Implementation Status & Results Brazil Fiscal Sustainability, Human Development and Competitiveness DPL (P117244)

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1 Public Disclosure Authorized Public Disclosure Authorized The World Bank Project Name: Implementation Status & Results Brazil Fiscal Sustainability, Human Development and Competitiveness DPL (P117244) Fiscal Sustainability, Human Development and Program Stage: Implementation Seq.No: 2 Status: ARCHIVED Last Modified : 03-Dec-2010 Competitiveness DPL (P117244) Country: Brazil Approval FY: 2010 Product Line: IBRD/IDA Region: LATIN AMERICA AND CARIBBEAN Lending Instrument: Development Policy Lending Implementing Agency(ies): State Finance Secretariat Key s Board Approval 02-Feb-2010 Original Closing 31-Dec-2011 Planned Mid Term Review Last Archived ISR 16-Mar-2010 Effectiveness 29-Apr-2010 Revised Closing 31-Dec-2011 Actual Mid Term Review Program Development Objectives Program Development Objective (from Program Document) The objective of the proposed operation is to assist the Government of Rio de Janeiro (GORJ) in strengthening its policies to improve fiscal management, competitiveness and social service delivery and covering the projected fiscal gap during 2010 resulting from a temporary fall in revenues associated with the recent global financial crisis and economic slowdown. The proposed operation is fully consistent with and closely linked to the objectives of the Brazil CPS, Sound macroeconomic management, fiscal consolidation, efficient public sector management, quality of education and health expenditures, especially at the sub-national level, and better investment climate are key pillars of the CPS for achieving inclusive economic growth in Brazil. Has the Program Development Objective been changed since Board Approval of the Program? losure Authorized Public Disclosure Authorized Yes No Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Implementation Status Overview The implementation of the program in the policy areas supported by the DPL is well underway and progress is robustly in the right direction. Most of the results indicators have achieved or surpassed their target values. Even though a few results indicators did not achieve their targets, there has been significant improvement. Results Results Indicators Page 1 of 7

2 Net asset position of the pension fund (in R$) Sep-2010 Two factors affected the amount of royalties revenues transferred to the pension fund in The price of oil increased from December 2008 to July The exchange rate also appreciated As expected the oil-based revenue transfers were not subject to executive discretion. of tax collected (R$) Revenues are well above expectations due to a vigorous post crisis pick up in the state and national economies Page 2 of 7

3 Financial Revenue from cash flow management (R$) *Predicted value at the end of 2010 The lower than expected outcome is due to three factors: 1. The crisis in 2009 resulted in a decreased final balance ( Saldo final) 2. The monetary policy response to the economic crisis included decreasing the SELIC by 500 bps. Consequently the remuneration that the State government received from private banks, which is indexed as a percent of CDI (certificado de deposito interbancario) which, in turn, depends on the SELIC also decreased 3. The State changed payment date for its payroll, bringing it from the 8th of the month to the 2nd of the month. The earlier payment of salaries meant that the State lost about 5 to 6 days of remuneration from it financial applications (aplicacoes financeiras) Net Financial Position (cash less current liabilities) [R$] *Predicted value at the end of 2010 Page 3 of 7

4 Share of payments made in less than 30 days Custom Indicator Percentage Average number of days to register a Firm Progress has been slower than expected because Cadastro Facil only became operational in December as opposed to September 2009, as originally envisaged. As a result the number of days fell from 63 in 2008 to 57 in 2009 (and not the 50 expected). The number of days, however, continued declining and the average for 2010 is 44 days. 3 Number of teachers trained for Projecto Autonomia Page 4 of 7

5 Number of students enrolled in Projecto Autonomia Implementation of the program encountered some operational delays and its expansion was not able to reach the target Number of students receiving conexao educacao smart cards Number of services at UPAs Number of municipalities with signed PAHI perfromance agreements Data on Financial Performance (as of 05-May-2010) Financial Agreement(s) Key s Page 5 of 7

6 Project Loan No. Status Approval Signing Effectiveness Closing P IBRD Effective 02-Feb Mar Apr Dec-2011 Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P IBRD Effective USD Tranches Tranche 1 Description All prior actions have been met before Negotiations. There are no conditions of effectiveness and the loan was signed on March Amount (USD) Expected Release Actual Release Status 485,000, Apr Aug-2010 Pending Released Tranche Condition Description Status If If Delayed Social Security System for State public servants capitalized with oil-based revenues and those transfers protected from risk of exec utive discretion (Decree /2009) Tax collection enhancement measures adopted, including: # Recruitment of qualified staff and upgraded training for existing staff o f the State Revenue Sub-Secretariat (SEFAZ official hiring and training records) # Adoption of Electronic Invoices to increase ta x compliance and oversight (SEFAZ resolutions No 118/2008 and 162/2008) Budget processes reorganized to improve financial management (Decrees No /09 and /09) and procurement processes (Decree s No /08 and /08) Streamlined business registration process # Cadastro Fácil # implemented (SEFAZ Resolution No. 248/09) Integrated Business Service Centers # Rio Poupa Tempo units # implemented (Decree No /09) New accelerated learning program developed to reduce age-grade distortion in basic education # designed by Fundação Roberto Marin ho (No 38/2008) New school management information program #Conexão Educação# developed to increase accountability among teachers and students and efficiency of resource use (No. 033/2008, 041/2008, 56/2009) 24-hour operating Urgent and Emergency Care Units (UPAs) are used to deliver urgent and emergency services (SESDEC Directives creat ing UPAs and proper registration of UPAs in National Registry of Health Entities # CNES # and National Registry of Private and Publ i c Entities # CNPJ) Page 6 of 7

7 System of performance-based transfers established between the state and municipalities based on improvements in mother-child healtha nd hospital care (SESDEC Resolution Number 843/2009) Key Decisions Regarding Implementation An Implementation Completion Report will be prepared by June 30, 2011 Restructuring History There has been no restructuring to date. Related Operations There are no related projects. Page 7 of 7