Human Development Network - Social Protection Unit - Social Funds Thematic Group Social Funds Innovations Updates Volume 1 No. 2 October 2001 Bulgaria Regional Initiatives Fund (RIF): 24091 Innovative Approaches to Income Generation by Peter Pojarski, Operations Officer; (ECSHD) The Bulgaria Regional Initiatives Fund- (RIF), the future. To do this, the IMPs component had funded through a L,arning and Innovation Loan two goals: (US$4.15'million), -began in early 1999 and closed * Create longer-term jobs (as opposed to in April 2001. The project tested the'social fund ' " temporary jobs created by infrastructure approach as. an institutional mechanism to help projects); and Bulgaria protect incomes of. the poor and * Foster the reintegration of disadvantaged vulnerable- groups during the transition. Its groups back into society. development objective was to help alleviate advcrse economic inpacts of the country's present Such micro-projects utilized new technologies; structural reforms by creating temporary and local traditions, 'and, promising employment longer-term jobs. opp'ortunities such as handicrafts to create a new approach to, job creation. In addition', IMPs Why job creatio1.; targeted those social groups in: a weaker position The main problem of Bulgaria during the period in the labor'market and among whom there is a of 'economic restructuring (1990 - present), and long-term . tendency for high- levels 'of especially' after the introduction of a currency unemployment (see below). board in 1997, has been the 'high rate of unemployment and the low levels of income i' associated with it. Currently the. -official >t, , unemployment rate - for the- country is around 18%,' though some non-governmental sources claim much larger numbers. 'This is why the Bulgarian pilot,social fund focused on short-term and long-term employment generation as its main- goals. Originally a smaill 'project, the success of the pilot RIF attracted an additional BGN .16 '' '' million '(equal to.-US$7.4 miion). of Bulgarian , / Government money to the project, and another , '1 BGN 16 million in funding from USAID. The innovative micro-project in the town of Karlovo trained women for jobs in the textile industry, and negotiated job What does the project fund? placements in local companies. The RIP's sub-projects (micro-projects) component (UJS$3.15million) funded two types of how does itworke activities: social infrastructure' and "innovative The IMPs 'created opportunities tori mcome micro-projects." The infrastructure. component generation by , establishing .. an enabling was "classic social fund," providing short-term job environment for business development 'These creatiori by building much-needed' community micro-projects (initially envisaged only as grants)' infrastructure. ' The innovative micro-projects could be non-ftinancial business scrvices (e.g. component' (IMPs) was the more innovative of 'trainitig, busincss advice and. 'marketing) to the two. The purpose of the innovative micro- improve production activities. that'directly created projects is to explore different 'approaches to jQbs for disadvantaged ethnic minorities and employment generation for possible replication in women; social 'services; procurement ,'of equipment and materials for demonstrative production purposes; or proauctive (business) How has the process worked so far: projects to help incorporate vulnerable The innovative microprojects cycle includes beneficiaries into the market. several'stages: 1. Promotion. Seven Innovative' Micro-projects totaling 2. Identification approximately US$130,000 were funded by the 3. Pre-selection and preparation Bank, and another 20 totaling approximately 4. Appraisal and final selection 5. Implementation' World Bank-fuinded Innovative Micro- Amount 6. Impact evaluation projects ' in-$US Being a pilot with limnited duration, the RIF ._________________________ _ . - .(approx) conduvcted one initial promotion campaign which Buslness Incubator in the town of Razlog 19,000 led to the submission of 40 'proposals. Then the Plastic waste recycling for Roma in the 'RIF adrninistratibn conducted pre-selection-based towns of Plovdiv, Stara Zagora, Russe,. on three sets of criteria - first a set of eligibility Nova Zagora 26,100 criteria, and then two tiers of objective criteria Retrainig for seamstresses in the town of including targeting vulnerable groups, number of Karlovo. 18,000 'jobs' created, cost per job' created, etc. The . cKthe te or nth ilae f'experience with the 'first proposals, some riore .Kitchen for the poor in the village of -... Tsenovo . 13,750 successful than others, have helped the RIF- to . . , further'revise. selection criteria. Tra*ning and job search for unemployed, town of Tvarditza 13,900 Business'Incubator, town of Vidin. 20,800' E>ligi Criteria _______________________________________> Microproject proposal must target v-ulnerable Business support for start-up of herb groups. cultivation business in Roma, Elhovo 18,400 > Fundng requested should not exceed DM- 60,000. Total' 129,950 > . Project implemertation should not go beyond February 2000. US$700,000 were - funded through' additional > The intermediary must provide at least 10% coit US.700:000 were - 1~unded ihrough' additional sharing. At least 50% of Intermediary donor~ financing.provsded by USAID. -contribution should be in cash. > Microproject proposal must demonstrate Who benefits? sustainability (technical, financial, social). The target beneficiaries of the IMP's are 'ethnic F L minorities at a disadvantage in the labor market, First L fvel Criteria - . . ~~~~~~~~~~~~~~~~> Degree of targertingvlu'lnerable groups - socially marginalized' women, vulnerable youth' percenritage of participating repnesentaove ot the (orphans first entering the labor market and youth 'target groups in the direct beneficiaries group. leaving ' underage detention establishments), > Number of created/preserved long-term jobs. disabled iunemployed people 'from the regions. > Cost per job created.' with high level of newly' laid off workers as a CostSharng. > Degree of acquiring or improving qualificanons result of the structural reform, as well as people of the target group from regions that are ' isolated in terms. -of > Degree of attained social iritegratnon o'f the target communications. group. Second Level Criteria' The projects are developed arnd proposed by the ' econo viabelityrba intermediaries, mainly non-governmental non- evaluation. profit oirganizations (NGOs). Examples of- such > Replicability (possibility for a project to be used organizations are: business, centers, business as a model). incubators- trade associations, or community > Expenence of the intermediary in projects trade involving the taiget groups. .centers. .>' Sum demanded from RIF. The IMP in action: examples from the first undergoing 'industrial restructuring, and is phase populated largely' by people of the Turkish minority. The project was implemented by'a local Roma'plastic waste recycling project. NGO - The Social Protection Foundation' The NGO One example of-.a RIF innovative micro-project selected on a.competitive basis a training agency was the .US$26,100 Plastic W`aste Recycling 'Prbact that provided training to 50 women from the area implemented in four Bulgarian towns. The trying' to find employment in the expanding.local project was developed by a Roma NGO 'with textile and clothing indhstry. Ouit of 50 women chapters in these four towns. The IMP consisted who receiyed training, 31 were offered a job after of two elements: training in the plastic waste successfully completing the training course and recycling process;- and purchase' of plastic sustained these jobs after project' completion.' processing machines.' Altogether about 140 persons.we're-trained. Out of them, 16 got jobs as machine'operators at the.recycling sites, the rest worked as waste collectors. Wages of machine. operators (equal to the minimum w,age) were paid by the state Professional, Training and Unemployment Fund: Ex-trainees who collected .the waste were paid somewhat-higher, commission i than non-trainees as they supplied better quality 1kl'"b - materials, i.e. training increased their productivity. The' project- proved efficient, in targeting the F" v . i disadvantaged Roma' ethnic minority members' w~ith a view of fostering,their social re-integration._ i - with a: view of fostering, their social re-integration. Ethnic miniority Roma w6rkers at a plastic waste processing Also, it'improved the skills and productivity of the site i the Roma neighborhood of StohpinOV6 in the city of target. beneficiaries afd had a ,. positive Plovdiv. environmental impact. Most'importantly, there was a strong feeling of ownership for the project The micro-project proved the impo'rtance of the on 'behalf of the Roma communities in the close contacts and cooperation -between the respective localities. However, the project's NGOs and the-local employer community, which ,in,ancial sustainability is' unce'rtain beyond the in this case, led to the provision 'of -training wage subsidies and the term for the project tailored to employers" needs, and subsequently'to supervision. Several m6nths after the formal end a -high rate of success in finding jobs 'for the of the RIF participation and mronitoring, some of trainees. The' overall cost per trainec was lower the 'sites were not functioning -regularly (if at all) compared to the trainng provided by the local for the lack of markets and insufficient returns to labor office. In sum, the project activity self-finance the activities. .Therefoe, this type'ofproject complemented that of the, local labor .office, but needs to be developed on the' basis of more businesslike services were provided in a more cost-effective approaches and improved.productiviy. 'Another point of way. -Ioweter, futurepm-jects of tis ype -should seek to caution is the issue of ownershp of assets (equipmetii), and also include mechanisms for having the employers shbre in the relationshbp between the,participtaing NGOs and the the cost of training. interested buisinesses. Future project managers gshould tr to build in incentives for the NGOs to siustain the project benefits beyond the closing date of the microprect. VET.for women in Tvarditsa Another example of 'an innovative micro-project, this time based on the value of training and the flexibility of the NGO sector, was the US$13,800 Vocational.Training to Unemployed Project in the'town ,of Tvarditsa. The project provided vocational training to the unemployed in' the area.- which' is Lessons Learned embedded in the project cycle. The The RIF. has yielded a number of lessons for review of the' RIF IMPs showed that social fund task managers to bear m mind: sometimes the benefiting communities did not have the chance to provide their A limited number of clearly defined and input during project development. easily monitored types of micro- projects are key to successful administration and Every project proposal should have a monitoring. Throughout the RIF project, sustainability analysis and a list of specific the implementing agency had problems measures ensuring sustainability of with monitoring, evaluating and project results. This will.prevent cases in comparing the success of the projects which project benefits are lost or cease because they were so diverse in nature. It when the project expires. This' is was difficult to apply common evaluation especially important in cases when criteria to the IMP portfolio. production equipment is provided as a part of the project. * A mechanism' for community -articipation in the - selection and mplemenrtation of the projects should- be For more' information on the Bulgaria Regi6nal Initiatives Fund, contact Peter Pojarski -(ppojarski@worldbank.org) at the World'Bank's Bulgarian office. S2~~~i~rot t% LAROR M1AR S, PE%sSO' SQCJIAt &SISlA.Cq T H E W O R L D B A N K "Social Funds Innovatton Updates" are published informally by the Social Funds thematic group of the Human Development Network - Social Protection. For additional copies, contact the Social Protection Advisory Service, The World Bank, 1818 H Street, NW, Washington, DC 20433, USA, Fax: (202) 614-0471, E-mail: socialprotection@worldbank.org. Coptes are also available on-line through htto://www.worldbank.ori!s, then click on "Social Funds". For more updates please check the Social Funds website.