Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY Report No: RES20444 Public Disclosure Authorized RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE Public Disclosure Authorized INCOME SUPPORT AND EMPLOYABILITY PROJECT LOAN 7811-SV November 24, 2009 TO THE REPUBLIC OF EL SALVADOR September 14, 2015 Public Disclosure Authorized Social Protection and Labor Global Practice Central America Country Management Unit Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
ABBREVIATIONS AND ACRONYMS FISDL INJUVE INSAFORP MTPS PATI RUP SPSU STPP TA Social Investment Fund for Local Development (Fondo de Inversión Social para el Desarrollo Local) National Youth Institute (Instituto de la Juventud) Salvadoran Institute of Professional Training (Instituto Salvadoreño de Formación Profesional) Ministry of Labor and Social Prevision (Ministerio de Trabajo y Previsión Social) Temporary Income Support Program (Programa de Apoyo Temporal a1 Ingreso) Unified Registry of Participants (Registro Unico de Participantes) Universal Social Protection System (Sistema de Protección Social Universal) Technical and Planning Secretariat of the Presidency (Secretaría Técnica y de Planificacion de la Presidencia). Technical Assistance Regional Vice President: Country Director: Senior Global Practice Director: Practice Manager: Task Team Leader Jorge Familiar J. Humberto Lopez Arup Banerji Margaret Grosh Pablo Ariel Acosta 2
EL SALVADOR INCOME SUPPORT AND EMPLOYABILITY PROJECT P117440 CONTENTS Page A. SUMMARY 5 B. PROJECT STATUS 5 C. PROPOSED CHANGES 6 3
DATA SHEET El Salvador Income Support and Employability Project (P117440) LATIN AMERICA AND CARIBBEAN Social Protection & Labor Report No: RES20444 Basic Information Project ID: P117440 Lending Instrument: Specific Investment Loan Regional Vice President: Jorge Familiar Original EA Category: Partial Assessment (B) Country Director: J. Humberto Lopez Current EA Category: Partial Assessment (B) Senior Global Practice Director: Practice Manager/Manager: Team Leader(s): Arup Banerji Original Approval : 24-Nov-2009 Margaret Ellen Grosh Current Closing : 31-Dec-2015 Pablo Ariel Acosta Borrower: Responsible Agency: Ministerio de Hacienda Fondo de Inversión Social para el Desarrollo Local, Ministerio de Trabajo y Previsión Social, Secretaria Técnica y de Planificación de la Presidencia Restructuring Type Form Type: Restructuring Level: Short Form Level 2 Decision Authority: Explanation of Approval Authority: Country Director Approval The RP requires CD approval since the new proposed closing date is 20 months after the original closing date. Financing ( as of 10-Sept-2015 ) Key s Project Ln/Cr/TF Status Approval Signing Effectiveness Original Closing Revised Closing P117440 IBRD-78110 Effective 24-Nov-2009 19-Jul-2010 18-Jan-2011 31-Dec-2014 31-Dec-2015 Disbursements (in Millions) Project Ln/Cr/TF Status Currency Original Revised Cancelled Disbursed Undis bursed % Disbursed P117440 IBRD-78110 Effective USD 50.00 50.00 0.00 47.88 2.12 96 4
Policy Waivers Does the project depart from the CAS/CPF in content or in other significant respects? Yes [ ] No [ X ] Does the project require any policy waiver(s)? Yes [ ] No [ X ] A. Summary of Proposed Changes This Restructuring Paper proposes a Level II restructuring of the El Salvador Income Support and Employability Project to: (i) extend the closing date of the Project for 8 months (from December 31, 2015, to August 31, 2016, which represents 20 months after the original closing date); and (ii) reallocate resources across disbursement categories. The main rationale for the proposed changes is to ensure continuation and implementation of key activities that are aligned with the new Government flagship youth employment strategy (Programa de Empleo y Empleabilidad Joven). The implementation of these activities will also allow continuity and preparation of a new Project in El Salvador with the Bank. B. Project Status The Income Support and Employability Project (US$50 million), effective since January 18, 2011, and closing on December 31, 2015, has disbursed 96 percent of Loan funds as of September 8, 2015, with US$ 2.12 million remaining. The Project supports the implementation of the Temporary Income Support Program (PATI) that provides transfers to extreme poor and poor population living in urban settlements in exchange for participation in community services and training sessions (US$40.7 million, 81 percent of total Loan funds). It also includes Technical Assistance (TA) to strengthen labor intermediation, information, and occupational training systems (US$6.7 million, 14 percent of funds), and the formulation and implementation of key instruments of the Universal Social Protection System (SPSU) (US$2.6 million, 5 percent of funds). The Project has been restructured four times: a) on December 21, 2010 to change the disbursement modality to an output-based disbursement to transfer financial resources to the Salvadoran Institute of Professional Training (INSAFORP), and allow the Project to become effective; b) on March 8, 2012, to redefine the eligibility activities under "Operating Costs to include incremental salary costs of locally contracted employees of the executing agencies, as well as to reallocate funds from Component 3 to Component 1 to finance PATI's impact evaluation; c) on August 2, 2013, to modify fiduciary arrangements across implementing agencies of the Project, reallocate resources across disbursement categories, and revise results indicators; and d) on July 16, 2014, to extend the closing date of the Project until December 31, 2015, and reallocate resources across disbursement categories. Progress in each component is described below: Component 1: Support to the Design and Implementation of the Temporary Income Support Program (PATI). The Social Investment Fund for Local Development (FISDL) finalized implementation of the sixth round of the Temporary Income Support Program (PATI) that involved 4,284 participants in 7 urban municipalities. Since PATI program started in 2011, around 41,000 participants from extreme poor and poor urban settlements in 25 municipalities have benefited from it. To date, the number of PATI participants has reached 95 percent of the Project s end target (43,000 intended beneficiaries by December 2015). In terms of demographic composition, 71 percent of participants are women, around 84% have not completed basic education, and a third of participants are youth (16-24 years old). The Salvadoran Institute for Occupational Training (INSAFORP), in charge of providing training courses, has also made important advances by complementing technical training with a job seeking module, in close coordination with the 5
Ministry of Labor (MTPS). PATI's impact evaluation's has indicated that the program is positively affecting job readiness, with higher effects among youth and women. A 7th round of PATI is currently underway in six of the country s most violent municipalities and is focused on the youth, with the aim to improve social cohesion to promote violence prevention in the participating communities. This round is being executed in coordination with the Ministry of Security and Justice and it is expected to finalize in December 2015. Component 2: Strengthening of labor intermediation, information, and occupational training systems. After overcoming delays faced during the first two years of implementation due to changes in authorities, technical teams and weak capacity, there have been important advances under this Component. MTPS officially launched the on-line Jobs Portal. Forty employment offices at the national level are staffed, equipped, and operating. Furthermore, a central Job Counseling Office was inaugurated and is comprised of trained professionals; clients will have access to psychometric tests for better counseling. Finally, the Labor Market Observatory under the Direction of Social Provision is operating, and generating material for decision making (i.e, bulletins, and periodic labor reports). In terms of its involvement in PATI, MTPS has continued to provide labor market orientation (16 hours) in the last four rounds and has continued re gistering participants in its IT platform for labor intermediation. Component 3: Support the design and development of the Universal Social Protection System (SPSU). This Component has made important advances, particularly with regard to the institutional strengthening of the Technical Secretariat of Planning of the Presidency (STPP), the development of the SPSU strategy, the establishment and on-going enhancement of the Unique Registry of Participants (RUP), and the evaluation of key social programs (PATI, social pensions, community health services, school uniforms). The component has also supported the formulation of the Law of Social Protection and Development, approved by Congress on April 2014). With regards to the development of RUP, STP has completed socio economic data collection in 71 municipalities and this activity is expected to expand in collaboration with the Ministry of Economy (which manages the subsidy registry) and the Ministry of Health (health registry). With regards to the general context there have been changes at the institutional and political levels. The Government administration that came to power on June 2014 finalized (under the leadership of STPP) the formulation of its 5-Year National Development Plan, which highlights three priorities: improving productivity (economic growth, employment employability), education, and security. In addition, the STPP has been reorganized and three new Management Units have been created: Modernization of the State, Government Coordination and External Cooperation, and Development Planning. The social sector coordination is under the responsibility of the Social Cabinet (chaired by the Ministry of Health and STPP as Executive Secretariat), and at the moment the coordination of the Social Protection and Development Policy remains under the STPP through its SPSU unit. Finally, STPP has also asked the Bank for technical assistance in the design of a new Youth Employment Strategy (Programa de Empleo y Empleabilidad Joven), a flagship highlighted in the 5-year National Development Plan. This new strategy would be implemented through several agencies (including the National Youth Institute INJUVE, MTPS, FISDL, and the Ministry of Education), and donors such as the European Union, under overall coordination of STPP. In that sense, STPP has asked the Bank to extend the closing date of the current Project to prioritize use of funds under each component in activities that are both aligned to the PDO and the new Youth Employment Strategy and will allow the implementation of the first phase of the strategy (on a trial basis) in three municipalities. C. Proposed Changes 6
Financing Change in Loan Closing (s): Explanation The main rationale for project extension of the closing date is to allow the Government to finalize implementation of key activities, in particular those who are consistent with the new Youth Employment Strategy. This will include the implementation of a new round of PATI focused on low-skilled youth in 3 urban municipalities in 2016, the strengthening of Ministry of Labor's employment offices (in human resources and equipment) in those 3 urban municipalities, and consultancies, communications campaign, and workshops related to the new Youth Employment Strategy and executed by STPP. Ln/Cr/TF IBRD- 78110 Reallocations Explanation Status Original Closing Current Closing Proposed Closing Previous Closing (s) Effective 31-Dec-2014 31-Dec-2015 31-Aug-2016 31-Dec-2015 The Government has asked the Bank to reallocate US$200,000 from Component 1 (Subcomponent 1.1, PATI Grants) to Component 3, given savings identified in the execution of PATI program and to ensure financing of key consultancies and activities supporting the new Youth Employment Strategy. Ln/Cr/TF IBRD-78110 USD Currency Current Category of Expenditure PATI Grants and Man.Exp. - PT A.1 GO,Non-CS,CS,OP,TR - PT A Allocation Current Proposed Disbursement % (Type Total) Curre nt Proposed 28,846,500.00 28,646,500.00 100.00 100.00 5,082,500.00 5,082,500.00 100.00 100.00 Outputs under PT A.2 6,731,000.00 6,731,000.00 70.00 70.00 GO,Non-CS,CS,OP,TR - PT B GO,Non-CS,CS,OP,TR - PT C 6,700,000.00 6,700,000.00 100.00 100.00 2,515,000.00 2,715,000.00 100.00 100.00 UNALLOCATED 0.00 0.00 100.00 100.00 Designated Account 0.00 0.00 100.00 100.00 Designated Account 0.00 0.00 100.00 100.00 Designated Account 0.00 0.00 100.00 100.00 FRONT END FEE 125,000.00 125,000.00 100.00 100.00 Total: 50,000,000.00 50,000,000.00 7