides and US$ 346,000 from Materias Primas de Monterrey (presently COVIA); and others. Local people attending one of a series of Jaguar Conservation Workshops, held in early May 2019 in Autlán and Playa Grande in Jalisco, and Acaponeta in Nayarit. Photo: World Bank. PAGE 105 BENEFICIARIES Thanks to the project, we enjoyed the great benefit of sustained finance that allowed us to monitor, learn, and better administer the human and natural capital we are lucky to have. We have learned a lot! Through the project, we have learned to be custodians of watershed resources, changing our worldview of the possibilities for growth and development. The project believed in me; the project believed in my community. Thanks to this trust and to our evolving capacity, the watersheds resources of the Tuxpan River watershed will be sustainably managed for years to come. Thanks to the project, we now believe in a transparent, efficient, and enabling environment that empowers communities to do better and to thrive. Thank you for all your support. —Tomás Guzmás Pérez, Agroproductores Forestales de Zacualpan MOVING FORWARD The landscape approach adopted by the project had clear environmental, social, and economic benefits and caught the attention of the national government and municipalities beyond those initially engaged. The Mexican government has now widely disseminated lessons learned from this innovative watershed-level approach to other local governments. This model of landscape conservation, including the IWAPs, will be shared nationally with the aim of scaling up the experience and approach in other watersheds. PAGE 106 Ecoturism El Jorullo, México. Photo: Jessica Belmont/World Bank. PAGE 107 Beneficiaries enjoying the new and improved water supply infrastructure in subproject in Paso Hondo community, Santo Tomás del Norte municipality, Chinandega department. Photo: Martin Albrecht/World Bank. PAGE 108 NICARAGUA USING THE SUSTAINABILITY CHAIN TO MOVE TOWARD UNIVERSAL ACCESS TO RURAL WATER SUPPLY AND SANITATION SERVICES IN NICARAGUA Over the past decade, Nicaragua has developed an integrated, cross-institutional, multi- stakeholder framework, called the Sustainability Chain. Using this approach to reform the water supply and sanitation sector, Nicaragua has moved toward universal access to water supply and sanitation services in rural areas across the country. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 13.12 US$ 2,030 6,465,513 130,370 IBRD/IDA lending commitments approved in FY17: 145 million PAGE 109 New and supplemental projects approved in FY17: 3 CHALLENGE Nicaragua has made solid progress in the water supply and sanitation (WSS) sector over the past two decades. Once one of the poorest countries in Latin America in the mid-2000s with around 48 percent of the population living below the poverty line, the poverty rate had fallen to around 25 percent by 2016, and the nation had achieved the Millennium Development Goals for access to water supply services. Nonetheless, the country continued to face large disparities in access to WSS between urban areas (98 percent access to water supply and 63 percent to sanitation) and rural areas (68 percent access to water supply and 37 percent to sanitation). This gap was even wider between the Pacific coast and the North and South Caribbean Coast Autonomous Regions, where the majority of Nicaragua’s Indigenous populations live. Lack of infrastructure investments combined with lack of institutional capacity to provide adequate support for operation and maintenance were identified as the main reasons for the gap. A Water Law, passed in 2007, provided a legal framework for the sector, but despite relatively clear guidance on sector regulation, strategic planning, and urban service provision, Left: old sanitation infrastructure at community school. Right: new sanitation infrastructure provided by PROSASR Project. Community Cerro Alegre de Malacatoya, de San José de los Remates municipality, Boaco department. Photo: Eliette Gonzalez/World Bank. PAGE 110 a sector strategy for the rural WSS sector had yet to be defined by the end of the century’s first decade. In addition to these institutional and financial challenges, rural areas are also increasingly affected by the impacts of climate change, with exacerbated water stress in the country’s traditionally dry central highlands, putting additional constraints on the limited availability of water resources. APPROACH To address these challenges, Nicaragua, with support from the World Bank, embarked on a series of projects and analytical work that sought to define a strategy for the rural WSS sector; strengthen the capacity of the lead agency, the Emergency Social Investment Fund (Fondo de Inversión Social de Emergencia, FISE); implement the Sustainability Chain as the guiding institutional framework; and provide financing for infrastructure investments to increase access to rural WSS services. The first Rural Water Supply and Sanitation Project (Proyecto de Agua y Saneamiento Rural, PRASNICA, 2008–2015) contributed to increased access to WSS services in rural areas while defining the institutional framework for rural WSS. The successor project, the Sustainable Rural Water and Sanitation Project (Proyecto de Sostenibilidad del Agua y Saneamiento Rural, PROSASR, 2014–2019), developed the sector further by integrating the Sustainability Chain across different levels of government, strategically strengthening institutional capacities at the national, regional, municipal, and community levels to provide communities with sustainable services. In parallel, the Adaptation of Nicaragua’s Water and Sanitation Sector to Climate Change Project (Proyecto de Adaptación al Cambio Climático para Agua y Saneamiento, PACCAS, 2012–2018) supported Nicaragua in piloting the mainstreaming of climate change adaptation into water resources management and water supply in rural areas to help the country adapt to climate-related challenges and increase the resilience of their rural communities. PAGE 111 RESULTS Through this series of projects over the past fifteen years, culminating in the PROSASR project, which recently concluded in September 2019, Nicaragua established a solid institutional sector strategy that leverages all levels of government to provide sustainable WSS services to rural communities across the country. The key framework guiding the sector is the Sustainability Chain, which defines a series of roles for each stakeholder at all levels of government to ensure that rural WSS services are embedded in solid planning, execution, and operation and maintenance phases to ensure the sustainability of services into the future. Specific results of the PROSASR project supporting the Sustainability Chain include: • A sound sector planning approach in which municipalities develop WSS plans that outline existing gaps and set priority actions for the rural WSS sector. • Analytical data collected and curated through the National WSS Information System (Sistema de información de agua y saneamiento rural, SIASAR), utilizing data from all municipalities in the country to allow for coordinated and strategic sector planning; 151 out of 152 municipalities updated for sector planning and decision-making activities in the latest of the triennial SIASAR data updating cycles in 2019. • Community-based WSS committees (Comité de Agua Potable y Saneamiento, CAPS) established to take charge of the planning, supervision, and management of community WSS systems, including a systematized performance matrix to evaluate and strengthen CAPS capacity. The project increased the number of CAPS considered sustainable from 13 percent in 2017 to 89 percent in 2019. PAGE 112 • A strong gender focus in capacity building strategies that resulted in CAPS management board representatives being more than 30 percent women (15 of 74 CAPS had a female president; 48 had a female treasurer). • An integrated support structure across all levels of government — including FISE at national level, regional advisors, municipal WSS teams, and CAPS at the community level — for the planning, preparation, execution, and long- term management phases of each community WSS system. • Targeted tools to support the different project cycles, including a sector-wide implementation manual for rural WSS; a range of training workshops to strengthen institutional capacity across all levels on a broad scale; the above-mentioned SIASAR information system; and Indigenous People Plans specifically supporting Afro-Nicaraguan and Indigenous communities in the Caribbean coast of the country. • Climate-change vulnerability plans developed for and incorporated into the planning process for rural WSS systems. • Targeted hygiene and sanitation behavior-change campaigns, which reached 46,885 persons by 2019. • And, not least, almost 45,000 beneficiaries with sustainable access to water supply and almost 20,000 beneficiaries receiving sustainable access to sanitation as result of the PROSASR’s implementation of 75 subprojects in selected poor rural areas of Nicaragua. PAGE 113 BANK GROUP CONTRIBUTION The World Bank, through the International Development Association (IDA), provided financing in the amount of US$ 30 million for this project. Over the past fifteen years, the Bank supported Nicaragua’s rural WSS sector development through a series of interventions. In 2008, it financed the PRASNICA project with US$ 26.0 million IDA financing. In 2012, the Global Environmental Facility (GEF) supported the sector with a US$ 6.0 million grant for the PACCAS project. In 2014, the Bank provided additional support through the PROSASR project with US$ 30.0 million IDA financing. Between 2014 and 2017, the Bank provided technical assistance to help strengthen institutional policy and planning capacity in Nicaragua through the multi-donor trust fund Water and Sanitation Program in the amount of around US$ 600,000. Between 2014 and 2019, the Strategic Impact Evaluation Fund funded an impact evaluation study of the PROSASR project with a total amount of US$ 400,000. The multi-donor trust fund Global Water and Sanitation Partnership provided additional funding of around US$ 50,000 for a South-South Knowledge Exchange with Costa Rica and to develop lessons learned from the experiences of the Sustainability Chain. Left: Old water supply infrastructure (hand pump). Right: new improved water supply infrastructure supported by PROSASR Project. Community Loma de Piedra, municipality de San Pedro del Norte, Chinandega department. Photo: Eliette Gonzalez/World Bank. PAGE 114 Almost 45,000 beneficiaries with sustainable access to water supply and almost 20,000 beneficiaries receiving sustainable access to sanitation as result of the PROSASR’s implementation of 75 subprojects in selected poor rural areas of Nicaragua. PARTNERS The Bank has been one of the leading partners for the development of the rural WSS sector in Nicaragua over the past two decades. During that time, the Bank has maintained an ongoing dialogue with relevant sector partners, including the Swiss Cooperation Agency and the German Development Bank (KfW). Further, the Bank has established a close collaboration with the Central American Bank for Economic Integration (CABEI), resulting in leveraging US$ 30.0 million to finance an operation parallel to the PROSASR project in 2014. CABEI’s operation aligns with the sector strategy and contributes to the PROSASR development objectives to increase access to rural WSS services and to strengthen capacities at municipal and community levels in Nicaragua. BENEFICIARIES Access to safe water and sanitation is one of the most basic needs of Nicaragua’s communities. These communities highly value the investments made by the PAGE 115 government and the capacity building they have received to manage these systems. The project also provides a platform to resolve some of the most pressing issues communities face beyond access to water supply and sanitation. The process can take time to reach the more remote communities and their members. Discussions around adequate levels of tariffs can be especially challenging; with the right guidance and support, however, CAPS members can explain the importance of tariffs to other community members. MOVING FORWARD All support provided to the Government of Nicaragua in the past fifteen years aimed at strengthening the development of the government’s rural WSS sector strategy known as the Sustainability Chain. While a solid institutional framework has been created to accelerate sustainable access to water supply and sanitation services in rural areas across the country, investment needs remain high. To achieve universal access by 2030, an estimated sector investment of US$2 billion to US$3 billion is needed over the next decade. Furthermore, the established institutional structures require continuous support to keep advancing sector development. Specifically, the municipal WSS teams require sufficient funding and resources to provide technical support to all communities within their territorial responsibility. CAPS have received solid initial capacity building to conduct their roles and responsibilities, but ongoing support is needed to maintain their performance. It is therefore necessary for Nicaragua to continue investing in the rural WSS sector in ways that will allow it to scale up successes achieved to date and reach universal access to rural WSS services nationwide. PAGE 116 Beneficiaries enjoying the new and improved water supply infrastructure. Photo: SIASAR. PAGE 117 Bella Vista Waste Water Treatment Plant construction. Photo: ESSAP. PAGE 118 PARAGUAY DRAWING THE ROADMAP FOR UNIVERSAL SUSTAINABLE WATER AND SANITATION IN PARAGUAY Paraguay has begun delineating the steps necessary to achieve universal, equitable, and sustainable water and sanitation services throughout the country. Developing planning instruments and strengthening key sector institutions have allowed Paraguay to provide access to new households, improve service delivery, and increase sustainability. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 40.49 US$ 5,670 6,956,071 406,752 IBRD/IDA lending commitments approved in FY19: 115 million PAGE 119 New and supplemental projects approved in FY19: 1 CHALLENGE In 2009, Paraguay was projected to miss its Millennium Development Goal targets. Although access to piped water in urban areas had reached 80 percent, water quality remained an issue due to the lack of monitoring and regulation of an unknown number of service providers. Wastewater treatment was practically nonexistent, and levels of sewerage network connection were very low; concentrated in Asunción, only about one-third of the city’s population was connected. In addition, Asunción had very low quality of service due to the poor condition of the infrastructure: water pipe ruptures were common, and water pressure was often a problem. Rural areas lagged in all indicators. The water and sanitation sector faced several challenges: it had no plan or strategy in place to address issues; the legal and institutional framework was weak, with new institutions taking charge of areas in which the government had not previously intervened; the national urban water and sanitation utility performed poorly; and rural areas, particularly Indigenous communities and more remote areas, experienced persistent gaps in service. Bella Vista Waste Water Treatment Plant terrain, and Cara Cara neighborhood for resettled population. Photo: ESSAP. PAGE 120 APPROACH The Water and Sanitation Sector Modernization Project (Proyecto de Modernización del Sector de Agua y Saneamiento, PMSAS), focused on (i) strengthening the capacity and consolidation of relevant water institutions, including the national water supply and sanitation (WSS) utility Sanitary Services Company of Paraguay (Empresa de Servicios Sanitarios del Paraguay, ESSAP), the National Sanitation Service supporting operators in rural areas, and the WSS regulator (ERSSAN, for its Spanish acronym); (ii) supporting the national utility to improve its performance and expand sewerage coverage; and (iii) expanding WSS services in rural areas. The World Bank, through the PMSAS, supported all key water institutions to proactively and collaboratively improve coordination among organizations and develop planning instruments to guide their work. RESULTS The PMSAS created pathways for transforming the water and sanitation sector by focusing on increased coverage, efficiency, and sustainability. Project-supported improvements achieved several outcomes, including: • Improved sector governance by (i) providing tools, such as the first information management system for ERSSAN, with service providers’ data and a laboratory for water quality analysis; (ii) supporting the newly created directorship (Dirección de Agua Potable y Saneamiento, DAPSAN) in preparing the first national water and sanitation plan; (iii) supporting changes in ESSAP’s managerial structure; and (iv) finalizing the sewerage master plan for the metropolitan area of Asunción. PAGE 121 • Improved water services in Asunción by rehabilitating 57 kilometers (km) of water networks and installing 104,000 water meters. ESSAP reduced water losses and increased the number of service hours, guaranteeing 24/7 service continuity in the rehabilitated area, benefiting 50,000 persons. • Increased and improved sewerage services in Asunción through the rehabilitation of 28 km and construction of 30 km of sewerage networks. Environmental conditions for about 400,000 persons in Asunción’s metropolitan area were also improved, allowing new users to connect. • Increased water and sanitation services in rural areas by constructing 61 water systems and 1,200 latrines in remote rural areas of Paraguay, benefiting 12,500 people in Paraguay’s Eastern region and 6,500 people in Indigenous communities of the Chaco region. BANK GROUP CONTRIBUTION The World Bank, through the International Bank for Reconstruction and Development (IBRD), provided a loan of US$ 64 million to support this project. Since the 1970s, the IBRD has financed dedicated rural water supply and sanitation projects in Paraguay. The IBRD’s Fourth Rural Water Supply and Sanitation Project (1999–2007) and the Asunción Sewerage Project (1995–2002) provided the analytical foundation for this project. PARTNERS The Inter-American Development Bank (IDB) is financing the Asunción Bay Clean Up Project, which will construct the first wastewater treatment plant in Asunción, Planta de Tratamiento de Aguas Residuales Bella Vista, thus completing the macro infrastructure required for the Itay Basin sewerage system initiated under PAGE 122 the IBRD-funded project. In addition to financing, the two multilaterals divided the project into stages, providing the strong technical cooperation that enabled completion of the Itay Basin sewerage system. BENEFICIARIES The project provided access to improved water and/or sewerage services, benefiting a total of 458,000 people in Paraguay, 440,000 of whom live in the urban area of Asunción. The remaining 18,000 beneficiaries live in remote rural areas, with over one-third belonging to Indigenous communities in the Chaco region, which is among the poorest in the country. Beneficiaries include Indigenous women and girls who can now stop fetching water from long distances, freeing up to six hours per day that can now be used for personal development. 18,000 beneficiaries live in remote rural areas, with over one-third belonging to Indigenous communities in the Chaco region, which is among the poorest in the country. MOVING FORWARD DAPSAN now possesses its first ever national plan, which will help in outlining a roadmap for achieving Sustainable Development Goal 6: Ensure availability and sustainable management of water and sanitation for all. The Government of Paraguay secured a US$ 110 million loan for the construction of the area’s first PAGE 123 three wastewater treatment plants, and it continues to implement the Asunción Metropolitan Area Sewerage Masterplan. The regulator, ERSSAN, has tested and sanctioned some service providers outside the norm and introduced an emergency action plan for the departments most affected by inadequate water quality. Bella Vista Waste Water Treatment Plant construction. Photo: ESSAP. PAGE 124 Water system beneficiary in Chaco. Photo: Catalina Ramirez/World Bank. PAGE 125 Ballestas Islands, Peru. Photo: Esmée Winnubst/Flickr CC. PAGE 126 PERU PROTECTING AND MANAGING A UNIQUE RESOURCE: CONSERVING THE GUANO ISLANDS, ISLETS, AND CAPES OF PERU’S COAST Peru strengthened its overall management of the marine and coastal ecosystems of the Guano Islands, Islets, and Capes National Reserve System, one of the last refuges for endangered species in the country, by improving the state of biodiversity and maintaining the integrity of its ecosystem services. GDP GNI Population Land per capita (billions) (atlas method) (sq.km) US$ 222.04 US$ 6,470 31,989,256 1,285,220 IBRD/IDA lending commitments approved in FY19: 280 million PAGE 127 New and supplemental projects approved in FY19: 4 CHALLENGE Peru is one of the world’s 17 megadiverse countries, with 11 ecological regions and 84 of the world’s 117 life zone types. It ranks first for genetic resources and species of fish, second for birds, and third for amphibians. Likewise, its fisheries are known for being extraordinarily productive. Unfortunately, Peru’s natural habitats are not free from human exploitation, putting ecosystems and the species relying on them under intense pressure. The islands, islets, and capes along Peru’s coastline form one of these unique environments. Since Incan times, guano has been harvested there as a fertilizer, and starting in the 1800s, overexploitation of both guano on the islands, islets, and capes and of the rich fisheries off the coast has taken a toll on the unique biodiversity of these small patches of land. Threats include habitat disturbance and destruction, unregulated and illegal fishing, overexploitation, tourism, and solid and liquid waste pollution. Threats include habitat disturbance and destruction, unregulated and illegal fishing, overexploitation, tourism, and solid and liquid waste pollution. APPROACH The Peru Strengthening Sustainable Management of the Guano Islands, Islets, and Capes National Reserve System Project was designed to support the National Service of Protected Areas (Servicio Nacional de Áreas Naturales Protegidas por PAGE 128 el Estado; SERNANP) in developing and implementing a strategy to coordinate collaborative management, surveillance, control and research of marine and coastal resources in this invaluable reserve system. The goal was to build the agency’s institutional capacity and strengthen its collaboration with strategic allies. The project also encouraged the active participation of local stakeholders, such as fisherfolk associations and tourist operators, in developing economic activities that protect the ecosystem while at the same time generating income. These goals were achieved mainly through the inclusion of socially viable marine management models organized along locally implemented collaborative subprojects in pilot sites. In addition, the project established ecological baselines and monitoring and evaluation systems within SERNANP and provided support for monitoring and evaluating project performance. Birds in Ballestas islands. Photo: SERNANP. PAGE 129 RESULTS Between 2013 and 2019, the project helped to improve the overall management of the marine and coastal ecosystems of the Guano Islands, Islets, and Capes National Reserve System and to protect biological diversity in pilot sites through contributions and improvements in various key areas. Results achieved include: • Areas under enhanced biodiversity protection expanded from 817 hectares to 2,952 hectares. • The number of staff from SERNANP and other agencies trained on marine and coastal protected area (PA) management topics increased from 10 to 484 individuals, 30 percent of whom were women. • Detailed zoning, mapping, and categorizing of PA based on conditions in the natural environment and specific protection needs were achieved in 10 pilot sites. This supported the development of a terrestrial and marine biological baseline, required to determine the state of conservation in the Reserve, and established conservation categories (protection, restoration, sustainable exploitation). • Populations of the Humboldt penguin, an endangered seabird living in Reserve, were maintained, and even increased, with 8,025 registered by project end. The use of drones helped strengthen monitoring capacity in less accessible areas, extending coverage and increasing generation of key information for decision making. PAGE 130 • The use of drones helped strengthen monitoring capacity in less accessible areas, extending coverage and increasing generation of key information for decision making regarding extractive activities to ensure they are undertaken with conservation objectives in mind. • Critical improvements were made in seven indicators of the Global Environment Facility (GEF) Biodiversity Tracking Tool, including delineation of areas, categorization of conservation status, and the development and implementation of site-specific management plans. • SERNANP’s capacity at the local level was improved through collaborative subprojects aimed at increasing the participatory management and capabilities of local stakeholders, benefiting a total of 5,240 people, 25 percent of whom are women. Humboldt penguins in Ballestas islands. Photo: SERNANP. PAGE 131 BANK GROUP CONTRIBUTION The World Bank, through the Global Environment Facility, provided US$ 8.92 million to the Peruvian Trust Fund for National Parks and Protected Areas to support the preservation of the Guano Islands, Islets, and Capes National Reserve System. The funds were fully disbursed by the end of the project. PARTNERS The project established and strengthened important communication channels and the formalization of joint-work plans with relevant key stakeholders. This helped to develop a shared sustainable management vision for the Reserve. SERNANP was supported through collaborative consultation and negotiation processes, resulting in the development of cooperation agreements with AGRORURAL, Ocean Institute of Peru (Instituto del Mar del Perú), the French Research Institute for Development, and the National University San Luis Gonzaga of Ica. Agreements included joint monitoring protocols for key bird species and surveillance and control of illicit activities. GEF financing was complemented with US$ 2 million from Germany’s Kreditanstalt für Wiederaufbau (KfW). BENEFICIARIES The project generated a number of benefits, direct and indirect, relating to improvements in the overall management of marine and coastal ecosystems. With more effective management of marine and coastal areas in place, the natural capital in the Reserve will remain an integral and important contributor to sustainable growth and development. Improving monitoring capacity and surveillance resulted in public benefits from greater conservation and preservation achievements, while private benefits were generated through the increase of tourist revenues. Public servants and private individuals, including fisherfolk, received useful training. A total of 5,240 persons benefited from the project. PAGE 132 MOVING FORWARD The project helped increase awareness about the benefits of sustainable management of biodiversity in the Reserve, resulting in increased engagement among local stakeholders who became collaborators in economic and conservation activities. Likewise, the project established cooperation mechanisms between agencies that have not traditionally worked together. As a result, collaboration among agencies improved, benefiting the overall management of the Reserve. Other agencies have demonstrated interest in entering into similar arrangements with SERNANP. An endowment fund has been established and is generating returns that, together with income derived from tourism, will contribute to the Reserve’s financial sustainability in the medium to long term. Ballestas Islands, Peru. Photo: Esmée Winnubst/Flickr CC. PAGE 133 Latin America and Caribbean Region The World Bank 1818 H Street, NW Washington, DC 20433, USA https://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 2020