. PROJECT INFORMATION DOCUMENT (PID) ADDITIONAL FINANCING Report No: 83059 . Project Name Social Protection Additional Financing Parent Project Name Social Protection Project Region LATIN AMERICA AND CARIBBEAN Country Jamaica Sector(s) Other social services (80%); Central government administration (10%); Compulsory pension and unemployment insurance (10%) Theme(s) Social safety nets (50%); Improving labor markets (25%); Social risk mitigation (25%) Lending Instrument Investment Project Financing Project ID P146606 Parent Project ID P105024 Borrower(s) Jamaica Implementing Agency Ministry of Labour and Social Security, Ministry of Finance and Planning, and Planning Institute of Jamaica Environmental Category C Date PID 26-Nov-2013 Prepared/Updated Date PID 27-Nov-2013 Approved/Disclosed Estimated Date of 27-Nov-2013 Appraisal Completion Estimated Date of Board 11-Feb-2014 Approval Decision Other Decision . I. Project Context Country Context Jamaica, the largest English speaking country in the Caribbean, is a small upper middle income country with a long history of elusive growth, high debt and high exposure to shocks and natural disasters. While overall inequality remains relatively low compared to the rest of the region, people at the bottom 40 percent of the income distribution have suffered more than the average household in recent years, and inequality and poverty have been constantly rising since 2008.1 Unemployment has substantially increased, especially among women and young people. Youth unemployment is particularly worrisome, as 37 percent of young women (ages 15 to 24) and 41.7 percent of young men were unemployed in 2013.2 Jamaica was hit hard by the global economic crisis, as tourism and bauxite revenues plummeted, Foreign Direct Investments (FDI) and remittances declined, and the economy contracted by 1.2 percent on average per year between 2009 and 2011. As in many other small open economies, economic recovery has been subdued. Moreover, Jamaica faces extreme difficulties in improving its debt situation, which stands above 140 percent of GDP. To avert a crisis and return to macroeconomic sustainability and growth, an agreement has been reached with the International Monetary Fund (IMF) on an ambitious economic reform for US$932.3 million supported by a four year Extended Fund Facility approved in May, 2013.3 Sectoral and Institutional Context Consistent with international best practice and the need to rationalize spending, in 2002 the Government of Jamaica (GoJ) developed a safety net program-Program of Advancement through Health and Education (PATH) to protect the poor, while at the same time improving their human capital. PATH improved the efficiency and coverage of the existing social safety nets (SSN) through the implementation of a beneficiary identification system that relies on a proxy means test to target beneficiaries. The identification system is now used for other SSN programs, including school feeding subsidies and some Poor Relief benefits. In response to the global crisis which increased socio-economic stress on poor and vulnerable families the GoJ significantly increased the coverage of PATH. Since its initiation the Government of Jamaica has financed the majority of PATH operations. In late 2010, the GoJ also piloted a small scale program aimed at improving the employability and productivity of PATH beneficiaries, with the objective to graduate them from the program and improve the program’s sustainability. Government is now in the process of defining the graduation strategy for PATH, which will be implemented nationwide starting next year. In parallel in 2010, aware of the fiscal pressure of public sector pension expenditures, the Government embarked on a significant reform program for the public sector pension scheme through the preparation of a parametric reform package that included increasing retirement ages, reducing accrual rates, introducing contributions, moving away from final salary as a basis for the calculation of pension benefits, and improvements in the related administration and information systems. Moreover, during the past year the Government of Jamaica further committed to establishing an effective Social Protection Strategy aimed at reducing poverty and vulnerability through the formulation of Vision 2030 Jamaica - National Development Plan. 1 Jamaica Country Economic Memorandum, Unlocking Growth, World Bank Publication, 2011. 2 Statistical Institute of Jamaica, data reported for July 2013. 3 International Monetary Fund Extended Fund Facility, March 2013. The parent Social Protection Project is a US$40 million Loan to the Government of Jamaica (GoJ), which was approved on May 13, 2008, and became effective on October 10, 2008. The original Project’s Development Objective (PDO) is to support Jamaica in strengthening its social protection system through: (i) improving the effectiveness of the PATH to foster investment by poor families in human capital accumulation; (ii) developing a structured system for assisting working-age persons of PATH households to seek and retain employment, through Steps to Work (StW) program; (iii) enabling the formulation of a reform program for the pension schemes of public sector workers; and (iv) developing a social protection strategy. The proposed AF’s aim is to provide additional support to strengthen the social protection system in Jamaica through continued financing for supporting, refining, and scaling up activities initiated successfully by the parent Project in a critical time of budget constraint for the Government. As a large Program with demonstrated ability to reach a wide share of the poor4 and to have a positive impact on human capital formation, the PATH has been central in the domestic policy response of the Government of Jamaica to the global economic crisis, as reflected in both increases in the cash grants levels and higher coverage of the target population. The GoJ also piloted the StW program, and reformed the Ministry of Labour and Social Security’s (MLSS) case management processes. The proposed AF would support the continued financing for the PATH grants and the operations to scale it up along with the StW over the next years in a context of tepid economic recovery from the 2008 crisis. It would also support efforts to improve the long-term effectiveness and efficiency of the country’s overall social protection system, by increasing coordination and articulation with other programs and services. Finally, the AF will support the implementation of the public sector pension reform and the operationalization of the social protection strategy, both of which were financed under the parent Project. II. Project Development Objective(s) A. Current Project Development Objectives: Parent The Project will support Jamaica in strengthening its social protection system. To this end, it will: (i) further improve the effectiveness of the PATH to foster investment by poor families in human capital accumulation; (ii) develop a structured system for assisting working-age members of PATH eligible households to seek and retain employment; (iii) enable the formulation of a reform program for the public sector pension schemes; and (iv) develop a holistic social protection strategy. . B. Proposed Project Development Objectives: Additional Financing (AF) The proposed Project would support Jamaica in further strengthening its social protection system. 4 “Targeting assessment of the Programme for Advancement through Health and Education”, G.A. Gibbison, 2013 and “Evaluation of Jamaica’s PATH Program: Final Report”, D.Levy and J.Ohls, MATHE MATICA Policy. . III. Project Description Component 1. Improving effectiveness of the PATH. This component will continue to support the Conditional Cash Transfer (CCT) program PATH by financing the following two subcomponents: Sub-component 1.a. Conditional Cash Transfers: Under this sub-component, the additional financing will finance eligible government spending on PATH grants. Sub-component 1.b. Institutional Strengthening of PATH: This sub-component will continue supporting activities in three core areas: (i) strengthening and improving administrative systems for efficient delivery of PATH benefits; (ii) improving accountability, monitoring, and evaluation of the PATH; and (iii) strengthening the capacity of the MLSS to implement the PATH and the graduation strategy. All the activities under this sub-component will be implemented through the provision of consultant services, training, goods, and operating costs. Component 2. Building Capacity for the Steps-to-Work Program. This component will continue to finance strengthening of the capacity to implement the Steps-to-Work (StW) program. Specifically, it will directly finance provision of tailored services to PATH households' members to facilitate sustainable human capital development and graduation from PATH. This will be done via public-private partnerships and the development and operationalization of a well-functioning monitoring and evaluation system for the program. More specifically, this component will support: (i) Provision of services such as job readiness and skills training, education completion at the secondary level, job placement services, entrepreneurial training and support, and stipends to trainees; (ii) Strengthening of capacity for implementing StW at the central and Parish level, including: improving StW design, systems, procedures and tools to provide adequate services to beneficiaries, recruitment and training of personnel to coordinate the provision of services and provide personalized coaching to beneficiaries; and (iii) Strengthening the StW Monitoring and Evaluation system, including the design and development of a Management Information System (MIS) for StW which would track the trajectories of each StW participant. Activities under this component will be implemented through the provision of consultant services, training, goods, stipends, and operating costs. Component 3: Improving the Public Sector Pension System Administration and Building Capacity and Support for Reform. This component will finance activities to support the implementation and operationalization of the pension reform for public sector employees. Specifically, it will support the following: (i) Carrying out a public information campaign for public sector workers to inform them of the changes introduced in the public sector pension system; (ii) Providing technical advisory services on the required legal amendments resulting from the parliamentary discussions of the White Paper; (iii) Building the capacity of the Pensions Administration Unit for implementing the earning database to capture and record contribution and earning information of public employees; (iv) Setting up of the Pensions Policy Unit to monitor the effective implementation of pension reforms and consolidate analysis and policy of private and public sector employer- provided pension systems; and (v) purchasing of equipment for the Human Resource Unit to support the pension administration. Activities under this component will be implemented through the provision of consultant services, training, and goods. Component 4. Development and Operational Support to the Implementation of the Social Protection Strategy. This component's focus will be to support the development and operationalization of the Social Protection (SP) Strategy, which was developed under the Parent project. The following activities will be financed under the AF: (i) Dissemination of the strategy to various audiences (ii) Institutional Capacity Building in key agencies; (iii) Policy Development and formulation in key areas; (iv) Research and diagnostic work on relevant priority areas, including but not limited to poverty and unemployment insurance; and (v) Developing a monitoring and evaluation system for the implementation of the social protection strategy. Activities under this component will be implemented through the provision of consultant services, training, and goods. IV. Financing (in USD Million) Total Project Cost: 40.00 Total Bank Financing: 40.00 Total Cofinancing: Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 0.00 International Bank for Reconstruction and Development (IBRD) 40.00 Total 40.00 . V. Implementation The Ministry of Labor and Social Security (MLSS) will have overall Project execution responsibility. It is also be the implementing agency for the PATH and Steps-to-Work components. The Ministry of Finance and Planning (MFP) will be the implementing agency for the pension reform component while the Planning Institute of Jamaica (PIOJ) will implement the component on the Social Protection Strategy. The Operations Manual for the Project specifies the implementation arrangements whereby the MFP and PIOJ are responsible for the technical oversight of components 3 and 4 (including preparation of periodic progress reports, and updating of implementation plans) while entrusting the fiduciary functions (financial management and reporting, procurement) to the MLSS. The Accounting Unit in the Public Assistance Division, MLSS, will be responsible for carrying out these fiduciary functions. Given that PIOJ is a separate legal entity, under Jamaica law, an implementation agreement between the borrower through MLSS and PIOJ will be required to ensure that the former will cause the later to carry out the Project in accordance with the provisions of the Loan Agreement. . VI. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X Comments (optional) . VII. Contact point World Bank Contact: Francesca Lamanna Title: Senior Economist Tel: 458-5077 Email: flamanna@worldbank.org . Borrower/Client/Recipient Name: Darlene Morrison Title: Deputy Financial Secretary, Economic Management Division Ministry of Finance and Planning 30 National Heroes Circle P.O Box 512, Jamaica Tel: 876-922-8600-13 Fax:926-9291 Email: darlene.morrison@mof.gov.jm Implementing Agencies Name: Denzil Thorpe Title: Director Social Security Ministry of Labour and Social Security 14 National Heroes Circle P.O Box 512, Jamaica Tel: 876 922-8000-13 Fax: 876 924-9639 Email: dthorpe@mlss.gov.jm Name: Barbara Scott Title: Director, External Cooperation Management Division Planning Institute of Jamaica 10-16 Grenada Way16 Oxford Road P.O Box 634, Jamaica Tel: 876-906-4463 Fax:876-906-3636 Email: Barbara_Scott@pioj.gov.jm VIII. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500