BASSAM RAMADAN, THE WORLD BANK

Outline

What are Fragile States and why are we concerned about them?

Safety Nets in Fragile Contexts Rationale, Constraints?

Program Experiences:

Public Works

Food Transfers

Cash Transfers

Social Funds

Case Study: Sudan Community Development Fund

Specific Operational Challenges in Fragile Contexts: Concluding Observations

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What are Fragile States?

Countries facing particularly severe development challenges:

Post Conflict (Afghanistan, Angola, DRC, East Timor) Prolonged Crisis (Somalia) Fragile Transition (CAR, Liberia, Haiti) Slow Progress (Sudan) Deteriorating Governance (Eritrea)

Countries scoring 3.2 and below on World Bank Country Policy and Institutional Assessment (CPIA)

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2010 List of Fragile States (34 countries and territories)

IDA-eligible countries with a CPIA* rating of 3.2 or below:Zimbabwe/ Comoros/ Eritrea/ Afghanistan/ Central African Republic/ Sudan/ Togo/ Cote d'Ivoire/ Chad/ Guinea-Bissau/ Congo, Rep./ East Timor/ Solomon Islands/ Angola/ Congo, Dem. Rep./ Haiti/ Sao Tome and Principe/ Guinea/ Burundi/ Tonga/ Kiribati/ Djibouti/ Sierra Leone/ Yemen, Rep./ Cameroon/ Gambia/ Tajikistan/ Liberia/ Kosovo

Countries without CPIA ratings:Myanmar/ Somalia

Non-member territories:West Bank and Gaza

Fragile situations: Political and Peace-building Missions (Countries with a UN or regional (AU, OAS, EU) political or peace-building mission in the last 3 years):Georgia (Abkhazia - South Ossetia)/ Nepal

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* Country Policy and Institutional Assessment

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Why are we concerned about Fragile States?

1.5 Billion People falling behind on all MDG indicators

Poverty 2.5 X LIC One third of people surviving on

less than $1.25/day Child mortality double LIC Malarial death 3 X LIC HIV/AIDs affected population

double LIC More than twice as likely to be

undernourished Children of primary school age

are 3 X likely to be out of school

Indicator LIC FragileStates

MDG1: Poverty Headcount Ratio

22% 54%

MDG2: Primary Completion Rate (%)

84% 66%

MDG4: Under Five Mortality (per 1000)

88 177

MDG6: HIV+ (% of population 15-49)

1.6% 3.2%

MDG7: Access to Improved Water

79% 57%

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Safety Nets in Fragile Contexts?

What type of shocks and crisis settings?8

Macroeconomic/Covariate shocks (one-time or seasonal), such as: the Asian Economic Crisis 1997-8 and the Food, Fuel and Financial crises of 2008-9, with huge impacts on the real economy and welfare, particularly of the poor and vulnerable.

Idiosyncratic shocks (household level), such as those to an individuals health (AIDS, malaria, maternal mortality), or crop yield losses and other singular events (property loss due to fire or theft).

Natural disasters, such as droughts in Niger, cyclones in Madagascar, floods in Mozambique, earthquakes in Pakistan and Haiti, Tsunami in Indonesia.

Conflict and political violence, in Fragile States including Yemen, Afghanistan, Liberia, Sudan, Somalia and Kosovo. Civil wars often recur in the same countriesover the past decade, 90 percent of civil wars occurred in countries that had already experienced a civil war in the last 50 years.

Rationale for SSN in Fragile States

Part of a series of risk management strategies for engaging in fragile states starting with enhancing coping mechanisms of poor and vulnerable groups to promoting post conflict reconstruction and state building.

Traditionally catering for groups directly affected by conflict (e.g. demobilized soldiers, refugees, IDPs). Increasingly for vulnerable groups in prolonged crisis and disaster contexts (unemployed youth, women, children, elderly , disabled).

The increasing significance of SSN interventions is driven largely by demonstration effects of simplified and community driven projects: Facilitating Disarmament, Demobilization and Reintegration (DDR) through

public works and cash transfers, e.g. Liberia, Burundi, Eritrea and Sierra Leone. Using CDD as an entry point is important to restore trust and legitimacy.

Local community approaches are critical in addressing a series of implementation concerns including beneficiary identification, targeting and payment.

Safety net interventions can be a mechanism to promote service delivery. Even in contexts of supply constraints, innovations can be promoted at community level e.g. public works to build social service infrastructure.

SSN projects are cross-cutting and require coordination across a range of sectors and agencies.

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World Banks Safety Net Lending Portfolio FY05-10 in the 34 Fragile States

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Total lending: US$ 240.74 million

Source: Safety Nets Lending Inventory FY05-10

46.62

49.78

45.58 12.04 16.61 6.14 0.06

55.3 8.55

0 10 20 30 40 50 60 70 80 90

non-cash

cash

public works

TA

US$ million

(technical assistance)

Health Training Food EnergyEducation

Income support/allowance Microcredit

Capacity building, decentralization

What are the constraints working in Fragile States?

Administration Security problems, breakdown of law Weak (non-existing) government capacity Proliferation of donors and international NGOs

leading to coordination challenges

Information

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Fiscal Dominance of externally financed (and led) safety net projects, often in the form of large

humanitarian responses to recurrent emergencies lack of sustainability Projects are expensive, high fiduciary concerns Hard to plan and budget given the multitude of demands and emerging priorities

Assessment practices: Joint Needs Assessments (JAM) front loaded, inaccurate, poorly timed,poor delineation of short vs. long-term priorities

Targeting is political and can exacerbate tensions, often limited to geographic and categoricaltargeting due to lack of basic data

More constraints caused by international assistance!

The current international architecture for assistance is not well adapted to provide fast and flexible assistance to restore confidence, or patient enough to help transform institutions.

The underlying reason why donor behavior is slow to change is the need to manage domestic risk and expectations of results in donor programs.

Current international instruments and procedures constrain efforts to rapidly restore confidence and support longer-term institutional transformation.

Aid to fragile sates is more than twice as volatile as aid to other developing countries. High volatility results in short-term projects that are not capable of delivering support over generation-long timeframes e.g., Burundi, Central African Republic, Guinea-Bissau, and Haiti.

Too fragmented to deliver rigorously prioritized results at a large scale. Too rigidly focused on first-best technical solutions to support unorthodox

second-best reforms. Too reliant on parallel systems.

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Program Experiences (Public Works)13

World Bank Definition: PW programs provide temporary employment at low-wage rate tounskilled manual workers on labor-intensive projects such as road construction andmaintenance, soil conservation, irrigation infrastructure, reforestation, waste disposal, etc.

Rationale: PW programs (also known as workfare programs) have been an importantcounter-cyclical safety net instrument, used in diverse circumstances, in many low andmiddle income countries for several decades.

Types: PW models are designed to respond to shocks and vary from protecting the mostvulnerable in the short term to reviving economic livelihood in the long term. These includebut are not limited to:

(i) Temporary PW programs (one-time shocks e.g. macroeconomic, seasonal, natural disasters)

(ii) Longer-term PW safety nets (guarantee no. of workdays/year, poverty reduction instruments)

(iii) Public Works Plus programs (bridge to employment thru training and skill upgrading)

Program Experiences (Public Works: Increasingly relevant in LIC and Fragile States)

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Poverty Response Common interventions in post conflict/disaster and fragile settings aimed at

providing needed support to vulnerable households serve multiple objectives. Adapted to low capacity environments. Support community empowerment and mobilization.

Productive Investment Provide temporary employment and consumption smoothing for targeted groups

(unemployed youth, women). Combined with life skills and vocational training. Generate much needed basic infrastructure in rural and urban settings.

Politically popular Provide Cash-for-Work as opposed to being a hand-out. More acceptable to

Ministers of Finance who are sensitive to creating dependency on transfers.

Examples Afghanistan, Ivory Coast, East Timor, Yemen, Burundi, Angola, Nepal, Eritrea,

Liberia, Kosovo, Kenya, Rwanda, Cambodia and Haiti.

Program Experiences (Public Works) - Conflict15

Ivory coast Repeated crisis since 1999 coup d'tat, culminating in 2002 political

and military crisis.

Deteriorating socio-economic climate Need to reinsert 35,000 ex-combatants in the socio-economic tissue.

Post-Conflict Assistance Program (PAPC) Main aims: Economic reintegration, identification of vulnerable

populations and Community Rehabilitation.

Subcomponent: Highly Labor-Intensive PW programs, mainly in road building and rehabilitation.

The PW programs aim to offer job opportunities to at least 11,200 ex-combatants and at risk youth.

Why important? Thus far, more than 5,000 at-risk youth have benefited from the PW

programs; around $2 million have been paid in salary and more than 2000 roads are being maintained.

Program Experiences (Public Works) - Conflict16

East Timor Military crisis in 2006 caused displacement of populations,

destruction of infrastructure and concentrated economic growth solely in urban areas.

Cash-for-Work Programs Labor-intensive PWs adopted to provide work and place cash in the

hands of the vulnerable poor (particularly women) and decrease the unrest caused by unemployed youth.

PW programs provided Capacity Building (seven week classroom and field training program) for the local contracting companies, supervisors, engineers.

17,000 beneficiaries (30% women, 57% youth).

Main activities included: Road rehabilitation and maintenance.

Why important? Since 2006, PW programs have been implemented as a key

strategy to cope with unemployment esp. youth and have the potential to create a link between relief and development.

Program Experiences (Public Works) - Natural Disasters17

Activities include: rubble removal, streetsweeping, drainage clearance, waste collection,road maintenance, etc.

Program aims for 30% female participation. Potential: to link PWs with existing Cash

Transfer programs, or have PWs serve as acontinuum to CTs.

HaitiJanuary 2010 earthquakes

Cash-for-work project currently in the implementation phase

Objective: to mitigate the impact of the crisis on vulnerable Haitian familiesby creating job opportunities for income/consumption smoothing, whilerehabilitating basic infrastructure and services in the community.

Program Experiences (Public Works) -Macroeconomic Shocks + Natural Disasters

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Ethiopia (Anti-poverty/ Long-term PW program) Geopolitical conflicts and growing population resulted in land degradation,

whereas climatic variability led to famine shocks.

For two decades, the Government launched the Emergency food-aidsystem; yet, it proved unproductive; saving lives-not livelihoods!

Government had a strong desire to shift from food-aid to a cash system.

Productive Safety Net Program (PSNP) PSNP is a combination of Cash transfers and PW programs, with the ability

to scale-up in response to shocks, such as droughts.

PW projects are mainly in soil/water conservation, roads, and infrastructure.

Aimed at improving agricultural productivity and supporting the developmentof the rural economy, especially for chronically food-insecure households.

Why important? Ethiopia exemplifies how a Low-Income country can adopt a Large-scale Safety Net program, with the aim

of promoting longer-term improvements in rural productivity.

The PW programs created sustainable community assets and have resulted in reduced soil loss, reducedsedimentation and improved biomass.

Program experiences (Food Transfers)

Significant: average 10 million tons per year globally since 1988. Emergency Food Aid accounts for 40% of all Food Aid. Includes direct provision of food, supplementary feeding for vulnerable

groups, and therapeutic feeding during crises, emergencies, and situations in which people are displaced.

Emergency food programs provide a safety net of last resort and account for a large share of humanitarian response. The timing, targeting and appropriateness of emergency food aid are areas of growing debate.

Challenges: Controversial given market impacts, incentive effects, dependency. Implementation: Timing can lag. Targeting can be politicized. Security

and access can be problematic. Procurement and financial issues.

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Program experiences (Food Transfers)

Guinea Bissau Global Food Price Crisis Response Program (GFRP). Emergency

Food Security Support Project implemented by WFP. The $ 5 million school feeding component was started in March 2009 and is being implemented in 116 schools in five regions. It provides 14,000 daily meals to pre-primary and primary students for 170 school days. There are early indications that the program has slightly improved education outcome indicators, including increased enrollment rates, reduced dropout rates and improved participation by girl students.

Ethiopia US$580.9 million from USAID and WFP as the in-kind component of

the Productive Safety Nets Program. Under this component, food is transferred to chronically food insecure households in either of two forms: (i) through payment for unskilled labor provided by adults for public works; or (ii) through direct support to labor poor households that cannot undertake public works due to age, sickness or pregnancy.

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Program experiences (Cash Transfers)

Context Objective is to smooth consumption and income e.g. DDR, emergency

responses where markets work Increasingly used in labor constrained and vulnerable households Conditional Cash Transfers (CCT) influence incentives and behavior Donors increasingly testing cash operations e.g. World Bank, UNICEF, FAO,

DFID, USAID, EU, Oxfam

Challenges Require basic systems: Beneficiary Identification; Targeting; Payment

Administration; validation; Monitoring and Evaluation Food may be preferred: Politically convenient, addresses consumption directly Linking benefits for demobilized beneficiaries to education/training Security and Corruption risks associated with money transfers

Examples: Eritrea, Somalia, Burundi, Indonesia, Nepal, Pakistan

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Program experiences (Cash Transfers) Natural Disaster + Conflict

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Pakistan Pakistan presently faces an emergency of historic proportions, caused

by two main events: the ongoing militancy crisis and the recent July/August 2010 floods.

Emergency Recovery Safety Nets Project

The project will provide three types of cash grants to poorest and most vulnerable groups in the Khyber Pakhtunkhwa Province and other Federally Administered Tribal Areas: Safety Net Support for households affected by the militancy

situation (monthly cash transfer for the duration of 6 months) Flood Recovery Grants for households affected by the flood (one-

time flood recovery grants) Conditional Cash Transfers for households with qualifying criteria in

both militancy crises and flood affected areas (grants linked to human development objectives such as primary education, nutrition and/or health care)

Program experiences (Social Funds)

Social Funds are instruments that channel resources to vulnerable groups through Community Driven Development (CDD) approaches

Used as convenient institutional/funding mechanism in post-conflict and crisis conditions adaptable to low capacity environments.

Channel funds for small scale development projects to local actors (NGOs, CBOs and local governments).

Long track record in successful delivery of basic social and economic infrastructure services in 64 countries (134 projects) adding up to $ 5.32 billion (from 1987 to 2010).

Use streamlined operational procedures and a combination of geographic and community targeting mechanisms.

Social funds are effective in a variety of settings, able to quickly respond to economic and political crises, natural disasters and fragility through a variety of instruments such as safety nets (e.g. cash assistance, public works), socio-economic infrastructure, microfinance and capacity building.

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Program Experiences (Social Funds)24

Yemen Social Fund for Development (SFD) Created in 1997. Its Third Five-Year Plan (2006-2010) includes

US$927 million funding for 7,710 projects in the areas of education, health, social protection and others

Labor Intensive Works Program (LIWP) aims to provide Cash-for-Work safety net to target households to bridge their consumption gap against shocks and stagnation during agricultural slack seasons.

Effective decentralized set-up: o Central level program coordination, financing, project

approvals, technical assistance, oversighto Regional level project proposals, progress reportso Community level beneficiary identification, day-to-day

operations, resource mobilization

Why important?

Yemen, as a fragile state, provides a real example of innovation in Social Protection systems,with efficient administrative and MIS frameworks.

SFD activities confirm that the Social Fund concept can work in a country with political,institutional and financial constraints.

Social Funds Design Issues?

When embarking on the design of a Social Fund, the following questions should be asked:

What are the priorities? Deliver post-conflict emergency basic social infrastructure and services. Deliver safety net interventions such as: public works, cash transfers or

school feeding programs. Provide economic opportunities/livelihoods. Build local government capacity to deliver services.

How best to achieve them? Use a public sector ministry or entity. Contract out services to existing private sector agencies or CSOs. Create an autonomous agency. Integrate the project within the Local Government Structure.

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The example of SudanCommunity Development Fund

(CDF)

Sudan: Community Development Fund (CDF)

CDF is part of a national program that targets all war-affected and underdeveloped areas of Northern Sudan including conflict areas of Kordofan, Blue Nile and Kassala States.

Objectives: Meet urgent community-driven recovery and development needs. Provide social and economic services and infrastructure to facilitate

conflict resolution, ensure peace dividends to the war-affected populations, address regional disparities, and promote good governance.

Build grassroots capacity (communities and local councils) to manage local development.

Phased implementation to respond to capacity limitations and rapid recovery process - balancing emergency needs with longer term development.

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Implementation Options

Figure 2: Phase II; Decentralized Funding Mechanism for Local Development*

primary fund flowsserv ices agree.planning inputsplanning process

* Block grants to local government and communities and service contracts based on local gvnt planning pr

MoF/Donor

UN/NGOs Private Sector

Community/CBOs

Local Government

CDR Funding Agency

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Figure 1: Phase I, Centralized Fund Management for Urgent Needs*

primary fund flowsserv ices/supportplanning inputsplanning process

* Direct flow of funds to communities and service providers, based on local gvnt planning processes

MoF/Donor

UN/NGOs Private Sector

Community/CBOs

Local Government

CDR Funding Agency

Institutional and Implementation Arrangements29

CDF Organizational Model

fund flowspossible fund flowtechnical asst.

MDTF-PSC

NGOs Private Sector

Community/CBOs

Locality Implementation Unit (LIU)

CDF-PIU

Rashad- South Kordofan- New and old school30

Kassala School damaged during the war31

School Rehabilitation32

Old school desks33

New school desks34

Students in the new school35

Bashammat Hafair- HamashkoreibKassala State Water in After 10 Years

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Sodari N.Kordofan Basic School Before37

Before Few Students38

Sodari N.Kordofan - AfterNew School Attracted Many Students

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Telonkosh Basic School Blue Nile Before40

Telonkosh Basic School Blue Nile- After41

Specific Operational Challenges in Fragile Contexts Concluding Observations

Existing Bank policies, procedures and instruments are inadequate and not well adapted to fragile conditions - - supertanker vs. life boats!

Cost of doing business is substantially higher than other LIC logistical and capacity constraints (technical and institutional).

Legal status of the client or beneficiary is not always clear thus complicating agreements, funds transfer, accountability, institutional continuity, etc.

More synergy between Banks long term economic development mandate and the UN humanitarian/recovery mandate - - UN and Intl NGOs better option in post-conflict reconstruction.

Challenge of balancing immediate recovery needs and long term institution building and growth hard choices on use of resources.

Risk of delaying peace dividends to affected populations may lead back to conflict. Managing expectations: disappointment is a function of high expectations, David

Deng, South Sudan.

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Useful References

World Bank. 2008. Cash Transfer Programs in Emergency Situations, Fragile and Conflict-Affected Countries Group, OPCS, June 2008.

Harvey, Paul. 2007. Cash-Based Responses in Emergencies, Humanitarian Policy Group. Overseas Development Institute. UK

Jaspers, Susanne and Paul Harvey. 2007. A Review of UNICEFs Role in Cash Transfers in Emergencies. Discussion Paper. Office of Emergency Programs. UNICEF

FAO. 2006. Food Aid for Food Security? The State of Food and Agriculture in the World.

GentiliniUgo. 2006. Cash and Food Transfers. A Primer. WFP

World Bank (2005). Engaging with Fragile States: An IEG Review of World Bank Support to Low Income Countries Under Stress. Independent Evaluation Group

Social Safety Nets Website (www.worldbank.org/safetynets)

Fragile States Information, World Bank (http://go.worldbank.org/TV8VJ1PRB0)

Fragile States Unit in Operational Policy and Country Strategy, World Bank (http://go.worldbank.org/08ZA38QQ40)

ODI Website on Fragile States (http://www.odi.org.uk/odi-on/fragile-states/)

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http://www.worldbank.org/safetynetshttp://go.worldbank.org/TV8VJ1PRB0http://go.worldbank.org/08ZA38QQ40http://www.odi.org.uk/odi-on/fragile-states/

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Thank you!

Social Protection Core CoursesSocial Safety NetsSocial Safety Netsin Fragile StatesDecember 14, 2010OutlineWhat are Fragile States?2010 List of Fragile States (34 countries and territories)Slide Number 5Why are we concerned about Fragile States?Slide Number 7What type of shocks and crisis settings?Rationale for SSN in Fragile StatesWorld Banks Safety Net Lending Portfolio FY05-10 in the 34 Fragile States What are the constraints working in Fragile States?More constraints caused by international assistance!Program Experiences (Public Works)Program Experiences (Public Works: Increasingly relevant in LIC and Fragile States)Program Experiences (Public Works) - ConflictProgram Experiences (Public Works) - ConflictProgram Experiences (Public Works) - Natural DisastersProgram Experiences (Public Works) -Macroeconomic Shocks + Natural DisastersProgram experiences (Food Transfers)Program experiences (Food Transfers)Program experiences (Cash Transfers)Program experiences (Cash Transfers) Natural Disaster + ConflictProgram experiences (Social Funds)Program Experiences (Social Funds)Social Funds Design Issues?Slide Number 26Sudan: Community Development Fund (CDF)Implementation OptionsInstitutional and Implementation ArrangementsRashad- South Kordofan- New and old schoolKassala School damaged during the warSchool RehabilitationOld school desksNew school desksStudents in the new schoolBashammat Hafair- HamashkoreibKassala State Water in After 10 YearsSodari N.Kordofan Basic School BeforeBefore Few StudentsSodari N.Kordofan - AfterNew School Attracted Many StudentsTelonkosh Basic School Blue Nile BeforeTelonkosh Basic School Blue Nile- AfterSpecific Operational Challenges in Fragile Contexts Concluding ObservationsUseful ReferencesSlide Number 44