The World Bank Social Assistance System Strengthening Project (P123960) REPORT NO.: RES38336 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SOCIAL ASSISTANCE SYSTEM STRENGTHENING PROJECT APPROVED ON JANUARY 22, 2014 TO SOCIALIST REPUBLIC OF VIETNAM SOCIAL PROTECTION & JOBS EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Ousmane Dione Regional Director: Daniel Dulitzky Practice Manager/Manager: Philip B. O'Keefe Task Team Leader: Nga Nguyet Nguyen The World Bank Social Assistance System Strengthening Project (P123960) ABBREVIATIONS AND ACRONYMS The World Bank Social Assistance System Strengthening Project (P123960) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P123960 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 22-Jan-2014 31-Dec-2019 Organizations Borrower Responsible Agency Socialist Republic of Vietnam Ministry of Labor, Invalids and Social Affairs Project Development Objective (PDO) Original PDO The project development objective is to support the government of Vietnam in strengthening the social assistance system by developing innovations in management and service delivery nationwide, and by piloting these innovations in the four project provinces. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-53540 22-Jan-2014 24-Apr-2014 22-Jul-2014 31-Dec-2019 60.00 30.60 23.65 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Social Assistance System Strengthening Project (P123960) Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Project implementation is currently on-track to achieve the PDO with PDO and intermediate indicators are reaching its targets. The project has completed key achievements, including: (i) the Opportunity package/scheme concluded in June 2018, all system-setting-up related activities, such as benefit payment for additional beneficiaries and VNPOST service fees and collaborator network, have been completed; (ii) the Project has finalized the deployment of the information system, and its associated hardware, across all 63 provinces. 2. In particular, the activities under sub-component 2.1 (Benefit payment to the beneficiary households under consolidated “Household package” (Opportunity Program) in four piloted provinces) have been implemented in a timely manner. However, the number of poor households and additional beneficiaries under this component was much lower than expected in the original project design for the following reasons: i) First, the initial supporting time for payments to beneficiaries was 3 years starting from July 1, 2015 as per the project’s original design. However, due to the long delay in data collection and identification of the beneficiaries, the actual support was started in 2017, and actual average supporting time was in the range of 1 to 1.5 years as the final eligible time was keeping unchanged as June 30, 2018; ii) Second, the number of additional beneficiaries was estimated based on the laws and regulations in place at the time of project preparation (early 2014). According to this, the poverty rate at the beginning of the 5-year period is usually set high (about 15%) with the expectation that the rate will fall over time. However, in 2015 Poverty Census had resulted in a much lower poverty rate of about 9% as a result of government selected poverty lines, and subsequently the poverty rate in 2017 was only 6.7%. The estimated total number of additional beneficiaries in 4 project provinces in 2017 was only about 90,000 as compared to around 200,000 originally. iii) Third, among the poor households in 2017, there were income-poor households and other poor households based on non-income dimensions. However, from 2017, the Ministry of Finance only agreed to support poor household according to the income criteria. As a result, only beneficiaries from income-poor households was considered eligible which accounted only 5.8%. This was equivalent to around 77,000 additional beneficiaries accordingly. iv) Finally, of the income-poor households identified in 2017, the number of additional beneficiaries registered was low as: i) localities were not familiar with the new review and approval process; ii) there was no consensus among the localities on supporting poor children who were not in schools, and poor pregnant women (with a believe that this may make women tend to have more children). In fact, total number of registered beneficiaries in 4 project provinces was 28,880 in later 2016 (of The World Bank Social Assistance System Strengthening Project (P123960) which 97% were children aged 0-3 from poor households, and only less than 3% were beneficiaries from other two groups); 21,947 in 2017 and was 18,909 in first 6 months of 2018. In addition, there are some procurement-related savings from activities, and saving from fee payment to payment service provider under the Category 1. 3. As a result, there was a substantial reduction in the number of beneficiaries who were eligible for support under the project compared to original projections. The task team worked with the Central Project Management Unit under the Ministry of Labor, Invalids, and Social Affairs and estimated that an amount of SDR 15,250,000 (US$ 21 million equivalent) from funding related to this activity would therefore not be used. 4. Accordingly, to take advantage of the possibility of recommitting under the same IDA terms, the Ministry of Finance of Vietnam has on August 19, 2019 requested the cancellation of SDR 15,250,000 unused IDA funds under this Project (along with the cancellation of certain amounts under other ongoing Projects). II. DESCRIPTION OF PROPOSED CHANGES 5. The proposed restructuring is to cancel the unused funds of SDR 15,250,000 million (US$ 21 million equivalent). The cancellation of the funds does not prevent the Project from achieving its PDO and results targets. Details reallocation of funds can be found in the following sections of this restructuring paper. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. III. SUMMARY OF CHANGES Changed Not Changed Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ The World Bank Social Assistance System Strengthening Project (P123960) Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Strengthening the social Strengthening the social assistance and poverty reduction 27.00 Revised assistance and poverty 26.67 system reduction system Launching a consolidated social Launching a consolidated social 30.00 Revised 9.43 assistance program assistance program Project management 5.50 Revised Project management 5.50 TOTAL 62.50 41.60 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE The World Bank Social Assistance System Strengthening Project (P123960) CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation LOAN Disburs IDA-53540- RESTRUCTUR ing&Re XDR 39,100,000.00 15,250,000.00 19-Aug-2019 23,850,000.00 001 ING, COST paying SAVINGS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-53540-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: GO-INCLVEH,CSNONCSIOCTR&WS PT1,2B,3 22,810,000.00 16,876,381.11 22,130,000.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: BENEFITS TO ADDL BENEFICIARIES PT2A 16,290,000.00 1,250,480.09 1,720,000.00 100.00 100.00 Total 39,100,000.00 18,126,861.20 23,850,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2014 0.00 0.00 2015 2,000,000.00 2,125,552.38 2016 4,000,000.00 12,554,976.46 2017 19,500,000.00 6,744,313.03 2018 17,000,000.00 7,088,200.00 The World Bank Social Assistance System Strengthening Project (P123960) 2019 16,500,000.00 2,085,000.00 2020 1,000,000.00 2,633,303.40 .