Document of The World Bank For Official Use only Report No: 74906-LB INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$30 MILLION TO THE REPUBLIC OF LEBANON FOR A SOCIAL PROMOTION AND PROTECTION PROJECT April 22, 2013 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. CURRENCY EQUIVALENTS (Exchange Rate Effective April 2, 2013) Currency Unit = Lebanese Pound (LL) LL1,507.5 = US$1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AIS Accounting Information Software CDD Community Driven and Developed CDP Community Development Project CDR Council of Development and Reconstruction CSD Community Social Development CSO Civil Society Organization DA Designated Account EDL Electricite du Liban (Lebanon Electricity) EMP Environmental Management Plan ESAF Environmental And Social Assessment Framework FO Financial Officer FM Financial Management GOL Government of Lebanon GRM Grievance Redress Mechanism HBS Household Budget Survey IFR Interim unaudited Financial Report IGA Income Generating Activities IPSAS International Public Sector Accounting Standards IMC Inter-Ministerial Committee M&E Monitoring and Evaluation MIS Management Information System MOSA Ministry of Social Affairs NPTP National Poverty Targeting Program PCM Presidency of the Council of Ministers PM Project Management PFS Project Financial Statements PMT Proxy-Means Test SDC Social Development Center SPPP Social Promotion and Protection Project SSN Social Safety Net TOR Terms of Reference Regional Vice President: Inger Andersen Country Director: Ferid Belhaj Sector Director: Steen Lau Jorgensen Sector Manager: Yasser El-Gammal Task Team Leader: Haneen Sayed LEBANON Social Promotion and Protection Project TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................9 A. Country Context ................................................ 9 B. Sectoral and Institutional Context .......................................... 11 C. Higher Level Objectives to which the Project Contributes .................. 14 II. PROJECT DEVELOPMENT OBJECTIVES .........................................................15 A. PDO....................................................... 15 Project Beneficiaries .......................................... ..... 15 PDO Level Results Indicators......................................... 15 III. PROJECT DESCRIPTION .........................................................................................16 A. Project Components ............................................ 16 B. Project Financing ......................................... ..... 19 Lending Instrument ...................... .................. 19 Project Cost and Financing ................... ................ 19 C. Lessons Learned and Reflected in the Project Design..................... 20 IV. IM PLEM ENTATION .................................................................................................. 22 A. Institutional and Implementation Arrangements .................... ..... 22 B. Results Monitoring and Evaluation ................................... 23 C. Sustainability........ .......... .............................. 24 V. KEY RISKS AND MITIGATION MEASURES....................................................25 A. Risk Ratings Summary Table .................................. 25 B. Overall Risk Rating Explanation .............................. ...... 25 VI. APPRAISAL SUM M ARY ......................................................................................... 27 A. Economic and Financial Analyses .......................... ......... 27 B. Technical .................................................... 28 C. Financial Management ................... ............... 29 D. Procurement ......................................... ......... 30 E. Social (including Safeguards) ...................................... 32 F. Environment (including Safeguards) ................................. 32 Annex 1: Results Framework and Monitoring .................................................................... 34 Annex 2: Detailed Project Description .................................................................................. 39 Annex 3: Implementation Arrangements ............................................................................. 50 Annex 4: Operational Risk Assessment Framework (ORAF).............................................68 Annex 5: Implementation Support Plan................................................................................76 Annex 6: Economic and Financial Analysis ......................................................................... 80 PAD DATA SHEET Lebanon Social Promotion and Protection Project PROJECT APPRAISAL DOCUMENT Middle East and North Africa MNSHD Basic Information Date: April 22, 2013 Sectors: Other social services (100%) Country Director: Ferid Belhaj Themes: Social Safety Nets (50%); Social Risk Mitigation (25%); Vulnerability Assessment and Monitoring (25%) Sector Manager/Director: Yasser El Gammal/ Steen EA B-Partial Assessment Lau Jorgensen Category: Project ID: P124761 Lending Instrument: Specific Investment Loan Team Leader(s): Haneen Sayed Joint IFC: Borrower: Lebanese Republic, Ministry of Finance Responsible Agency: Ministry of Social Affairs Contact: H.E Wael Abou Faour Title: Minister of Social Affairs Telephone No.: +961-1-611242 Email: ckalot@socialaffairs.gov.lb Project Implementation Period: Start Date: 01-Jan-2014 End Date: 30-June-2018 Expected Effectiveness Date: 01 -Jan-2014 Expected Closing Date: 31-Dec-2018 Project Financing Data(US$M) [X] Loan [ ] Grant [ ] Other [ ] Credit [ ] Guarantee For Loans/Credits/Others Total Project Cost: US$70 million Total Bank US$30 million Financing : Total Cofinancing: Financing Gap: 0 Financing Source Amount(US$M) BORROWER/RECIPIENT 40 IBRD 30 IDA: IDA: Others Financing Gap Total 70 Expected Disbursements (in USD Million) Fiscal Year FY14 FY15 FY16 FY17 FY18 FY19 Annual 1.2 8.71 7.95 6.14 5.1 0.9 Cumulative 1.2 9.91 17.86 24 29.1 30 Project Development Objective(s) The development objective of the project is to increase access to social development services at the community level, improve the coverage and targeting of the National Poverty Targeting Program (NPTP), and strengthen the capacity of the Ministry of Social Affairs (MOSA) at the central level and the Social Development Centers (SDC) at the local level. Components Component Name Cost (USD Millions) Component 1: Social Development Centers 9.0 Component 2: Community Social Development Program 12.3 Component 3: National Poverty Targeting Program 6.7 Component 4: Project Management 2.0 Compliance Policy Does the project depart from the CAS in content or in other significant respects? Yes [ ] No [X] Does the project require any waivers of Bank policies? Yes [ ] No [X] Have these been approved by Bank management? Yesr ] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [X] Does the project meet the Regional criteria for readiness for implementation? Yes [X] No [ ] 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 Legal Covenants Name Recurrent Due Date Frequency Description of Covenant Team Composition Bank Staff Name Title Specialization Unit UPI Haneen Sayed Human Development Coordinator, TTL MauriziaTovo Lead Social Development Specialist Victoria Levin Economist Lina Fares Senior Procurement Specialist Rima Koteiche Senior Financial Management Specialist Mona El-Chami Senior Financial Management Specialist Alaa Sarhan Senior Environmental Economist Nina Bhatt Senior Social Development Specialist Franco Russo Operations Analyst Zeina El Khalil Public Information Associate Mei Wang Senior Counsel Hassine Hedda Finance Officer Hala Ballout Program Assistant Angela Elzir Research Analyst Rita Faddoul Program Assistant Non Bank Staff Name Title Office Phone City Tarsicio Castaneda Consultant Manila - Philippines Locations Country First Administrative Location Planned Actual Comments Division I. STRATEGIC CONTEXT A. Country Context 1. An upper-middle-income country of 4.2 million inhabitants and a large diaspora, Lebanon is highly urbanized with more than 85 percent of the population living in cities. The Lebanese economy is an open economy in which the services and trade sectors account for 60 percent of GDP and 73 percent of jobs.1 The economy, with an average real GDP growth of 4 percent over the 1997-2010 period and GDP per capita of US$9,904 (201 1),2 is driven by a dynamic private sector and is dependent on financial flows from the Arab Gulf economies. Growth and job creation performance are below potential despite the significant financial resources, due to a number of factors, including the country's macroeconomic volatility, infrastructure bottlenecks, inadequate support to innovation, distorted product and labor market regulations, and poor governance. Only 47 percent of the working age population participates in the labor market, of which 11 percent remain unemployed.3 Unemployment is especially high among youth (34 percent) and women (18 percent). The majority of the labor force is employed in low productivity service jobs, with only 29 percent of workers in formal wage employment, i.e., with access to social security and protected by labor regulations. Fifty percent of workers are in the informal sector (either as wage employees or self-employed).4 2. Although the country has proven its economic resilience to external shocks and its ability to rebound from crisis, a number of critical reforms need to be implemented to put the economy on the right track. One example of Lebanon's resilience was the recent financial, food, and fuel crisis, which did not have serious economic effects on the country. Foreign saving and inflows increased considerably in 2007-2010, which demonstrated, in part, the attractiveness of the Lebanese banking sector, considered "a safe haven in times of crisis"5. These inflows contributed to an increase in aggregate demand and led to fluctuations in economic activity without improving the prospects for long term growth enhancement and job creation. More recently, the influx of Syrian refugees into Lebanon as a result of the conflict in Syria constitutes yet another external shock to the economy and the country's social fabric, putting a strain on public services and resources, as well as creating an urgent humanitarian situation.6 Therefore, it is crucial to strengthen the country's resilience and to put the domestic economy on a path to high, sustainable, and broad-based growth that will create sufficient employment opportunities to meet the needs of a growing educated labor force and to achieve fiscal space for social needs and other priorities. 3. The complex confession-based political system and the lack of a regionally balanced development strategy, among other factors, affect the quality of public services provided across Lebanon. Lebanon's complex political economy is based on a sectarian consensual democracy, in which political authority is shared among confessional groups. This political Central Administration of Statistics (CAS) 2 World Development Indicators 3Lebanon: Good Jobs Needed: The Role ofMacro, Investment, Education, Labor and Social Protection Policies ("MILES'), A Multi-Year Technical Cooperation Program, World Bank; December 2012. 4 Ibid. 5 World Bank (2012). Using Lebanon's Large Capital Inflows to Foster Sustainable Long-term Growth. Report No. 65994-LB, 6 According to the JNHCR, the number of registered refugees is 360,000 as of March 2013, and is expected to exceed 500,000 by July 2013. 9 structure affects, among other things, the quality of the country's public institutions for service delivery. As a consequence, citizens often turn to costlier alternative providers of services. In addition, the absence of a regionally balanced development strategy together with geographic disparities in human capital has created regional disparities in living conditions. Development efforts since the end of the Civil War (1975-1991) have mostly focused on urban reconstruction, while the rural northern region, which houses almost half of the poor population, continues to lag behind. 4. Although poverty rates are comparable to those of other middle-income countries, poverty remains significant and regional disparities in living conditions are acute. Based on the latest available household budget survey, it is estimated that nearly 27 percent of the Lebanese population, or 1 million people, were poor, living on less than US$4 per day, and 8 percent, or 300,000 people, were extremely poor, living on less than US$2.40 per day. 7/8 Poverty is significantly higher in some regions. In addition, over half of the Lebanese citizens claimed they do not have any money left after paying for basic needs and necessities.9 Even more alarming is the fact that 63 percent of Lebanese claimed not being able to afford the basic necessities at some time. Out of those who have some surplus, almost 30 percent save for unexpected emergency/medical expenses, and only 7 percent save to invest capital in business or assets. Compounding this situation is the dearth of community development and social safety net initiatives that could support the livelihoods of the poor and vulnerable, promote their inclusion in society, and enhance their resilience to shocks (see paragraph 6). 5. Overall in human development, Lebanon has achieved good health and education outcomes, but this has occurred in spite of uneven quality service delivery by the public sector. Life expectancy at 72 years is comparable to that of other middle-income countries, 10 while infant and child mortality rates as well as maternal mortality rates are below the regional averages for the Middle East and North Africa (MENA). The net enrolment rate in primary education increased from 71 percent in 1997 to 92 percent in 2010 and secondary school net enrolment rates are five percentage points above the MENA regional average and 11 points above the average in middle-income countries. In addition, with a 54 percent gross enrolment rate in tertiary education in 2010, Lebanon greatly exceeds the 31 and 26 percent enrolment rates registered, respectively, for the MENA region and for middle-income countries. Still, weak institutional capacity and inefficiencies limit the country's prospects for developing higher quality education and health services. In some sectors, public service delivery is severely under- resourced, especially in terms of skilled staff, which affects the performance of ministries and their capacity to deliver quality services. Therefore, those who can afford it rely on the more expensive services provided by the private sector. There is widespread consensus that improved service delivery is a critical step toward a more inclusive Lebanon. 7 The last national household budget survey conducted in Lebanon was in 2004. The Central Administration of Statistics is currently finalizing the next HBS (2011/2012) with support from the World Bank. United Nations Development Program (2008). Poverty, Growth and Income Distribution in Lebanon. Beirut, Lebanon. 9 Findings from the Lebanon Financial Capability and Literacy Survey undertaken in May 2012. This was the first survey ever measuring financial literacy and capabilities at the country level. 10 All comparisons in the paragraph are based on the World Development Indicators for 2010 10 B. Sectoral and Institutional Context 6. Social safety nets (SSNs) in Lebanon are fragmented, weak, and ill-prepared to play an effective role in times of need. Government spending on social safety nets is only 1.3 percent of GDP (2010) and the effectiveness and impact on poverty is limited due to high rates of leakage to the non-poor, weak capacity and coordination among the main public institutions, and the lack of reliable and timely data. The following three types of public social safety nets exist: (i) social services to specific categories of vulnerable groups provided by the Ministry of Social Affairs (MOSA) primarily through welfare institutions and NGOs; (ii) price subsidies for diesel, bread, and domestic production of tobacco11; and (iii) fee waivers for hospitalization in public and private hospitals. The first type of social safety net consists of programs targeted to certain categories of the population (disabled persons, juvenile delinquents, school dropouts, orphans, etc.) and represents around 90 percent of MOSA's budget. These funds are known to reach over 200,000 beneficiaries through welfare institutions and NGOs. The second type of safety net - price subsidies (for domestic production of tobacco and consumption of diesel) - either reach a small number of beneficiaries (e.g., 2,400 tobacco farmers), or are distributed universally, with significant benefit leakages to distributors and suppliers (in the case of diesel subsidies). The bread subsidy has been implemented in an ad hoc manner with inadequate monitoring and evaluation, and there are indications that subsidized flour is often used for food items not commonly consumed by the poor (e.g., pizza, pasta, and French pastries). The third type of safety net, fee waivers for hospitalization (85 percent of the bill), is for use of hospital services by those not covered by the National Social Security Fund and lacking the means to purchase insurance. There is suggestive evidence that this program is not well targeted to the 12 poor. 7. Consecutive governments in Lebanon over the past five years have put reforming social safety nets and tackling poverty as a priority. In 2007, the Social Action Plan (SAP) submitted by the Government of Lebanon (GOL) to the donor community at the International Conference for Support to Lebanon (Paris III) focused on the establishment of an effective SSN system targeted to the poor and vulnerable to help them cope with social and economic difficulties and to strengthen the population's ability to better manage negative shocks, as well as to ensure improvements in health, education, and pensions. In addition, social issues have featured prominently in a number of government policy statements, with the current government identifying local development and prioritization of the needs of the poor in its policy statement to the Parliament in June 2011. In fact, as affirmed in this policy statement, the Cabinet is committed to attaining social justice and sustainable development in all the regions through comprehensive development and economic plans. 8. Preparation for the National Poverty Targeting Program (NPTP) began in 2009 with World Bank assistance, and the program was officially launched as a national program in October 2011. The objective of the NPTP is to "provide social assistance to the poorest and most vulnerable Lebanese households based on transparent criteria that assess each household's " In addition, in 2011, the MOF provided an annual subsidy of approximately LBP2,626 billion (equivalent to US$1.74 billion) to the electric supply company (Electricit du Liban, EDL), which is the largest drain on the budget, but it is not considered a safety net per se. 12 Silva et al. (2012), Inclusion and Resilience: The Way Forward for Social Safety Nets in the Middle East and North Africa. MENA Development Report. Washington, DC: The World Bank. 11 eligibility to receive assistance, given the available public resources ".13 The NPTP is based on a proxy-means testing (PMT) targeting mechanism and was allocated US$28.2 million by the Council of Ministers for 2011-12.14 The program currently offers access to the following benefits: (i) payment of the beneficiary portion of health bills in public and private hospitals; (ii) coverage of chronic disease prescription medications through the MOSA Social Development Centers (SDC); (iii) registration fee waivers and free books for students in primary and secondary public schools; and (iv) discounts on the electricity bills submitted to the Lebanon Electricity (EDL). As of October 2012, more than 62,000 households applied to the program, 43,608 households were assessed and received a score, and 18,801 households were deemed eligible to receive the benefits and approved by the Social Inter-Ministerial Committee (Social- IMC) and the Council of Ministers. 15 9. Despite the above progress, the NPTP is still an anti-poverty program in its infancy. Coverage remains low - the program today reaches only 27 percent of the extreme poor and 7 percent of the poor. The GOL's objective is to expand the program to reach all the individuals below the extreme poverty line by 2024. This is estimated at 7.19 percent of the population. 16 The impact of providing the current "basket of benefits" to the poor and vulnerable is still to be assessed. The organizational structure of the program, while working fairly effectively today, needs to be institutionalized (see Annex 2). Monitoring and evaluation as well as other business processes and infrastructure systems are just getting established and awareness of the program is low (40 percent among the poor) as seen from a recent survey.17 Finally, the GOL would like the NPTP to become an integrated anti-poverty program over time where beneficiaries are activated into labor market and/or other programs increasing self-reliance. 10. In addition to social safety net programs, community-driven development (CDD) programs have a key role to play in addressing poverty and regional disparities in human development outcomes, particularly if such programs are implemented transparently and with community participation. In Lebanon, evidence from prior CDD programs indicates some positive impacts such as five-fold reduction in morbidity of water-borne diseases through a project that connected 130 households to a sewage network and a wastewater treatment station (Zouk El Moqashreen in north Lebanon);18 creation of jobs and improvement of incomes through a project that planted new vine shoots in 11 villages, increasing the area of developed land in Baalbeck; and improved access to health services to the members of a community in Akkar by building and equipping a health dispensary, among many others.19 But the key issue has been that these efforts/programs have not been sustainable. The CDD programs are managed and implemented by various agencies and ministries, each applying different methodologies, 13 Cabinet policy statement on the NPTP (June 18th, 2009) formally adopting the program. 14 The program was officially launched at a national ceremony in Beirut on October 17, 2011, with the President of the Republic, the Prime Minister, Speaker of the House, members of Cabinet, Parliament, among others. 15 In September 2012, the first round of education benefits - free school textbooks and waivers of school fees for general education students (pre-primary, primary and secondary) as well as vocational students - were distributed. 16 The estimated number of poor in 2012 was determined based on the 2012 population in Lebanon (World Development Indicator) and the extreme poverty rate of 7.2 percent (2004 Household Budget Survey, latest available). 17 Silva et al. (2012). Inclusion and Resilience: The Way Forward for Social Safety Nets in the Middle East and North Africa. MENA Development Report. World Bank, Washington DC. 15 Moussa, Z (2011). Impact Evaluation of the Community Development Program of the Economic and Social Fund for Development (ESFD). The Economic and Social Fund for Development. Beirut, Lebanon. 19 The Consultation and Research Institute (2012). Impact Study of Sub-Projects Implemented Under the Community Development Project. 12 criteria, implementation mechanisms, and driven by different donor priorities. Little coordination exists between these various agencies and donors.20 Finally, robust monitoring and evaluation systems have not been put in place, and where attempts were made, they have fizzled out after the donor support ended. 11. The agency in Lebanon with the mandate to coordinate and lead CDD-type programs for the social sectors is the Ministry of Social Affairs (MOSA). At the strategic level, MOSA has placed the CDD approach central to its 2011 National Social Development Strategy. As stated in the strategy: "MoSA's objective is to establish an effective and sustainable institutional mechanism to build social and economic assets of disadvantaged communities, building on its mandate among government agencies of supporting social development at the community level".21 Building an effective CDD-type program is seen as the way to transform MOSA from a ministry of social affairs to a ministry of social development. In addition, the complementarities of such a program with the NPTP are high, with the former tackling poverty and inequality at the community level and the latter aiming to achieve similar goals at the household level. Thus, implementing these two programs in parallel can assist the GOL in moving forward on a comprehensive anti-poverty and social development agenda. 12. To achieve the above vision, however, MOSA will need to address a number of financial, technical, and institutional constraints --key among them is the modernization and empowerment of its 218 Social Development Centers (SDCs) spread across the country. Other than municipalities, the SDCs are the only permanent government institutions at the grassroots level, and they are the key local agencies in implementing MOSA's strategy on the ground, including the CDD approach. The SDCs provide social services and promote integrated development at the individual, household and community levels. Specific roles and responsibilities of the SDCs include: (i) undertake studies on various topics related to the welfare of the local community (education, health, poverty, demography, economy, etc.); (ii) identify and prioritize community needs and issues (resulting in local plans); (iii) propose, implement and supervise social development programs in collaboration with local private and public stakeholders; (iv) set up local social committees, and collaborate with them to address local development issues; (v) recommend and support social awareness, educational and counseling programs; (vi) provide social services to the community and, particularly to individuals with special needs (disabled, orphans, homeless, delinquents and the elderly); and (vii) provide assistance and relief work in case of emergency. In 2009, the SDCs across Lebanon reached: (a) almost 309,200 individuals with health services; (b) around 61,600 individuals with social services; (c) almost 7,000 individuals with training services; and (d) 16,500 individuals with education services. 22 13. However, the performance of SDCs has been very uneven across the country, in part reflecting their widely varying endowments: some centers have ample space and staff, and offer a variety of services, while others are very under-resourced and offer minimal services. The recent influx of Syrian refugees, particularly into the poor and lagging areas of the country, has placed additional demands on the SDCs which are already stretched financially and capacity- 20 A quick stocktaking reveals that as of 2012, more than ten community development programs are being implemented throughout Lebanon. More than US$200 million has been invested in these programs in the past decade. 21 Ministry of Social Affairs (2011), The National Social Development Strategy ofLebanon 22Ibid. 13 wise. Since 2012, one of the top priorities of MOSA is to reform and reinforce SDCs to enable them to fulfill their mandated role, including relief work in the case of the current refugee crisis. 14. Among other constraints facing MOSA in the CDD arena is the weakness of the central unit responsible for supporting community development projects - the Social Development Directorate. With an annual budget of LBP 1 billion (US$665,000), very limited staffing, and no set criteria or guidelines, the Directorate today finances and implements small projects that mainly consist of small infrastructure works (retainer walls, agricultural roads, cemetery maintenance, etc.) with unclear effects on the poor and vulnerable, and limited social impact. In addition, the approval process for such projects submitted for funding by communities lacks clear criteria, well-defined guidelines, and effective monitoring. C. Higher Level Objectives to which the Project Contributes 15. The World Bank Group's Lebanon Country Partnership Strategy (CPS) for 2011- 2014 (Report 54690-LB) discussed by the Board of Executive Directors on July 28, 2010, aims to support the Government in putting the Lebanese economy on a path to sustained, high, and broad-based growth. Two strategic goals have been identified in the CPS to which the proposed Social Promotion and Protection Project (SPPP) speaks: (i) Human Capital Development and Social Protection; and (ii) Local Development. 23 The CPS places improvement of living standards of the population and regional equity at the center of the strategy, with local development as one of the means for reducing regional imbalances. Under local development, the CPS highlights the role of community-driven development as investments that will create jobs, provide income opportunities, and leverage local assets, thereby increasing economic empowerment in communities and reducing regional disparities. The CPS also gives priority to the development of Lebanon's weak and fragmented social safety net system in order to enhance its poverty impact. With its focus on supporting poverty reduction through a safety net program (the NPTP), as well as community-level interventions, the proposed SPPP is expected to contribute to the following CPS objectives: (a) build economic and social assets, increase economic empowerment in communities and reduce regional disparities, and (b) reduce poverty and vulnerability at the household level. 16. The proposed SPPP is in line with the Ministry of Social Affairs National Social Development Strategy of Lebanon, developed in 2011. The strategy, developed through a broad-based and nationwide consultative process, highlights that both community social development and poverty targeting are key elements of social development. It emphasizes the complementarities between the two approaches, and that one of MOSA's goals is to "provide livelihood assistance to vulnerable households through the creation of a mechanism that combines targeting formulas and community-based approaches to identify families with various types and levels of need, and to establish coordination mechanisms between social development centers, municipalities, and community NGOs to provide the needed assistance". 24 Implementation of MOSA's strategy has been progressing well with specific anti-poverty programs such as the NPTP already under implementation. 23 The World Bank (2010). Country Partnership Strategy for Lebanese Republic for the Period FY 1-FY14. MNCO2 Country Management Unit. Middle East and North Africa Region 24 Ministry of Social Affairs (2011), The National Social Development Strategy ofLebanon 14 II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 17. The development objective of SPPP is to increase access to social development services at the community level, improve the coverage and targeting of the National Poverty Targeting Program (NPTP), and strengthen the capacity of the Ministry of Social Affairs (MOSA) at the central level and the Social Development Centers (SDC) at the local level. Project Beneficiaries 18. The SPPP beneficiaries consist of the following three categories: (a) Poor and Vulnerable Households and Community Members. The ultimate beneficiaries of the project include: (a) vulnerable individuals and households (e.g., children, elderly, youth at risk, school dropouts, disabled, drug addicts and their families, victims of domestic violence) who will have improved access to social services provided by SDCs; (b) poor and vulnerable individuals who will receive assistance through income generating activities (IGAs), as well as others in the community who will find new employment or experience increased earnings stimulated by growth of IGAs; and (c) the extremely poor households who will be eligible to receive NPTP benefits. (b) MOSA. The project will help strengthen MOSA's capacity to carry out its official mandate, both at the central level and through the SDCs at the local levels. In particular, MOSA will be supported in managing the implementation of small projects using a community-based, demand-driven and participatory approach, so as to position itself as the main government actor for community development activities in the social sphere. At the same time, the continued implementation of the NPTP will help MOSA develop the skills needed for administering well-targeted and efficient social safety nets. (c) Civil Society Organizations (CSOs) and Municipalities. CSOs will also benefit from the project, as they will have an opportunity to improve their capacity to propose, prepare, and implement income-generating projects and social services. Municipalities will benefit from the project as they will have opportunity to propose, prepare, and implement social services at the community level. PDO Level Results Indicators 19. Progress toward the PDO will be monitored through the following key indicators (see Annex 1): (a) Direct project beneficiaries, in total number as well as by type of service - i.e., institutional capacity building at the central and SDC levels, social services, income generating activities support, safety net programs, and capacity building - specifying the percentage of female beneficiaries (Core Indicator) 15 (b) Beneficiaries of safety net programs (Core Indicator), tracking in particular the number of female beneficiaries and the total number of NPTP beneficiaries (programs such as NPTP, which offer education credits, fees waivers and health subsidies, are defined in the core indicators as "other social assistance programs"). (c) NPTP beneficiaries from extremely poor households as a share of total NPTP beneficiaries, as a measure of the targeting accuracy of the program. (d) Percentage of SDC beneficiaries reporting improved quality of services provided by SDCs, measuring the centers' improved capacity. Information for this indicator will come from opinion polls, beneficiary surveys and social audits. (e) Percentage of citizens reporting MOSA's improved responsiveness in delivering social assistance and development grants, measuring MOSA's improved capacity. This indicator will be measured through opinion polls and/or beneficiary surveys. III. PROJECT DESCRIPTION A. Project Components 20. The SPPP will have the following four components: (1) Social Development Centers (SDCs); (2) Community Social Development Program (CSD); (3) National Poverty Targeting Program (NPTP); and (4) Project Management (PM). Component 1, which focuses on building the capacity of the SDCs, is cross-cutting between Components 2 and 3, as the SDCs are the local implementing arms of MOSA's mandate. Specifically, both the CSD and NPTP programs rely on the SDCs for implementation. Component 1: Social Development Centers (SDCs) (US$9.0 million total cost, all of which to be financed from IBRD) 21. The objective of this component is to enhance the administrative and operational capacity of the SDCs to enable them to offer social services of improved quality and relevance. This component will also include key cross-component functions such as monitoring and evaluation, social accountability measures, and communication outreach. To achieve the above, this component will consist of the following sub-components: (a) Equipping, automating, and electronically linking the SDCs to the central unit at MOSA. The project will finance: (i) necessary equipment and software to computerize systems and processes at the SDCs (e.g., creating databases) and to ensure proper processing of NPTP transactions; (ii) the establishment of a computerized, modular MIS, with dedicated modules for the CSD and NPTP25 programs, as well as, for other core functions (e.g., procurement, financial management) and which will be accessible to both SDCs and the central MOSA unit; (iii) internet connectivity between the SDCs and MOSA; and (iv) small works and equipment to refurbish and rehabilitate the SDCs, as needed. 25 As an NPTP module is already in use, any needed upgrading will be handled under the NPTP Component. 16 (b) Building and empowering the human resources of the SDCs. The project will finance training of SDC staff, including in: (i) the use of new equipment and systems; and (ii) specific topics to support the implementation of the CSD and NPTP programs, such as handling grievances, writing proposals, and applying case management and participatory approaches. (c) Community participation. The project will finance capacity building and technical assistance for SDCs to: (i) establish mechanisms at the SDC level to facilitate community consultation in the SDC catchment area in the form of "Local Consultative Platforms" (LCP); and (ii) create inventories of local social service providers, carry out social needs assessments and prioritization, and establish referral systems to ensure that social services match community needs. (d) Monitoring and Evaluation, Social Audits and Communication Outreach (see Section IV. B for further details). The project will finance the development of a comprehensive M&E system relying primarily on the computerized MIS, as well as training of MOSA staff and the project team to use it. As part of the monitoring effort, as well as to promote good governance, this component will finance social audits. Communication outreach campaigns for the NPTP and the CSD programs will also be supported. Component 2: Community Social Development Program (CSD) (US$12.5 million total cost, of which US$12.3 million to be financed from IBRD) 22. This component aims to support the establishment of a transparent, accountable and efficient national CSD program that will finance community-based sub-projects through grants. The CSD program is designed building on the experience of the World Bank-supported Community Development Project (2001-2008), and MOSA experiences, as well as lessons learned from other CDD programs in Lebanon and around the world. Grant sizes are limited to US$50,000 equivalent, implementation time for each sub-grant is one year, and beneficiaries will be required to make contributions upfront. Targeting will be done according to two criteria: (a) geographic targeting to prioritize areas of greater poverty and deprivation, based on information from the NPTP database, updated poverty estimates, and studies carried out by various agencies and experts; and (b) categorical targeting to prioritize vulnerable groups (e.g., the handicapped), based on MOSA's mandate. The component will consist of the following two sub-components: (a) Establishment of a National Community Social Development Program in MOSA: the project will finance technical assistance in the form of key experts (e.g., CSD program manager, engineer, social specialist, income-generation specialist) who will manage a transparent process of outreach, calls for proposals, screening and prioritization of proposals, and monitoring and supervision of sub-grant implementation. (b) Funding community-driven sub-projects. The project will provide grants to eligible applicants (primarily SDCs and CSO) whose projects have been selected through the national funding mechanism and will consist of two windows, as follows: 17 (i) Social services: The SDCs, as well as NGOs and local authorities, will be invited to apply for grants in support of social services that address a proven social need within the community, and which are in line with the mandates of the SDC (e.g., targeting children, elderly, youth at risk, school dropouts, disabled, drug addicts and their families, victims of domestic violence). To ensure a level-playing field and avoid conflicts of interest, separate calls for proposals will be issued to SDCs, and to the other entities. Eligibility and selection criteria will be specified in the Operations Manual. (ii) Income generating activities: Grants will be made available to associations, cooperatives and NGOs to support income generating activities benefitting vulnerable members in the community (e.g., female heads of households, members of NPTP households, the disabled, youth, and the long-term unemployed). Eligibility and selection criteria will be specified in the Operations Manual and will include technical feasibility, sustainability, environmental impact, potential for employment creation, and benefits to the community as a whole. Component 3: National Poverty Targeting Program (NPTP) (US$46.3 million total cost, of which US$6.7 million to be financed from IBRD) 23. This component aims to expand the coverage from approximately 93,900 (expected in 2013, baseline of SPPP) to 160,700 (in 2018) individual beneficiaries, as well as to improve the efficiency of the NPTP. To achieve this objective, the project will provide technical support for the continued roll-out and institutionalization of the NPTP, which was launched in 2011 under the Bank-financed Second Emergency Social Protection Implementation Support Project (ESPISP II). Presently, NPTP benefits consist of waived school and hospitalization fees, coverage of chronic disease medications, free schoolbooks, and discounts on electricity bills. The cost of these benefits, as well as the cost of the SDC social workers involved in administering the program, are being borne and will continue to be borne by the Government.26 To achieve its objective, this component will consist of the following three sub-components: (a) Continued roll-out and institutionalization. The project will finance technical assistance for: (i) supporting the program management team; (ii) refining the program application forms and Proxy-Mean Testing (PMT) questionnaire; (iii) upgrading the MIS for the NPTP and establishing an archiving system; (iv) adopting measures to prevent and discourage fraud and corruption; (v) refining the grievance and redress mechanism for improved efficiency and transparency; (vi) assessing the performance of the M&E system, designing and implementing changes to improve it, and implementation of short quantitative and qualitative surveys conducted on a regular basis (beneficiary assessments, opinion polls on awareness, etc.); and (vii) building the capacity of social workers through specialized training. 26 The Council of Ministers allocated US$28.2 million in 2011 to finance the benefits, and approximately US$4 million for the hiring of 350 social workers. 18 (b) Access to social safety nets. The project will finance technical assistance for: (i) assessing the performance of the reimbursement mechanism of the NPTP benefits and designing any improvements; and (ii) designing and piloting a case management approach with NPTP beneficiary households. (c) Enabling evidence-based policy making for poverty reduction. The project will finance: (i) technical assistance to support the Inter-ministerial Committee for Social Policy (Social-IMC) and its Secretariat; (ii) technical assistance to establish a Poverty Analysis Team, whose role will be to assess the poverty and inequality situation in Lebanon using Household Budget Survey (HBS) data; and (iii) the design and implementation of the next HBS (in 2017), which will be a large-sample survey representative at the governorate (Mohafazat) level. Component 4: Project Management (PM) (US$2.2 million total cost, of which US$2.0 million to be financed from IBRD) 24. The project will finance a team which will be responsible for: (i) overall project coordination, working closely with the teams responsible for the implementation of the other project components (see Section III and Annex 3), and reporting to the Minister on overall project progress; (ii) implementation of the fiduciary functions of the project, including procurement, financial management and internal audit, as well as ensuring that external audits are undertaken in compliance with requirements; and (iii) supporting the management of Component 1. The PM is foreseen as a temporary structure set up only for the duration of the project. For this reason, it is expected that during project implementation, the PM will actively contribute to building the capacity of the various actors involved in the implementation of the other three components, particularly concerning core functions such as M&E, procurement and financial management. B. Project Financing Lending Instrument 25. A Specific Investment Loan (SIL) was the instrument found most suitable for the financing of the project. This is due to the combination of investment and technical assistance that is needed. Project Cost and Financing 26. Total project cost is US$70 million, of which US$30 million will be financed by an IBRD loan, and US$40 million will be financed by the GOL, for a project implementation period of five years. The breakdown of project costs among the four components is shown in the table below. Approximately US$10 million (1/3 of loan) will be utilized to finance sub-project grants for community development (Component 2). 19 Project Components Project Cost BRD Financing % Financing (US$ million) (US$ million) 1.Social Development Centersa 8.26 8.26 100% 2.Community Social Developmenta 12.31 12.13 99% 3.National Poverty Targeting Programa 45.30 6.05 13% 4. Project Managementa 2.02 1.84 91% Total Baseline Costs 67.89 28.28 Physical contingencies 1.09 0.71 Price contingencies 0.94 0.93 Total Project Costs 69.92 29.92 43% Interest During Implementation Front-End Fees 0.075 0.075 Total Financing Required 70.00 30.00 43% 'The amounts exclude physical and price contingencies 27. The majority of GOL financing (US$40 million) will go to cover the cost of the NPTP social assistance and the NPTP social workers. The total cost of the social assistance over the five year period is approximately US$110 million (assuming a target of reaching all the extremely poor households in Lebanon by 2024; see Annex 6 for detailed analysis). The cost of the social workers for the five year period is approximately US$19 million. As the GOL has adopted the NPTP in 2009, it aims through the SPPP for the continuation of the program. C. Lessons Learned and Reflected in the Project Design 28. In 2002, the World Bank supported the first CDD project in Lebanon - the Community Development Project (CDP) - through a US$20 million loan. Between 2008 and 2010, the Bank provided a US$2 million Post Conflict Facility (PCF) grant for six municipalities around the Nahr el-Barid camp for CDD projects to re-build social infrastructure, strengthen social services, and facilitate economic recovery in the localities surrounding the camp. After a difficult period establishing the implementation mechanisms, both projects achieved satisfactory results, funding some 350 sub-projects managed by NGOs/CSOs and municipalities. However, the sustainability of the implementation arrangements was not achieved after the project closed.27 Other donors in Lebanon have also implemented and supported community development activities, mostly through the CDR, but with no national coordination in objectives, selection methodology, or target areas. As a result, implementation arrangements have been highly varied, and rather than emphasizing the establishment of sustainable institutional mechanisms, they have focused on providing immediate benefits to vulnerable groups, especially in response to crisis. Such lack of a coherent strategy has led to fragmentation of effort, low sustainability of sub-project activities, and inability to realize the potential impact of CDD activities. 27 In the case of the CDP, the implementing agency was the Council for Development and Reconstruction (CDR), which was established to implement large-scale national infrastructure projects and where social projects, especially those dealing with NGOs/CSOs, are not a priority. In the case of the PCF grant, the implementing agency was the Ministry of Interior and Municipalities, which did not have experience implementing social projects. In both cases, after the project closed, the activities also stopped. 20 29. Since 2008, the World Bank has been the leading agency in assisting the GOL in designing and implementing the NPTP through the Second Emergency Social Protection Implementation Support Project (ESPISP II). As of October 2012, around 62,000 applications had been submitted in the 12 months since the program was launched. The NPTP was designed building on the extensive experience of the Bank and lessons learned from around the world. The continuous support provided to the GOL under this project also builds on the experience and lessons from this initial phase. 30. The proposed SPPP has been designed building on the positive aspects of past interventions and taking into account the lessons learned. These include: (a) Sufficient administrative capacity at the local level is an essential precondition for achieving results in both improvements in SSN infrastructure and implementation of CDD-type projects. Grosh et al. (2008) emphasize that the targeting effectiveness of a safety net program depends to a critical extent on the availability of adequate resources, including, among others, properly-trained staff, clarity of program rules and regulations and institutional responsibilities, as well as the establishment and maintenance of computerized databases to aid beneficiary identification and avoid duplication. To ensure the success of CDD-type projects, experience with the CDP has demonstrated the need to have local actors capable of performing outreach to local communities in order to stimulate proposal submissions, and conducting or reviewing needs assessments for proposed sub- projects. To this end, under Component 1, the project envisions providing SDCs with appropriate equipment and training to facilitate the staff's effective and efficient performance of the mandated activities. (b) The availability of timely and reliable data is necessary to evaluate (both ex- ante and ex-post) the effectiveness of CDD-type projects and SSN programs. While the CDP has asked for baseline data to be included in proposals submitted by NGOs, this requirement was not enforced, making any systematic ex-post evaluation of the project impact extremely difficult. Quality and timely data are also vital for the success of proxy-means tested SSN interventions, as the targeting formula is derived from household survey data, and the assessment of the program's performance is evaluated using the same data source. The prime importance of data will be emphasized in the project design by: (i) making collection of verifiable baseline data a selection criterion for CSD proposals (in both windows); and (ii) investing project resources in the collection of household survey data to evaluate NPTP performance, including a comprehensive monitoring and evaluation system. (c) Wide-ranging outreach and awareness campaigns are needed to achieve the intended impact for both programs implemented under components 2 and 3. One common risk associated with community-driven projects is "elite capture", whereby elites reap most of the benefits by manipulating the decision-making process. As the CSD component would invite submissions from different entities (e.g., SDCs, NGOs, and CSOs), the necessary but not sufficient condition to stave off elite capture is to ensure that all the potential stakeholders are aware of the call for proposals, the application process, and the selection criteria. To achieve this, the 21 project will invest in a broad-ranging outreach and awareness campaign both at the national and local levels. The NPTP learned the difficult lessons of its initial PR campaign, which portrayed the poor in too negative a way, possibly creating stigma and dissuading potential target beneficiaries from applying. As part of the NPTP component, the messages of the PR campaign will be refined, and a more focused and local effort will be made to reach out to poor households and encourage them to apply. (d) A high level of transparency is paramount to maintain credibility of CSD and SSN programs, especially in a post-conflict and politically sensitive environment, such as Lebanon. In Component 2, the decisions made in the selection process will be publicly disclosed to the community of the applicants by posting them in a public space (such as SDC offices, municipalities, etc.), with the description of accepted sub-projects, as well as justification of the decisions on the rejected sub-projects. SSN program credibility hinges on the quality of the beneficiary selection and applicant notification process. This implies that a well- developed grievance redress mechanism needs to handle complaints in an accountable and transparent manner. The NPTP component of SPPP will provide technical assistance to the Government in order to strengthen this mechanism and thus maintain the credibility of the program. (e) Sustainability of sub-projects often presents a concern in community-driven initiatives and needs to be addressed in initial sub-project design. A recent study of CDP sub-projects about five years after implementation revealed a 59-66 percent survival rate, which is quite an achievement. Deeper analysis of survival determinants is warranted, but there are some lessons on factors that improve sustainability, such as engagement of local municipalities in design and/or implementation, as well as the necessity of ex-ante studies to ascertain technical feasibility and/or existence of a market for proposed income-generating activities. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 31. MOSA is the project implementing agency and it will oversee the implementation of all SPPP activities. A Project Coordinator will head the PM, and also will be responsible for the implementation of Component 1, assisted by a Project Officer, while Components 2 and 3 will each be headed by a Program Manager. These positions will be financed by project funds. A combination of contracted and MOSA staff will be responsible for the implementation of component activities. 32. Each component will be overseen by a MOSA committee that will report to the Minister. In the case of Components 2 and 3, the committee will be an "Emanating Project Committee" consisting of 4-5 high ranking MOSA officials, and which allows facilitation of expenditures and institutionalization within MOSA (see Annex 3 for description of Emanating Project). In the case 22 of Component 1, the committee will be a SDC Committee consisting of the SDC Director and other MOSA staff. 33. The heads of the components, the Director General, heads of the relevant departments, and the Minister will form the SPPP Steering Committee, which will meet periodically to review implementation progress and ensure coherence with ministry policies. At the national policy level, the Social Inter-Ministerial Committee (Social-IMC), with MOSA acting as its Technical Secretariat, will ensure coordination of the SPPP with other social policies.28 Further details are provided in Annex 3. 34. With respect to the institutional setup of the NPTP, the program has been managed by the MOSA and the Presidency of the Council of Ministers (PCM). This was deemed the best option at the time of appraisal of the ESPISP II project, which supported the creation of the NPTP (see Annex 3 for details). The present institutional setup will be retained during the implementation of the SPPP, though the GOL has started discussing the possibility of consolidating the NPTP under MOSA and institutionalizing it as an independent program with its own budgetary allocations. B. Results Monitoring and Evaluation 35. The results monitoring framework assesses progress towards the PDO through key indicators, focusing on achieving improvement in responsiveness and quality of social services provided by MOSA, expanded coverage of SSNs (the NPTP), implementing viable income generating projects, and improving the capacity of MOSA (see Annex 1). In addition, intermediate indicators will monitor the progress of each component over the life of the project. All data will be collected, disaggregating by gender to be able to monitor participation by women and girls. Monitoring and evaluation (M&E) arrangements will be supported under Component 1, which will fund the development of an M&E system as well as training of MOSA staff and the project team to use it. A computerized, modular MIS will be the central piece of the M&E system and will include: (a) a database on capacity building activities carried out under Component 1 and their beneficiaries (e.g., date, place, topic, and the names of beneficiaries of a specific training); (b) a module to track the processing of applications under Component 2, input baseline data for approved sub-projects, register complaints and grievances, and monitor the physical progress in sub-project implementation and related tranche disbursements; (c) a module to register applicant households in the NPTP database, record the results of their eligibility assessment (including their NPTP score), follow their utilization of benefits, and register complaints and grievances; 28 The Social-IMC, established on January 22, 2007 by decree signed by the Prime Minister, is composed of the Ministers of Finance, Social Affairs, Health, Education, Labor, Interior & Municipal Affairs, Economy & Trade, NSSF, and the President of CDR. It is charged with: (i) drafting a comprehensive, integrated, and coordinated social strategy; (ii) coordinating government activities for the provisions of social services; (iii) ensuring coordination of all studies, surveys, reports related to social affairs and ensuring availability of relevant social data and indicators; (iv) overseeing the implementation of social safety net programs; and (v) coordinating, monitoring, and evaluating development programs that are financed by local and international partners. 23 (d) a financial management module for the whole project. 36. Particular attention will be paid to ways of encouraging demand for good governance and social accountability. While the final instrument will need to be defined in collaboration with Lebanese counterparts, the use of Social Audits appears well suited for this project. A Social Audit is a process that collects information on the resources of an organization or project. The information is then analyzed and shared publicly in a participatory fashion, with the central concern being how resources are used for social objectives. Most Social Audits start with the production of information that is perceived to be evidence-based, accurate and impartial, and then make it available to citizens. This may include requests for administrative data and budget information, but also requires the implementation of a stakeholder analysis or other form of information gathering from both beneficiaries and service providers to obtain their own assessment. Communities are then encouraged to identify corrective measures and possibly set up semi-permanent structures to keep monitoring the evolving situation, which tends to work as a deterrent against fraud. Social Audits have been used successfully to improve delivery of social programs, including safety nets, as in the case of the rural employment guarantee schemes in India. 37. The project will conduct mid-term and post-completion evaluations to gauge progress towards the PDO, to assess the impact of the project on the ultimate beneficiaries and on MOSA, and to assess the quality of the services provided, as well as overall project efficiency. The focus of such evaluations will include: (i) quality, variety, relevance, and cost-effectiveness of social services offered directly or supported by SDCs; (ii) the impact of the IGA supported by Component 2 on the earnings of beneficiary households and on generation of additional employment and income in the affected communities; (iii) the performance of NPTP with respect to the program's coverage of the extremely poor households, as well as targeting accuracy; (iv) effectiveness and efficiency of NPTP procedures for registration and assessment of applications, addressing complaints and grievances, prevention of and reporting on fraud and corruption, and provision of reimbursement to service providers (schools, hospitals, etc.); and (v) evaluation of the impact of NPTP on aggregate extreme poverty and inequality in Lebanon, as well as utilization of health and education services and electricity by the extreme poor. C. Sustainability 38. Institutional sustainability is very likely, as the GOL has demonstrated clear commitment to community social development and poverty reduction in its National Social Development Strategy. The MOSA in particular is poised to assume and maintain a leadership role in community development and in safety net administration. The activities to be financed by the project will strengthen MOSA and, in particular the SDCs, thus increasing the ministry's implementation capacity and hopefully contributing to making it the preferred implementing agency for community development and social safety nets funding from both the national budget and international donors. 39. From a technical point of view, the extensive capacity building effort included under each component, and in particular under Component 1, will ensure that the project benefits will continue to accrue after project completion, as social workers will have been trained in social needs assessment and prioritization, the systematic use of computerized monitoring systems, 24 case management, handling grievances and complaints, and preventing fraud. Concerning Component 2, the sustainability of activities to be funded through CSD grants will be a selection criterion and technical assistance will be provided to support it. With respect to Component 3, the targeting system established for the implementation of the NPTP represents a crucial building block for the country's social safety nets system, as the compiled database of applicants is expected to become the primary targeting tool for other programs aimed at reducing poverty and vulnerability. To this end, the project will finance dissemination activities to encourage other entities/ministries to utilize the NPTP database for identification of potential beneficiaries for their own programs. In addition, the NPTP is designed in such a way so as to be scaled up or down and therefore to accommodate budgetary changes, as the threshold score can be raised or lowered. V. KEY RISKS AND MITIGATION MEASURES A. Risk Ratings Summary Table Stakeholder Risk Substantial Implementing Agency Risk - Capacity Substantial - Governance Substantial Project Risk - Design Substantial - Social and Environmental Moderate - Program and Donor Moderate - Delivery Monitoring and Sustainability Substantial - Other (Choice of NPTP benefit package) High Overall Implementation Risk Substantial B. Overall Risk Rating Explanation 40. The overall implementation risk rating of the project is substantial. At the institutional level, risks are high (see Annex 4). Currently, MOSA is implementing the first phase of the NPTP through a World Bank grant (ESPISP II) but it has not been responsible for fiduciary aspects of the program as they are being handled by an external unit.29 The SPPP is the first World Bank financed project that MOSA is preparing and will implement entirely itself. While members of the MOSA team working on project preparation are gaining some experience with Bank policies and procedures, it is reasonable to expect some delays at the beginning of implementation due to general lack of experience with Bank procedures. To mitigate this risk, familiarity with Bank procedures will be a criterion in selecting PM staff to be hired with project funding, and Bank staff from the Beirut Country Office will be readily on hand to offer training 29 Under the ESPISP II grant, a Fiduciary Operations Team (FOT) was created in the Prime Minister's Office to handle all procurement and financial management matters of the grant as there are four ministries involved. 25 and guidance (e.g., in procurement). Also, all project staff financed with IBRD funds will be selected in a competitive and transparent way so as to ensure a pool of technically competent core staff. 41. At the project level, risks are also high because of the complexity of Components 2 and 3 in particular. Fortunately, each of these two components can build on the experience of previous Bank-financed operations - Component 2 can learn from the implementation of the CDP, and Component 3 from the implementation of the ESPISP II, which included phase I of the NPTP (see section on Lessons Learned above). In the case of Component 2, implementation will be sequenced so that intensive capacity building of SDCs, including hands-on assistance for preparatory activities such as social needs assessments and the establishment of community feed- back mechanisms, will take place before SDCs are asked to submit proposals for funding by the CSD program. 42. Below is a more detailed description of some specific risks. * Availability and readiness of human resources, particularly social workers for the NPTP, and at the SDC levels. The success of both the NPTP and the CSD programs depends on having the adequate numbers and quality of social workers/social inspectors. During the first phase of the NPTP, the program hired some 350 social workers/social inspectors (to accept applications, conduct household visits, enter applications, etc.), essentially operating as the backbone of the program. It is expected that the social workers/social inspectors will continue to be hired under the NPTP Phase II as contractors. The freeze on civil service hiring government-wide creates uncertainties as to whether MOSA can fill in at least some of the critical missing positions in the SDCs which are needed to run an effective CSD program. Having said this, the MOSA has successfully recruited more than 50 new social workers in 2012. * Error, Fraud and Corruption: The possibility of making errors in the registration and eligibility assessment of NPTP applicants, as well as benefit provision for NPTP beneficiaries, is real and exists in any SSN program of this type. Several factors will reduce such possibilities. To begin with, the application of the targeting formula is fairly straightforward as it is based on the observable and verifiable assessment of each household's correlates of welfare (such as household composition, living conditions, and possession of certain durables); thus, while still possible, the formula is relatively difficult to tamper with. Second, over the past year of NPTP implementation, the project team has gained experience in detecting errors, and a system is in place. Third, even if the risk of interference in the selection of NPTP beneficiaries turns out to be high, instances of fraud and corruption should be fairly easy to detect with proper supervision given the observable nature of indicators comprising the targeting formula. On the other end, targeting and selection for activities financed by the CSD component will be significantly more open to errors and interference because criteria for sub-project selection will necessarily be more subjective and/or more difficult to verify than the NPTP formula. To mitigate this risk, the criteria will be spelled out as precisely as possible in the Operations Manual and their application closely supervised by the Emanating Committee and, on a 26 random basis, by the World Bank. Finally, a poorly designed reimbursement system to NPTP service providers (i.e., schools, hospitals, EDL) could also create opportunities for difficult-to-detect leakages, with funds being diverted to non- beneficiaries (e.g., charging to an NPTP beneficiary account medicines consumed by a non-beneficiary). * Political interference and inappropriate targeting: Clear eligibility and selection criteria for the approval of community driven sub-projects will be determined in the Operations Manual to avoid any political interference and inappropriate targeting. For the NPTP, extremely poor and vulnerable households will be determined through the PMT formula. Information campaigns will be designed and implemented before the start-up of the new mechanism for CSD sub-projects and continued throughout implementation. In addition, grievance and redress mechanisms will be established to help deal with dissatisfied households and community members. To increase transparency, reasons for the rejection of sub- projects will be made public. * Monitoring and Evaluation: For both Components 2 and 3, a well-performing, modular MIS is a must to ensure proper monitoring and evaluation. However, since such systems are new, they will inevitably face some design and programming problems and will require adjustments. Fortunately, an MIS for the NPTP has already been designed for the first phrase of the program. It appears to be working properly and the counterpart teams are using it to monitor program implementation and generate regular progress reports. On the other hand, the MIS module for Component 2 will be new, so the implementing teams will need to be supported and motivated to use it and update data regularly (bearing with the inevitable initial snags), especially the staff unfamiliar with computerized processes. To mitigate the risk and ensure proper use of the MIS in Components 2 and 3, technical expertise will be provided under Component 1 to design and implement the M&E system, and extensive training will be offered to program teams. VI. APPRAISAL SUMMARY A. Economic and Financial Analysis 43. The main rationale for supporting government investment in community-based activities aimed at improving the provision of social services in Lebanon is the current presence of stark disparities in access to such services across areas of Lebanon and for various vulnerable groups. Access to such social services has significant long-term benefits and positive externalities as it helps build human capital, as well as decreasing social risks, which would then improve productivity and growth. For income-generating activities, the justification for public involvement is twofold: (i) the poor do not have the financial resources and sufficient liquidity to start their own business; and (ii) the very poor, many of whom are already in debt, usually find it too risky to take on a loan. 44. Given the demand-driven nature of the sub-projects financed by the CSD component of SPPP, the benefits and potential welfare impacts are difficult to quantify ex-ante as the structure 27 of the sub-projects' portfolio will not be known with certainty until SPPP is well under implementation. Still, evidence from an ex-post study of the CDP reveals that the majority of these sub-projects remain operational four years after project completion, which signals some degree of sustainability. Moreover, qualitative evidence suggests that some of these sub-projects have been quite successful at providing much-needed social services to the poorest areas of Lebanon, creating jobs, and raising the earnings of their beneficiaries. In addition, impact evaluations of CDD projects in other countries demonstrate that eliciting demand from the community and involving communities in implementation makes CDD interventions the least- cost alternative compared to other public investments. Other CDD projects, such as the Philippines's KALAHI-CIDSS, India's Andhra Pradesh District Poverty Initiative Program, and Burkina Faso's Community-Based Rural Development Project have achieved significant economic gains in terms of rates of return and increases in consumption for their beneficiaries. 45. The rationale for supporting government investment in NPTP is to provide extremely poor and vulnerable households with effective and reliable protection against destitution, to help them navigate idiosyncratic and systemic shocks, and to promote their inclusion in the society. Government's involvement can: (i) ensure horizontal equity, so that two persons with the same standard of living have access to the same basket of SSN benefits, irrespective of their geographical location or political/religious affiliation; and (ii) obtain efficiency gains through consolidation of SSN provision and targeting resources to the neediest members of society. 46. The current basket of benefits is expected to have economic impacts on two levels, household and aggregate. On the household level, the NPTP is expected to increase disposable income and consumption of extremely poor households, and it may improve their education and health outcomes if it affects behavioral changes in the utilization of education and health services. On the aggregate level, this program is expected to increase utilization of health and education services as well as the coverage of electricity connections, with all the corresponding externalities these changes imply. While the magnitude of such changes cannot be estimated ex- ante, NPTP is also expected to reduce the level of extreme poverty and inequality in the country, which is more amenable to forecast. Assuming an average value of US$168.92 per beneficiary and perfect coverage of the extremely poor households by 2024, NPTP can potentially attain significant poverty reduction gains, lowering the extreme poverty incidence rate by 30 percent (from 7.2 percent to 5.1 percent), the extreme poverty gap by 38 percent, and extreme poverty severity by 44 percent (see Annex 6). 47. In terms of cost efficiency, NPTP spends about 14 percent of operating costs over total recurring costs. This compares relatively well with the administrative cost efficiency of other SSN programs, such as Bulgaria's Guaranteed Minimum Income Program, Kyrgyzstan's Unified Monthly Benefit Program, and Colombia's Families in Action, even after including the additional but minor administrative costs incurred to reimburse service providers (see Annex 6). B. Technical 48. The proposed technical design has been agreed with the GOL and it is the most appropriate to support the borrower objective to strengthen MOSA capacity to promote community development and provide well-targeted safety nets. It is recognized that the complexity of implementing Components 2 and 3 constitutes a tall order for a ministry that so far 28 has limited experience with large amounts of external funding, and whose representation throughout the country is quite uneven in terms of spatial distribution and resources (both human and financial). For this reason, Component I was added after the initial Concept Note review, so as to ensure a concerted effort to modernize and render more efficient the way in which MOSA, and in particular SDCs, operate. Reliance on SDCs for project implementation, in turn, was considered key for project success, as a community-based project that relies on a decentralized institutional framework is the most suitable approach to reach vulnerable groups and provide them with improved access to social services, employment/earnings opportunities, and social assistance. 49. The proposed design also promotes local empowerment and ownership through the use of consultative community mechanisms, a measure that has been shown to contribute to project effectiveness in a number of ways: it ensures responsiveness to real needs, discourages political interference, promotes transparency in the use of funds, and increases sustainability. C. Financial Management 50. The Bank team undertook an assessment of the financial management systems within MOSA as the project implementing agency. The assessment concluded that with the implementation of agreed-upon actions, the proposed financial management arrangements would satisfy the Bank's minimum requirements under OP/BP 10.02. Taking into account the risk mitigation measures proposed in the ORAF, the overall financial management risk for this Project is assessed as "Moderate" after mitigation. Annex 3 provides additional information on the financial management assessment, the recommended mitigation measures and financial management (FM) arrangements (the detailed financial management capacity assessment and arrangements are available in the project files). 51. As loans are not subject to ex-ante budget law oversight, procedures and controls, a project Operations Manual will be developed and ready shortly after project effectiveness to comprehensively guide the project financial management, including the sub-grants management. 52. The accounting staff of MOSA have little experience with World Bank-financed projects. Accordingly, the Project Management (PM) - Component 4 - will include a Financial Officer (FO) whose main role will be to handle and follow up on the project's FM arrangements implementation as described in the project Operations Manual. The FO needs to be on board no more than two months after project effectiveness. The development and installation of the project Accounting Information Software (AIS) needs to be completed no more than three months after project effectiveness. The FO will cooperate and collaborate with MOSA accounting staff to enable a knowledge-transfer process that would be sustained at MOSA. 53. The quarterly project Interim Un-audited Financial Reports (IFRs) will be prepared, in compliance with International Public Sector Accounting Standards (IPSAS), and delivered by MOSA to the Bank no later than 45 days after the end of each calendar quarter. 54. The annual Project Financial Statements (PFS) will be audited by an independent private external auditor acceptable to the World Bank, to be engaged within six months after project effectiveness. The audit services Terms of Reference (TORs) will be developed by the PM and 29 cleared by the World Bank. The external audit report and project Audited Financial Statements will be submitted to the World Bank no later than six months after the end of each fiscal year and will be made public as per the World Bank disclosure policy. A management letter will also be expected to provide the external auditor's assessment of the project internal controls. 55. As the project's activities represent a complex process and entail substantial FM risk, there is a need to establish within MOSA an internal audit function for the project, to provide an independent and objective oversight of project implementation and fiduciary management. The internal auditor will report to the project Steering Committee. The internal audit TORs will be prepared by the PM and cleared by the World Bank. An internal auditor, acceptable to the World Bank, is expected to be on board within six months of project effectiveness. 56. To ensure that funds are readily available for project implementation, MOSA will centrally-manage the flow of funds process. MOSA, through MOF, will open, maintain and operate a Designated Account (DA) in US Dollars at the Central Bank of Lebanon. Deposits into, and payments from the DA will be made in accordance with the provisions stated in the loan agreement and as outlined in the World Bank "Disbursements Guidelines for Projects ". DA replenishments will be on the basis of Withdrawal Applications. MOF will open a Project specific Transit Sub-Account under the MOF's Treasury Account to channel the Loan proceeds to the Designated Account. Transfers will be made from the Transit Sub-Account to the Designated Account. Other disbursement methods will be available as per the project Disbursement Letter. D. Procurement 57. The project shall be implemented centrally by MOSA for Components 1, 3 and 4, while for Component 2, the SDCs and NGOs/CSOs will be granted funds to implement the qualified proposals in a decentralized manner. An Operations Manual will be developed with chapters on, inter alia: (i) the project as a whole, (ii) the implementation of CSD sub-projects, and (iii) the NPTP. The procurement section of the manual will specify the procurement processing and contract management to be followed in each case. It will also detail arrangements for record- keeping requirements and the complaint mechanism. 58. A procurement capacity assessment of the implementing agency was conducted to identify the overall procurement implementation risk, which was found Substantial. The following measures are proposed to lower the risk rating to Moderate: (i) include a procurement section in the Operations Manual, (ii) systematize record keeping, (iii) agree on a procurement training program to be implemented over the life of the project that is both relevant and practical, (iv) assign field staff to support procurement, (v) arrange for appropriate support (staff, training, tools) to ensure a clear link between project objectives and the procurement plan, (vi) prepare acceptable sample bidding documents for NCB, (vii) establish an advertising policy and develop a sample advertisement in line with the Bank Guidelines requirements, (viii) establish/improve and implement a complaint management system, (ix) review causes for recurrent amendments and cost overruns; and (x) develop suitable corrections to planning, cost estimates, inappropriate designs or technical specifications, etc. 30 59. Project guidelines: "Guidelines On Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants" dated October 15, 2006 and updated January 2011, World Bank "Guidelines: Procurement of Goods, Works and Non- consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 and World Bank "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011, shall apply to the project. For purchase of Goods and Works, the World Bank Guidelines "Procurement under IBRD Loans and IDA Credits" version of January 2011 shall be used. 60. Procurement methods for Goods, Works and non-consulting services: (a) MOSA is expected to conduct (i) international competitive bidding (ICB) for which the Bank standard documents shall be used, (ii) national competitive bidding (NCB) for which MOSA shall use either ICB -or a translated version- or develop Standard Bidding Documents acceptable to the Bank as mentioned in clauses 3.3 and 3.4 of the procurement guidelines, (iii) shopping, (iv) framework agreements, and (v) direct contracting. (b) The SDCs/CSOs/municipalities are expected to implement their sub-projects following simplified procurement processing used when community participation is foreseen (i.e., community-based procurement). CSOs shall be using (i) local competitive bidding, (ii) shopping, (iii) direct contracting, and (iv) Force Account as shall be defined in the Operations Manual of the project. Force Account method may be used for activities where government personnel and equipment may be needed for installation of equipment and non-consulting services. Force Account shall be justified and may only be used after Bank no objection and as per the provisions of clause 3.9 of the procurement guidelines. Also, in view of the nature of the project, purchase of used heavy duty equipment (such as tractors or other farmers' vehicles) may be accepted if in good condition with a reasonable life cycle and on a case-by- case basis. 61. Selection of consultants: (a) MOSA is expected to conduct (i) Quality and Cost Based Selection (QCBS), (ii) Selection under a Fixed Budget (FBS), (iii) Least-Cost Selection (LCS), (iv) Selection Based on the Consultants' Qualifications (CQS), (v) Single Source Selection (SSS), and (vi) Selection of Individual Consultants. (b) CSOs shall be using reasonable competitive process for selection as well as single source/sole source, as defined in the Operations Manual for the CSD component. 62. Procurement plans: A procurement plan for the project dated March 11, 2013 has been prepared. It shall be updated and reviewed by the Bank at least twice a year or as seen necessary. Given the demand-driven nature of subprojects to be financed by the CSD Program, in the case of Component 2 it may not be practical to prepare detailed procurement plans at the time of negotiations as required under paragraph 1.18, especially when the procurement of activities or the activities themselves are carried out directly by the SDCs/CSOs. Simplified procurement 31 plans, or any alternative, may be prepared, if practical, based on an indicative list of eligible activities to be implemented. E. Social (including Safeguards) 63. No social safeguards issues are expected under the proposed project as designed. This is because the emphasis of the project is on improving MOSA's capacity to assist vulnerable groups through a bottom-up approach that should ensure that all voices are heard and special attention is given to the groups most at risk of being marginalized. In particular, MOSA will be supported in developing a transparent process of outreach, screening, financing, and monitoring and evaluation of the sub-projects. In addition, a grievance and redress mechanism will be established for both the CSD and NPTP programs, and MOSA staff will be trained to use it. As the sub-projects financed by the CSD program will be mainly to provide social services in the areas of literacy training, elderly care, and training for the disabled, no land related impacts are envisaged. As the design and objectives of the project are focused on capacity building and developing business processes (M&E systems, establishing databases), and also development of social programs with no land acquisition impacts, there are no adverse impacts anticipated using the eminent domain principle. F. Environment (including Safeguards) 64. The sub-projects to be financed under this project will not entail construction or physical investments; therefore, no significant environmental impacts are expected. However, to ensure the mitigation of any potential risks and impacts, an environmental and social assessment framework (ESAF) has been developed during project preparation and subsequently reviewed, cleared, and disclosed prior to appraisal on the Bank's external website on January 30, 2013 and in-country on January 29, 2013. Public consultations took place over the ESAF in two stages - a technical scoping session, followed two months later by a larger public consultation. The ESAF, which comprises an Environmental and Social Management Plan (ESMP), will be used as one of the main building blocks to ensure that the project is meeting its commitment and is in full compliance with the Bank safeguards policy OP 4.01 pertaining to the Environmental Assessment Guidelines, which is triggered in this project. 65. The framework approach is utilized for typical sub-projects because their precise nature cannot be known in advance due to their demand-driven character; similarly, sub-project locations will not be known until project implementation has started. The ESAF articulates the screening criteria and processes for the project to ensure that no Category "A" sub-projects are funded under this project. This screening process will also be defined in the project's Operations Manual, which will be finalized no more than one month after project effectiveness and therefore before any of the sub-projects are funded. 66. The ESAF clearly outlines the safeguards process to be undertaken upon the environmental screening of sub-projects whereby ESMPs are to be prepared for those sub- projects classified as category B. The World Bank will review and clear all ESMPs during the first two years of project implementation. Thereafter, the Bank will rely on the review of the PM and Environmental Specialist (ES) while maintaining the right to conduct a spot check on random ESMPs during the remaining three years of project implementation. The ES will also 32 ensure that all the needed approvals on the ESMPs are obtained from the Ministry of Environment as deemed relevant and necessary. 67. The ESAF (and the ESMP) comprise training and capacity strengthening measures for the implementing agency given that it has neither the experience nor adequate capacity to monitor safeguard policies - or implement any environmental management measures in general. An estimated cost of US$140,000 has been allocated in the project for the capacity building activities. 33 r.ý 0 ~ c 00 1 9 a U U CKJ cp> > ooCc a -1 en voox 0 0 rfj o .0 >> g U o0 o o Ge rC CD oC, Ge0c z- 0 -k 3o o o coo0 rD 0 0 00 0 0 n - 'D 0 0 00 00 60 co r-]® - CD 0- 0n 0 >D 3 U"O 5 0. co 0 co ri - 0 Cd 0 0 o CC aC ri u-D1 u 7u .So 0> d d | u 9 $ .l F bol o4. C - - 7: b l 4 g 1 0 0 o o 000 -cs ci "0 oo oo 0 o oo o o o 0 oo o bo bo o o o- n r- r- v 0 ' C 00 - ~ r 00 0 0 O OCO O cn 0 0 UD U 0 0 _ 4. o . o:1 0 00 0 CC ooo sn u cli -D VD 0D" O Oo- ~ O -O* .> C O O O~~ a - ~Q)0~ ~ 0* 閱斗 Cn ト叱 Cn 슴 · Annex 2: Detailed Project Description LEBANON: SOCIAL PROMOTION AND PROTECTION PROJECT (SPPP) 1. The development objective of SPPP is to increase access to social development services at the community level, improve the coverage and targeting of the NPTP, and strengthen the capacity of the MOSA at the central level and the SI)Cs at the local level. To achieve this objective, the SPPP consists of the following four components: (1) Component 1: SDCs; (2) Component 2: CSD Program; (3) Component 3: NPTP; and (4) Component 4: PM. Progress towards achieving the PDO will be monitored through the following five indicators: (i) direct project beneficiaries, in total number, as well as by type of service - i.e., social services, income generating activities, safety net programs, and capacity building - and specifying the percentage of female beneficiaries (core indicator); (ii) beneficiaries of safety net programs (core indicator), tracking in particular the number of female beneficiaries and the total number of NPTP beneficiaries (programs such as NPTP, which offer education credits, fee waivers and health and electricity subsidies, are defined in the core indicator as "other social assistance programs"); (iii) NPTP beneficiaries from extremely poor households as a share of total NPTP beneficiaries as a measure of the targeting accuracy of the program; (iv) SDC beneficiaries reporting improved quality of services provided by SDCs, an indicator to measure SDCs' improved capacity; and (v) citizens reporting MOSA's improved responsiveness in delivering social assistance and development grants, an indicator to measure MOSA's improved capacity. Component 1: Social Development Centers (SDCs) (US$9. 0 million total cost, all of which to be financed from IBRD) 2. There are 218 SDCs, of which 102 are main SI)Cs and the remainder are satellite SDCs, distributed throughout the national territory, tasked with delivering a variety of social services and with implementing MOSA policies at the local level. Theoretically, each main SDC should have 18 staff working in six units: a studies unit, an education unit, a health unit, a social development unit, a handicraft and small and medium enterprise unit, and a women and family unit. However, many SI)Cs have insufficient personnel and are therefore unable to staff all the units, which results in staff working on different tasks for which they do not necessarily have the required skills. It is estimated that the total number of SDC staff should be 3,700 but it is only 1,233. In addition, many of the current SDC staff do not have appropriate qualifications (e.g., they have a general background in social sciences but no training to provide social services) and job descriptions are lacking. Access to modem technology is also a problem, as more than half of the SI)Cs are not yet equipped with computers and/or internet connections. Finally, there does not appear to be an agreed vision of what should be the minimum set of social services to be offered by the SDCs, let alone their quality standards. Three main shortcomings result from this situation: (a) many SI)Cs offer a very limited set of services, (b) the services offered by SI)Cs are of uneven quality, and (c) in some cases, SI)Cs offer services that duplicate what is already offered by other entities (e.g., NGOs and faith-based organizations). 3. The objective of this component, therefore, is to enhance the administrative and operational capacity of SI)Cs to enable them to offer social services of improved quality and relevance. On the basis of a preliminary assessment carried out during project preparation, a 39 number of activities have been identified to help SDCs achieve this goal. They have been grouped in the following three main sub-components: (a) Equipping, automating, and electronically linking the SDCs to the central unit at MOSA: While 98 SDCs already have computers and internet connection and another 16 centers will be supported by a recently approved Italian Cooperation project, some 103 SDCs are still without computers and/or internet connectivity and many others have severely outdated hardware. In addition, some centers require small works or standard equipment (e.g., furniture, office equipment). Overall, SDCs need to make the transition from a paper-based modus operandi to a computerized one that relies on databases and an MIS linking SDCs to the central MOSA unit. The project, therefore, will finance the purchase of hardware (computers, servers) and software, including the development and deployment of a tailor-made MIS to computerize systems and processes. The MIS will be a modular system, with dedicated modules for the CSD and NPTP31 programs as well as for other core functions (e.g., procurement, financial management) and it will be accessible to both SDCs and the central MOSA unit. For transparency purposes, some parts of the MIS will be accessible also to the general public. In the case of the CSD Program, for instance, information about approved and rejected proposals will be public, as well as the eligibility and scoring criteria for proposals. (b) Building and empowering the human resources of the SDCs: Several capacity building activities have been identified to strengthen SDC staff skills in connection to: (a) the new equipment and computerized systems, (b) the implementation of the CSD and NPTP programs supported by Component 2 and 3, (c) community participation, and (4) overall outreach and M&E. Specific hands-on instruction will be provided on the use of MIS and databases. As a database of social service providers will be created, SDCs staff will be trained to collect and enter information concerning providers in their catchment area (see below). In connection with the implementation of the CSD and NPTP programs, staff will receive training in handling grievances, preventing and detecting corruption and fraud, fiduciary matters, and using case management and participatory approaches, while training on proposal writing will be provided to both CSOs and SDCs. A training needs assessment carried out as soon as the project becomes effective will provide additional detailed information, on the basis of which a training plan will be elaborated. Other areas for capacity building will likely emerge during project implementation, either on general topics (e.g., communication skills, planning skills, prioritizing, networking) or on specific issues (e.g., dealing with refugees from Syria, children's rights). Implementation will therefore be flexible and demand- driven, and while an initial set of activities are already included in the procurement plan, it is expected that it will evolve. (c) Community participation: To ensure that the services offered by SDCs are indeed what the community needs and wants, the centers will be asked to establish mechanisms to facilitate community consultation in the SDC catchment area. Such 3 As an NPTP module is already in use, any needed upgrading will be handled under the NPTP Component. 40 mechanisms could take the form of "Local Consultative Platforms" (LCP), that is, informal community structures where representatives of civil society, local NGOs and municipal services could exchange ideas and formulate suggestions for MOSA. As some municipalities have already established some sort of consultative platform, SDCs will be discouraged from duplicating what exists, but should ensure that it is truly representative of the interests of the community as a whole (e.g., by lobbying for the inclusion of excluded groups or a greater female participation). Information obtained through LCPs, however, will have to be complemented by information independently collected and verified by the centers. SDCs personnel will be trained to conduct social needs assessments and carry out inventories of existing social services. This will enable SDCs to identify unmet needs for social services in their catchment areas, plan their activities accordingly (including preparing or stimulating proposals to be financed by the CSD program), and establish referral systems. As mentioned above, the information collected will be used to set up a database accessible to all SDCs. (d) Monitoring and Evaluation, Social Audits and Communication Outreach. The project will finance the development of a comprehensive M&E system relying primarily on the computerized MIS mentioned under (a) above, as well as training of MOSA staff and the project team to use it. As part of the monitoring effort, as well as to promote good governance, this component will finance social audits (see Annex 3). Robust communication outreach campaigns for the NPTP and the CSD programs will also be supported to ensure that all stakeholders and potential beneficiaries, in particular, are aware of the opportunities offered by these two programs 4. The implementation of this component will rely to a great extent on MOSA's Training Department, with support from a small pool of technical experts hired by the project on a competitive basis, e.g., a Training Coordinator and a Community Liaison Officer to assist SDCs in carrying out social needs assessments and establishing effective community consultation mechanisms. Because building SDC capacity is crucial for the successful implementation of the CSD and NPTP components, activities under this component will be given priority at project start-up, while Component 2 will only be launched after an initial training cycle has been carried out, that is, most likely in the second half of the second year. Component 2: Community Social Development Program (CSD) (US$12.5 million total cost, of which US$12.3 million to be financed from IBRD) 5. This component aims to establish a transparent, accountable and efficient CSD program that will finance community-based sub-projects through grants. The program will have two windows, one for social services and one for IGA support, with review and approval mechanisms in large part the same for both windows. The CSD program will be designed building on the experience of the World Bank-supported Community Development Project (2001-2008), as well as MOSA experiences, and on the lessons learned from other CDD projects implemented in Lebanon and around the world. Grant size will be limited to a maximum of US$50,000 equivalent, with US$30,000 expected to be the average, and implementation time for each sub- project will be up to one year. Beneficiaries will be required to make contributions upfront - 15 41 percent for social services (in cash or in kind) and 30 percent for IGA support (with at least half in cash). 6. The project will support the establishment of an effective national CSD program at MOSA by: (a) contributing to the staffing of the CSD program team at the central unit in MOSA by financing key experts (e.g., CSD program manager, engineer, social specialist, income- generating specialist, etc.) who will contribute to the implementation of a transparent and rigorous national funding mechanism for local development projects in collaboration with MOSA-financed staff (e.g., 35 field workers); and (b) financing community sub-projects through the competitive provision of grants under a national funding mechanism that will have two windows: one for social services and the other for income-generating activities. In light of the need to strengthen SDCs capacities first, the CSD program will not be launched until the third quarter of the second year of project implementation. During the first year, however, CSD preliminary activities supported by Component I will be carried out. In addition to SDC training (e.g., in proposal writing), these activities will include social needs assessments and the establishment of community consultative mechanisms. 7. Before the end of the project, it is expected that the CSD program team at the central level will be managing a transparent process of screening and prioritization,32 financing, and monitoring and evaluation of sub-projects, including the promotion of community participation and empowerment. Once this is in place, MOSA should be able to attract additional funds - both from government budget as well as donors - to finance community development projects in a sustainable way. 8. Social Services Window. This window will provide grants in support of social services that address a proven social need within the community. Any entity with a legal personality will be allowed to present proposals, but only entities with relevant competences and experience will be considered, so it is expected that the majority of successful applicants will be SDCs and civil society organizations (e.g., NGOs, faith-based organizations and local associations). To avoid conflicts of interests between SDCs and other applicants, as well as to ensure a level-playing field, calls for proposals will be alternatively for SDCs only and then for other entities (NGOs/CBOs), with the first call for proposals for SDCs. Social needs assessments carried out by SDCs --with support from activities financed under Component 1-and community consultations will help determine whether the proposed service addresses a real need in the community and will be a precondition for proposals to be considered. * Targeting: Targeting will be done according to two criteria: geographic targeting, on the basis of poverty and deprivation, and categorical targeting, on the basis of individual vulnerability. This will ensure that poorer areas receive more funding but will not exclude vulnerable individuals who happen to live in richer areas. Geographic targeting represents somewhat of a challenge, as a poverty map is not available and the coverage of NPTP is not yet exhaustive enough to be able to use the number of NPTP beneficiaries as an indicator of poverty and deprivation (as the NPTP database expands it can be utilized to help determine poverty pockets). However, the experience of the Bank-financed CDP project suggests that it is possible to use rapid assessment techniques in conjunction with 32 Outreach activities will be supported under Component 1. 42 existing studies to identify marginalized areas quite reliably and in a relatively short time. As for categorical targeting, MOSA priority areas of intervention will provide a general framework and the Operations Manual will specify targeted groups (which will also be identified in the calls for proposals). Examples of target beneficiaries include: poor/vulnerable children, female-headed households, elderly, youth at risk, school dropouts, disabled people, drug addicts, victims of domestic violence and gender-based violence, juvenile delinquents, street children, homeless families, and the unemployed. Activities: As the project aims to stimulate creative responsiveness, there will be no predetermined list of eligible activities, though activities should be within the broad mandate of MOSA. Project funds could be used to pay for incremental costs incurred to implement the proposed activities (e.g., equipment, supplies, small works, consultancies and training), but not for the regular operating costs of the applicants. It is envisaged that proposals will be to finance activities such as vocational training, educational and recreational activities for disadvantaged children and youth (nurseries, youth clubs, extracurricular programs, summer camps, etc.), literacy programs and adult education, training on handicrafts, elderly care programs, rehabilitation programs for the disabled, family care programs, programs aimed at empowering women, individual and family counseling, sensitization and preventive campaigns (domestic violence, drug addiction, children's rights, etc.). 9. Income Generating Activities Window. This window will provide grants to support income generating activities proposed by the community/groups in the community, in favor of vulnerable groups. * Targeting: As in the case of the social service window, targeting will be both geographical and categorical. Beneficiaries will have to belong to vulnerable groups, such as the long-term unemployed, female-headed households, the poor households (e.g., beneficiaries of the NPTP), the disabled, and youth. Any entity with a legal personality will be allowed to present proposals, but only entities with relevant competences and experience will be considered, so it is envisaged that the majority of successful applicants will be cooperatives and professional and trade associations. Applications from individuals will not be accepted. Selection criteria, specified in the Operations Manual, will take into consideration the vulnerability level of beneficiaries. * Activities: Grants provided to successful applicants will aim at improving production factors but will not cover the purchase of land or buildings. Eligible activities will include: capacity building such as training in new production techniques; small works such as repair/construction of storage facilities, land erosion control and water harvesting; and purchase of equipment (e.g., mills, refrigerators, olive presses, wood-cutting machines, green houses, drip irrigation systems) and supplies (e.g., improved seeds, bulk production materials). Selection criteria will be specified in the Operations Manual and include technical feasibility, sustainability, environmental impact, potential for employment creation, and benefits to the community as a whole. 10. Outreach. With support from Component 1, a robust outreach campaign will be carried out to inform potential applicants, local authorities and the population at large about the 43 opportunities available and the conditions to take advantage of them. This phase will rely on a variety of media, such as radio, posters, the internet (including MOSA's website), and face-to- face communication (e.g., meetings with municipal authorities and CSO representatives). All SDCs will be briefed about the program so as to serve as a relay for the information. A user- friendly guide explaining the purposes and functioning of the program will also be produced. 11. Calls for proposals. As explained above, calls for proposals will be launched separately for SDCs and for other entities, alternating them. Given the limited amount of funding available and the vibrant NGO community, requests are expected to be much higher than what the available budget could finance, therefore each call for proposals will have a set envelop to distribute. Calls for proposals will be widely advertised with different media, and application forms will be made available from the internet (MOSA's website) as well as from SDCs and the central unit at MOSA. 12. Review and Approval Mechanism. The flowchart at the end of this section provides an overview of the review and approval process to be followed, and the Operations Manual will describe it in detail, specifying responsibilities and timing (of course, the process may be modified during project implementation to incorporate lessons from experience). The steps are summarized below. (a) Applicants will be invited to use standard forms to submit proposals to the CSD program team in Beirut. Proposals will be checked for completeness by the receiving SDC and applicants will be given a receipt with a proposal number; proposals found to be incomplete will be rejected with an explanation (checklist of missing information). If the applicant is an SDC, proposals will be sent directly to the CSD program team in Beirut. Applications will only be considered if a social needs assessment has been carried out in the concerned area. Hence there will be two initial filters: application completeness and availability of a social needs assessment. (b) Complete proposals will be presented for discussion to the relevant LCP or equivalent consultative body to obtain feedback on, among other things: the actual need (in the case of social services) or likely market value (in the case of IGA) of the proposed activity; the reputation of the applicant, the likely sustainability of the proposed activity, any problematic aspect (e.g., conflict of interest, political interference, environmental risks, etc.), and the overall compliance of the proposal with the purposes of the program. This feedback will be non-binding but will need to be taken into consideration when deciding whether or not to fund the proposal. Social audits (see M&E section) will contribute to monitor the role of local consultative bodies. (c) The CSD program team will carry out a detailed desk review of all complete proposals to assess their technical quality as well as the reasonableness of their budget and timeline. The composition of the reviewing teams will be adapted to the nature of the proposal and could be supported by specialists contracted ad hoc as the need arises (e.g., in a specific business line or value chain). Proposals found to be unacceptable will be either recommended for outright rejection with an explicit reason or sent back for revisions. 44 (d) If the desk review has a positive outcome, the CSD team will conduct a field assessment, which will include the application of the ESAF. This could require the use of a specialist contracted ad hoc (e.g., in bee keeping or in domestic violence). On the basis of the combined results of the LCP (or equivalent body) feedback, the desk review and the field assessment, the CSD team will apply the scoring criteria specified in the Operations Manual. On the basis of the score obtained and of the available budget envelop for the particular call for proposals, the CSD team will make a recommendation to reject the proposal (with an explanation), send back the proposal requesting revisions or recommend accepting the proposal. Proposals that undergo revisions at this stage will reenter the process at the desk review stage. (e) All proposals will be sent to the Emanating Committee for validation, accompanied by the recommendation of the technical team. (f) The validated proposals will be sent to the Minister of Social Affairs for final approval. Any disagreement with the recommendations received will have to be justified and will be included in the information available to the public (see below). (g) The CSD program team will notify rejected applicants with an explanation and invite winners to go to the relevant SDC to sign the contract. To promote transparency and social accountability, the CSD program team will also publish selection results on MOSA's website (see below), while the relevant SDC will display the information on its bulletin board. The contract will then be sent to the Minister/DG for counter- signature. Subsequently, winners will be asked to open a bank account in a commercial bank of their choice, and the CSD program team will liaise with the fiduciary team in the PM to set up transfers. (h) Monitoring and supervision will be the responsibility of the CSD program team and, where appropriate, the SDC (i.e., in cases where the SDC has the needed competence and means, and there is no conflict of interest). If warranted, specialists could be contracted to assist the CSD program team and/or SDC in carrying out this task. Subsequent payments will be linked to implementation progress and will only be authorized after field verification. (i) The M&E Expert will carry out evaluations and impact assessments. These will be complemented by Social Audits carried out regularly throughout the project, as well as by spot checks on service providers (including SDCs) by the internal auditor. 13. Transparency. All efforts will be made to ensure that the program is implemented in such a way as to reassure the public about the rigor and objectivity of funding decisions and grant use. In addition to a program website accessible to the public and containing basic data about each grant awarded (e.g., beneficiary, proposed activity, proposed budget), information about rejected proposals (i.e., proposed activity, proposed budget, and reasons for rejection) will also be made public, though only the project number will be divulged rather than the applicant name or project location to protect privacy. 45 Component 3: National Poverty Targeting Program (NPTP) (US$46.3 million total cost, of which US$6.7 million to be financed from IBRD) 14. Officially launched in October 2011, the NPTP is the first poverty-targeted social assistance program established by the GOL. Since 2009, the World Bank has been assisting the GOL in designing and implementing the NPTP through the ESPISP I and II grants. The program established a targeting system, based on the proxy-means test (PMT) methodology, for the delivery of social assistance that improves living standards of the poorest and most vulnerable. The social assistance (the basket of benefits), for which the Council of Ministers has allocated US$28 million for 2012, consists of the following: (i) comprehensive health coverage for beneficiaries in public and private hospitals, through the waiver of 10-15 percent copayments for hospitalization; (ii) coverage of chronic disease prescription medications; (iii) registration fee waivers and free books for students in primary and secondary public schools; and (iv) discounts on the electricity bills submitted to EDL. As of October 2012, 62,000 households applied to the NPTP, 43,608 households were assessed and received a score based on the PMT, with 18,801 households deemed eligible to receive the NPTP benefits. The first round of education benefits -- free school textbooks and waivers of school fees for general education students as well as vocational students -- have been made available in September 2012. Nevertheless, the program is still in its infancy, and many processes, such as grievance redress and reimbursement mechanisms, need strengthening and support. Moreover, take-up of NPTP has been significantly lower than expected, partly due to the limited reach of the initial PR campaign, and partly due to citizen's skepticism about the GOL's ability to provide social assistance targeted to the poor and vulnerable. In fact, as of April 2012, awareness of the NPTP was below 40 percent for the bottom three income quintiles. 15. The objective of this component is to expand the coverage from 93,900 (expected in 2013, baseline value of SPPP) to 160,700 (in 2018) individual beneficiaries, as well as improve the efficiency of the NPTP. To achieve this objective, the project will provide technical and financial support for the continued roll-out and institutionalization of the NPTP. The GOL will continue to allocate a budget for the benefits as well as for the social workers and social inspectors involved in administering the program, whereas the SPPP will finance the following three sub-components: (a) Continued roll-out and institutionalization. (i) Support central management team functionality. The SPPP will finance the central unit staff involved in the expansion and national roll-out of the NPTP. The team will be staffed by highly competent staff and will consist of the following: (i) an Information and Communication Technology (ICT) group responsible for the NPTP database refinement, maintenance and management (ICT professionals); (ii) a technical group responsible for updating of the scoring index (an economist and statistician); (iii) a data collection coordination group for planning and quality control of decentralized information collection on applicant households (training coordinator, field work coordinators); (iv) a managing group (CMU director, NPTP Project Manager, executive assistant); and (v) other key experts. 46 (ii) Establish a web-enabled MIS and an archiving system, as well as training NPTP staff to use them. Financing will be provided to carry out an assessment of the MIS performance during the first phase of NPTP, and on its basis design and install any needed refinement and adjustment. Given the specificity of this assignment, it will be the responsibility of the NPTP team rather than being handled as part of overall MIS development. The SPPP will also finance the costs of the preparation and printing of NPTP household assessment questionnaires and ID cards. (iii) Refine the Grievance and Redress Mechanism. The SPPP will cover the costs of a consultancy that assesses the effectiveness of the existing protocols, role assignments, and procedures associated with the NPTP Grievance Redress Mechanism (GRM), and that provides recommendations for improved efficiency and transparency. It will also finance the costs associated with hiring a consultant to design and install a computerized GRM that links up with the NPTP MIS, as well as training NPTP staff on utilizing the new GRM. A Grievance Officer will be hired by the project to oversee the implementation of the mechanism and ensure its proper functioning. (iv) Adopt measures to prevent and discourage Fraud and Corruption Mechanism. SPPP will cover the cost of a consultancy tasked with designing anti-Fraud and Corruption guidelines and code of conduct, based on international best practice in this sphere. The costs associated with training workshops that would educate the NPTP staff (in MOSA as well as staff of NPTP service provider agencies) on how to detect and report on incidents of fraud and corruption and how to handle complaints from the public about fraud and corruption will also be covered under this component. Finally, financing will be provided for design and production of dissemination materials educating the public on how to detect and report on fraud and corruption in NPTP. (b) Access to social safety nets. This sub-component will: (i) Assess and improve the performance of the reimbursement mechanism: Phase I of the NPTP (under the ESPISP II) included the design and testing of the reimbursing system to the service providers involved in NPTP benefit delivery (i.e., schools, hospitals, EDL) and signed Memorandum of Understanding with all agencies involved. A consultancy to assess the performance of this reimbursement mechanism and design any improvements will be financed by this component Financing will be provided for training and materials to inform all NPTP service providers as well as MOSA staff about the appropriate procedures to follow. (ii) Design, test and implement a case management pilot: The SPPP will include the piloting of case management, whereby social workers adopt an individualized approach to each beneficiary family in order to assist exits from poverty, and eventually, graduation from social assistance. The case management approach starts with social workers assessing the family's needs and capabilities, identifying any welfare-improving programs or services, and facilitating application to such programs and services. It also involves follow-up with beneficiary families in order to track progress on the individualized action plan agreed by the family, and to record any changes in welfare that may necessitate modifications in the action plan. 47 (c) Enabling evidence-based policy making for poverty reduction. This sub-component will: (i) Support the functioning of the Social-IMC and creation of a poverty analysis capability. In order to build capacity for evidence-based policymaking for poverty reduction, SPPP will finance (i) technical assistance to support the Inter-ministerial Committee for Social Policy (Social-IMC) and its Secretariat; (ii) technical assistance to establish a Poverty Analysis Team, whose role will be to assess the poverty and inequality situation in Lebanon using Household Budget Survey (HBS) data; and (iii) the design and implementation of the next HBS (in 2017), which will be a large- sample survey representative at the governorate (Mohafazat) level. Component 4: Project Management (US$2.2 million total cost, of which US$2.0 million to be financed from IBRD) 16. The project will finance a team which will carry out key cross-component functions, including: (i) overall project coordination, working closely with the teams responsible for the implementation of the other project components (see Annex IV) and reporting to the Minister on overall project progress; (ii) implementation of the fiduciary functions of the project, including procurement, financial management and internal audit, as well as ensuring external audits are undertaken in compliance with requirements; and (iii) supporting the management of Component 1. The PM is foreseen as a temporary structure to last the duration of the project, after which it will cease to exist. For this reason, it is expected that during project implementation, the PM will build the capacity of the MOSA teams implementing each component in the various functions such as M&E, procurement and financial management. Specifically, the component will finance: (a) PM contractual staff and equipment: SPPP will support salaries of technical specialists covering financial management, procurement, and internal audit, as well as any administrative staff and ad-hoc personnel as deemed necessary by the PM coordinator and the World Bank. It will also cover the necessary equipment costs (computers, telephones, office furniture, connectivity hardware, etc.). (b) Operating costs: this component will finance operating costs associated with the PM, including additional office space rent (if applicable), utilities and supplies, bank and communication/connectivity charges, equipment maintenance and in-country travel and supervision. (c) External audit: this component will finance external audit services throughout the project life, including the project grace period, in accordance with World Bank requirements. 48 Flowchart on the approval mechanism for CSD sub-projects Responsibility Review and approval mechanism for CSD sub-projects Applicants Submit proposal < Verifydocumentationcomplete Not complete => give checklist SDC level (can be done by admin staff) Complete:give receipt& move LCPs Provide non-bindingfeedbackon sub-project appropriateness CSD Program team Technical desk review Revise & re-submit and send note Social team Tehia ekrve IGAteam (2teams dependingon windows) Reject&send note pass Social services Income generating activities CSD Program team Field assessment Field assessment Evaluation &scoring (Accept/Reject or Evaluation &scoring (Accept/Reject send back for revisionsthen submit or send back for revisionsthen submit directlyfordesk review) directlyfordesk review) Recommend acceptance or rejection Recommend acceptance or rejection Emanating Validation committee Minister Approval Notifyapplicants& publish on CSD Program MOSA website and SDCs bulletin manager board Winner Contract signature bywinner Contract counter-signature bythe Minister/DG Ministeror DG 49 Annex 3: Implementation Arrangements LEBANON: SOCIAL PROMOTION AND PROTECTION PROJECT (SPPP) Project Institutional and Implementation Arrangements 1. The project will be under the auspices of MOSA with the Minister retaining general oversight and authority. As the Minister is a member of a Social Inter-Ministerial Committee (Social-IMC) responsible for coordinating government and donor interventions in the social sectors, he/she will be able to ensure that the SPPP will complement ongoing programs and national social priorities, and exploit opportunities for synergies. The heads of the components, the Director General, heads of the relevant departments, and the Minister will form the SPPP Steering Committee, which will meet periodically to review implementation progress and ensure coherence with ministry policies. 2. The day-to-day coordination of the project will be the responsibility of a Project Coordinator, who will also be responsible for Component 1. Component 2 and 3 will each be headed by a Program Manager. These individuals will be appointed by the Minister and deemed acceptable to the Bank. The Project Coordinator, Program Managers and Officer (who will be either highly competent MOSA staff or consultants) will be assisted by a small team of experts based on the needs of each component. The Project Coordinator and component Managers, in collaboration with their teams, will be responsible for preparing action plans, monitoring and supervising their implementation, ensuring that each component has the physical and human resources necessary to carry out project activities, and liaising with the PM (see below) on procurement and financial management, as well as with Component 1 for M&E, and in particular MIS-related issues. They will be in charge of managing the daily activities of their respective components and will provide support to the SDCs as needed. 3. A PM will be established to ensure that the other three project components are coordinated and to undertake key activities that cut across different components. The PM will thus liaise with the component managers and officer, and report to the Minister and the World Bank on project progress. To be able to effectively carry out this role, the PM will include a Project Coordinator (who will also be the manager of Component 1) and fiduciary staff. Given MOSA's limited capacity and experience with donor-funded projects, the PM will handle all procurement, financial management and internal audit activities. To ensure the internal audit independence, internal audit reports will be submitted to the SPPP Steering Committee. The PM, in consultation with the Bank's procurement team, will prepare bidding documents, coordinate and monitor the bidding and contract award process, and administer disbursements. The PM will open the Designated Account at the Central Bank and ensure its regular replenishment based on mechanisms approved by the Bank. It will also be responsible for periodically preparing the project's financial reports in accordance with internationally accepted accounting standards, and for having them audited in accordance with internationally accepted auditing standards. In addition, the PM will be responsible for preparing the bi-annual progress reports for the overall project. In its coordinating role, the PM would serve as the focal point for donor inquiries. The PM will be a temporary structure to last only for the duration of the project, and therefore it will be expected to make skills transfer toward MOSA staff a priority. 50 4. The Operations Manual will define roles, responsibilities and processes for each component in a user-friendly way, as well as specific processes and roles for fiduciary functions. The Operations Manual, under preparation and expected to be completed no later than one month after project effectiveness, will be a living document, to be improved and amended in light of field experience and changing circumstances, at the request of either the Borrower or the Bank and with the agreement of both parties. 5. Components 2 and 3 will each be overseen by an "Emanating Project Committee" to allow facilitation of expenditures and institutionalization within MOSA. An Emanating Project is a particular and unique construct to MOSA (no other GOL ministry has this feature). It was created in 2004 through Law No. 327/93 giving MOSA the ability to establish flexible administrative and financial sub-structures to facilitate implementation and responsiveness to local social conditions.33 Emanating projects can also accept donor (and other) funds and disburse them flexibly. Each SDC is considered an emanating project and has its own administrative committee. 6. During project preparation, MOSA carried out an assessment to determine the urgent equipment needs of SDCs, and the initial procurement plan has been informed by it. A needs assessment will be carried out to obtain a detailed picture of the equipment and training needs of each SDC. Strengthened capacity and upgraded infrastructure and equipment will also help SDCs take on the additional tasks proposed under the project. Specifically, the SDCs will help carry out the following activities: a. Component 2: The SDCs will be responsible for: (i) organizing/setting up the Local Consultative Platforms (LCPs), defining LCP members' roles and responsibilities and organizing their regular meetings;34 (ii) facilitating the processing of sub-project proposals in collaboration with the component manager, as long as there is no conflict of interest (e.g., if the SDC itself is the applicant); (iii) carrying out field assessments and other ad-hoc surveys under the M&E specialist guidance35; (iv) supervising sub-project implementation, as long as there is no conflict of interest (e.g., if the SDC itself is the applicant); and (v) provide the PM and Component Manager with regular updates on sub-project progress, as per the Operations Manual. b. Component 3: The SDCs will continue supporting the implementation of the NPTP by hosting the social workers who register beneficiaries, administer household questionnaires, do data entry, and overall follow up for the NPTP. The SDCs will liaise with the Component Managers and MOSA Training Department on aspects of: (i) anti-corruption and fraud training for SDC staff and social workers, especially 33 Resolution No. 133/1, dated 07/06/2004 on the administrative systems for social projects emanating from the Ministry of Social Affairs and partnerships with civil society organization; and Resolution N. 134/1, dated 07/06/2004 on the financial system of social projects emanating from the Ministry of Social Affairs and partnerships with CSOs. 34 Should there already exist other consultative platforms in a given community or district, the SDCs will need to evaluate their suitability for the purposes of the project, and avoid creating duplications. In all cases, SDCs will be asked to build on existing structures to the extent possible. Ad-hoc surveys could include beneficiary satisfaction surveys, before/after impact assessments etc. and will be carried out either by the SDCs where the capacity exists or contracted out. 51 related to NPTP benefit administration; (ii) handling grievances and facilitating tracking of complaints; and (iii) training social workers in case management. 7. With respect to the NPTP implementation and institutional structure, the following explains the overall implementation arrangements of the program: * The Council of Ministers makes policy decisions related to the NPTP, allocates annual budget, and defines cut-off scores which determine benefits. * The Social-IMC reviews progress of NPTP and makes recommendations to the Council of Ministers. * The NPTP Central Management Unit (CMU), located at the PCM, is responsible for: (i) co-managing the central NPTP database; (ii) validating data and cross-checking with national databases; (iii) processing household data and generating scores and ranks according to the proxy-means testing (PMT) formula; (iv) generating the PMT formula; (v) analyzing national data and reporting findings to the Social Inter- Ministerial Committee (Social-IMC); and (vi) monitoring the targeting formula to minimize errors. * MOSA Central Unit is responsible for: (i) co-managing the central NPTP database and the PMT formula; (ii) checking for errors or unclear information in application received; (iii) transmitting data to the central database of the NPTP CMU; (iv) printing applicant IDs; and (v) managing the public relations campaign. * MOSA SDCs are responsible for: (i) receiving household applications and interface with applicant; (ii) data entry into program application; (iii) conducting household visits; (iv) checking possible data errors in application forms against provided official documents; (v) transmitting households' application data to MOSA central unit; and (vi) handling appeals and claims received by households.. 8. With respect to the institutional setup of the NPTP, the progam has been managed by the MOSA and the Presidency of the Council of Ministers (PCM).6 This was deemed the best option at the time of appraisal of the ESPISP II project, which supported the creation of the NPTP.37 The present institutional setup will be retained during the implementation of the SPPP, though the GOL has started discussing the possibility of consolidating the NPTP under MOSA and institutionalizing it as an independent program with its own budgetary allocations. 36 A central management unit at the PCM and a central unit in MOSA manage the program. The former is responsible for: (i) co- managing the central NPTP database; (ii) validating data and cross-checking with national databases; (iii) processing household data and generating scores and ranks according to the proxy-means testing (PMT) formula; (iv) maintaining the PMT formula; (v) analyzing national data and reporting findings to the Social Inter-Ministerial Committee (Social-IMC); (vi) monitoring the NPTP targeting; and (vii) auditing data processing. The central unit in MOSA (through its SDCs) is responsible for (i) co- managing the central NPTP database; (ii) receiving household applications; (iii) interfacing with applicants; (iv) entering data; (v) conducting household visits; (vi) checking for data errors; (vii) transmitting data to the central database of the NPTP CMU; and (viii) managing the public relations campaign. 3 Other options were considered at the time and are detailed in the EPP of the ESPISP II. 52 Social Inter-Ministerial Committee (Social-IMC) MOSA Minister Social-IMC Component IV Secretariat Program Coordination Team * Project Coordinator SPPP Steering Committee * Fiduciary team Chaired by Minister and composed of Project * Internal auditor Coordinator, Dept Heads, Program Managers E SDC Committee Emanating Committee Emanating C..) Committee Component I Component II Component III Social Development Community Social National Poverty Targeting Centers Development Program * Project Officer * Program Manager MOSA CMU at * Head of SDC Dept. * Engineer Central Unit PCM * Training Coordinator * Social Specialist * Program * Community Liaison * Income-generating Manager * CMU Officer activity Specialist * HR Officer Director * Connectivity * Environmental * Field work * Database Consultant Specialist coord. Admin. * Communication * Field Workers * Database * Statistician specialist * SDC Dept. Admin. * M&E expert Representative * Network * Others * Others Admin. * Poverty specialist * Others Social Development Centers (SDCs) Service Providers 7: * Schools * Hospitals * Electricit6 du 5Lihan Financial Management, Disbursements and Procurement Financial Management 9. The Bank assessed the adequacy of the project FM arrangements proposed by the implementing entity during the preparation and appraisal periods. The arrangements are considered acceptable if the entity budgeting, accounting, internal controls, funds flow, financial reporting, and auditing arrangements: (a) are capable of correctly and completely recording all transactions and balances relating to the project; (b) facilitate the preparation of regular, timely, and reliable financial statements; (c) safeguard the project's assets; and (d) are subject to auditing arrangements acceptable to the Bank. The project will be financed through an IBRD Loan of US$30 million (co-financing will be provided by MOSA). An FM assessment was performed for MOSA, based on the proposed implementation arrangements. Risks and Mitigating measures 10. The FM risk was assessed to be "Substantial" before mitigation, and this rating is expected to be lowered to "Moderate" when the proposed mitigation measures are effectively implemented. The key identified FM risks are: (i) in addition to the assessed significant public financial management risk in Lebanon, the loan is an extra-budgetary activity not subject to the budget law oversight, procedures, and controls; (ii) weak institutional capacity and lack of sufficient human resources with the needed qualifications at MOSA; (iii) lack of previous FM experience with World Bank-financed projects38; (iv) use of manual systems to record the financial transactions, thus, lack of an efficient and reliable information system that can cater for reporting per cost center and generate the project financial reports; (v) weak internal controls, lack of documented administrative and accounting procedures, and inexistence of internal audit; (vi) complex project design with different beneficiaries and channels of funds flow requiring effective coordination and close monitoring to ensure proper, reliable, and timely management of project data and funds; and (vi) lack of effective independent, and timely scrutiny over MOSA accounts due to the limited capacity of the Court of Accounts. 11. Based on the assessment, Country FM Systems will not be adopted as there are no effective formal procedures and controls applicable to the Loan. The following measures were agreed on to mitigate the identified risks: (i) a Project Management (PM) will be established within MOSA to include a full time Financial Officer (FO) to undertake the project financial management arrangements recruited no more than two months after project effectiveness; (ii) an Operations Manual describing and detailing the project implementation, stakeholders responsibilities, procurement and financial management policies and procedures will be prepared and ready no more than one month after project effectiveness; (iii) appropriate and timely training on the World Bank policies and guidelines and Operations Manual will be provided to the PM, including the FO; (iv) recruitment of an internal audit officer acceptable to the Bank as per Terms of Reference (TORs) cleared by the Bank to ensure compliance with the project Operations Manual and to provide an independent, objective, and systematic assurance of the project's operation; (v) centralizing the project Designated Account (DA) management in MOSA 38 Though MOSA is involved in one of the components of the World Bank-finance project, ESPISP II, it is not responsible for its FM arrangements. 54 and controlling the issuance of payments by the signature of the authorized signatories; (vi) design and installation of a customized accounting software to align with the project financial reporting requirements no more than three months after project effectiveness; and (vii) engaging an independent private external auditor acceptable to the Bank as per TORs cleared by the Bank to perform the project annual external audit. Organization & Staffing 12. MOSA was assessed to lack sufficient human resources with the needed qualifications, and thus, the requirements to complement the gap with hiring consultants, including a PM. The existing accountants of MOSA have practically no previous experience with Bank-financed projects and limited experience with international donors (few projects with the Italian cooperation and the EU). A Financial Officer (FO) will be recruited within the PM to handle and follow up on the project FM arrangements and ensure compliance with the project FM procedures as described in the Operations Manual. The PM main role is to ensure coordination among the three components' activities and consolidation of the project's related transactions, including FM. The FO will cooperate and collaborate with MOSA accounting staff to enable a knowledge-transfer process that would be sustained at MOSA. The FO needs to be on board no more than two months after project effectiveness to follow up on development and installation of the AIS and to contribute to the drafting of the internal and external auditors TORs. 13. Budgeting. Loans are still considered as extra budgetary activities and thus they are not subject to the budget law oversight, procedures and controls. To compensate for this gap, this loan will need to follow the World Bank's guidelines, policies and procedures for financed projects. A set of FM arrangements (detailed below) will be undertaken to ensure proper project accounting, reporting, controls and audits. As to the project budget, the project's allocation and categories of expenditures will be disclosed in the Financing Agreement to be approved by the Council of Ministers and ratified by the Parliament. A project quarterly and annual disbursement plan will be maintained by the PM based on the project procurement plan and implementation schedule to ensure timely availability of funds. It will be used as an effective tool for comparing planned expenditures with actual ones and monitoring the existing variances. Accounting and Reporting 12. MOSA accounting departments use manual entries to record daily transactions. No accounting software is available. Only a local program on Fox Pro is used to process employees' salaries and is being used and administered by a single user who prepares the monthly salaries. Local accounting standards are in use as per the Lebanese Law. No financial reports are being generated except for the required "cut off' account that is done on a yearly basis. In order to ensure that the project's accounting transactions are adequately captured and recorded and reliable reports are generated on time, the project will need to procure an AIS and have it ready for use no more than three months after project effectiveness. 13. The project will be required to issue quarterly IFRs and annual PFS for submission to the Bank. 55 14. Quarterly IFRs: The Project's IFRs, prepared in accordance with IPSAS - Cash Basis and generated through the AIS, will be sent to the Bank by no later than 45 days after the end of each quarter. The format and content of IFRs were agreed upon with MOSA during negotiations, and will be included in the Operations Manual. Training will be provided to the FO and the relevant financial team of MOSA. The IFRs will be composed of: a. Statement of Cash Receipts and Payments by category for the year then ending and cumulatively from inception date up until the year ending including funds received from third parties (i.e. other sources such GOL); b. Accounting policies and explanatory notes including a footnote disclosure on schedules: i. Statement of Designated Account reconciling period-opening and end balances; ii. Statement of project commitments, showing contract amounts committed, paid, and unpaid under each project's signed contract; iii. Grant listing report indicating all relevant information (such as description of activity, beneficiary name, amount of grant, geographical location, registration number in case of NGOs, period of implementation, etc.) 15. Project Financial Statements (PFS): The PFSs, prepared in accordance with IPSAS - Cash Basis - should contain the same information as the quarterly IFRs but cover an annual period. The audited PFS would be submitted to the Bank no later than six months after the end of each fiscal year39 (see External Audit Arrangements below). Controls and Audits 16. External Audit arrangements: The PFS will be audited by an independent private external auditor acceptable to the World Bank. The audit will be comprehensive and will cover all aspects of the project, including compliance with the Operations Manual, review of effectiveness of the internal controls system, and compliance with the Financing Agreement. The audit will be carried out in accordance with International Standards on Auditing. The audit report and PFSs, along with management letter, will be submitted to Bank no later than six months after the end of each fiscal year. In addition, the project management letter will contain the external auditor assessment of the internal controls, accounting system, and compliance with financial covenants in the Loan Agreement. The audit TORs will be finalized and agreed upon with the Bank three months after project effectiveness. The external auditor is expected to be engaged within six months of project effectiveness. 17. Moreover, the Bank makes publicly available the borrowers' audited annual financial statements for all investment lending operations. 18. Internal controls: Since each project component is considered as an Emanating Project, it will be overseen by a MOSA committee (an administrative and financial committee) that will report to the Minister, and which will check the legal aspect of all activities financed and implemented by the Emanating Project, oversee the way the activities are carried out, and 3 Project fiscal year ends December 31. 56 channel to the Minister all decisions to be taken. The PM will ensure proper project coordination and responsibility for cross-component functions such as M&E, fiduciary management, and communications. The heads of the components, with the Minister, the Director General, and heads of the relevant departments, come together to form the SPPP Steering Committee, which meets periodically to review the progress of the project and ensure coherence with ministry policies. The project implementation, procurement and financial management procedures will be documented in the project Operations Manual. The Operations Manual will detail clearly the stakeholder's roles and responsibilities, the relationships among them, flow of information and funds, for the project and each of its components, including the sub-grants. 19. Internal audit: Modem internal audit does not exist in the public sector in Lebanon. As the project's activities represent a complex process and entails substantial FM risk, there is a need to establish within MOSA an internal audit function for the project in particular and for MOSA in general to provide an independent and objective assurance over the project implementation and fiduciary management. This action would strengthen the internal control environment and provide a line of transparency on the implementation progress of the project. To protect the internal auditor independency, he/she will report to the SPPP Steering Committee. The internal audit TORS will be prepared by the PM and cleared by the World Bank within three months after project effectiveness. An internal auditor, acceptable to the World Bank, is expected to be on board within six months after project effectiveness. Flow of Funds Arrangements 20. The FM Chapter as part of the Operations Manual will be prepared no more than one month after project effectiveness. These procedures will disclose in details the project flow of funds and documents. 21. The project's disbursements would be managed centrally by the PM for all components including component two that involve disbursements in the form of grants to beneficiaries and SDCs. The project's flow of funds and supporting documents will be channeled as shown in the below charts: 57 SPPP- Flow of funds Chart World[lankMOF/ Borrower Loan agreem rvent IBRDLoanAccunt Withdrawal IVIDSAf Implementing Agency ampoxvt Advance Appliclfnswrth HostingaProjetOrdingUnit sendsapproval on e replenishnentDAR documents (PCT) Incltding FO actiein& ansi&ce e Admiritrafwe Treasury Su b - commateof Account (#36}) oa pnnojects Project Designated trans-tions Account (DA) at Central Bank Issue checks& trasFers payments Project's Annual Project's Interim-Un- Audited Financial audited Financial Project's Statementssubmitted Reports (FRs submitted consultants/suppliers annuallytoWorld Bank quarterlytoWodd Bank and grants beneficiaries ------ Cash Flow - . Document Flow Component 2 Flow of funds Chart MOSA/ PCT Project Designated Account (DA) at Central Bank IF SDC Sub-Bank Account Controlled by MOSA Head of Financial and head of SDC Issue checks & transfers payments I Project's consultants/suppliers Cash Flow 58 Disbursements Arrangements 22. To ensure that funds are readily available for project implementation, MOSA through MOF will open, maintain and operate a Designated Account (DA) in US Dollars at the Central Bank of Lebanon. Deposits into, and payments from, the DA will be made in accordance with the provisions stated in the Loan Agreement and as outlined in the World Bank "Disbursements Guidelines for Projects " by means of advances, replenishment and reimbursements. Replenishments of the DA will be against Withdrawal Application. The Ceiling of the Designated Account is set at US$1 million. MOSA will be responsible for submitting monthly replenishment applications with appropriate supporting documentation. MOF will open a Project specific Transit Sub-Account under the MOF's Treasury Account, to channel the Loan proceeds to the Designated Account. Transfers will be made from the Transit Sub-Account to the Designated Account. Other disbursement methods will be available as per the project Disbursement Letter. The following table specifies the categories of eligible expenditures that will be financed out of the proceeds of the IBRD Loan: Category Amount of the Loan Percentage of Expenditures Allocated (expressed in to be financed (inclusive of USD) Taxes) (1) Goods, civil works, non- 29,925,000 100% consulting services, consultants' services, Incremental Operating Costs, Training, Workshops and Study Tours, and Grants (2) Front-end Fee 75,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07 (b) of the General Conditions (3) Interest Rate Cap or 0 Amount due pursuant to Interest Rate Collar premium Section 2.07(c) of this Agreement TOTAL AMOUNT 30,000,000 23. The proceeds of the Loan will be disbursed in accordance with the traditional disbursement procedures of the Bank and will be used to finance project activities through the disbursement procedures currently used: i.e. Advances, Reimbursement and Special Commitment. Replenishment and Reimbursement Withdrawal Applications will be accompanied by Statements of Expenditure (SOEs) in accordance with the procedures described in the Disbursement Letter and the Bank's "Disbursement Guidelines". Interim Unaudited Financial 59 Reports and Annual Financial Statements will be used as a financial reporting mechanism and not for disbursement purposes. The minimum application size for reimbursements and replenishments will be the equivalent of 20 percent of the Advance ceiling amount. 24. E - Disbursement: The World Bank has introduced e-disbursement for all Lebanon supported projects. Under e-disbursement, all transactions will be conducted and associated supporting documents scanned and transmitted on line through the Bank's Client Connection system. E-disbursement will considerably speed up disbursements and facilitate project implementation, and is in effect for all World Bank financed projects starting January 2013. 25. Necessary supporting documents will be sent to the Bank in connection with contracts that are above the SOE thresholds, except for expenditures under Contracts with an estimated value of: (a) US$300,000 or less for works, (b) US$200,000 or less for goods; (c) US$100,000 or less for Consulting Firms; (d) US$50,000 or less for Individual Consultants, as well as Sub- Grants, incremental operating costs, training, workshops and study tours which will be claimed on the basis of SOEs. The documentation supporting expenditures will be retained at the PM and will be readily accessible for review by the external auditors and periodic Bank supervision missions. 26. Retroactive financing of eligible and agreed completed expenditures and rendered services will apply based on the conditions and time-frame disclosed in the Financing Agreement. MOSA has to actually make payments to the providers of these expenditures during the retroactive financing period to get reimbursed, as per the World Bank Disbursement Guidelines. 27. The Bank will honor eligible expenditures completed, services rendered and goods delivered by the project closing date. A four months' grace period will be granted to allow for the payment of any eligible expenditure incurred (i.e., services, goods or works, received and accepted) before the Loan Closing Date. 28. Authorized Signatories: Authorized signatories will be nominated by MOSA to sign the Withdrawal Applications (WAs). Names and corresponding specimen signatures will be submitted to the Bank prior to the receipt of the first WA (advance to DA). Each WA will be approved and signed by the authorized signatories. 60 Governance and Anti-Corruption 29. Fraud and corruption may affect the project resources, and thus impact negatively the project outcomes. The World Bank Financial Management Specialist (FMS) worked closely with the project's Task Team Leader (TTL) as well as with the project consultants, developed with the team an integrated understanding of possible vulnerabilities, and agreed on actions to mitigate the risks. The above proposed fiduciary arrangements, including the Operations Manual with a detailed FM chapter, reporting, external audit, in addition to the establishment of the internal audit function within MOSA are expected to address the risk of fraud and corruption that are likely to have a material impact on the project outcomes. In addition, the monitoring and evaluation function and the refining of the grievance and redress mechanism would contribute to improved efficiency and transparency. Financial Management Action Plan Action Date due by Responsible 1 Develop and finalize Operations Manual No more than 1 MOSA month after project effectiveness 2 Recruit project Financial Officer (FO) No more than 2 MOSA months after project effectiveness 3 Develop a TOR for project external auditor and submit Within 3 months MOSA to the Bank after project effectiveness 4 Develop a TOR for internal audit and submit to the Within 3 months MOSA Bank after project effectiveness 5 Design and Install an AIS No more than 3 MOSA months after project effectiveness 6 Appoint a project external auditor acceptable to the Within 6 months MOSA Bank from Project effectiveness 7 Appoint an internal auditor acceptable to the Bank Within 6 months MOSA after project effectiveness 8 Quarterly IFRs submitted to the Bank 45 days after the MOSA end of each quarter 9 Annual project audited PFS, audit report, and project Within 6 months MOSA management letter after the end of each fiscal year period 61 11 Periodical and ad hoc internal audit reports Based on MOSA agreement World Bank Supervision 30. A supervision mission will be conducted at least twice a year based on the risk assessment of the project. The supervision mission objective is to ensure that strong financial management systems are maintained throughout the life of the project. The IFRs will be reviewed on a regular basis by the World Bank team and the results and issues will be followed up during supervision missions. Financial audit reports will be reviewed and issues be identified and followed up by the Project FO. Internal audit reports will be reviewed as well. Additionally, during supervision missions, the Project's financial management and disbursement arrangements (including a review of a sample of SOEs and movements of the DA) will be reviewed to ensure compliance with the Bank's requirements. 31. An implementation support plan is provided based on the outcome of the financial management risk assessment (see Table 1, Annex 5). Procurement Procurement Capacity Assessment 32. MOSA past experience: MOSA has acquired experience in processing procurement for CSOs. Supplying funds to CSOs and signing agreements with them based on proposals, verification and validation of such proposals are being piloted with a defined mechanism under the Italian Cooperation-financed project entitled 'The National Program for Local Socio- Economic Development through Strengthening of the Social Development Centers (SDC) and Enhancement of the Social Development Fund in Lebanon'. This financing mechanism will be improved through the proposed SPPP. MOSA has limited experience in international project preparation and implementation, and has no experience with procurement of projects funded by the Bank. MOSA has limited procurement capacity, despite the fact that it has some qualified technical staff members who will certainly provide an important support to the procurement function. 33. Applied taxes: The following are the three types of taxes applied: (1) Stamp Duties of (a) 3 percent of the contract price for contract registration at ministry of finance (MOF), and (b) 3 percent on each payment; (2) Value Added Taxes (VAT) of 10 percent applied on consultants and contractors who are registered and eligible for VAT; and (3) Income Taxes that are a flat rate of 7.5 percent for non-resident consultants and variable for resident consultants, depending on their job classification at MOF. Exemption of consultants from Income Taxes may be observed if they are registered in countries that have entered with Lebanon into agreements prohibiting double taxation. Contracts financed by international donor proceeds are exempted from VAT (Law No 379 dated December 14, 2001). 62 34. Audit: MOSA does not have an internal audit but relies on the Court of Accounts for ex- ante and ex-post reviews. The Central Inspection plays a role in verifications and in complaints cases. 35. Current Procurement Staff More than 100 staff members are involved in the procurement processing through participation in the committees for evaluation of projects, quotations and acceptance process. The financial department is composed of 24 staff. Nevertheless, it was observed that MOSA relies on one engineer for field verification, as well as acceptance of delivered equipment and works. 36. Procurement Planning: MOSA does not rely on any procurement plan. Planning is driven solely by the budget line items. 37. The overall procurement implementation risk is assessed as Substantial. The following are the identified risks: (i) staff have no practical guidance on the steps of the procurement process, (ii) manual record keeping with no electronic cross-referencing, (iii) insufficient resources, reliance on centralized efforts, (iv) delays in project processing and implementation due to lack of proper planning, (v) implementation delays because no standardized bidding documents for national competitive bidding (NCB) known to local bidders, (vi) no advertisement experience with large contracts, (vii) no unit equipped to timely handle complaints, (viii) contract management: no control over project pace, delays, (ix) potential deficiencies in coordination between MOSA, Social Development Centers (SDCs) and CSOs, and (x) procurement not processed using acceptable practices. Procurement Arrangements 38. Procurement Implementation: The project shall be implemented centrally by MOSA for Components 1, 3 and 4, while for Component 2, SDCs/CSOs shall be granted funds to implement the qualified proposals in a decentralized manner. 39. Project guidelines: "Guidelines On Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants" dated October 15, 2006 and updated January 2011, World Bank "Guidelines: Procurement of Goods, Works and Non- consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 and World Bank "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011, shall apply to the project. For purchase of Goods and Works, the World Bank Guidelines "Procurement under IBRD Loans and IDA Credits" version of January 2011 shall be used. 40. Procurement methods for Goods, Works and non-consulting services: a. MOSA is expected to conduct (i) international competitive bidding (ICB) for which the Bank standard documents shall be used, (ii) national competitive bidding (NCB) for which MOSA shall use either ICB -or a translated version- or develop Standard Bidding Documents acceptable to the Bank as mentioned in clauses 3.3 and 3.4 of the procurement guidelines, (iii) shopping, (iv) framework agreements, and (v) direct contracting. 63 b. The SDCs/CSOs are expected to implement their sub-grants following simplified procurement processing used when community participation is foreseen. The CSO shall be using: (i) local competitive bidding, (ii) shopping, (iii) direct contracting, and (iv) Force Account as shall be defined in the project Operations Manual. Force Account method may be used for activities where government personnel and equipment may be needed for installation of equipment and non-consulting services. Force Account shall be justified and may only be used after Bank no objection and as per the provisions of clause 3.9 of the procurement guidelines. Also, in view of the nature of the project, purchase of used heavy duty equipment (such as tractors or other farmers' vehicles) may be accepted if it is in good conditions with a reasonable life cycle and on a case-by-case basis. 41. Selection of Consultants: a. MOSA is expected to conduct (i) Quality and Cost Based Selections (QCBS), (ii) Selection under a Fixed Budget (FBS), (iii) Least-Cost Selection (LCS), (iv) Selection Based on the Consultants' Qualifications (CQS), (v) Single Source Selection (SSS), and (vi) Selection of Individual Consultants. b. CSOs shall be using a reasonable competitive process for selection as well as single source/sole source, as defined in the Operations Manual of the sub-grants. 42. Staff: The procurement function shall be supported by MOSA technical staff but there will be the need for outsourcing a Procurement Officer and field consultants (for approval of sub-projects and reception). The SDCs/CSOs on their end shall have to assign a staff to ensure the procurement function as a condition for signing the sub-grant agreement with MOSA. 43. Operations manuals shall be developed for: (i) the project, (ii) the implementation of the sub-grants, and (iii) the NPTP. The procurement section in each manual shall be specifying the procurement processing and contract management. It shall also tackle the record-keeping requirements and the complaint mechanism expected arrangements. 44. Procurement plans: For Components 1, 3 and 4, a preliminary procurement plan dated March 11, 2013 for the life of the project has been developed and will be updated and reviewed by the Bank at least twice a year or as seen necessary. Given the demand-driven nature of CDD projects, it is not practical to prepare detailed procurement plans in advance as required under paragraph 1.18 for the CDD component (component 2) of the project, especially when the procurement of activities or the activities themselves are carried out directly by the SDCs/CSOs. Simplified procurement plans, or any alternative, may be prepared, if practical, based on an indicative list of eligible activities to be implemented. 45. Mitigation measures: As for the identified risks, the following measures are proposed to mitigate the risk rating to Moderate: (i) prepare Operations Manual to be completed no later than one month after project effectiveness, (ii) systematize record keeping, (iii) agree on a training program (internal/ external) to be implemented over the life of the project that is both relevant and practical, (iv) assignment of field staff to support procurement, (v) arrange for appropriate 64 support (staff, training, tools) to prepare the project procurement plan such that there is a clear relation between project objectives and the procurement plan, (vi) prepare acceptable sample bidding documents for NCB, (vii) establish advertising policy and develop sample advertisement in line with the Bank Guidelines requirements, (viii) establish/improve and implement complaint management system, (ix) review causes for recurrent amendments and cost overruns; and (x) develop suitable corrections to planning, cost estimates, lack of proper designs, technical specifications, etc. Environmental and Social (including safeguards) 46. No major social safeguards issues are expected under the project as designed. This is because the emphasis of the project is to improve MOSA's capacity through measures including supporting an effective national mechanism for MOSA to finance CDD projects; developing a transparent process of outreach, screening and prioritization, financing, and monitoring and evaluation of the sub-projects, building MOSA staff capacity; establishing databases; developing M&E systems and related business processes and quality assurance functions. However, because Component 2 would also finance CDD sub-projects, provisions relating to community sub- project land acquisition must be addressed. CDD sub-projects can obtain lands through a variety of ways: voluntary donation or long term lease of private land; willing buyer/willing seller transactions; or the involuntary land acquisition based on eminent domain with or without associated displacement. Addressing these impacts would be either through a resettlement policy framework or through procedures specified in the Operations Manual. Since no land acquisition using the eminent domain principle is anticipated, the approach of using a negative list to include all sub-projects with land acquisition under eminent domain is viewed as the best way forward. Therefore, in addition to a clear negative list which specifies activities which cannot be financed at the sub-project level, institutional arrangements will be carefully determined in the context of community land acquisition needs (who acquires lands, how will this be financed, capacity of local government units to monitor and supervise land transaction processes, etc.), and there will be clear and simple grievance redress arrangements, along with monitoring of grievance processing and resolution. 47. No significant environmental impacts are expected from project activities given that the sub-projects to be financed under this project will not entail huge construction or physical investments as such. However, to ensure the mitigation of any potential risks and impacts, an environmental and social assessment framework (ESAF) was conducted during project preparation and subsequently reviewed, cleared and disclosed prior to appraisal on the Bank's external website on January 30, 2013 and in-country on January 29, 2013. The ESAF, which will comprise an Environmental Management Plan (EMP), will be used as one of the main building blocks to ensure that the project is meeting its commitment and is in full compliance with the Bank safeguards policy: OP 4.01 pertaining to the Environmental Assessment Guidelines, which is triggered by the project. 48. The framework approach will be utilized for typical sub-projects given that these are not known at the present time, and also the fact that the sub-project locations will not be known until project implementation has started. The ESAF will articulate the screening criteria and process for the project to ensure that no Category "A" sub-projects are funded under this project. This 65 screening process will also be defined in the project Operations Manual, which will be developed no more than one month after project effectiveness and before any of the sub-projects are funded. 49. The ESAF (and EMP) prepared is coherently organized, simple and streamlined while in compliance with the Bank's environmental safeguards policies, that is, with OP 4.01 pertaining to the Environmental Assessment Guidelines. Also, the main elements and procedures of the EMP will be included in the project Operations Manual. 50. The ESAF clearly outlines the safeguards process to be undertaken upon the environmental screening of sub-projects whereby ESMPs are to be prepared for those sub- projects classified as category B. The World Bank will review and clear all ESMPs during the first two years of project implementation. Thereafter, the Bank will rely on the review of the PM and Environmental Specialist (ES) while maintaining the right to conduct a spot check on random ESMPs during the remaining three years of project implementation. The ES will also ensure that all the needed approvals on the ESMPs are obtained from the Ministry of Environment as deemed relevant and necessary. Monitoring & Evaluation 51. The results monitoring framework assesses progress towards the PDO through key indicators, focusing on achieving improvement in quantity and quality of social services provided by MOSA, expanded coverage of SSNs (the NPTP), and viable income generating sub- projects (see Annex 1). In addition, intermediate indicators will monitor the progress of each component over the life of the project. Monitoring and evaluation (M&E) arrangements will be centralized at the level of the PM, which will have a dedicated M&E Specialist, and rely on an M&E system adapted to the needs of each component. A computerized, modular MIS will be the central piece of the M&E system and will include: (a) a database on capacity building activities carried out under Component 1 and their beneficiaries (e.g., date, place, topic, and the names of beneficiaries of a specific training); (b) a module to track the processing of applications under Component 2, input baseline data for approved sub-projects, as well as monitor the physical progress in sub- project implementation and related tranche disbursements; (c) a module to register households in the NPTP, record the results of their eligibility assessment (including their NPTP score), and follow their utilization of benefits; (d) a financial management module for the whole project. 52. The SDCs will be the primary providers of information to be entered into the MIS and will be trained accordingly, as well as equipped with computers and connected to the internet. The MIS will be designed to allow data entry directly from the field, while the PM will perform data checks and produce summary reports. For transparency purposes, part of the data contained in the MIS will be accessible to the public (on a viewing-only basis) through the MOSA website. The M&E specialist will randomly visit SDCs, sub-project sites, and beneficiary households to verify the accuracy of the data entered, accompanied by the Internal Auditor as needed. 66 Monitoring will occur at each stage of project implementation, in order to identify arising problems and issues and to promptly consider and adopt corrective measures. In addition to the quantitative data contained in the MIS, ad hoc studies will be conducted on specific topics, such as beneficiary satisfaction or gender sensitivity. 53. Particular attention will be paid to ways of encouraging demand for good governance and social accountability. While the final instrument will need to be defined in collaboration with Lebanese counterparts, the use of Social Audits appears well suited to this project. A Social Audit is a process that collects information on the resources of an organization or project. The information is then analyzed and shared publicly in a participatory fashion, with the central concern being how resources are used for social objectives. Most Social Audits start with the production of information that is perceived to be evidence-based, accurate and impartial, and then make it available to citizens. This may include access to government documents but will also require the implementation of a stakeholder analysis or other form of information gathering from both beneficiaries and service providers to obtain their own assessment. Communities are then encouraged to identify corrective measures and possibly set up semi-permanent structures to keep monitoring the evolving situation, which tends to work as a deterrent against fraud. Social Audits have been used successfully to improve delivery of social programs, including safety nets, e.g., rural employment guarantee schemes in India. 54. The project will conduct mid-term and post-completion evaluations to gauge progress towards the PDO, to assess the impact of the project on the ultimate beneficiaries and on MOSA, and to assess the quality of the services provided, as well as overall project efficiency. The focus of such evaluations will include: (i) quality, variety, relevance, and cost-effectiveness of social services offered directly or supported by SDCs; (ii) the impact of the IGA supported by Component 2 on the earnings of beneficiary households and on generation of additional employment and income in the affected communities; (iii) the performance of NPTP with respect to the program's coverage of the extremely poor households as well as targeting accuracy; (iv) effectiveness and efficiency of NPTP procedures for registration and assessment of applications, addressing complaints and grievances, prevention of and reporting on fraud and corruption, as well as provision of reimbursement to service providers (schools, hospitals, etc.); and (iv) evaluation of the impact of NPTP on aggregate extreme poverty and inequality in Lebanon, as well as utilization of health and education services and electricity by the extreme poor. 67 ；、＀巨 끄· UD CD cli CC -49 CC ct z3 u cd C5, UD C,, ct u 'cý ct cd 4 E u ct cd c13 .j, cc Z$ CC Cd H Cg cc cc 9ý C4 -e. 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U i. 0U cc 9r cci 91 z ____________________________u 0 oo 9 0: - 4 0 0 - x 55. cd~ o 0 o -o ~ t o r. - e --e o n - -e eo 2 8 *-e a C) UD C) ~E ~V oC~ -tD E & e e r 0 U 0 o 80 Q 8 3 *5 m - o - >*ao - o - --, e o a 40 e -o -.-*> 2 +2+3 e 5 ·0 5 y0 E -aw . -. . a % ä - N d . s ' 9: cd :z cd t9 CC Hm ea 9 d å o-o --a o - 0 cc Ce~c UDa e .-x- -- o - $-e ov Co * e o- Q C+- CC. ·d CC r ·-t 0 C >. g .~ 2 -- C) = cn , S .z . o b H - 寸 r、 clý cý cý C12 rn :S 'cý > :S 'cý sn, Cýj Cýj clý ct Cýi Ct Cýj pil, ws Cýi C'S C.J, cn 44 z -5 tjD Annex 5: Implementation Support Plan LEBANON: SOCIAL PROMOTION AND PROTECTION PROJECT (SPPP) Strategy and Approach for Implementation Support 1. The Bank's Implementation Support Plan for the SPPP explains the approach used to support the PM as well as each of the program managers and officer, based on the project's design and its risk profile. The project will require close collaboration of the different component managers, project coordinator, and other MOSA central and decentralized staff. To facilitate collaboration, the Bank's Implementation Support Plan will focus on: (i) fostering continued communication and exchanges among government entities as well as the Government and the Bank team; (ii) providing support to the Government to achieve the project's objectives and mitigate risks, and identifying bottlenecks and helping to find solutions; and (iii) overseeing due diligence in the areas of procurement, financial management and safeguards. Implementation Support Plan 2. The implementation support plan consists of the following: * The Bank's core team, based in the Lebanon Country Office: The Task Team Leader and fiduciary team are based in Beirut and are therefore expected to maintain close communication, cooperation and coordination with the client as well as with different actors involved in the project. Such a decentralized implementation support model will ensure timely, efficient and effective inputs to the client and fulfill project needs. A strong partnership between the country-based Bank team, the different government departments and other development partners has already been established due to previous operations, which will help with the implementation of the proposed project. * Missions and dialogues: In addition to the frequent follow up and communication with the client that this decentralized implementation support model enables, official project supervision missions will be carried out twice a year with all relevant task team members' participation. As part of the ongoing interactions with MOSA and the periodic supervision missions, the Bank will: (i) ensure coherence between the implementation plan and actual project activities; (ii) assess overall achievement of results set for a given year and adjust project interventions for the next year based on success/failures of the previous year; (iii) actively participate in budgetary and action plan discussions for the next year; (iv) ensure compliance with fiduciary agreements; (v) reassess project risks and mitigation measures; and, (iv) determine if any adjustments are needed in the project design to ensure that the development objectives are met. The PM will produce quarterly progress reports, which include procurement, financial management and physical progress for the Bank's review, allowing the Bank's team to identify possible bottlenecks and propose corrective measures. * Procurement: The Bank will support project implementation by: (i) reviewing procurement documents and providing clearances/comments (prior and post review); 76 (ii) ensuring consistency of procurement activities with agreed procurement plan as necessary; (iii) maintaining close collaboration between the fiduciary agency and the Bank's country-based procurement staff; and (iv) providing ad-hoc training to project procurement staff as needed. The PM may have only limited experience with Bank procurement procedures and will therefore benefit from intensified training and coaching. As the PM acquires the necessary experience, Bank support will be adjusted but will include at least two supervision missions per year. * Financial Management: The financial management of the project will be supervised by the Bank in conjunction with its overall project supervision to be conducted at least twice a year. Based on the outcome of the financial management risk assessment, the following implementation support plan is proposed: Table 1: Financial Management Activity Frequency Desk reviews Interim financial reports review Quarterly External Audit report review of the project Annually Review of other relevant information such as internal audit reports. Cniusa be On site visits Review of overall operation of the FM system Annually Monitoring of actions taken on issues highlighted in audit reports, auditors' management letters, internal As needed audit and other reports Transaction reviews (if needed) As needed Capacity building support FM training sessions Before Project starts and thereafter as needed The objective of the above implementation support plan is to ensure that the project maintains a satisfactory financial management system throughout the project's life. * Anti-Corruption: Fraud and corruption may affect the project resources, thus impacting negatively on the project outcomes. Beside standard fiduciary monitoring activities (see above), the task team (with procurement and FM specialists playing a key role) will support the PM and program managers' efforts in addressing the potential risks of inefficiencies due to fraud and corruption issues. Regular supervision missions by the Bank's fiduciary team as well as their presence in the field will help leverage the risk of corrupt practices. The proposed fiduciary arrangements, including the Operations Manual with detailed fiduciary chapters, in addition to the establishment of the internal audit function within MOSA, are expected to address the risk of fraud and corruption. 77 * Safeguards: The Bank's safeguards team will provide the necessary specialized assistance on managing the environmental management and mitigation issues. This may include training of relevant project staff and consultants to ensure compliance with the EMP. The EMP will clearly specify the monitoring arrangements. Even though the project interventions are expected to have limited environmental impacts, it is necessary to have regular supervision missions to identify and resolve any issues regarding compliance. * Monitoring and Evaluation: Given the decentralized nature of: (i) the sub-projects to be implemented under Component 2, and (ii) the collection of applications under Component 3, M&E for both of these two programs is a challenge. A web-enabled MIS will be developed for the SPPP, with different modules for each of the three components (an MIS has already been developed during the first phase of the NPTP). A local M&E expert will be hired at the PM, and assisted by database developers and IT specialists, to ensure that data is entered in the system and monitor its utilization. The Task Team will include a M&E Specialist who will build the capacity of the M&E expert at the PM, help monitor the performance of the existing system and support the PM's effort to generate useful, timely, and reliable progress reports. 3. Table 2 below summarizes the main focus of the implementation support. 78 Table 2: Implementation Support Plan Time Focus Skills Needed Resource Estimate (US$) Year 1 Monitor sub-project TTL 25,000 approval flow and CSD Operations Analyst central unit under Environment Specialist Component 2 Monitor implementation Social development 23,000 of trainings under TTL Components 1 and 2 Operations Officer Monitoring Social development 23,000 implementation of NPTP Economist (application received, TTL distribution of benefits, Operations Officer etc) Monitoring and M&E specialist 10,000 Evaluation system Financial management FM specialist 5,000 Monitoring SPPP TTL 15,000 implementation progress Operations Officer Years 2-5 FM, disbursement and FM specialist 50,000 report Procurement review Procurement specialist 50,000 Technical inputs Economist, TTL, Social Development, 100,000 Operations Officer Social monitoring Social specialist Environmental monitoring Environmental specialist Monitoring and TTL, M&E specialist 100,000 Evaluation Project implementation TTL, Operations Officer 100,000 progress Table 3: Skills Mix Required Skills Needed Number of Staff Weeks/FY Number of Trips/FY Task Team Leader 8 weeks n/a - Country Office based Operations Officer 8 weeks n/a - Country Office based Procurement 4 weeks n/a - Country Office based Financial Management 4 weeks n/a - Country Office based Social Development 4 weeks 2 Economist 2 weeks 2 Monitoring and Evaluation 2 weeks 1 Environmental Safeguard I week 1 Social Safeguard I week 1 79 Annex 6: Economic and Financial Analysis LEBANON: SOCIAL PROMOTION AND PROTECTION PROJECT (SPPP) 1. The SPPP will finance the development of two programs at the MOSA: (i) the CSD; and (ii) the NPTP, intended to support the livelihood of extremely poor households. This annex aims to analyze the rationale for public involvement and economic implications of these two programs as well as the proposed approach to ensure cost-efficient outcomes. Given the demand-driven nature of the sub-projects financed by the CSD component of SPPP, the benefits and potential welfare impacts are difficult to quantify ex ante as the structure of the sub-project portfolio will not be known with certainty until SPPP is well underway. Moreover, the economic impact of the NPTP is not directly quantifiable, as this brand-new program delivers access to services and utilities rather than cash, and thus the benefits that accrue to each household depend on utilization of health and education services as well as connection to electricity network. For this reason, as well as the severely limited data availability in Lebanon, this Annex draws on empirical evidence gathered in similar projects in other countries and on estimating, where possible and under admittedly strong assumptions, the quantifiable aspects of the programs in Lebanon. The paucity of existing data in Lebanon emphasizes the importance of collecting ex ante and ex post data in CSD and NPTP programs, with a view towards improving the future evidence base for similar projects in the country. The Community Social Development Program Rationale for Public Involvement 2. Social Services Sub-projects. Investing in social services has the potential to help build human capital as well as decrease social risks, which can then improve productivity and stimulate growth. For example, investing in education could help generate higher future incomes; improving health centers could help decrease mortality and morbidity rates of the workforce thereby leading to increased labor productivity. Government involvement in the provision of social services is essential to improve their accessibility to the poorest and most vulnerable population and thus enhance the equity and efficiency of such services across Lebanon. In fact, although the Govermment competes with the private sector for the provision of social services (such as health and education), as 53 percent of students are enrolled in private schools40 and around 60 percent of total health expenditures come from private sources , the social benefits associated with consumption of these services are likely higher than the private benefits due to positive extermalities, such as reduction in crime due to education or reduction in communicable diseases due to vaccinations.42 This provides sufficient rationale for the Govermment to subsidize the consumption of such social services, especially in the presence of inequitable distribution of privately-provided services. For instance, although providing health services might be generally profitable, the private sector might not be attracted to fund such projects to the poorest and most vulnerable population to remote areas of the country due to low private economic rates of returm. 40 Center for Educational Research and Development. (2009-2010) Statistical Newsletter. Ministry of Education and Higher Education. Beirut, Lebanon. 41 World Development Indicators (value for the year 2010) 42 McMahon, Walter W. (2002a), Education and Development: Measuring The Social Benefits, Oxford and New York: Oxford University Press; Culyer, Anthony J. (1976), Need and the National Health Service: Economics and social choice, Oxford: Rowman and Littlefield. 80 Such additionality of public provision of social services was evident in the study conducted to examine the survival and, where possible, impact of the sub-projects implemented in Lebanon under the World Bank-financed Community Development Project (CDP), which closed in February 2008.43 One of the sampled sub-projects was construction and equipment of a health dispensary in Akkar, a poor area in North Lebanon. To date, this is the only dispensary in the area, receiving, on average, 5 to 7 patients a day and employing three nurses (two of whom are volunteers). Given the scarcity of social service provision in poor regions like Akkar, where private providers are not willing to enter, government involvement in social services is essential for reducing regional disparities in living standards. 3. Income-Generating Activities (IGA). The rationale for investing in income-generating activities that produce private benefits is not as clear as in the case of social services. Yet, Government intervention in promoting income-generating activities to the poor and vulnerable through the provision of grants is justified for the following reasons: (i) the poor might not have the financial resources and sufficient liquidity to start their own business, even if they do save and that business is likely to be profitable; (ii) the very poor, many of whom are already in debt, usually find it too risky to take on another loan; and (iii) the poor living in a fragile livelihood state cannot absorb entrepreneurial risks, which limits their ability to benefit from technology and economic opportunities.44 For these reasons, micro-credit and microfinance options were rejected as alternative vehicles to support income-generating activities. Given that high- risk/high-return investments can have positive spillovers on the entire community by creating jobs and increasing income and consumption of people other than the direct beneficiaries, the project opted to finance grants for income-generating activities. Besides having economic spillovers on the wider community, the social return to investment in IGA grants could include development of local organizations or cooperatives and create linkages between communities and the private sector to enable the poor to manage their economic activities in the long term. As a result, the provision of grants for IGA creates economic infrastructure, which will be shared by a number of people from the community and is, therefore, more similar to a public rather than private good.45 The previous CDD project in Lebanon demonstrated the potential of supporting income-generating activities: for instance, a successful income-generating viniculture sub- project, analyzed in the impact evaluation study of CDP, created 5 construction jobs to build the cooperative's headquarters, planted 35,375 new vine shoots in 11 villages generating 150 planting jobs, led to a 10 percent increase in the developed land surface, and increased the 43 In 2002, the World Bank supported the first CDD project in Lebanon - the Community Development Project (CDP) through a US$20 million loan. The objective of the CDP was to improve the living conditions and the economic status of the poor in disadvantaged communities, and it funded more than 321 sub-projects, targeting five groups of beneficiaries (farmers, residents, social cases, women and youth), and covered several sectors. A study on the survival, and where possible, impact of sub-projects implemented CDP was conducted in 2012 and provided insights and information on: (i) the survival rate of sub-projects after a period of four years since their implementation; (ii) quantitative and qualitative changes that can potentially be attributed to the project (on the community, households, beneficiaries, etc.); (iii) success factors and drawbacks/obstacles; and (iv) lessons learned and recommendations. A telephone survey was conducted to determine the status of the 321 sub-projects; the results show that 70% are still operational, 11% could not be reached, 10% are not operational anymore and the rest preferred not to reveal their status. A sample of 10% (31 sub-projects), with both operational and non-operational ones, was drawn for the fieldwork covering various sectors and regions. The results of the fieldwork revealed that the telephone survey was not reliable. Assuming this finding of the field work is representative of all 321 sub-projects, the survival rate of sub-projects is 66%. 44 Presentation by Anne Ritchie entitled "Financing Productive Assets in Social Funds and CDD" for the following workshop: Social Funds: Exploring New Frontiers; Session III: Financing Productive Assets through Social Funds and CDD Operations November 16, 2005 45 Ritchie, A (2006). "Grants for Income Generation ". Agricultural and Rural Development Notes Series. The World Bank. 81 revenues of 118 grape growers. Moreover, this sub-project created gains in terms of social capital formation, as it resulted in the creation of a network of growers, professionals, and university students to support the business activity. Expected Economic Implications 4. Given the demand-driven nature of the sub-projects financed by the CSD component of SPPP, the benefits and potential welfare impacts are difficult to quantify ex ante as the structure of the sub-project portfolio will not be known with certainty until SPPP is well into implementation. Cost-effectiveness and Best Alternative 5. The following design features of SPPP help to ensure that the implemented social sub- projects represent the least-cost and best alternative: (i) the sub-projects will be demand-driven, which allows the scarce resources to flow to the community and sector most in need; (ii) SDCs will take stock of the available local development plans and existing local social services, which will help them to identify the gaps and thus, the needs of the communities; in addition, community participation (through LCPs) will help to ensure that proposed sub-projects truly reflect the needs and preferences at the local level, thus resulting in allocative efficiency; (iii) technical experts (e.g., sociologists and engineers) will analyze the proposed sub-projects to ensure feasibility and technical efficiency; and, (iv) sub-projects will be implemented by communities and SDCs, including the procurement process, which would create incentives for cost control. International experience has shown that the delegation of sub-projects' implementation to the community generates cost savings compared to similar sub-projects implemented by public sector agencies, primarily due to eliminating the middle man or contractor. For example, a study of CDD/SF programs around the world demonstrated that such sub-projects have between 13 to 40 percent lower costs, depending on the type of investment, compared to similar work built through government service delivery mechanisms.46 To ensure quality and cost-effectiveness and minimize corruption, MOSA will nominate a team composed of Ministry staff at the central and SDC levels to oversee the implementation of the sub-projects and run regular audits. Rates ofReturns 6. The sub-projects' approval mechanism under the CSD component of SPPP will be potentially open to receive proposals from all SDCs and NGOs across all communities in Lebanon, irrespective of the levels of poverty and vulnerability of the population. As a result, there is a considerable risk that the impact of the Project will be undermined by the lack of targeting. To minimize such risk, strict guidelines with clear eligibility and selection criteria will be developed and documented in the project Operations Manual. During the selection process, LCPs and SDCs will be encouraged to identify the sub-projects that target poor and vulnerable groups and communities. In a study on the costs and benefits of the CDD sub-projects implemented as part of Philippine KALAHI-CIDSS Project, the economic rates of return for 46 Wong, Susan (2012). What Have Been the Impacts of World Bank Community-Driven Development Programs?. Social Development Department. Sustainable Development Network. The World Bank. 82 activities closest to the ones envisioned under SPPP - schools, health centers, and daycare facilities - were 16, 20 and 16 percent, respectively.47 Profitability ofIncome-Generating Activities 7. Sub-projects aimed at promoting income-generating activities will be implemented by NGOs, and funding will be given only for proposals that include a well-developed business plan with estimated cash flows showing the profitability of the proposed sub-project and an exit strategy to ensure its sustainability once the project funds are fully disbursed (including the maintenance and operating costs of the assets). Technical feasibility studies will need to be implemented, including a market analysis to illustrate the demand for the proposed product or service. Moreover, the proposals will be reviewed by technical experts through field visits to ensure feasibility and verify the information contained in the proposals. An impact evaluation study of the Andhra Pradesh District Poverty Initiative Program (DPIP), a program aimed at supporting income-generating activities and building self-help groups, found significant economic gains through higher consumption levels - 15 percent increase in consumption and 11 percentage point increase in per capita consumption for participants compared to counterfactual - as well as asset accumulation and better nutrition for self-help group participants - nutritional intake increased by 15 percent and asset endowments by 26 percent.48 The results of an ex post economic analysis of the Burkina Faso's Community-Based Rural Development Project (known as PNGT) illustrated that the economic rates of return in productive projects were extremely high, 116 and 250 percent on average for an erosion control fence and compost pits, respectively, since such projects result in increased agricultural production. The National Poverty Targeting Program (NPTP) Rationale for Public Involvement 8. The primary objective of public involvement in social safety nets is to provide poor and vulnerable households with effective and reliable protection against destitution, to help them navigate idiosyncratic and systemic shocks, and to promote their inclusion in the society. Prior to the launch of NPTP, the Government of Lebanon played only a minor role in this sphere apart from financing untargeted price subsidies, and financing non-state organizations, such as NGOs and CSOs, that provided a wide spectrum of programs to different target groups in the country. While these charitable and religious organizations (who are 90 percent confessional-based) assist many poor and vulnerable people, the rationale to increase public involvement in SSN provision is two-fold: (1) to ensure horizontal equity, so that two persons with the same standard of living have access to the same basket of SSN benefits, irrespective of their geographical location or political / religious affiliation; and (2) to obtain efficiency gains through consolidation of SSN provision and targeting resources to the neediest members of society. 9. Besides the direct income support received by poor households, social protection programs, including social safety nets, contribute to economic growth and reduce poverty at 47 Araral E, Holmemo C, (2007). Measuring the Costs and Benefits of Community Driven Development: The KALAHI-CIDSS Project, Philippines. The World Bank Social Development Paper No. 102. 48 Wong, Susan (2012). What Have Been the Impacts of World Bank Community-Driven Development Programs? Social Development Department. Sustainable Development Network. The World Bank. 83 three different levels: (i) individual or micro level; (ii) local economy or meso level; and (iii) national economy or macro level.49 Unfortunately, the magnitude of these indirect effects cannot be estimated ex ante, and it is often difficult to assign proper attribution ex post. Below is a summary of evidence collected in other countries, mostly through rigorous impact evaluation of social safety net programs. 10. At the individual (micro) level, such projects can build human capital, improve health leading to higher productivity, empower and support poor individuals to invest and accumulate productive assets conducive to growth, and provide households with an income that would help them diversify their investment decisions and adopt higher return activities, potentially increasing their income levels.50 For example, Mexico's Conditional Cash Transfer (CCT) program called PROGRESA/Oportunidades achieved the following impacts: (i) decreased stunting among poorest children in rural areas; (ii) reduced infant mortality; (iii) diminished anemia prevalence; and (iv) reduced incidence of illness, with children in treatment areas being 40 percent less likely to be reported ill after 2 years of program exposure than children in control areas. In another program implemented in Indonesia, as a response to the crisis of 1997-98, the Government launched the Jaring Pengamanan Sosial scholarship program and waivers of health care fees to avoid a drop in school enrollment and health care access. The evaluation found that the program mitigated the impact of the crisis on these expenses and enabled households to stabilize their consumption and reduce child labor. 52 11. At the local (meso) level, social protection programs can enable the creation of community assets (through public works programs), economic spillovers from increased demand and positive externalities, and better functioning of local labor markets. 53 There is a concern that participation in social protection programs may lead to dependency. However, in general, such effects are not empirically observed in the developing world. For example, a review on the impact of SSNs revealed that most of the programs that do not directly affect labor supply have no indirect impact on it.54 Studies in Mexico and South Africa suggest that transfers actually make work more feasible as eligible individuals can afford bus fares and presentable clothes for work. 5 49 Alderman, H, and Yemtsov, R (March 2012). Productive Role ofSafety Nets. Background Paper for the World Bank 2012- 2022 Social Protection and Labor Strategy. Discussion Paper No. 1203 so Ibid. 51 Ibid based on evidence from: (i) Skoufias, E. (2001). Progresa and Its Impact on the Human Capital and Welfare of Households in Rural Mexico. A Synthesis of the Results of an Evaluation by IFPRI. Washington DC: international Food Policy Institute; (ii) de Janvry, A. and E. Sadoulet. (2006). Making Conditional Cash Transfer Programs More Efficient: Designing for Maximum Effect of the Conditionality. World Bank Economic Review 20(1): 1 - 29; and, (iii) Behrman, J. and J. Hoddinott. (2005). "Programme Evaluation with Unobserved Heterogeneity and Selective Implementation: the Mexican PROGRESA Impact on Child Nutrition," Oxford Bulletin ofEconomics and Statistics 67(4):547-569. 52 IEG. (2011). Assessing the Development Impacts of Social Safety Nets through Impact Evaluations. The World Bank. Companion Volume to IEG Evaluation of Social Safety Nets. Washington DC: World Bank. 53 Alderman, H, and Yemtsov, R (March 2012). Productive Role ofSafety Nets. Background Paper for the World Bank 2012- 2022 Social Protection and Labor Strategy. Discussion Paper No. 1203 54 Ibid. Ibid based on evidence from: (i) Marcus, R. (2007). Tackling Obstacles to Social Protection for Chronically Poor People. Chronic Poverty Research Centre, Policy Brief No. 3. Manchester, UK: Chronic Poverty Research Centre (CPRC); and, (ii) Ardington, C., A. Case, and V. Hosegood. (2009). Labor Supply Responses to Large Social Transfers: Longitudinal Evidence from South Africa, American Economic Journal: Applied Economics 1(1): 22- 48. 84 12. At the national economy (macro) level, social protection programs act as stabilizers of aggregate demand, promote social cohesion, improve resource allocation and availability, and enable growth-enhancing reforms (e.g., removal of universal fuel subsidies) to become more politically feasible. In an economy with an aggregate demand constraint, increased consumption by the poor enabled through SSNs can lead to short/medium term growth through stabilizing impact (increased output) and improved long term growth prospects. 56 Indeed, there is evidence that the poor consume different goods and services than the non-poor, with a higher share spent on non-tradable goods. For example, low-income households in South Africa spent relatively high proportions of their income on domestic goods and services, which favored domestic and local industries and enhanced the country's trade balance.57 In addition, social protection initiatives have proven to reduce the potential for social tensions/unrest, insecurity, and crime by reducing poverty and inequality. In fact, as post-conflict states face substantial challenges - such as political instability, weak institutional capacity, violence, and poor governance - SP initiatives can promote sustainable peace through the stimulation of broad-based and pro-poor growth and 58 employment. For example, in Kenya, a direct cash transfer program was implemented in communities hosting the displaced following the violence that erupted in 2007, which led to a large-scale destruction of buildings, disruption of labor markets and displacement of around 300,000 individuals. The evaluation revealed that, in terms of social cohesion, the program reduced tensions, allowed people to feel safer again, re-established trust and led to participants reporting higher encouragement to restart their lives. 5 13. With these impacts of social protection programs in mind, the project considered several alternatives to supporting a national-level government-provided PMT-targeted social safety net program, such as NPTP. One alternative is to preserve the pre-NPTP non-government provision of social assistance through political and religious organizations. As mentioned above, this can result in under-coverage of the poor and vulnerable who might not have a political or religious affiliation, and in inefficient distribution of SSN resources to the non-needy clients of such organizations. Another alternative is for the government to devolve the responsibility for SSN provision to the subnational level, with local governments or communities determining eligibility and distributing benefits. Given the political structure of Lebanon and the varying extent of administrative capacity in local institutions, this alternative was rejected in favor of building capacity at the central level in terms of SSN program administration but involving local branches of MOSA, i.e., SDCs, in encouraging take-up of the program, registering applicants, and conducting household visits as part of the eligibility determination process. Finally, NPTP faced many options for determining the targeting method: categorical, geographical, means-tested, proxy means tested, and community targeting. As pointed out in the literature on targeting methods (most recently, in Silva et al. 2012), categorical and geographical targeting methods work best when poverty is very concentrated in terms of either location (urban slums or remote rural areas) or in categories (by age, gender, or family status). Since poverty in Lebanon is complex and multi-faceted, these targeting methods were rejected. Means tests (i.e., income based eligibility) work well in countries with well-developed and synchronized information s6 Ibid. Ibid based on evidence from Williams, M. (2007). The Social and Economic Impacts of South Africa's Child Support Grant. Research Paper No. 40. Cape Town. South Africa: EPRI. 58 Ibid. 59 Henderson, M. and S. Pietzsch (2008). Direct Cash Transfer to Post Election Violence Affected Host Community: Nakuru, South Rift Valley, Kenya. Action Contre la Faim (ACF) International Network. 85 systems that can allow for verification of income information, which is otherwise often unreliable; moreover, means tests do not work well in environments with high informality. Since Lebanon has a high rate of informality as well as a dearth of reliable information on income, means tests were also rejected. Finally, community targeting was rejected due to the post-conflict environment and the fragility of community relations in the country. The chosen targeting method - proxy means test - has been demonstrated to work well in countries with high informality and unreliability of income information, and it relies on an objective assessment of a household's welfare based on observable correlates of living standards. Expected Economic Implications 14. For the first round of benefit distribution in 2012, the NPTP is providing the following benefits: (1) waivers for primary and secondary education fees (registration fees, parent fees) and provision of required textbooks free of charge; (2) waivers of copayments of hospitalization fees (with the rest waived through MOH hospitalization fee waiver program); and (3) payment of electricity connection charges and a lump-sum discount off electricity bills. The next round (still in Phase I) will also include coverage of chronic disease prescription medications through the MOSA SDCs. 15. This basket of benefits is expected to have economic impacts on two levels: (1) household; and (2) aggregate. On the household level, the NPTP is expected to increase disposable income and consumption of extremely poor households, and it may improve their education and health outcomes, if it effects behavioral changes in the utilization of education and health services. On the aggregate level, this program is expected to reduce the level of extreme poverty and inequality in the country, and it may increase aggregate utilization of health and education services and the coverage with electricity connections, with all the corresponding externalities these changes imply. 16. Eligible households can be divided into three groups based on their expected utilization of each benefit in the NPTP basket: marginal, infra-marginal, and unaffected households. The overall economic benefit of NPTP depends on how many households find themselves in each column with respect to each of the NPTP benefits. More details are provided in Table 1 below. Table 1: Benefits of NPTP based on groups to which the household belongs to Households currently not Huhdaeo ed hout sending their eligible childrensednthielgbe clrnoflgbeaesr to school due to high costs chir to so an tho for who NPTP involved in the fees andg payin th e nefee eucat benets do textbooks. out o oet. coe te stsOf Houshold curentl not Households already Hueod ihu sendng teireligblechilrensending their eligible cide feiil gso Educaion o schol de to igh osts children to school and thsfowomNT benefis invoved inthe fes and paying the education fees edctoabnfisont textbooks. ~~out of pocket. cvrtepiaecsso Benefit of NPTP: enroll or Benefit of NPTP: use the sending children to school keep their eligible children in NPTP benefit as an (perhaps due to the 86 school and reap long-term injection of cash, which opportunity cost of benefits of higher human allows them to increase children's earnings or capital without having to consumption of goods and other costs, such as school reduce their current services other than eligible clothing and supplies) consumption basket (unless children's education. Benefit of NPTP: None those children were working before, and sending them to school implies losing that Households with access to Households with access to Households which for MOPH hospitalization fee MOPH hospitalization fee some reason or other waivers and unmet needs for waivers and who can (presence of other hospital care but who cannot afford to pay the insurance that prevents Heathafford to pay the copayment copayments for all the care their eligibility for MOPH Benefit of NPTP: obtain they need hospitalization fee needed health services for Benefit of NPTP: use the waivers, rationing of these their members, who otherwise NPTP benefit as an fee waivers, etc.) do not would go untreated, and reap injection of cash, which have access to MOPH the long-term benefit of better allows them to increase hospitalization fee health without having to consumption of goods and waivers, or those which do reduce their current services other than hospital not consume hospital care. consumption basket care Benefit of NPTP: None Households with chronically Households with Households without sick members who cannot chronically sick members chronically sick members afford to pay the medicines who can afford to pay the whose drugs would be Benefit of NPTP: obtain cost of chronic disease covered under this tneeded medicines for their drugs program (assuming the list wmembers, who otherwise Benefit of NPTP: use the of diseases / drugs is not would go untreated, and reap NPTP benefit as an exhaustive) hthe long-term benefit of better injection of cash, which Benefit of NPTP: None health without having to allows them to increase reduce their current consumption of goods and consumption basket services other than chronic disease drugs Households which do not Households that already Households that are not have an existing electricity have an existing electricity paying for their current connection due to the costs of connection, do not have electricity consumption, or connection charges, and those unmet electricity needs, are not connecting to the which currently restrict their and are paying electricity network for reasons other consumption of electricity bills out of pocket than cost (e.g., Elecricty ue o th cot ivoled.infrastructure). Benefit of NPTP: connect to Benefit of NPTP: use the Benefit of NPTP: None EDL and/or increase the NPTP benefit as an consumption of electricity for injection of cash, which the amount that the lump-sum allows them to increase discount can buy consumption of goods and services other than electricity 87 17. The economic impact of NPTP on the aggregate level would be achieved through the reduced extreme poverty and inequality in Lebanon as well as the realized positive externalities from greater utilization of health and education services as well as electricity coverage. The benefits arising from externalities cannot be estimated ex ante due to inherent uncertainty regarding the share of marginal households in the eligible population as well as the magnitude of such externalities. Still, we can estimate the potential magnitude of impact on extreme poverty and inequality by assuming that all eligible households will be infra-marginal or unaffected, thus providing a somewhat conservative estimate of the economic benefits of NPTP. A few other simplifying assumptions are necessary for such a simulation: * The average value of the benefit per recipient. For this, estimates made by the PCM unit of the NPTP, based on the first two batches of NPTP applications already in the NPTP database (43,608 applicant households, with 18,801 households below the eligibility cutoff) are used (Table 2). * These estimates yield the total expected budget for the first two batches of 84,322 NPTP beneficiaries - with all five benefits listed in the table above - to be US$14,243,898, or US$168.92 per beneficiary (or US$757.61 per household) in 2012 prices. It is important to note that this is likely to be an overestimate of the benefit, due to the following assumptions in the above calculation: (1) all age- eligible students will use the NPTP education benefit; (2) the morbidity rate of NPTP individuals will be twice the national morbidity rate; and (3) all NPTP households will use the electricity benefits. 88 Table 2: Estimated annual value of each NPTP benefit Expected number Annual of affected Beneit vlue (marginal + infra- Comments Education benefit US$150 per 28,263 students The value is estimated by the MEHE; the (fee waivers, student aged 6-18 years number of students of eligible age is textbooks) calculated from the NPTP database Health benefit US$374 per 13,492 individuals The value is calculated based on MOPH (hospitalization fee individual data of age-specific morbidity rates; the waiver copayments) number of affected individuals is at twice the current national morbidity rate (MOPH estimate) to account for expected increase in utilization of hospital care Electricity benefit US$159.60 18,801 households The value is calculated as 10,000 L.L. of (cost of connection + per monthly connection charges and 10,000 lump-sum discount household L.L. of monthly lump-sum discount off the electricity bill) annualized and converted to US$ Health benefits (Cost US$120 per 16,315 individuals The value includes registration fee for of chronic drugs) individual monthly checkup of chronic diseases as well as medicines provided by MOSA SDCs * The expected coverage rate of extremely poor individuals by the end of the project. We are making an optimistic assumption that, by 2024, 100 percent of extremely poor households will be covered with NPTP benefits. Since we are using 2004 HBS data to simulate NPTP impact, we are assuming that the extreme poverty line is US$2.4 per capita per day, and that 7.2 percent of the population (or 273,761 individuals) were extremely poor in that year. Assuming no changes in the distributions or total number of extreme poor in Lebanon between 2004 and 201260 NPTP currently (in 2012) covers 84,322/273,761 = 30.8 percent of extremely poor individuals (assuming that all the current NPTP beneficiaries are extremely poor, i.e., there are no errors of inclusion). Thus, 100 percent coverage rate assumes better outreach achieved by 2024. 18. Thus, the simulation of the expected impact of NPTP on aggregate extreme poverty and inequality in Lebanon consists of applying the average value of the NPTP benefit (US$541.15 per household in 2004 prices, assuming the value of the benefit increased at the same rate as overall CPI, or by 40 percent from 2004 to 2011) to the income of all individuals below the extreme poverty line of US$2.4 per capita per day. We use the 2004 Household Budget Survey to run this simulation. The results are summarized in Table 3 below: 60 The estimated number of extremely poor in 2012 was determined based on the 2012 population in Lebanon (World Development Indicator) and the extreme poverty rate of 7.2 percent (2004 Household Budget Survey or HBS). Due to lack of updated data on poverty, it is assumed that the extreme poverty rate will remain the same as it was in 2004, when it was assessed through a HBS. 89 Table 3: Impact of NPTP on extreme poverty Exree ovrt rte7.19 5.06 2.13 29.6% Exree ovrt gp1.40 0.87 0.53 37.9% ExrmePvet svriy0.43 0.24 0.19 44.1% Gini coefficient 39.25 39.00 0.26 0.7% Source: Author's calculations using 2004 Household Budget Survey and ADePT 19. Thus, with perfect coverage, NPTP can be expected to reduce the extreme poverty rate in Lebanon from 7.19 percent to 5.06 percent or by 30 percent (Table 3 ). It is important to note that extreme poverty gap and extreme poverty severity would decrease by even more in percent terms (38 and 44 percent, respectively). Needless to say, these are significant gains in terms of poverty reduction. 20. Here, we perform sensitivity analysis to relax our strong assumption of perfect coverage. For each level of coverage, this would consist of drawing a certain share (say, 10 percent) of extremely poor households in the 2004 HBS, adding the average value of NPTP to their consumption, calculating the extreme poverty rate with NPTP, and repeating this sufficient number of times (100 times) to generate an average impact on extreme poverty and inequality (Table 4). Table 4: Sensitivity Analysis Coverage Extreme poverty rate Difference Extreme poverty Difference Extreme poverty Difference rate of the with NPTP (%) with gap with NPTP (%) with severity with NPTP (%) with extremely [with 95% confidence value in [with 95% value in [with 95% confidence value in poor interval] 2004 confidence interval] 2004 interval] 2004 10% 6.97 [6.96-6.98] 3.09% 1.34 [1.34-2.69] 3.94% 0.41 [0.41-0.82] 5.01% 20% 6.77 [6.76-6.79] 5.81% 1.29 [1.29-2.58] 7.69% 0.39 [2.81-3.2] 9.36% 30% 6.55 [6.53-6.57] 8.89% 1.24 [1.23-2.47] 11.63% 0.37 [2.73-3.1] 13.89% 40% 6.32 [6.3-6.34] 12.12% 1.19 [1.18-2.37] 15.33% 0.35 [2.66-3.01] 18.01% 50% 6.13 [6.11-6.15] 14.78% 1.13 [1.13-2.26] 19.15% 0.33 [2.58-2.91] 22.71% 60% 5.92 [5.9-5.94] 17.70% 1.08 [1.08-2.16] 22.71% 0.32 [2.5-2.81] 26.69% 70% 5.7 [5.69-5.72] 20.66% 1.02 [1.02-2.04] 26.90% 0.29 [2.42-2.71] 31.59% 80% 5.48 [5.47-5.5] 23.75% 0.97 [0.97-1.94] 30.51% 0.28 [2.34-2.62] 35.79% 90% 5.27 [5.26-5.28] 26.72% 0.92 [0.92-1.84] 34.26% 0.26 [2.26-2.52] 40.07% Source: Author's calculations using 2004 Household Budget Survey and ADePT 21. Thus, for example with coverage of 40 percent, NPTP can be expected to reduce extreme poverty rate in Lebanon from 7.19 to 6.32 percent or by 12.12 percent, extreme poverty gap from 1.40 to 1.19 percent or by 15.33 percent and extreme poverty severity from 0.43 to 0.35 or by 18.01 percent (Table 4). 90 Budget Projections 22. In terms of budget implications of the NPTP benefits during the implementation of the SPPP, if the target is to reach all the extremely poor in Lebanon by 2024 (assuming a constant percentage of the extremely poor at 7.19 percent of the 2012 population, or 306,251 individuals), the number of beneficiaries would need to increase by an average of 11.3 percent annually. Assuming the benefits cost US$168.92 per individual beneficiary, the budget needed by 2018 would reach US$27 million - estimated to be Y5 of SPPP (see Table 5). This would increase government expenditure on the NPTP from 0.03 percent of GDP in 2012 (0.11 percent of total government expenditure) to 0.04 percent of GDP in 2018 (0.13 percent of total government expenditure).61 While this constitutes an increase in spending on social safety nets, Lebanon has the lowest SSN spending as a share of GDP in the MENA region, implying substantial space for increasing the level of this expenditure.62 Moreover, these figures are congruent with the best- performing SSN programs, such as Mexico's Oportunidades, which covers about 30 percent of population at the cost of 0.3-0.5 percent of GDP. Table 5: NPTP Benefit Budget Projections Year 2012 2013 2014 2015 2016 2017 2018 NPTP HH bNei HH 18,801 20,934 23,310 25,955 28,900 32,179 35,830 beneficiary beT necr 84,322 93,890 104,544 116,406 129,614 144,322 160,698 beneficiariesI NPTP Budget 14,243,898 15,860,136 17,659,768 19,663,602 21,894,809 24,379,188 27,145,466 (US$) NPTP Budget 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.04% as a % of GDP NPTP Budget as a % of 0.11% 0.11% 0.11% 0.12% 0.12% 0.13% 0.13% public expenditures Source: GDP and government expenditures projections are based on World Bank estimates Cost efficiency analysis 23. While the potential economic benefits of NPTP have been outlined above, one needs to take into account the costs of the program in order to evaluate its efficiency of delivery. The table below summarizes the analysis of administrative cost efficiency of NPTP, with costs based on the 2011 NPTP procurement plan, the costing developed for the SPPP over the lifetime of the project, and benefits extrapolated from the average value of the NPTP basket of benefits (calculated at US$168.92 per beneficiary). The cost of NPTP benefits in Table 6 below corresponds to the estimated budget reached by the SPPP end date; i.e., December 31, 2018. 61 GDP and government expenditures projections are based on World Bank estimates 62 Silva et al. (2012), Inclusion and Resilience: The Way Forward for Social Safety Nets in the Middle East and North Africa, Washington: World Bank. 91 Table 6: Cost efficiency of NPTP Administrative costs, of which: - Operating costs (technical and management staff, social workers/social inspectors, $4,530,500 printing, operating expenses) - Infrastructure costs (computers, scanners, questionnaire development) $3,355,260 Cost of NPTP benefits (US$168.92 * 160,698individuals) $27,145,466 Total recurrent costs (Operating costs + NPTP benefit costs) $31,675,966 Total program costs $35,031,226 24. According to the table above, administrative costs constitute between 14.3 and 22.5 percent of total program costs, depending on whether infrastructure costs are included or not. 25. Benchmarking against administrative costs of mature SSN programs reveals that NPTP would perform relatively well compared to the programs listed below, especially given that this is a first-ever SSN program run by the central government in Lebanon (Table 7). It is important to note that this calculation assumes no administrative costs for the delivery of and reimbursement for the NPTP basket of benefits and that there are no costs of scaling up the program to cover all the poor individuals in Lebanon. Table 7: Cost efficiency figures by program Lithunia: Socilyot Benefit s Program, 200 2 Romania: Guaranteed Minimum Income Program, 2005 32% Colombia: Familias en Acci6n, 2004 11% Mexico: PROGRESA, 1997-2000 6% Source: Margaret Grosh, Carlo del Ninno, Emil Tesliuc, and Azedine Ouerghi (2008), For Protection & Promotion: The Design and Implementation of Effective Safety Nets. 92 IBRD 33433R 35°30'E 36°00'E 36°30'E Al Hamnidiy Tall Kålckh 1 LE BAON --Qoubauyat LåANON-Halba 34°30'N 34°30'N pAbou Mousa Zhgarta Hermel NORT H Ch LEALEBANON sib'il ihdin Amioun Bcharri• O Douma ernat Al Laah (3,088 m) Anata Mediterranean \\0e . Sea Jbeilg ^'^ Nubk b Aah a DAfg "Q \6 BadIbeck 34°00N Jounie ej, ý934°00'N MOUNT BEIRUT o LEBANON BRU Antilyas B E K AA BEIRRayak Baab a . 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