Document of The World Bank Public Disclosure Authorized
Report No. 16090-PA Public Disclosure Authorized
STAFF APPRAISAL REPORT
PANAMA
RURAL POVERTY AND NATIJRAL RESOlIRCES PROJECT Public Disclosure Authorized April 14, 1997 Public Disclosure Authorized Central America Department Latin America and the Caribbean Regional Office Currency Equivalents Currency Unit: = Balboa US$1 = I Balboa Weights and Measures I quintal (qq) = 100 pounds = 46 Kg. Fiscal Year January I - Decembcr 31
ABBREVIATIONS, ACRONYMS AND GLOSSARY ABC Atlantic Biological Corridor CAP Community Action Plan CAS Country Assistance Strategy Comarca Indigenous administrative district (Corregimiento Smallest administrative division in Panama CTC (COrregimiento Technical Committcc FES Social EmergencyFund (Fondo dc Emcrgencia Social) FUSARD Fund for Sustainable Agricultural and Rural Development GEF Global Environmental Facility GOP Government of Panama IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding IDA International DevelopmentAssociation IDB Inter-American DevelopmentBank IDIAP Agricultural Rcsearch Institutc (Inst. dc Investigaci6n Agropecuaria) IFAD International Fund for Agricultural Dcvelopment IICA Inter-American Institute for Cooperation on Agriculture INRENARE Institute for Renewable Natural Resources (Instituto dc Recursos Naturales Renovables) 10 Implementing Organization IPDP Indigenous Peoples Development Plan LIB Limited International Bidding MBC Mesoamerican Biological Corridor MIDA Ministry of Agricultural Development(Ministerio de Desarrollo Agropecuario) MIPPE Ministry of Planning and Economic Policv (Ministerio de Planificacion y Politica Econ6micz NAPAS National Protected Area System NCB National Competitive Bidding NGO Non Governmental Organization PA Protected Area PCU Project Coordinating Unit PPF Project Preparation Facility PTC Provincial Technical Committee RUTA Regional Unit for Technical Assistance in Agriculture in Central Amcrica SA Special Account SDC Sustainable Rural Development Committee SOE Statement of Expenses UNDP United Nations Development Programme
Vice President: Shahid Javed Burki Director: Donna Dowsett-Coirolo Sector Leadership Group Manager: Michael Baxter Sector Leader/Task Manager: Mark Cackler i
PANAMA
RURAL POVERTY AND NATURAL RESOURCES PROJECT
Table of Contents Page Number Loan and Project Summary ...... iii I. BACKGROUND...... 1 A. COUNTRY OVERVIEW ...... 1 B. GOVERNMENT POLICY IN AGRICULTURE AND NATURAL RESOURCES ...... 1 C. RURAL POVERTY AND NATuRAL RESOURCES.2 ...... e..2 D. INSTITUTIONALFRAMEWORK ...... 6 E. Gov'T STRATEGY FOR RURAL POVERTY ALLEVIATION AND NATURAL RESOURCE MANAGEMENT ...... 8 F. BANKINVOLVEMENT IN THE SECTOR...... 8 G. ACTIONS BY OTHER DONORS IN THE SECTOR ...... ,9 9...... H. LESSONSLEARNED ...... 9 II. THE PROJECT ...... 11 A. ORIGIN ...... 11 B. PROJECTOBJECTIVES AND SUMMARY DESCRIPTION ...... 11 C. RATIONALEFOR BANK AND GEF INVOLVEMENT...... 13 D. PROGRAMOBJECTIVE CATEGORIES ...... 14 E. DETAILEDPROJECT DESCRIPTION ...... 15 F. PROJECTBENEFICIARIES AND PARTICIPATION ...... 18 G. GENDERA SPECTS...... 18 H. INDIGENOUSPEOPLES ASPECTS...... 19 I. COSTSAND FINANCING ...... 19 111 PROJECT IMPLEMENTATIONAND MANAGEMENT...... 22 A. IMPLEMENTATIONARRANGEMENTS ...... 22 B. PROCUREMENT...... 26 C. DISBURSEMENTS...... 30 D. ACCOUNTSAND AUDITS ...... 31 E. STATUSOF PROJECTREADINESS ...... 32 F. SUPERVISION,MONITORING AND EVALUATION ...... 32 IV. EXPECTED BENEFITS AND RISKS...... 35 A. SOCIALIMPACT ...... 35 B. ENVIRONMENTALAND ECONOM ANALYSISICAL ...... 36 C. SUSTAINABILITY.3...... 8 3 D. SUMMARYOFPROJECT BENEFITS.. . 39 E. PROJECTRISKS ...... 39 V. SUMMARY OF AGREEMENTS, LOAN CONDITIONS AND RECOMMENDATION ...... 41
This report is based on the findingsof an appraisalmission to Panamain October1996 consisting of: Mark Cackler, MaurizioGuadagni, Luis Constantino,Jorge Uquillas,Teresa Roncal (Bank), Kathy Mackinnon (GEF-Bank), Martin Raine, James Smyle(RUTA Agriculture), Nelson Espinoza (IICAIRUTA), Alicia Pitty, ManuelRodes, Jose Morcillo, AntonioArmas and AgapitoLedezma (Government Project Preparation Unit). Other Bank staff that have contributed to the preparationof the projectinclude MichaelBaxter, Arnoldo Contreras, Gabriel Keynen,Silvia Castro, Cora Shaw,Richard Ground,Jose AntonioGonzAlez, Doris Herrera-Pol, Sandra Vallimont and SocorroGane. The Peer Reviewerswere Tom Wiens (Bank),and JaniceAlcorn (WorldWildlife Fund). TABLESIN TEXT Table 1. Project Cost Summary ...... 20 Table 2. Components by Financiers .21 Table 3. Procurement Arrangements .27 Table 4. Thresholds for Procurement Methods and Prior Review.29 Table 5. Analysis of Indicative Community Subprojects 37
FIGURESIN TEXT Figure 1. Poverty in Panama: Urban-Rural Disparities .3 Figure 2. Migration in Panama (1990-95) by Province .5
ANNEXES A - Sustainable Rural Development Component Figure 1: FUSARD Flow of Funds Appendix1: Fund for SustainableAgricultural and Rural Development(FUSARD) B - Biodiversity Conservation Component Table 1: NationalProtected Area System- By Category Table 2: NationalProtected Area System- Detail Table 3: Preliminary Proposal of Protected Areas For Strengthening Under Mesoamerican Corridor Sub-Component Appendix 1: Land Titling C - Project Organization, Administration and Coordination Figure 1:Functional Organogram of the Project Figure 2: Project Implementation Schedule D - Indigenous Peoples Development Plan E - Estimated Costs, Financing and Disbursements Table 1: Components Project Cost Summary Table 2: Expenditure Accounts Project Cost Summary Table 3: Project Component by Year -- Totals Including Contingencies Table 4: Expenditure Accounts by Year -- Totals Including Contingencies Table 5: Disbursement Accounts by Financiers Table 6: Allocation of Loan Proceeds Table 7: Estimated Disbursements F - Planning, Budgeting, Monitoring and Evaluation and Reporting Appendix 1:Financial Indicators Appendix 2: Status of Legal Covenants Appendix 3: Key Performance Indicators Appendix 4: Project Impact Indicators G - Economic Analysis of Community Subprojects and Protected Areas Table 1: Analysisof IndicativeCommunity Subproject Table 2: Financial Analysis for Four Protected Areas (Option A) Table 3: Financial Analysis for Four Protected Areas (Option B) Table 4: Protected Areas Table 5: Financial Analysis, Isla Bastimentos Marine Park H - Documents in the Project File
MAPS: IBRD No. 28335 Transportation and Relief IBRD No. 28336 Forest Cover and Atlantic Biological Corridor IBRD No. 28337 Protected Areas IBRD No. 28338 Rural Development Component IBRD No. 28339 Darien Province IBRD No. 28505 Poverty in Panama iii
PANAMA
RURAL POVERTY AND NATURAL RESOURCES PROJECT
LOAN AND PROJECT SUMMARY
Borrower: Republic of Panama
Implementing Agencies: Ministry of Agricultural Development (MIDA) and the Institute for Renewable Natural Resources (INRENARE)
Poverty Category: Program of Targeted Interventions
Amount: US$22.5 million
Lending Terms: Single currency-loan, denominated in U.S. Dollars, based on Libor rates.
Commitment Fee: 0.75% on undisbursed loan balances, beginning 60 days after signing, less any waiver
Financing Plan: See para. 2.19
Net Present Value: See paras. 4.6 - 4.10
Associated GEF Project ID: 45937
Project Identification No.: PA-PA-7847
Maps: IBRD No. 28335: Transportation and Relief IBRD No. 28336: Forest Cover and Atlantic Biological Corridor IBRD No. 28337: Protected Areas IBRD No. 28338: Rural Poverty Component IBRD No. 28339: Darien Province IBRD No. 28508: Poverty in Panama
Vice President: ShahidJaved Burki Director: Donna Dowsett-Coirolo SectorLeadership Group Manager: MichaelBaxter Sector Leader/TaskManager: Mark Cackler
PANAMA
RURAL POVERTY AND NATURAL RESOURCES PROJECT
STAFF APPRAISAL REPORT
I. BACKGROUND
A. Country Overview
1.1 Country and Sector Background. With a 1996 per capita income of US$2,880 and low inflation, the Panamanian economy appears to be among the most prosperous in the region. Progress on the economic reform agenda has been good in recent years, supported in part by the Economic Recovery Loan (Ln. 3438-PA), which disbursed its third and final tranche in April 1997.
1.2 As a result of the progress made, prospects for growth in Panama are good. GDP growth of 3.5% is projected for 1997 and 4% thereafter, and stable growth would support Government's poverty alleviation efforts. In the meantime, however, Panama has one of the most unequal distributions of income in the hemisphere, and, as described below, rural poverty in particular has had a negative effect on the conservation of natural resources.
B. Government Policy in Agriculture and Natural Resources
1.3 Historically, inefficient public expenditure and policy distortions were prevalent in the rural sector, especially prior to 1989. Public expenditure has had an urban bias, in particular in favor of those activities related to international trade and the Panama Canal. Expenditure in human capital formation has also been concentrated in the urban areas. Where there has been expenditure to rural areas or agriculture in particular, it has been targeted to medium and large farmers: the Agricultural Research Institute - Instituto de Investigaci6n Agropecuaria, has emphasized research for crops and activities that medium and large producers are able to invest in: irrigation, extensive cattle, mechanized rice, etc., and which have limited relevance for small mixed crop/livestock producers. Credit subsidies have been used mainly by large farmers for livestock production and mechanized rice.
1.4 The most negative impact of Governments past policies in the agricultural sector and the livelihood of the rural population has come from trade protection, which in theory was intended to improve (small) producers' incomes. Its actual effect was to increase the cost of food, both for the urban as well as the rural populations, including subsistence farmers who are net consumers of food. Government also protected and provided subsidized credit for those activities in which Panama has no comparative advantage: rice, milk, tomatoes, corn, sugar. For those where Panama does have a clear advantage (sustainable forest extraction or plantations, and export crops like melon and root crops) it -2 - did relatively little. The more competitive crops (bananas, coffee) were taxed, while the least competitive (milk, rice) were subsidized.
1.5 In the natural resource sector, policies have been equally contradictory, producing on balance, a negative effect on the environment. Government has difficulties controlling deforestation of private or protected areas. There is little research on species selection and marketing. In the past, the support, protection, and subsidization of the cattle industry has been a major contributor to deforestation, in Panama as in most of Central America.
1.6 Realizing the effect these policies have had on poverty and natural resource degradation, the Government has since 1989 initiated changes that have reduced the role of the state in the economy, privatized state enterprises, reduced tariff and non-tariff barriers, increased social investment in the rural sector and reduced credit subsidies. However, there have been many decades of neglect in the rural areas, and a longer-term concerted effort is needed to redress the situation, with special emphasis on employment- creating and income-generating productive activities, both on- and off-farm, and improved management of the country's unique biological resources.
C. Rural Poverty and Natural Resources
1 7 Rural Poverty. According to the 1991 national household survey, 42 percent of households were poor, and 23 percent were in extreme poverty (Figure 1). These percentages understate the true situation, because the survey only includes households whose income is known, thus excluding some of the poorest groups, such as subsistence farmers and indigenous populations. The rural poor (two-thirds of the total), can be found throughout the country (IBRD Map No. 28508), but they are particularly concentrated in the more mountainous, resource-depleted parts of the country. Basic needs (education, health and housing) met are particularly low: Veraguas 9 percent, Cocle and Colon 17 percent, and Herrera 29 percent1 . A graphic representation of the disparities in urban- rural poverty in Panama is in Figure 1; poverty is considerably more widespread and more extreme in the rural areas.
Source"Panama: Nivelesde Satisfacci6nde las NecesidadesBasicas, MIPPE, 1993". The definition of basic needs includesthe provisionof education,health, and housing. -3 -
Figure 1. Poverty in Panama: Urban-Rural Disparities
Families in Poverty
80% ...... 60%.
20%-,t.40% I-l .<8;.
Urban Rural
Families in Extreme Poverty Average Income of the Poorest 40 Percent 40% rT
30% . . | 60%- 20% ( , 40% K i 10% l R : 20%- 1 eRg!
0% '' 0% ...... '1 ... .. Urban Rural Urban Rural
Poor Households Headed by Illiteracy Rate Women
80% - 20%- 60' ;Lt 15%
Urban Rural Urban Rural
Source: "Desigualdades e Inequidades en el Desarrollo Econ6mico y Social de PanamA:Principales Indicadores", Ministerio de Planificaci6n y Politica Econ6mica; Panama, May, 1996.
1.8 Most of the rural poor who live in these areas subsist in ecologically fragile areas with degraded natural resources, little forest cover, poor soils, and threatened water supplies. Many have insufficient land (47 percent have less than 1 ha), they must use poorly maintained roads for access to markets, and they have little working capital, credit, or new agricultural technologies. Their farm incomes are supplemented by occasional -4 -
employment, often seasonal, which is usually considerably below the legal minimum wage. More than half of rural men (55 percent) and women (59 percent) receive incomes below the $250 monthly minimum. Health and education services are often absent or far from the villages. Finally, a large percentage of their limited cash income is spent on high cost food (para 1.5) and related to this, malnutrition is prevalent.
1.9 Women are usually the most affected by poverty, suffering from additional work, poor nutrition, health (life expectancy is five years less than men's) and education services, low wages and even less access than poor man to credit, land markets and technology. Indigenous populations are the poorest of the poor (para. 2.18), and receive little governmental assistance, although this is now changing somewhat. Recent experiences (para 1.15 and 1.16) with both the rural poor mentioned above and the indigenous groups show the considerable potential which exists for improving living standards through productive activities if appropriate participatory, demand-driven assistance is provided to the communities.
1.10 Natural Resources. The Isthmus of Panama is the terrestrial bridge which unites the continental masses of North and South America and separates the waters of the Pacific and Atlantic Oceans. This and a number of other biogeographic and climatic factors combine to make Panama a high biodiversity country with 12 confirmed life zones out of 30 globally. Its narrow mass between two oceans and sharp altitudinal gradients (sea-level to 3,400m) cause a compression of life zones and rapid changes within and between habitat-types. The former Canal Zone transects such a gradient and represents the only location in the Americas where an interoceanic biological corridor is still practically uninterrupted, protecting the water supply of a $400 million per year operation (shipping fees and services related to the Canal) of global economic importance.
1.11 In addition, a large portion of the Atlantic watershed constitutes relatively pristine ecosystems, forming a defacto biological corridor from Colombia to Costa Rica (IBRD Map No. 28336), making it a very important part of the Mesoamerican Biological Corridor. The forests of the Darien (IBRD Map No. 28339), which are also part of the corridor, act as a biological barrier to the interchange of economically important crop and livestock diseases and pests (e.g., foot and mouth disease) between South, Central, and North America. From a conservation perspective, a recent World Bank study2 has identified Panama as the one country in the Central American Isthmus with areas of globally important Tropical Moist Broadleaf Forest (Choc6/Darien moist forests). Also of note from this study, two-thirds of Panama falls either into the "highest" or "high" priority category for biodiversity conservation.
1.12 The existence of such rich biodiversity contrasts sharply with the land use situation. Over half the forests have disappeared mostly in the Pacific, leaving about 43 percent (33 million ha) forested mostly in the Atlantic. Another 25 percent of all lands are considered either as degraded or in the process of rapid degradation, and as in other
2 A ConservationAssessment of the TerrestrialEcoregions of Latin America and The Caribbean,1995, WorldBank. countries, this process is often tied to rural poverty, highly prevalent in Panama (para 1.8). The lack of opportunities in the degraded areas (primarily the mountainous Central Pacific provinces of Veraguas, Chiriqui, Colon, Cocle, Herrera) has forced thousands of small farmers to migrate to resource-rich areas (provinces of Bocas del Toro and Darien), where they receive a higher return to their labor by deforesting, cultivating the land for a few years, and then, often sellingthe land to extensive livestock operations. Their deforestation is usually preceded by loggers who extract the most valuable timber species. Overall deforestation, including timber extraction and other activities, is estimated at an annual rate of 55,000 ha. These migration patterns are graphically represented below.
Figure 2. Migration in Panama (1990-95) by Province (number of migrants)
50,000~~i 40,000
30,000
20,000-...... -.....
10,0001 i Especial'No.2, oa Geneal-d 54~~~~~~~SnosCoe oldn , * _1_
-20,000-,f v '' ] Panama BLocs D_ del Toro Helea 1 L '' Santos Cln Ciiu^
Source:- "Situaci6n Demogrfifica - Proyecci6n dc la Poblacion Total de la Repuiblica,por provincia segfin sexo y gruposde edad, Aiios 1990- 2015", Boletin Especial No.2, "Contraloria General de la Repuiblica, Panama, 1994.
1.13 To protect what remains of the country's healthy ecosystems, the government has set aside 23 percent of its territory to form the National Protected Area System (NAPAS - IBRD Map No. 28337), made up of 46 management units, and with representation of most of the 12 confirmed life zones. However, the generous size of the system has not been adequately supported. Field personnel are under-equipped, boundaries have not been clearly established, and there are only a few parks which have the most rudimentary facilities to receive visitors or scientists. Strategic planning, staff training and alternative financing strategies are often lacking or inadequate. The result of this is that the NAPAS - 6 - is experiencing invasions and deforestation and some "forest reserves" are now down to only 20 percent forest cover.
D. Institutional Framework
1.14 Community Organizations. While there have been efforts to organize rural communities in the past, most have had little lasting effect in the communities. These efforts have involved land reform organizations, cooperatives, community-wide groups, sectoral community groups related to religion, politics, health, education, and agricultural production. Some of the reasons for the failure or non-sustainabilityof many of these groups are: high poverty rates, paternalistic approaches to development and limited or no efforts to strengthen community development in leadership, organization, and project cycle methods. Despite this generally weak environment for community organization, several rural organizations have survived and prospered, including organizations for marketing and savings and loan. Some recent experiences have also shown that participatory approaches have yielded significant returns in terms of reaching goals and maintaining longer-term sustainability. Municipalities3 are quite weak, and generally ineffective in promoting development in their constituency area. There are several programs aimed at strengthening them, such as the Local Investments Programs and XXI Century, executed by the Planning Ministry (MIPPE). The Social Emergency Fund (FES) is also a successful example of a demand-driven, participatory mechanism to finance mainly social infrastructure4.4
1.15 Local Private Organizations. There are a number of private organizations in the high rural poverty areas of the Central Pacific, in the Provinces of Herrera, Veraguas and Los Santos, including non-governmental organizations (NGO), cooperatives and producer organizations. Some of the more active NGOs include FundeProve (Desarrollo de la Provincia de Veraguas), PRODESO (Promoci6n del Desarrollo Social), and Fundamujer. About 20 cooperatives also operate in these areas, including two of the most important in the country: Juan XXIII, and COOPEVE (Cooperativa del Educador Veraguense). Other cooperatives relate to milk producers, livestock production, agricultural marketing, savings and loans, and a union of agricultural exports cooperatives (UCA.PE). There are also several agricultural organizations, including ADEMIP (Asociaci6n para el Desarrollo del Micro y Pequefio Productor) for small and medium producers, and an organization of
3 The administrativedivision of the countryis province (9), district(68), which is the municipallevel, and corregimiento (510), the representatives of which form, with the elected mayor, the municipal council. As in other Latin American countries, the municipality covers a geographic demarcation that includesurban and rural areas. 4 The FES, established in 1990, was formerly financed by USAID, and now is supported by the Inter- American Development Bank, and IFAD. The World Bank is now preparing a project to support it for an additional period. FES channels matching grants to finance investments in the whole country. It is an autonomous public entity, independent from the cumbersome regulations on procurement, disbursement, and financial management of other governmental institutions. It is directly managed by the President's office. As is normally the case with such funds elsewhere in the Latin American region, most investment is destined to social infrastructure and a small proportion of its resources destined to productive subprojects. - 7 - small and micro-entrepreneurs. Several of these have worked on a small scale with donors on rural credit, community organization, identification and implementation of community projects, agro-industries and agricultural technology. As mentioned above, participatory, demand-driven approaches to rural development have been the most successful, although many of the smaller organizations require strengthening through training and the adequate provision of equipment to improve their effectiveness in the field.
1.16 Ministry of Agricultural Development (MIDA). MIDA has the greatest government presence in rural areas. However, despite its coverage, it is spread thinly; it is estimated that MIDA provides technical assistance to less than 5 percent of farmers, mostly medium and large commercial farmers, and the Agricultural Research Institute (IDIAP) has almost exclusively emphasized developing technologies for commercial agriculture in the past. MIDA's structure is made up of provincial directorates with considerable decision-making delegation, and it utilizes agricultural extension offices in each district which, typically, are made up of up to seven or eight agricultural and social science professionals. MIDA can legally constitute farmners'organizations called Agricultural Committees and Rural Women's Groups. Generally speaking, field staff are inadequately trained, especially for dealing with small farmers, and underequipped for transport, rural communications or field demonstrations. MIDA has begun to work with NGOs in an effort to increase its coverage and effectiveness, in particular for small farmers which it has paid relatively little attention to in the past. Its newly created Department of Rural Development supervises various new small farmer projects (para 1.22), showing its efforts to reach the small farmer and improve its project management capacity. Other sectoral institutions include the Agricultural Marketing Institute, the Community Development Institute, and the Panamanian Cooperative Institution.
1.17 Institutefor Renewable Natural Resource (INRENARE). Charged with the conservation and management of renewable natural resources, INRENARE has focused most of its efforts on the formation and management of the National Protected Areas System (para 1. 14), though it also has reforestation and forest management programs, and regulation and control of natural resource use. Considering its responsibilities, INRENARE is inadequately staffed, trained, managed and equipped, and only recently has the possibility of moving towards financial self-sufficiencybeen studied, e.g., charging entrance fees for tourists and scientists, carbon sequestration agreements, etc. Panama is a signatory of most international conventions, including the Biological Diversity Convention, International Wetlands Convention-RAMSAR, Convention on International Trade in Endangered Species (CITES), and the Central American Alliance for Sustainable Development, among whose projects are the Mesoamerican Biological Corridor running from southern Mexico through Northern Colombia. - 8 -
E. Government Strategy for Rural Poverty Alleviation and Natural Resource Management
1.18 Government's strategy for alleviating poverty and inequality has four main elements: (a) introducing the conditions for sustainable growth, in particular policy reforms that mitigate the bias against employment creation, reduce the high cost of the basic consumption basket, and alter the incentive framework to encourage increased agricultural production and employment in rural areas, where most poor people live; (b) introducing more effective mechanismsto protect people most susceptible to malnutrition and disease; (c) improving efficiency and equity in social expenditures through social sector reforms, especially in education and health, and targeting subsidies to the most vulnerable groups; and (d) institutional modernization in those institutions most directly linked to poverty.
1.19 Government's strategy in the natural resources sector emphasizes the fulfillment of the obligations set out in the law establishing INRENARE. With a vast mandate for the conservation and management of renewable resources, including direct control of 23 percent of the national territory, INRENARE's immediate priorities are strengthening its staff, introducing improved management methods, and equipping its field operations. Although some areas that are important for biodiversity protection remain outside the NAPAS, the priority at this point is to consolidate the management of lands already in the system. This includes better establishingthe legal boundaries of protected areas, avoiding the expansion of settlements already inside the protected areas, and establishing protected area management committees with surrounding communities in the buffer zones to integrate them in day-to-day operations, so these communities will be more likely to conserve the protected resources. Promoting the longer term financial viability of the NAPAS is another important objective of INRENARE, and Government, with INRENARE's oversight, has embarked on a reforestation program. program.
F. Bank Involvement in the Sector
1.20 The Bank has been relatively inactive in the agricultural sector of Panama for many years. The most recent investment loans, which were for livestock and fisheries, were approved in 1977. Since then, there have been two significant non-lending interventions: First, since 1980, the Bank has been the executing agency for a United Nations Development Programme (UNDP) project called the Regional Unit for Technical Assistance in Agriculture in Central America (RUTA), co-financed by the Central American Governments and other donors including the International Fund for Agricultural Development (IFAD), the Inter-American Development Bank (IDB), the Food and Agriculture Organization, and the Inter-American Institute for Cooperation on Agriculture (IICA). RUTA is now in its third phase and provides technical assistance and other support to Central American Ministries of Agriculture and other agencies. Second, in 1995 the Bank approved an Institutional Development Fund grant (No. 28877) for a program to MIDA's Sectoral Planning and Programming Department, which is being - 9 - implemented with RUTA support. Two thirds of the program has been implemented and it has been successful in strengthening a previously weak Department, by providing basic training and equipping of its staff. The Department's analytical focus, which now includes the small farmer, was conspicuously absent from MIDA's outlook and field efforts in the past. The Bank has also supported reforms of the agricultural sector at the macro level through the Economic Recovery Loan (No. 3438-PA, approved January 30, 1992), which has supported Government in the removal of various distortions, particularly related to trade (high protectionism) and price policies. The third and final tranche release was approved for disbursement in March 1997.
G. Actions by Other Donors in the Sector
1.21 Although MIDA in the past has centered its attention on commercial farmers, the current Administration has supported programs small farmers in an effort to alleviate poverty (para. 1.19). These include various smaller pilot operations utilizing budgetary resources and funds from the World Food Program and the European Union and are aimed at promoting sustainable agriculture, increasing productivity, increasing access to rural credit and developing community organizations. IFAD is implementing two projects in high poverty and indigenous areas (Ngobe-Bugle and the Darien) and is preparing a third project in the poorer central provinces. The Inter-American Development Bank is financing a Modernization of Agriculture Services Project, aimed at increasing the competitiveness of commercial farmers. Other projects are mentioned in para. 1.15.
1.22 INRENARE is currently implementing 23 projects, most of which are relatively small (except for a larger project financed by the United States Government, they total US$15.0 million). They include sustainable development in frontier agricultural areas (European Union); training (Government of Japan); agro-forestry (Government of Germany), strengthening the protected areas system (U.S. in association with ANCON, a local NGO) and protected area and buffer zone management in the Darien (Global Environment Facility, GEF).
H. Lessons Learned
1.23 Beneficiary Participation. There is considerable experience worldwide, some supported by the Bank, on demand-driven development. A recent Latin American review shows that: (i) participation by communities in project identification and preparation helps meet community needs more closely than if investments are decided centrally; (ii) once the communities develop a sense of ownership in a project, they are willing to co-invest in it and support its maintenance; and (iii) if allowed responsibility for project implementation, communities will better ensure that contractors execute the project honestly and according to established standards. Some small-scale programs in Panama have adopted these participatory methods with considerable success (paras. I . 14 and 1. 15).
1.24 Rural Decentralization. The proposed project would support the strengthening of rural communities, typically at the village level. Other countries have chosen, in similar - 10- projects, to work directly with the municipalities,which cover a district that can include hundreds of communities. The Panamanian Government, which has other municipality strengthening projects (para 1.14), has decided in this project to work directly with the local communities as a step toward overcoming a strong paternalistic legacy and toward grass-root decentralization. Community organization and self-management are among the project's prime objectives, as experience has shown them to improve the targeting of the poor, to provide more local control and to increase development focus and accountability.
1.25 Biodiversity Protection. Recent Bank experience in this area has grown considerably in the last five years with 27 Bank supported and 31 GEF supported projects worldwide, totaling US$531 million. An independent review of the UNDP and Bank affiliated projects financed by the GEF showed that more emphasis needs to be given to avoid: (i) insufficient attention to local people and their expertise and priorities; and (ii) inadequate NGO involvement. A recent Bank review5 of its projects in the sector concluded that: (i) conservation incentives must be substantive and realistic; (ii) buffer- zone activities and areas must be clearly prioritized with related rural development activities for neighboring communities. A UNDP executed GEF project, Biodiversity in the Darien, started in January 1995, takes into account several of these lessons: substantive buffer zone community involvement in the implementation, and providing greater economic incentives for project beneficiaries.
"Mainstream Biodiversity in Development: A World Bank Assistance Strategy for Implementing the Conservation on Biological Diversity". - 11 -
H. THE PROJECT
A. Origin
2.1 In 1994, the Bank agreed to a Panamanian Government request for assistance in preparing a project dealing with natural resource conservation and management. Project preparation was financed by a grant from the Japanese Government and a Project Preparation Facility (PPF). Project preparation was carried out by a small unit that operated under the directives of a MIDA, INRENARE, and MIPPE steering committee, with the assistance from the Regional Unit for Technical Assistance in Agriculture in Central America (RUTA).
2.2 Although the project originated as a natural resources project, its scope was expanded during project preparation, given the realization that a great deal of natural resource degradation is linked to rural poverty. Experience in Panama and elsewhere had shown that fencing off forested/protected areas does not stop invasions and deforestation; the root causes of these have to be dealt with, including rural poverty. Neither rural poverty programs nor natural resources management have been given sufficient attention by Government in the past, but the present Administration has made several efforts to reverse this situation. In the rural areas this has meant increased expenditure, mainly in the social sectors. Few investments have been made in productive activities, however, which are essential to increasing employment and income.
2.3 During project preparation, two issues came up which particularly influenced project design. The first was whether the two major components, dealing with rural poverty and natural resources, respectively, should be separated into two projects. It was ultimately determined with Government that the arguments were stronger for keeping them together to deal with the root causes of rural poverty, which in turn could alleviate pressure on natural resources. In addition, it was decided that maintaining both components in a single project would promote the coordination between public and private institutions that work in both sectors, thereby reinforcing the links between the two. Second (and perhaps somewhat contradictory to the first issue), in view of the fact that this would be the first Bank financed operation in the rural productive sector in many years, there were suggestions made during project preparation to consider including other rural development areas that require support, such as national research and extension programs, the rural financial sector, and the national land administration system. It was ultimately decided that this project should maintain its focus on a few priority areas, although during implementation of the project new areas could be identified that future Bank-supported lending and non-lending services could address.
B. Project Objectives and Summary Description
2.4 The principal objectives of the project are to: (i) apply, on a pilot basis, methodologies that would channel financial resources to rural communities to assist them in promoting sustainable productive systems, and thereby reduce rural poverty, the - 12 - degradation of natural resources and migration; and (ii) promote the sustainable use and conservation of selected priority biodiversity areas. Special emphasis would be placed on gender and indigenous aspects. More specifically,operational goals include:
(a) Creating capacity at the local community level to organize, self-diagnose problems, plan activities through participatory means, seek out and negotiate assistance, and act in pursuit of resolving priority quality of life issues.
(b) Establishing a demand-driven financing mechanism that operates in high poverty areas and provides matching grants to communities for activities that help reduce rural poverty, improve the quality of life, and offer alternatives for sustainable natural resource management and livelihood.
(c) Promoting the long-term conservation and sustainable use of Panama's biodiversity resources, including the biological corridor that passes through the Atlantic watershed.
2.5 To meet these objectives, the project would finance three closely related components:
(a) Sustainable Rural Development. Implemented by the Ministry of Agricultural Development (MIDA), NGOs, and private and community organizations, this component would promote community training, organization, planning and investment. The project would: (i) provide training and organizational assistance to communitiesto identify their needs, in activities related to production technology, production support, community organization and rural development, and to prepare community development or action plans using participatory methodologies; and (ii) establish a demand- driven Fund for Sustainable Agricultural and Rural Development (FUSARD) that would provide matching grants to communities to help finance these plans in whole or in part (other sources of funds would also be used when available). Eligible investments would include: agricultural system research, agricultural extension, technical assistance, training and productive infrastructure, including mini-irrigation schemes, processing facilities, reforestation and rehabilitation of rural roads.
(b) Biodiversity Conservation.6 Implemented by the Institute for Renewable Natural Resources (INRENARE) and NGOs, this component would support
6 Althoughconceptually and administrativelypart of the same project,the GEF grant (for the Atlantic BiologicalCorridor) would be managedas a separatefinancial operation,with differenttiming, documentation,legal agreementsand supervisionreports. The GEF activitiesare still under preparation,and expectedto be submittedfor Board approvalin FY98, and if approved, implementationwould start aboutfour monthsafter the IBRDloan is effective.The description - 13 -
activities in selected areas in the Pacific Zone and the Atlantic Biological Corridor. The component would finance (i) biodiversity research and planning, including base studies, management plans, and environmental impact assessment and monitoring; (ii) capacity building for relevant actors in biodiversity conservation and sustainable use, including modernization of protected areas management and institutional strengthening in environmental impact assessment processes; and (iii) activities that contribute to biodiversity conservation and sustainable use, including protected areas delimitation and infrastructure, and environmental subprojects.
(c) Project Coordination. The above two components would be coordinated by a Project Coordinating Unit (PCU), formed mostly by seconded staff from the two lead institutions, MIDA, and INRENARE. Through this component, the project would also finance technical assistance and studies agreed with the Bank for these and other areas related to rural development and natural resources management.
C. Rationale for Bank and GEF Involvement
2.6 Consistency with the CAS. The Bank's Country Assistance Strategy (CAS) for Panama (Report No. 13846-PAN), dated December 28, 1994, and discussed at the Board on February 7, 1995, focuses on: (i) reviving sustainable growth; and (ii) poverty alleviation. This strategy is consistent with the overall thrust of the donor program in Panama, which emphasizes medium-term fiscal viability, sustainable growth, poverty reduction, and environmental conservation. The proposed project is consistent with these objectives and is included in the CAS. It would foster sustainable growth in rural areas, thereby stabilizing populations that may otherwise migrate to frontier areas and to cities (Figure 1). The Biodiversity Conservation Component would improve natural resource use and conservation and help increase the economic potential of these areas for future generations, and the Sustainable Rural Development Component would focus resources on poverty alleviation.
2.7 Consistency with GEF Strategies. The proposed GEF supported activities are consistent with the guidance from the First and Second Conferences of the Parties (COP I and COP2). The project would: address in situ conservation; include institutiona) capacity building; strengthen conservation management, and promote suitable use of ecosystems and habitats, including coastal and marine ecosystems and mountain regions" and strengthen the involvement of local and indigenous peoples and integrate social dimensions, including those related to poverty. The proposed GEF supported activities are also part of a larger GEF-supported strategy for an integrated Mesoamerican Biological Corridor within GEF operational program #3 for forest ecosystems. Other
presentedof GEF financed activitiesis preliminaryand could be changedduring the on-going preparationof the component. - 14 -
related projects are currently under preparation with Bank and GEF support in Honduras and Nicaragua.
2.8 Complementarity with other Bank Operations. The project would complement two on-going IBRD operations that support poverty alleviation: the Basic Education Project (Loan No. 3994, approved March 3, 1996), the Nutrition and Health Project (Loan No. 3841, approved 7 February, 1995) and the proposed Social Investment Fund Project (Fondo de Emergencia Social, or FES, scheduled for Board presentation later in 1997).. The project would be especially complementary to the FES Project as part of a rural poverty alleviation strategy. Based on experience elsewhere in Latin America (Chapter 1), when Community Action Plans (CAPs) are prepared, they are likely to contain a combination of productive and social needs. The Rural Poverty and Natural Resources Project would support the preparation of CAPs including subprojects to address both needs: the social subprojects would then be submitted to the FES and other financing sources when available, and the productive subprojects would be submitted to the FUSARD (for rural roads, see para. 2.11 (b)). Besides this linkage to the proposed FES Project, project preparation has coincided with and has been linked to the Bank- supported Living Standards Measurement Survey; many of the results of the study will be used as part of the project's baseline survey.
2.9 Complementarity Between the Bank and GEF Financed Activities. The proposed project has been developed to provide the Government of Panama with a coherent, multi-sectoral response to the interrelated issues of rural poverty, natural resources management, and biodiversity conservation. The Bank financed activities would contribute to the specific objectives of the GEF financed activities by: (i) channeling rural development investments and agricultural intensification to the poor mountainous regions of the Central Pacific provinces, thereby reducing the causes leading to out-migration and expansion of the agricultural frontier caused by farmers squatting in protected areas; (ii) contributing to strengthening of the protected areas system and INRENARE' s institutional capacity for conservation and management. At the same time the GEF financed activities would complement the Bank financed activities by: (i) identifying priority areas for conservation and sustainable use within the Mesoamerican Biological Corridor to guide public spending; (ii) establishing sustainable mechanisms for biodiversity protection, and the financial viabilityof the protected areas; (iii) supporting local subprojects related to global biodiversity benefits, and (iv) training indigenous and non- indigenous communities in methodologies and technologies consistent with the overall objective of biodiversity conservation and natural resources management.
D. Program Objective Categories
2.10 Most project activities and benefits are related to the productive activities of the rural poor and the sustainable use of the natural resource base. Approximately 70% of project communities are below the poverty line. Therefore, the project is included in the Program of Targeted Interventions and designated as belonging to the Program Objective Categories of: (a) Poverty Alleviation and (b) Environmentally Sustainable Development. - 15 -
E. Detailed Project Description
(1) Sustainable Rural Development Component (US$23.6 million, 60.6 percent of total cost)
2.11 This component would be implemented under MIDA's responsibility through two sequenced actions: (a) training and equipping of public and private organizations, which would in turn train and organize communities in the project area to diagnose their development needs and prepare Community Action Plans (CAPs); and (b) implementing the CAPs through community investments financed by MIDA through the proposed Fund for Sustainable Agricultural and Rural Development (FUSARD). These actions are summarized below and detailed in Annex A.
(a) Institutional and community training, organization, and planning (US$7.9 million). The project would finance training, technical assistance, equipment and vehicles for MIDA, NGOs and rural communities. These funds would be used for three activities: (i) training and rural organization (US$3.2 million), which consists of (a) strengthening MIDA's Department of Rural Development to be better prepared for its supervisory and normative role in the implementation of this and other rural development projects as it only recently has commenced dealing with small, poor producers; (b) retraining and equipping of MIDA and NGO and other Implementing Organization staff to carry out project activities; (c) training and organizing communities, particularly in the area of participatory community diagnostics and planning, the end result of which would be the development of Community Action Plans'; (ii) technical assistance to rural communities in production technology development (US$3.0 million);and (iii) production support (US$1.6 million) to prepare subprojects identified in the CAPs to be presented to the FUSARD for financing. In some cases sub-projects would be grouped together and rationalized where appropriate in a Provincial Action Plan for such subprojects as rural roads rehabilitation, reforestation schemes, nurseries, soil conservation schemes, agro-industries, etc. The technical assistance for subproject preparation would be procured from existing institutions as needed (e.g., mini-irrigation, small scale agro-industries and marketing). In certain technical areas, however, (e.g., smallholder technology) adequate technical assistance is not available from existing institutions, and special programs may have to be organized by the project to meet these needs. These are described in paras 3.7 and 3.8, and the training program is described in Document 5 in Annex H.
A CommunityAction Plan is a list of investmentneeds (subprojects) ranked accordingto a defined developmentstrategy, resources availability, and implementationpossibilities. - 16 -
(b) Rural Subprojects through the Fund for Sustainable Agricultural and Rural Development (FUSARD) (US$15.7 million). This demand-driven fund, to be created within MIDA under the project, would finance-on a matching grant basis- productive community investment activities (called rural subprojects) developed in the CAPs. The beneficiary communities would contribute a variable share-ranging from 10 to 30 percent- of the cost of the subproject in kind and/or cash. The CAPs of one province would be submitted to the Provincial Technical Committee (PTC) and would be grouped where appropriate in the Provincial Action Plan. Some subprojects, such as social infrastructure, would be submitted to the Social Emergency Fund (FES), or other similar programs for financing. Other subprojects, such as productive agriculture and related investments, would be submitted to FUSARD. FES has gained considerable experience rehabilitating rural roads. Thus, in the project area, FUSARD would finance the rehabilitation of rural roads through the FES, who would actually contract and supervise the works. While in most cases the technical assistance for subproject preparation would be provided under the institutional and community training subcomponent, for larger and/or more complex feasibility studies, such as certain community irrigation schemes or small-scale agro-industries, the study itself could be considered a "subproject" for financing from FUSARD.
(2) Biodiversity Conservation Component (total cost US$11.6 million, 29.8 percent of total cost; GEF US$8.1 million).
2.12 This component includes: (a) studies to prepare management plans for selected priority biodiversity areas; related environmental impact assessments; and a public information campaign with respect to these areas; (b) the design and implementation of plans to promote the participation of the population living in these areas; (c) the provision of training and technical assistance to INRENARE, beneficiaries and others in environmental matters, subprojects to promote the sustainable use and conservation of project areas to identify and monitor biodiversity threats to these areas. For the purposes of implementation, this component would be divided into two subcomponents: (a) Pacific Zone Protected Area Management and (b) Panama Atlantic Biological Corridor. The Bank and GOP would finance INRENARE strengthening and the investments in the protected areas outside the Panamanian portion of the Mesoamerican Biological Corridor on the Atlantic side of the country, which total US$2.2 million. Investments in the Atlantic Biological Corridor are still under preparation, and financing for these, totaling US$8.1 million, is being requested from the Global Environmental Facility (see footnote, para 2.05).
(a) The Pacific Zone Protected Area Management Subcomponent (total cost US$0.9 million;GEF: no contribution) would finance civil works, equipment, consultant services, training, workshops, community subprojects and operation and maintenance costs. Activities would - 17-
include: (i) improved management of priority protected areas of national importance in the Pacific Zone including Cerro Hoya National Park and the Islas de Canias,Isla Iguana and Isla Taboga Wildlife Refuges through investment in infrastructure (administrative/research/visitorscenters), PA perimeter land titling, equipment for administration and management (radios, fire fighting, boats, office), (ii) training of protected area system's personnel; (iii) management planning and implementation; (iv) community outreach and environmental education; and (v) development of the PA's ecotourism potential with involvement of local communities.
(b) The Atlantic Biological Corridor Subcomponent (total cost US$10.8; GEF US$7.9) is still under preparation (footnote, para 2.5). This subcomponent would include: (i) Atlantic Biological Corridor (ABC) Information and Planning includes: (a) supporting studies to integrate the corridor into sectoral development planning and policies; (b) elaboration and dissemination of corridor land use plans with and among local stakeholders (at both the municipal and community levels); (c) biodiversity monitoring to identify, monitor, and address threats to the corridor and biodiversity; and (d) promotion, information dissemination and awareness building, nationally and among communities in the region on the ABC and biodiversity. (ii) Capacity Building For Biodiversity Conservation and Sustainable Use for: (a) strengthening indigenous and non-indigenous communities' capacity to monitor resource use and to conserve and sustainably use biodiversity resources; (b) creating and strengthening partnership mechanisms involving private sector, NGOs and local governments/communities to enhance protection of priority areas, land use planning and better land use practices; (c) upgrading management norms on public lands in support of biodiversity conservation; and iv) development of a revenue capture and financial management systems for protected areas. (iii) Atlantic Biological Corridor (ABC) Investment Program includes: (a) assisting indigenous communities in critical areas of the corridor to regularize their access and usufruct of lands; (b) a grant program for local biodiversity conservation and management activities, targeted at incremental needs for conservation and protection of priority areas in the corridor; and (c) strengthening management in priority protected areas within the corridor in cooperation with local stakeholders.
(3) Project Coordination Component (total cost US$3.7 million, 9.6 percent of total; GEF US$0.2 million)
2.13 A Project Coordinating Unit (PCU) would be set up to coordinate the implementation of the two components. Most staff would be seconded from MIDA and INRENARE, but approximately seven professionals would be hired where appropriate skills are not available in the two institutions. The PCU would be provided with office space, vehicles, equipment, funds for project management and related technical assistance - 18 - and services (e.g., audits, monitoring and evaluation, legal, policy and other studies), funds for other operating costs, and funds for selected priority studies related to rural development and natural resources management, including for the preparation of future projects. The PCU would be responsible for managing the FUSARD through appropriate intermediaries, as described in Annexes A and C.
F. Project Beneficiaries and Participation
2.14 The main project beneficiaries would be communities of rural poor in some of the poorest corregimientos in Panama, principally in the Provinces of Herrera, Veraguas, and Los Santos (IBRD Map No. 28338 and Table 1 in Annex A). In addition, many of the communities in the PA buffer zones are in the extreme poverty category, many of them indigenous. The project would directly benefit approximately 15,000 families or 75,000 people, assuming 5 people per family. This would be divided between the sustainable development component directly covering 11,000 families or 55,000 people, and another 4,000 families or 20,000 people in the Biodiversity Conservation component. This includes in the sustainable development component approximately 2,760 communities, of which the project is expected to work directly with about 40 percent or 1,100.
2.15 There was a considerable amount of local participation in the preparation of the project through participatory rural diagnostics and consultations carried out over a two month period in the project areas, followed up by community visits by the specialist consultants for a five month period. In addition, 10 formal workshops and seminars were held with over 360 stakeholders including government, NGOs, foundations and other national, regional and local level organizations operating in the project areas. In addition, over 25 community level workshops were held, as well a large number of formal and informal consultations with the public and private institutions that would be involved in project implementation. Several of these consultations, diagnostics and information sharing were held in indigenous communities; an indigenous peoples development plan (IPDP) was completed (Annex D), and the results incorporated into the formulation of the project. Training was provided to government officials in participatory diagnostics, which they have continued to implement. This same participatory approach would continue to be utilized during project implementation, with the collaboration of NGOs which would operate in the project area. Further preparation is required to complete what would be the proposal for Panama's contribution to the Mesoamerican Biological Corridor, included in the Biodiversity Conservation component. In addition to preparing the overall corridor strategy, review of the proposed protected area investments in light of the strategy, and ongoing participation and consultation processes with stakeholders to ensure proper design would be carried out.
G. Gender Aspects
2.16 In developing the communities' self-management capacity, special attention and targeting would be used to promote women's active participation in the training, organization, planning and subproject implementation. In addition, the project would - 19 - support women's groups, several of which are already being assisted by MIDA, and promote the association of these groups to provide certain economies of scale (e.g. marketing). To promote women's participation during the community training and organization stage, two people from each community, a man and a woman, would be sent to training centers to receive more intensive training which they would then apply in their communities. Specific training would be provided to women who form part of mixed groups, or all-women groups, in areas they request. According to the diagnostics carried out during project preparation, the areas of greatest interest to women include project management, basic accounting, food processing (agro-industries), medicinal plants and marketing. Gender analysis aimed at ensuring greater women's participation would also be one of the subproject selection criteria.
H. Indigenous Peoples Aspects
2.17 The indigenous populations are the poorest in Panama. The preparation of the IPDP and the rural diagnostics provided the project's orientation towards implementing its activities in indigenous lands (Annex D). Indigenous groups demonstrated considerable interest in carrying out additional income generating productive activities, but not at the expense of their culture, forms of government or traditions. The traditional local organization structures/government would be utilized to channel assistance to implement the training, organization and planning stages, as well as the implementation of the subprojects. Where possible, activities would be carried out in local languages or dialects, and activities would attempt to take advantage of their knowledge of natural resource use and management. Particular areas of interest expressed by indigenous populations include improved demarcation and legal recognition of their lands, agricultural techniques for subsistence agriculture and sale of surpluses, handicrafts improvements and marketing, medicinal plants marketing, and eco- and ethno-tourism. Women's groups would also be encouraged and assisted (e.g., handicrafts, certain foodstuffs, medicinal plants). Project staff working with indigenous people would be from the same ethnic groups where possible.
I. Costs and Financing
2.18 Project Costs. Base costs are expressed in July 1996 values, and total costs are estimated at US$39.0 million, including incremental recurrent costs, contingencies, duties and taxes. Base costs are US$36. 1 million, and contingencies US$2.9 million, calculating using applicable norms. The foreign exchange expenditures are estimated to be 14 percent of total costs, or $5.3 million. Identifiable taxes and duties are estimated to be $1.2 million. The main expenditure categories include equipment, technical assistance, training and studies, grants for subprojects, operating costs, vehicles and works. The costs are summarized in Table I below, and detailed in Annex E. - 20 -
Table 1. Project Cost Summary (US$ million)
%Foreign % Total Local Foreign Total Exchange Base Costs
A. Sustainable Rural Development 1. Institutional and Community Training, Organization and Planning a. Training and Rural Organization 2.4 0.6 3.0 20 8 b. Production Technology Development 2.6 0.2 2.8 8 8 c. Production Support 1.2 0.3 1.5 19 4 Subtotal Institutional and Community Training, 6.3 1.1 7.4 15 21 Organization and Planning 2. Fund for Sustainable Agricultural and Rural 14.6 0.0 14.6 - 40 Development Subtotal Sustainable Rural Development 20.9 1.1 22.0 5 61 B. Biodiversity Conservation 1. Pacific Zone Protected Area Management 0.8 0.1 0.8 7 2 2. Atlantic Biological Corridor 6.4 3.4 9.8 35 27 Subtotal Biodiversity Conservation 7.2 3.5 10.6 33 29 C. Project Coordinating Unit 3.3 0.2 3.5 7 10 Total BASELINE COSTS 31.3 4.9 36.1 13 100 Physical Contingencies 0.1 0.1 0.3 50 1 Price Contingencies 2.3 0.3 2.6 12 7 Total PROJECT COSTS 33.7 5.3 39.0 14 108
2. 19 Project Financing. Table 2 shows project financing by components. The Sustainable Rural Development Component would be financed by IBRD, communities and GOP. The Biodiversity Conservation Component would be financed by IBRD, communities, GEF, and GOP. The Project Coordinating Component would be financed by IBRD, GEF and GOP. Overall this corresponds to each financier as follows: IBRD $22.5 million (58 percent), which includes the refinancing of US$1.2 million from the Project Preparation Facility (PPF), GOP $4.6 million (12 percent), GEF $8.1 million (21 percent), and communities $3.8 million (10 percent). IBRD financing would be in the form of a variable-rate US dollar single currency loan based on Libor. GEF funding is subject to GEF Council approval, which will be requested at the May 1997 Council meeting, and approval by the Board of the Bank, scheduled for FY98. - 21 -
Table 2. Components by Financiers (US$ million) IBRD GEF' Communities GOP Total Amount % Amount % Amount % Amount % Amount %
A. SustainableRural Development 1. Institutionaland CommunityTraining, Organizationand Planning a. Training and Rural Organization 2.9 88.7 - - - - 0.4 11.3 3.2 8.3 b. Production Technology Development 1.8 59.0 - - - - 1.2 41.0 3.0 7.8 c. Production Support 0.9 56.8 - - - - 0.7 43.2 1.6 4.2 Subtotal Institutional and Community 5.6 70.7 - - - - 2.3 29.3 7.9 20.3 Training,Organization and Planning 2.FundforSustainableAgriculturalandRural 11.6 73.5 - - 3.4 21.5 0.8 5.0 15.7 40.3 Development SubtotalSustainable Rural Development 17.1 72.6 - - 3.4 14.3 3.1 13.1 23.6 60.6 B. BiodiversityConservation 1. Pacific Zone ProtectedAreaManagement 0.7 76.4 - - 0.0 3.1 0.2 20.6 0.9 2.3 2. AtlanticBiological Corridor 1.8 17.0 7.9 73.0 0.4 4.0 0.6 6.0 10.8 27.6 SubtotalBiodiversity Conservation 2.5 21.5 7.9 67.4 0.5 3.9 0.8 7.1 11.6 29.8 C. Project Coordinating Unit 2.9 76.4 0.2 6.6 - - 0.6 17.0 3.7 9.6 Total Costs 22.5 57.7 8.1 20.8 3.8 9.8 4.6 11.7 39.0 100.0
8 Although conceptually and administratively part of the same project, the GEF grant (for the Atlantic Biological Corridor) would be managed as a separate financial operation, with different timing, documentation, legal agreements and supervision reports. The GEF activities are still under preparation, and expected to be submitted for Board approval in FY98. The cost estimates presented of GEF financed activities are therefore preliminary and may be changed during on-going preparation of the component. - 22 -
III. PROJECT IMPLEMENTATION AND MANAGEMENT
A. Implementation Arrangements
3.1 Two institutions would be in charge of project implementation - MIDA for the Sustainable Rural Development Component and INRENARE for the Biodiversity Conservation Component. Each institution would, however, assist the other implement its component (e.g., INRENARE would assist MIDA implement reforestation subprojects). Both institutions would execute the project through a joint Project Coordination Unit (PCU), which would be directed and supervised by a Technical and Operational Coordination Council. The FUSARD would be managed by the PCU. Rural communities would participate in the implementation of project activities though the Sustainable Rural Development Committees (SDCs) established at the local community level. Decision-making and technical support would be coordinated-at the corregimiento level-by the Corregimiento Technical Committees (CTCs) and-at the provincial level-by the Provincial Technical Committees (PTCs). Staff of MIDA, INRENARE and municipal governments would be represented on the PTCs. The CTCs would produce the Corregimiento Action Plans and, if appropriate, the PTCs would review them on technical grounds and rationalize them before incorporating them into Provincial Action Plans. The functions of these organizations are further detailed below and in Annex A.
3.2 Technical and Operational Coordination Council. The Council would advise and monitor the execution of the project in order to promote project objectives, meet annual operating plans, and establish proper use of project funds. It would include representatives of the communities in the project areas, and representatives of the public and private sector (local and regional NGOs). The council would be presided by the Minister of MIDA or his designated representative. It would include the NAPAS Director, a representative of MIPPE, three SDC representatives-one for each Province-, a representative of the entrepreneurial private sector, and the Director of the PCU who would act as the Council's Executive Secretary.
3.3 Project Coordinating Unit (PCU). The PCU would be responsible for the proper functioning of the project and promoting its objectives. It would not implement project actions directly, but rather coordinate and contract the execution to other public and private implementing organizations. It would carry out two essential functions: First, it would promote, through the contracting of appropriate institutions, the delivery of high quality goods and services described in paras 2.12 and 2.13. In many cases, sufficient or appropriate skills do not exist in local public or private institutions, thus appropriate training must first be provided by the project. This is particularly relevant for the Sustainable Rural Development component, and would thus meet one of the project's objectives of institutional strengthening. Second, the PCU would monitor and evaluate the performance of the above institutions to ensure project objectives are met, community training and organization is completed, subprojects implemented as programmed, and investments in the selected priority biodiversity areas appropriately completed. Public and private institutions (paras 1. 15 and 1.16) would compete for the provision of most of the - 23 - services required. It was agreed at negotiations that the PCU would have staff of quality and experience satisfactory to the Bank to carry out project activities. The satisfactory establishment of the PCU and the Technical and Operational Coordination Council would be a condition of Loan effectiveness.
3.4 Administratively(Annex C) the PCU would be divided in two departments, one for each component. The PCU and the Department of Sustainable Rural Development would be located in the one of the three Provinces where that component would be implemented, and the Department of Biodiversity Conservation would be located at INRENARE Headquarters in Panama City, as the project activities are scattered throughout the country. The Head of the Sustainable Rural Development Department would coordinate with MIDA's staff in the region, many of whom would be seconded to the project. The Head of the Biodiversity Conservation component would coordinate with INRENARE regional directors in charge of the priority biodiversity areas the project would assist. The implementation schedule for the Project is in Annex C. A Subsidiary Agreement between Government and INRENARE acceptable to the Bank would be executed as a condition of disbursement in respect of the Biodiversity Conservation Component. Because of the difficulties of operating within the normal budgetary processes, Government requested funds be handled by an external specialized executing agency such as UNDP or IICA. The signing of an agency agreement for funds administration between Government and an external executing agency, on terms acceptable to the Bank, would be a condition of Loan effectiveness. Other financial/administrativefunctions would be carried out by the PCU and similar arrangements are being used for on-going IDB and IFAD projects.
3.5 Community Organization. To produce the community diagnostics, action plans and subprojects, the project would support the establishment of local community Sustainable Rural Development Committees. These committees would be formed or consolidated by bringing together the various community groupings (e.g., farmers, women's groups, church groups and specific committees) to carry out their participatory diagnostic with the objective of identifying bottlenecks and solutions to their developmental and income generating possibilities. Given the large number of communities the project would work with (1,100), it would not be feasible to have an external promoter in each locality; instead each community would select two people, a woman and a man, to be trained to carry out the training, diagnostic, and the preparation of a Community Action Plan (CAP), with the help of specialists as required. They would be provided with travel expenses, per diems and certain basic materials (paper, markers, etc., used in the participatory methodologies).
3.6 Once the CAPs are prepared, they would be passed to the Corregimiento Technical Committee for review, technical improvement, and, where appropriate, rationalized (e.g., where there are repetitions of certain subprojects that are of a wider geographic scope such as some possible agro-industrial and watershed subprojects) and incorporated in a Provincial Action Plan. The CAPs would contain prioritized subprojects and arrangements would be made through the PCU to send the necessary specialists to the - 24 - community to prepare the subprojects for submissionfor funding, be it to the project's FUSARD or other sources of funding (e.g., FES).
3.7 Technical Assistance. The project would provide specialized technical assistance as requested by the communities, for the preparation of their action plans and subprojects. The diagnostics carried out during project preparation identified the two following areas of greatest community interest for productive subprojects: production support, including marketing, small agro and cottage industries, rehabilitation of rural roads, and micro- irrigation; and production technology, principallyby introducing new agricultural technology through validation and extension, and reforestation. When technical assistance is requested for the above, the services would be contracted from public or private organizations through a competitive process. Limited amounts of pesticides would be purchased under the project. A condition of disbursementsfor pesticides would be that they be on an approved list ofpesticides, satisfactory to the Bank and based on the World Health Organization categories I-A, I-B and II.
3.8 For the production technology services, as limited smallholder agricultural technology generation and transfer experience exists in Panama, a different methodology would be used to build-up technological options from on-farm validation trials carried out with interested project area farmers. With the technical backing of IDIAP, which has demonstrated interest in increasing its work with smallholders, and/or other local or international institutions, small technical groups would be formed made up of, as required, an agronomist, an agricultural economist, an animal production specialist, and a sociologist. The team would present technological options developed in areas of similar agro-ecological and social conditions in neighboring countries, or locally, where experience or information exists. Those deemed by the particular community most suited to their particular conditions, would be tried on-farm by interested producers in farmer validation groups. Technical support would continue to be provided as producers further adapted these technologies and are ready to try new ones. As more technological experience becomes available,the extension can become more demand-driven, and local farmers involved in the first trials can initiate cross-visit programs to other farmers, as this has been shown in various parts of the world to be one of the most effective means of transmitting information.
3.9 Fund for Sustainable Agricultural and Rural Development (FUSARD). Located in the PCU, FUSARD would be operated by a Fund Administrator, under the directives of a small Board of Directors composed of six directors, appointed respectively by MIDA, MIPPE, INRENARE, the NGO community, sub-national government bodies and producers/community organizations. The Board would approve the Operational Manual, and meet a few times a year to set operating guidelines, supervise performance, and ensure proper use of funds. The operational management of FUSARD would be carried out by the PCU, whose Coordinator would be responsible for FUSARD's overall operation. Within the PCU, a small FUSARD administrative unit would be created, with four basic staff (a unit director, an expert in monitoring and evaluation, a lawyer to draw up the agreements with the communities and contractors, a disbursement expert, plus - 25 -
support personnel). It is expected that only the unit head would be hired by the project; the rest of the personnel would be seconded from MIDA. The subproject technical quality control would be carried out by the Corregimiento Technical Committees, and, where appropriate, Provincial Technical Committees, and checked by the FUSARD unit. Where possible, FUSARD would channel funds through implementing organizations (e.g., NGOs, Cooperatives, Government agencies), so as not to deal directly with the disbursement of funds for the large number of subprojects expected to be generated. Just as NGOs and other implementing organizations have played an important role in project preparation, they would also be essential for project execution as only minimaldirect implementation by Government is envisioned. Criteria for the selection of these organizations would be detailed in the Subproject Operation Manual.
3.10 Subproject Operational Manual. Eligibility criteria and the subproject cycle are described in Annex A, and further detailed in the Operational Manual currently being finalized by Government. A preliminary version of the Operational Manual, which establishes the terms and conditions of grant administration, including technical, environmental, and economic criteria, was agreed at negotiations, and the final version, acceptable to the Bank, would be a condition of disbursementsfor subprojects. If Government wishes, for the final version, it may submit separate Operation Manuals for the rural and biodiversity subprojects. An additional condition of disbursement for subprojects is the signing of Subproject Agreements acceptable to the Bank with the Implementing Organizations.
3.11 The subproject appraisal by FUSARD would take into account the level of participation in the microplanning process, cost-effectiveness, poverty focus, and technical, economic, social and environmental sustainability. In addition, the subproject preparation would take into account gender analysis which would promote women's contribution and benefits in the execution of the subprojects. When funding is approved, FUSARD and the community's requesting Implementing Organization, would enter into a contract. When a contractor is required (e.g., for infrastructure), the contract would also involve the contractor. Once funds are disbursed, which may be in one or more tranches depending on the size and complexity of the project, technical supervision would be provided by the Implementing Organizations and MIDA, INRENARE, or other line agency field staff. Rural roads subprojects would be financed by the project, but channeled by the FES considering their considerable experience in this field. Other subprojects requested by the communitiesthat could be financed through other existing programs/sources of funds (para 1. 15), particularly social infrastructure, would be prepared by the project, and project staff would assist the communities make the requests for financing at the other programs. This would assist the communities learn to deal with other institutions. The use of funds would be closely controlled by the: (i) communities; (ii) project (internal audit), (iii) the National Controllers Office, and (iv) annual external audits. Most of this review would be ex-post to avoid excessive procedures that could reduce agility in the preparation and implementation of subprojects. - 26 -
3.12 Flow of funds. Project funds would be channeled through an international external agent (such as UNDP or IICA) under an Agency Agreement for the provision of administrative services. This agreement would be signed with the implementing agencies (MIDA and INRENARE) and the selected external agent would provide the services of fund administration, including signing of contracts with consultants and suppliers, but without responsibility for project implementation, bidding processes, or consultant selection. This mechanism, which has been requested by Government, is a common practice in Panama to reduce the obstacles created by the cumbersome national requirements on procurement, disbursements, accounting and auditing. The external agent would be selected through standard consulting services procurement procedures. A condition of Loan effectiveness would be the execution of the external Agency Agreement. In the case of rural roads financed under FUSARD, the funds would be channeled through FES, given its considerable experience in infrastructure subprojects. For other FUSARD subprojects, the PCU would request the external agent to transfer funds to the executing agency under the provision of an implementation agreement, whose models are defined in the Subproject Operational Manual (see Figure 1 of Annex 1). GEF funds would be channeled in the same way as IBRD financing. The possibilityof using a special account (SA) would be left as a possible option (para. 3.26).
3.13 Counterpart Funds. An assurance of the availability of timely counterpart financing, which would total US$4.6 million, was obtained during negotiations. For 1997, as the budget was prepared before any legal document on the project was available, it was not possible to create a budget item for the project. To reduce difficulties, the Project Preparation Facility (PPF P306-0 PAN) has been approved to provide, among other things, bridge financing before project effectiveness. If the project, as expected, becomes effective in 1997, it would be necessary to create an extraordinary line item in the 1997 budget, which is fairly common in Panama.
B. Procurement
3.14 It was agreed at negotiations that procurement under the proposed Bank Loan would be in accordance with the Guidelines for Procurement under IBRD loans and IDA credits (January 1995, revised January and August 1996) and as further described below. Standard bidding documents agreed to by the Bank and the Government would be used for the procurement of goods under National Competitive Bidding. The Bank would finance civil works, vehicles, equipment, training, consulting services, grants for subprojects, and incremental operating costs. Procurement arrangements are summarized in Table 3. - 27 -
Table 3. Procurement Arrangements (US$ million) Procurement Method International Local Competitive Competitive Bidding Bidding Other N.B.F. Total
A. Civil Works /a - 1.0 0.3 - 1.3 (0.2) (0.1) (0.2) B. Equipment /b 0.9 0.6 0.4 - 1.8 (0.3) (0.2) (0.1) (0.7) C. Vehicles/c - - 1.4 - 1.4 (0.9) (0.9) D. Consultants and Technical Assistance /d - - - - 11.1 (5.1) E. Training - 0.9 - 1.9 (0.7) (1.3) F. Rural Development and Biodiversity - - 10.2 - 15.2 Subprojects /e (7.3) (1 1. 1) G. Recurrent Costs Incremental Salaries /f - 1.8 1.8 (0.1) (0.1) Operation and Maintenance - 3.2 0.2 3.4 (1.9) (0.0) (1.9) H. PPF - - 0.7 - 1.2 (0.7) (1.2) Total 0.9 1.5 17.1 2.0 39.0 (0.3) (0.4) (11.6) (0.1) (22.5)
Notes: Figures in parenthesis are the respective amounts financed by IBRD. a/ Three quotations procedure for small works, including mapping. b/ Includes LIB ($0.2 million) and national/international shopping ($0.2 million). c/ Vehicles to be procured by LIB. d/ Services to be procured in accordance with World Bank Guidelines: Use of Consultants by the World Bank as Executing Agency (August 1981). e/ Grants for Rural Development and Biodiversity. f/ Salaries are not financed.
3.15 Works. Civil works would consist of rehabilitation of rural roads, rehabilitation of buildings and facilities for office use and construction of small rural markets and protected area infrastructure. To the extent possible, contracts would be grouped in packages valued at more than US$250,000 and procured under NCB procedures. Small works valued at less than US$250,000 would be procured under lump-sum, fixed price contracts awarded on the basis of quotations from at least three qualified domestic contractors, up to an aggregate amount of US$300,000.
3.16 Goods. The project would procure vehicles, motorcycles, computer equipment, office equipment, furniture, communications equipment, laboratory and field equipment, and educational material. Where possible, goods would be packaged into contracts valued at US$150,000 or more to be procured under ICB procedures. Vehicles, motorcycles and computer equipment would be procured through Limited International Bidding (LIB) procedures from suppliers with established maintenance and services facilities in Panama. - 28 -
Other goods (office equipment, furniture, etc.) estimated to cost less US$25,000 or more but less than US$150,000 per contract would be procured under NCB up to an aggregate amount of US$500,000. Contracts for goods valued below US$25,000 would be procured using national and international shopping, based on price quotations from at least three bidders up to an aggregate amount of US$400,000.
3.17 Consultant Services and Technical Assistance. All consultant services would be procured according to the guidelines, "Use of Consultants by the World Bank Borrowers and by the World Bank as Executing Agency (August 1981) ". Consulting, training and studies under the project would consist of consultant assignments for individuals and firms providing direct technical and implementation assistance to MIDA and INRENARE, in, among others, training, land titling, promotion, subprojects, establishment of community participatory structures and participatory planning, and environment and land use planning and monitoring.
3.18 Rural Development and Biodiversity subprojects (Grants). The average size of a community subproject is expected to be around US$20,000. Few subprojects are expected to exceed US$50,000, which would be the normal maximum subproject cost. In exceptional cases a maximum of US$100,000 would be allowed, subject to approval by FUSARD's Board of Directors. Procurement for subprojects costing the equivalent of US$10,000 or less and procured by local communities would be carried out mainly by direct contracting, up to an aggregate amount of US$2.5 million. This procurement procedure is proposed taking into consideration that most subprojects: (i) would be small and it would be difficult to obtain competitive proposals; (ii) can be managed directly by communities that would contribute to the work through the donation of unskilled labor and local materials; (iii) would be selected on the basis of willingness of the beneficiary communities to contribute to and physically supervise their execution; and (iv) would provide a vehicle for communities to play an active role in the local development process.
3.19 Procurement by the communities under the subprojects would follow National Shopping procedures for goods, and procedures acceptable to the Bank for procurement of small works under lump sum, fixed price contracts awarded on the basis of price quotations (under US$25,000). For details on FUSARD's operation, see Annex A. - 29 -
Table 4. Thresholds for Procurement Methods and Prior Review (US$ thousands) .Category ContractValue ProcurementMethod ContractsSubject to Prior Review CivilWorks >US$250 NCB First 3 contracts
Goodsexcept Consulting >US$100 Selectionaccording to All Services ConsultantGuidelines -Firms Individuals >US$30 All Rural Developmentand Biodiversity >US$25 NCB First three contracts Subprojects Goodsand Works 3.20 Post review would be carried out for all other procurement by implementing agencies and communities. For this purpose, both MIDA and INRENARE would recruit, through the PCU, auditors, under terms of reference satisfactory to the Bank (paras. 3.30 and 3.31), who would not only examine financial implementation,but also procurement procedures, physical implementation and impact on beneficiaries. These auditors would carry out annual audits on the basis of a sample not lower than 60 percent of the Bank's financed investments in the first project year, 50 percent in the second project year and 40 percent in the remaining years. For convenience and to avoid overlap, the same auditors, if their performance is satisfactory, would be eligible to carry out an ex-post review of the expenditures and investments financed by the Bank. 3.21 Provisions in Legal Documents. An assessment by the Bank of Panama's procurement procedures and regulations indicates that they are not fully compatible with Bank Group procurement guidelines and policy. To resolve inconsistencies between local legislation and Bank's procurement guidelines, during negotiations, agreement was reached to include the following procurement provisions in the legal documents. 1. For - 30 - goods and works to be procured under National Competitive Bidding (NCB) procedures: (i) bids may be submitted at any reasonable time before bid opening accompanied by bid securities acceptable to the Bank, either by mail or by courier; (ii) the contract would not be provisionally awarded at the bid opening session; (iii) no minimum number of bids would be required to award a contract, (iv) contracts would be awarded to the lowest evaluated bidder; and (v) after contract award, the amounts for performance securities would be inform and amount specified in the bidding documents. In addition, for works to be procured under NCB, contracts may provide for mobilization advances and price adjustment provisions, acceptable to the Bank; 2. For consultants' services, foreign consultants would not be required to: (i) be locally registered as a condition of participation in the selection process; (ii) give any participation to local consultants; (iii) furnish any certificate issued by a local authority about their legal capacity or tax status; and (iv) personally submit their proposals. C. Disbursements 3.22 The IBRD loan has a five-year disbursement period and the Closing Date would be June 30, 2002. (It is expected that the associated GEF grant would have also a five-year disbursement period subject to GEF Council approval). There is no Standard Disbursement Profile relevant to agriculture or natural resources projects in Panama, so the country's overall disbursement profile has been used to estimate annual disbursements (Annex E, Table 5). 3.23 The Loan would be disbursed against eligible project expenditures at the rates of: (i) 80 percent for civil works; (ii) 100 percent for foreign supplied and 80 percent of locally supplied machinery, equipment, vehicles, and furniture; (iii) 100 percent for consultant services, training and studies; (iv) 100 percent of non-beneficiary financing of grants for community subprojects; and iv) incremental recurrent costs on a declining basis (90 percent first two years, 60 percent third and fourth years and 40 percent thereafter). (Annex E, page 4). 3.24 Retroactive Financing. Agreed project activities after January 1, 1997 would be eligible for retroactive financing, up to a maximum of US$2.0 million. 3.25 Documentation of Expenditures. Disbursements would be made on the basis of full documentation for all expenditures made under contracts requiring prior review by the Bank and amendments to contracts raising the value of such contracts above the prior review limits (Table 4). For all other expenditures, training, grants and recurrent costs disbursements would be made against Statements of Expenditures (SOE) for which supporting documents would be maintained by MIDA and INRENARE and would be available to the Bank for review. 3.26 Special Account. At Government's request, an international external agent would be contracted for procurement (para 3.12). However, should government wish to take over procurement directly, a Special Account (SA) in US dollars could be opened in a - 31 - bank acceptable to IBRD, and would be managed by the PCU. The authorized allocation in the SA would be US$1.4 million corresponding to about four months of average expenditures under the project. The initial deposit would be US$500,000 and once total disbursements have reached US$3.5 million, the Borrower may request the balance of the authorized allocation to be released. The SA would be replenished monthly on the Borrower's request (but no less frequently than every three months), or whenever one third of the authorized amount has been withdrawn, whichever occurs first. 3.27 Documentation. The PCU would be responsible for submitting regular replenishment requests with appropriate supporting documents for expenditures under the project. The documents would include: (i) a standard withdrawal application (Form 1903) for the total amount of eligible project expenditures to be replenished into the international external agent's account or the Special Account with a copy of the monthly bank statement for that account; (ii) Statement of Expenses (SOEs), for expenditures not requiring documentation, including grants to communities; (iii) summary sheets for fully documented expenditures (designed for each subproject and included in the disbursement letter) with the supporting documentation for all expenditures above the procurement prior review thresholds; and (iv) a reconciliation statement for the agent or the SA. The use of grants by communitieswould be checked through technical and financial audits, the monitoring systems and project and subproject supervision arrangements. D. Accounts and Audits 3.28 Project Financial Statements and Financial Reporting. The PCU would be responsible for preparing project financial statements including a statement of sources and uses of funds, and a register of project assets or balance sheet where appropriate. The funds flow statement would indicate sources (the Bank, GEF, as well as counterpart financing) and expenditures in accordance with main project components and disbursement categories. Project financial statements would show actual and pending payments against those budgeted. Information on sources and uses of funds would be provided monthly to the PCU. Information reported would also include the value of contracts signed, i.e., commitments, relative to actual and pending payments. 3.29 MIDA and INRENARE would maintain separate records and accounts for project expenditures as well as a register of assets purchased with project funds. They would also have the responsibility for preparing the project's financial statements, including balance sheets and sources and uses of funds statements, according to internationally accepted accounting standards. MIDA and INRENARE would also receive technical assistance to help establish accounting procedures acceptable to the Bank. Separate accounts would be established for GEF and Bank funds. 3.30 Auditing. A process for selection of financial and technical auditors, their TORs, and auditing arrangements, as described below, would be agreed with MIDA and INRENARE during negotiations. The selection process includes pre-qualifying audit firms, contracting auditors for one year with a provision to extend for a further two years - 32 - based on satisfactory performance. The process for selection of auditors would be initiated during the PPF stage with the objective of having auditors in place by the start of Loan disbursements. The PCU would contract audit firms to audit the consolidated financial statements for the components of the project. Separate audits would be carried out for GEF and Bank funds. 3.31 The auditors report would include audits of the external agent or the SA, an opinion on the use of statement of expenditures (SOEs), confirmation that project implementation was in accordance with provisions of the Loan Agreement and verification of procurement transactions. The auditor's TORs would also include a review of internal controls and preparation of a management letter. Audit reports would be submitted to the Bank within six months of the close of the fiscal year. The first audit reports would cover the first year's disbursement as well as disbursements under the PPF. 3.32 Annual technical audits would be carried out separately and would consist of checks of subprojects ensuring that what is purchased is in fact there and would include assessments of whether resources were used efficiently or appropriately or any technical issues worth analyzing. The methodology would include having an adequate sample of subprojects selected in accordance with criteria acceptable to the Bank. The report of the technical audit would be submitted to the Bank within two months of the end of the fiscal year. E. Status of Project Readiness 3.33 With the approval of a PPF for the project, and with RUTA's assistance, Government has initiated the advertising of key positions for the PCU. It is expected several members of the Project Preparation Unit would form part of the PCU, thus providing for a smoother transition to implementation. The initiation of the project with a pilot PPF stage would allow for a simpler start and provide the opportunity to apply the learning curve. RUTA is also organizing a project management course for April 1997. The Living Standards Measurements Survey, which was co-financed by project preparation funds, would also provide detailed base-line information for the project. Thus overall, considerable effort is going into initiating project activities in an organized, small scale, pilot fashion, which should allow for a more rapid and effective project start-up once the Loan is effective. F. Supervision, Monitoring and Evaluation 3.34 Supervision. Day-to-day supervision of the project would be carried out by the PCU with MIDA and INRENARE. IBRD and GOP would monitor the project's overall progress during joint supervision missions, annual reviews and an Implementation Completion Review. 3.35 Because of the large number of subprojects that would be financed under the Sustainable Rural Development Component and to a lesser degree, the Biodiversity - 33 - Conservation Component, the demands for close supervision would be high, and funds have been made available for the PCU to enable it to carry out these functions. There would be four supervision mechanisms for activities carried out by the communities in the project area: (i) by communities: the community level SustainableRural Development Committee (SDC) would supervise implementation of their subprojects, supervising in particular the execution carried out by contractors; (ii) by the Implementing Organizations (e.g., NGOs): these would supervise subprojects executed by contractors implementing subprojects on behalf of communities; (iii) by the PCU: project staff would supervise the work of the communities, implementing organizations and contractors to assess whether the Corregimiento Action Plans, the subproject preparation and implementation by contractors with implementing organizations oversight, are carried out according to plan; and (iv) for the supervision of funds use, four levels of control would exist: the community, the project's internal audit, the annual external audits, and the National Controllers Office. 3.36 Monitoring. Based on an Annual Operating Plan agreed with the Bank, the PCU, with MIDA and INRENARE, would monitor overall project progress and provide quarterly reports (for the periods ending March 31, June 30, September 30 and December 31) to the Minister of MIPPE and IBRD. An outline for quarterly reports is included in Annex F. Progress would be measured against the implementationindicators included in that Annex. An assurance was obtained at negotiations that annual operating plans would be agreed with the Bank, and monitoring reports would befurnished to IBRD no more than 45 days after the completion of each quarter. 3.37 Project Launch Workshops. Upon project effectiveness, the Government, through the PCU, would organize project launch workshops targeted at: (a) MIDA and INRENARE; (b) community leaders at the local and provincial levels; (c) local NGO, cooperative and other possible Implementing Organizations; and (c) other Government agencies supporting the project. An initial project management workshop organized by RUTA, would be implemented at the during in April 1997. 3.38 Supervision Missions. At least twice a year, GOP and IBRD would organize joint project supervision missions. Project supervision would also provide implementation assistance. Before each mission, G'P and IBRD would agree on the major subjects to be supervised, which would include an evaluation of the project's progress based on the Annual Operating Plan, monitoring indicators, compliance with legal covenants, and procurement and financial management, as detailed in Annex F. At the conclusion of each mission, the Bank would provide an Aide Memoire to GOP that would contain the findings of the mission and recommendations. 3.39 Annual Reviews. Each year, GOP and IBRD would carry out an annual review. Before such a review would take place, GOP and IBRD would agree on detailed TORs and staffing of the review teams. These reviews would have elements of supervision and may be combined with a supervision mission, but would focus more on project impact (evaluation) and operational changes required to correct obstacles or bottlenecks to - 34 - meeting project objectives. The review would cover the status of such issues as follows, which are further detailed in Annex F: (i) community participation and role of the project and implementing organizations in promoting it; (ii) technical assistance and training program for the project staff and communities; (iii) training of consultants and local availability of trained consultants and Implementing Organizations; (iv) functioning of the subproject cycle; and (v) infrastructure and management in the protected area system. Following these reviews GOP would, within forty-five days of the review, draw up an action plan, satisfactory to IBRD, to make adjustments in project implementation wherever necessary and promptly carry out the plan. It was agreed at negotiations that adjustments, if necessary, to project implementation plans, satisfactory to IBRD, would be carried out forty-five days after annual reviews. 3.40 Implementation Completion Report. An assurance was obtained at negotiations that, not later than six months after the project closing date, GOP and IBRD would carry out a joint project completion review and produce an Implementation Completion Report. Following this review, GOP would present to EBRDa plan for the future operation of the project, furnish the plan to IBRD for comments, and carry out the plan taking into account IBRD's comments thereon. - 35 - IV. EXPECTED BENEFITS AND RISKS A. Social Impact 4.1 It is expected the project would have a significant positive social impact on project beneficiaries by providing them with improved economic opportunities both for the short and long term. Their better management of natural resources, an environmental benefit, would also yield social and economic benefits through improved living conditions from more productive soils, forests and water sources. Perhaps the greatest and most lasting benefit the project would provide, given the paternalistic approach to rural development often adopted by governments in the past, would be to provide communities with the tools and the practical experience in identifying their problems, analyzing their causes, proposing solutions, preparing projects to implement the solutions, execute the projects and monitor and evaluate their effectiveness. Training in this type of participatory planning is remarkably enduring: in Honduras there are communitiesthat continue to use the technique up to ten years after it had been taught to them. 4.2 Direct benefits would accrue to approximately 75,000 people or 15,000 families in the poverty areas and the buffer zones spread over more than 100 corregimientos. Indirect effects would accrue to at least 30 percent more people, or another 25,000 (service providers, farmers and consumers that benefit from better local and regional marketing facilities, communities outside the project area that benefit from improved roads, watershed management, etc.). Land tenure regularization related to the protected areas would not adversely affect farmers as Government has a policy against resettlement of squatters who have lived in protected areas before their creation or for extended periods of time. An assurance was obtained at negotiations that no involuntary resettlement would be carried out under the project. This restriction has been reflected in the legal documents and will be included in the project's Operational Manual. 4.3 Approximately 70 percent of the project area communities are below the poverty line, and a significant number of these below the extreme poverty line. Although the project would not finance labor, the subprojects would generate fuller or new employment at low cost: e.g., the investments in agricultural technology would cost between $600 - $2,500 per farm, which is significantlyless than creating employment in micro or small enterprises, estimated between $3,000 and $5,000. Total employment created cannot be calculated for a demand-driven fund like the FUSARD, but indicative employment for typical subprojects is estimated in Table 5. 4.4 Women's benefits would derive from the targeted project interventions aiming to provide them with equal access to participation in the planning process, training, specialized technical assistance, and investment funds. During project preparation, women in the project area identified certain areas of greater economic/productive interest which would be provided with specialized assistance (marketing, agro-industries, small livestock - 36 - raising, medicinal plant marketing, and marketable handicraft), but other areas would also be attended as requested to provide them with the technical and financial tools to improve their economic opportunities. 4.5 In those project areas where the indigenous populations are not being attended by other on-going projects (e.g., the ongoing IFAD Ngobe-Bugle project which carries out actions in some of the rural development areas), a special program outlined in the IPDP and Annex D would provide project services to improve the situation of the indigenous populations, among the poorest of the extreme poverty group. Initial emphasis would be on improving the agricultural crop/livestock subsistence level of families, which in many cases are below even a minimum acceptable level where malnutrition is prevalent. As a second step, they would enter into or increase the production of marketable surpluses including crops, livestock and handicrafts for which there is considerable demand. These actions, carried out in accordance with indigenous governance and cultural values, is expected to provide the tools for a longer term improvement in their living standards. When there has been assistance to indigenous groups, it has been mostly through social services delivered in the paternalistic fashion described before, and there has been little emphasis on developing productive activities that this project would concentrate its actions on. B. Environmental and Economical Analysis 4.6 The project's direct environmentalbenefits are considerable, even ifjust the Biodiversity Component is taken into account, which alone covers 913,000 ha, corresponding to 52 percent of the NAPAS and 12 percent of the national territory. The biodiversity represented is of national, regional and global importance. Regionally, the Panamanian segment of the Mesoamerican Biological Corridor, including the Choco- Darien Humid Tropical Broadleaf Forests and others of global importance, would be protected. While it is difficult to quantify the various environmental benefits, for illustrative effects, it has been done for the national benefits of soil conservation and mangroves. 4.7 Soil Conservation. The Sustainable Development area contains approximately 650,000 ha of land under agricultural activity. It is estimated conservatively the project would improve soil conservation measures under 12 percent of the area. Taken as a weighted average of the soil losses that can realistically be expected under the above land uses, the project can reduce losses by 62 percent, or 2.4 million tons of non-sustainable soil losses/year which is valued annually at approximately $220,000 or an NPV of $1.6 million over 20 years. 4.8 Mangroves. Mangroves are highly productive ecosystems yielding fish, mollusks, shrimp, wood, etc. Panama is no exception and they are highly valued. According to the use given, these resources have been valued from US$700 to $10,000/ha. Mangroves are, however, sensitive to contamination, including from excessive sedimentation carried by the rivers that feed into the mangroves. The sustainable development component area on the - 37 - Pacific is upriver from the largest mangroves in Panama at Golfo de Montijo and Golfo de Parrita. If it is assumed that the project's soil conservation and reforestation activities would protect 20% of the mangrove's area (almost 7,000 ha) that would otherwise disappear, and using the low value estimate, the 20 year NPV would equal $11.4 million. 4.9 Community subprojects. The largest component of the project is the demand driven fund, the FUSARD, expected to benefit approximately 1,100 communities. It is not possible to determine ahead of time for what type and in what quantity the totality of the grant and counterpart community funds would be used. Nonetheless, the participatory diagnostics carried out during project preparation, gave an idea of the sorts of productive investments the communities are most interested in. Illustrative financial analysis was carried out for 12 probable investments: timber species seed processing, nurseries (pine and fruit), pine plantations (1 ha, and 4000 ha), Cedro plantations (1 ha), lumber, cheese, coffee, and fruit processing plants, farm technologies, and two export crops. The results, summarized below, and further detailed in Annex G, are positive, with rates of return between 13 and 24 percent, and quantifiablebenefit:cost ratios between 1.0 and 12.8. An indicative distribution of investments from FUSARD is in Table 6 of Annex A, Appendix 1. Table 5. Analysis of Indicative Community Subprojects (US$) Activity Plant FixedInvest- Average Average Man IRR NPV Benefit Capacity ment cost Income Days (%) (12%yr.) Cost Usage(%) p/yr.(USS) Plyr. p/yr.(No.) Ratio Forestry SeedsProcessing 20-70 5,810 2,490 5,460 433 22.1 2,716 1.36 Nursery 50-100 7,063 24,850 48,500 790 24.3 15,823 1.36 PinePlantatn. (1ha) n.a. 930 51 660 38 16.7 1,133 6.57 CedarPlantatn(1 ha) n.a. 930 930 577 38 13.8 467 12.73 Plantat.(4000 has.)* n.a. 2,576,100 2,576,100 2,713,043 29,287 18.8 25,040 9.94 Apromindustry Cheeseprocessor 70-96 12,372 150,225 64,966 1,248 20.0 7,091 1.31 Coffeemill 55-75 26,604 53,186 157,265 624 12.5 2,178 1.03 Fruit processor 60-80 110,910 310,241 348,507 3,120 16.1 27,140 1.20 Wood 22-66 34,350 175,546 194,400 2,400 18.9 11,686 1.17 Agriculture Technology- n.a. n.a. 746 1,113 109 49.0 1,290 1.48 SquashProd. (1 ha) n.a. n.a. 619 1,000 61 n.a. 340 1.61 OtoeProd. (1 ha)-" n.a. n.a. 581 1,000 52 n.a. 374 1.61 *t 4.000 ha isthe totalarea estimatedto be reforestedby varioussubprojects ** Frameworkfor I ha. or productionin cropsuccession (rice, corn, beans, and cassava) *** Otoeis a vegetableproduced for the localor exportmarket. Bothotoe and squashare annualcrops, thus an [RRis not calculated. 4.10 In addition to the above quantifiable financial benefits, decentralized community or municipal investments of the demand-driven nature have been shown to be more cost- effective than centrally controlled investments, in terms of cost, completion time, and a more efficient mix of local investments, which, because of local participation, are used more often and better maintained. Other benefits are improved local decision-making by communities, and higher productivity of farmers from training activities. - 38 - C. Sustainability 4.11 There are various dimensions to sustainabilityof the two main project components: the community subprojects, related mostly to the Sustainable Development Component, and the natural resource conservation and management, related mostly to the Biodiversity Management Component. 4.12 The sustainabilityof the participatory community planning and subprojects is expected because of the demand-driven participatory process that would allow the communities to define their own priorities and be directly involved in their implementation, use and maintenance, as opposed to previous government interventions where decisions were made centrally and often did not adequately involve the communities. Proper financial, environmental, social and management criteria would be used to assure subproject viability. More important for the longer term, members of the communities would be trained and have hands-on experience in identifying problems, defining solutions, and implementing and maintaining them, as well as dealing directly and demanding more of their government. If the methodology is successful, which it has proven to be in other countries, it is possible the government, with Bank support, could expand this investment methodology in Panama. 4.13 The sustainabilityof the PA system in the Pacific and the Biodiversity Corridor in the Atlantic would be improved by four actions: (a) improving the management of the PA system in INRENARE through intensive training, new management systems, and proper equipping; (b) resolving the land tenure problems on the PA boundaries and within the parks; (c) providing a source of income for the system, through park entrance and user fees, thereby making it less dependent on the vagaries of the national budgetary process and external donations; and iv) identifying financial means to capture a larger share of the external benefits of biodiversity protection in Panama. In addition, the sustainabilityof the Panamanian portion of the Mesoamerican Corridor would be assured by the above investments to the protected areas, as well as an intensive environmental education programs and a community demand-driven investment program in the areas outside the protected areas which would encourage sustainable development consistent with corridor protection. 4.14 Protected Areas Investments. At present, entrance fees to the protected areas are not charged. INRENARE has considered changing this policy, in order to capture a larger share of the internal and external or global benefits of biodiversity protection. INRENARE would begin charging visitors once they have the infrastructure to receive them. They would charge $2 to nationals, and $5 to foreign visitors. Rates for scientific visitors are being studied considering longer stays, and the requirement for living, eating and laboratory facilities which the project would also provide. This concept is not new in Panama; the Smithsonian Institution charges visiting scientists fees for using their facilities in protected areas. An analysis of four protected areas with the greatest potential - Bastimento, La Amistad, Volcan Baruf,and Taboga - shows that operational costs, both existing and incremental, can be covered by year eight assuming part of the investment - 39 - costs would be covered by the proposed GEF grant. This would guarantee the sustainabilityof GEF supported investments. D. Summary of Project Benefits 4.15 The project would yield two principal benefits: (a) creation of a capacity at the community level to organize, self-diagnose problems, plan through participatory means, seek out and negotiate assistance, and act in pursuit of resolving priority quality of life issues. This community capacity has been shown to be remarkably enduring, generally well beyond an expected project completion period; and (b) promotion of the long-term conservation and sustainable use of Panama's unique biodiversity resources. The first benefit would be achieved in one region of the country, and if successful could be expanded nationally; the second would cover most of the protected areas and the Panamanian portion of the Mesoamerican Biological Corridor not assisted by other donors. The quantifiable benefits are considerable: approximately 75,000 people would be directly benefited, most of whom live in poverty, and another 25,000 indirectly, covering approximately 1,100 communities in the Sustainable Rural Development Component. Moreover, over 910,000 ha of protected areas would be strengthened, and an even larger area (the Panamanian portion of the Mesoamerican Biological Corridor) managed in a more sustainable fashion. E. Project Risks 4.16 Three main risks are foreseen. One is the risk of continuing deforestation and natural resource degradation in the project areas. The basic premise of the project itself points towards reducing this problem, by (a) reducing the root causes of out-migration from poverty areas to protected areas; (b) carrying out environmentallysustainable and productive activities in the buffer zones of the protected areas that would make the surrounding communities more conscious of the benefits to them and the country of conserving the protected areas; and (c) carrying out land titling on private properties that border the protected areas, thereby more clearly establishingtenure and thus promoting sustainable use. 4.17 Another risk is whether the institutional capacity is adequate to execute the project. Both MIDA and INRENARE have recognized their weaknesses in this respect and during project preparation an intensive training program has been drawn up to deal with this. In addition, training would be provided to private organizations that would assist in project implementation. Recognizing their responsibilityto small as well as to medium and large farmers, MIDA has recently begun working with small farmers, initiating several small farmer projects using Government budgetary funds as well as funds from international donors. 4.18 Inadequate counterpart funding has been a risk in many countries, and efforts have been made to reduce this risk in this project by focusing on high priority areas, and limiting many project activities to a pilot phase. Community cofinancing of subprojects reduces - 40 - the Government counterpart financing requirement for the project and growing entrance and user fees for protected areas would over time reduce budgetary requirements associated with project objectives, as would carbon sequestration agreements, if they are implemented in the future. In addition, Government's decision to use the Project Preparation Facility prior to Bank approval of the full loan is an indication of the high priority it attaches to the project. - 41 - V. SUMMARY OF AGREEMENTS, LOAN CONDITIONS AND RECOMMENDATION 5.1 Assurances obtained at negotiations: (a) The PCU would have staff of quality and experience acceptable to the Bank to carry out project activities (para. 3.3). (b) Counterpart funds would be provided on a timely basis (para. 3.13). (c) Procurement, including the recruitment of consultants, would be carried out as described in Chapter 3. (d) Disbursements would be carried out as described in Chapter 3. (e) Quarterly, Annual, Audit and Project Implementation Completion Reporting would be carried out as described in Chapter 3. (f) Annual Operating Plans would be carried out as described in para. 3.36 and Annex F. (g) No involuntary resettlement would be carried out under the project, and this restriction would be included in the Operational Manual (para 4.2). 5.2 Conditions of effectiveness: (a) Establishment of the Project Coordinating Unit with staff with qualifications and experience satisfactory to the Bank and the PCU's Technical and Operational Coordination Council (para 3.3). (b) Signing of an Agency Agreement for funds administration between Government and an international external agency on terms acceptable to the Bank (para 3.4). 5.3 Conditions of disbursement: (a) For disbursement of the Biodiversity Conservation Component, signing a Subsidiary Agreement satisfactory to the Bank between Government and INRENARE (para 3.4). (b) For disbursements of pesticides, that they be included in a list agreed with the Bank (para 3.7). (c) For disbursement for rural subprojects: approval of the respective Operational Manual, and signing of Subproject Agreements with the Implementing Organizations (para 3.10), both satisfactory to the Bank. - 42 - (d) For disbursement for biodiversity subprojects, approval of the respective Operational Manual (para 3. 10). Recommendation 5.4 Based on the above, the proposed project is suitable for an IBRD loan of US$22.5 million to the Republic of Panama. - 43 - PANAMA RURAL POVERTY AND NATURAL RESOURCE PROJECT ANNEXES AND MAPS Annexes A - Sustainable Rural Development Component Figure 1: FUSARD Flow of Funds Appendix 1: Fund for Sustainable Agricultural and Rural Development (FUSARD) B - Biodiversity Conservation Component Table 1: National Protected Area System - By Category Table 2: National Protected Area System - Detail Table 3: Preliminary Proposal of Protected Areas For Strengthening Under Mesoamerican Corridor Sub-Component Appendix 1: Land Titling C - Project Organization, Administration and Coordination Figure 1: Functional Organogram of the Project Figure 2: Project Implementation Schedule D - Indigenous Peoples Development Plan E - Estimated Costs, Financing and Disbursements Table 1: Components Project Cost Summary Table 2: Expenditure Accounts Project Cost Sumnmary Table 3: Project Component by Year -- Totals Including Contingencies Table 4: Expenditure Accounts by Year -- Totals Including Contingencies Table 5: Disbursement Accounts by Financiers Table 6: Allocation of Loan Proceeds Table 7: Estimated Disbursements F - Planning, Budgeting, Monitoring and Evaluation and Reporting Appendix 1: Financial Indicators Appendix 2: Status of Legal Covenants Appendix 3: Key Performance Indicators Appendix 4: Project Impact Indicators G - Economic Analysis of Community Subprojects and Protected Areas Table 1: Analysis of Indicative Community Subproject Table 2: Financial Analysis for Four Protected Areas (Option A) Table 3: Financial Analysis for Four Protected Areas (Option B) Table 4: Protected Areas Table 5: Financial Analysis, Isla Bastimentos Marine Park H - Documents in the Project File MADS IBRD No. 28335 Transportation and Relief IBRD No. 28336 Forest Cover and Atlantic Biological Corridor IBRD No. 28337 Protected Areas IBRD No. 28338 Rural Development Component IBRD No. 28339 Darien Province IBRD No. 28508 Poverty in Panama P-SAR-B2.DOC ANNEX A Page 1 of 18 PANAMA RURAL POVERTY AND NATURAL RESOURCE PROJECT Sustainable Rural Development Component 1. This component is divided in two: (i) the training and organization of communities into Sustainable Development Communities to undertake communal planning including: diagnosis of community development bottlenecks, followed by a Community Action Plan (CAP), and then specific investments or subprojects that would operationalize the CAP. The CAPs from all the Sustainable Development Communities would be combined at the corregimiento and provincial levels; and (ii) the implementation of prioritized subprojects which will be financed by the Fund for Sustainable Agricultural Rural Development (FUSARD). Some of the subprojects would also be financed by other funding sources, where available, such as the FES or PROINLO programs (see Chapter 1). This Annex covers the technical support services the project would provide to the communities, and in Appendix 1, FUSARD's operation which also includes details of the community training and organization methodologies. Community Organization 2. Before the communities receive project staff, this staff must be properly trained in community planning and organization skills. This personnel would include reassigned MIDA staff, and contracted NGO and local organizations (e.g., producer organizations, cooperatives) staff. They would receive training in participatory communal diagnosis, planning and project formulation. This would be complemented with related skills training including group dynamics, negotiations and leadership skills. Not all staff would necessarily have the ability to become communal promoters and carry out these functions; instead they could be assigned one of the more specifictechnical skills. These technical staff (see below) would also receive refresher courses and more in depth training where necessary. Full details of the training program for staff and communities is in Document 5 of Annex H. 3. At the community level, to form the Sustainable Rural Development Committees (SDC) which would carry out the community planning described above, the community promoter would begin by describing the project and its objectives; carrying out an inventory of all the formal and informal groups in the community including youth groups (e.g., women's, church, education, producers, marketing, road); integrating these groups into a SDC; choosing two community representatives - a woman and a man - which would be sent to specialized centers for training in communal planning, they would return to initiate the participatory planning process in the community, with the specialized technical assistance of project staff as needed. ANNEX A Page 2 of 18 4. It is estimated that during the project period, 220 SDCs would be formed, to organize 11,000 families for an estimated population of 55,000 people. 440 community representatives would be trained. This process would cost approximately $2.2 million, divided as follows: $1.27 million to form the 220 SDCs ($5,800 each) which includes training, technical assistance, and related logistical support. Community promoter training (project staff) would cost $78,000, community representatives $194,000, and technical assistance to the communities $651,OOOmn. Specialized Technical Assistance 5. In the community diagnostics carried out during project preparation, most communities identified the following areas of greatest interest for the purpose of developing productive projects: production technology: agricultural technology, mini-irrigation, social reforestation; and production support: marketing, agroindustries, rehabilitation of rural roads. Other areas of interest were also identified, which could also be attended by the project as all subprojects identified would be demand-driven. As the above were the most commonly requested, specialized technical assistance delivery and possible solutions are described below. The implementation of this assistance would be through subproject (FUSARD or other) financing. Production Technology 6. Agricultural and Agroforestry Production Systems. The objective would be to facilitate the process of the adoption of agricultural and agroforestry technologies, tailored to the economic, natural resource, labor, and land possibilities of the producer and his family. This area of assistance starts off with a major disadvantage which is that Panama has not adequately developed smallholder technology: formal Government research has emphasized only commercial agriculture for medium and large farmers. The following is the methodology the project would utilize at least initially, to introduce smallholder technologies, while sufficient appropriate technological options become available from project activities. 7. First, the Sustainable Development Component project area was divided into three principle agroecological zones to determine possible technologies that could be introduced. Second, a typology of the producers was carried out to determine their possibilities for technology adoption (e.g. subsistence, subsistence and marketable surplus, mostly surplus). Third, technologies developed for regions ecologically and socially similar in neighboring countries were explored to determine suitabilityand possible adaptability to the project area. Fourth, the Agricultural Research Institute (IDIAP) has expressed interest in supporting smallholder research, even if they were unable to carry out all the investigation themselves. They, or another national or international institute, would therefore provide technical support to this technology validation and extension proposal. Fifth, to deliver the services to the field, the following logistical set-up would be utilized. ANNEX A Page 3 of 18 8. Communities that express interest in adopting new production technologies would receive the assistance from small multidisciplinarytechnical groups made up of an agronomist, an animal production specialist, an agricultural economist, and a sociologist. The team would present technical options, and those deemed by the particular community to be suited to their particular conditions would be tried on-farm by interested producers through validation trials. Technical support would continue to be provided as producers adapted the technologies and become ready to try new ones. As proven technologies are developed, farmer to farmer extension would be encouraged. Details of the technical options proposed for different level producers are in the Document No. 3 of the Project File (Annex H). It is estimated these technologies would cover a majority of the families in the project area, and costs are estimated at $6.15 million, of which $3.3mn would be used for technical assistance, training, the costs of the technical specialists, and logistics support. The actual subprojects implemented by the producers would total $2.86 million which would cover the costs of purchased inputs for the first one or two years to reduce the risks associated with technology adoption. The project would cover these costs because families in poverty are often unwillingto try new technologies because their fragile finances are unable to suffer losses from crop failures for even one year, even though only a portion of the farm would be utilized to try the new technologies. 9. Mini-irrigation schemes. The objective is to increase productivity and increase crop diversification by extending the growing reason and reducing risk. These schemes would be set up in those communities that express interest, and where water is available at a relatively low cost (e.g. does not come from deep pump wells). Emphasis would be on producing for surplus/markets (local and export), rather than for subsistence, as this would be the only way to cover irrigation installation, operating and maintenance costs. 10. Grouped individual producers forming community projects of up to 10 ha would be assisted, as well as individual plots, though the assistance provided by the project to each would vary. The community projects would be assisted with technical assistance for the design and with purchased inputs, whereas the individual plots would be provided with only technical assistance. MIDA's Department of Rural Engineering would assist the smaller projects, whereas the larger ones could be covered by private firms. With an estimated 50 projects of lOha, and 100 of 1 ha, the total costs are $0.5mn divided between technical assistance, inputs, and labor costs. 11. Community Reforestation. The objective would be to reforest soils with little or no agricultural potential for the medium and long term economic and environmental benefit of small farmers. This would be carried out mainly, but not exclusively, in communitiesthat are already convinced of the benefits of reforestation through earlier reforestation schemes initiated in the 1970s. Some are being harvested now and the communities are receiving the benefits from these harvests. Several schemes would be assisted: (i) timber seed processing facilities, particularly for pine, but also native species appropriate for the area. Panama imports a large percentage of its seed requirements, when this could be procured locally; (ii) commercial nurseries to provide the interested communities and commercial reforesters ANNEX A Page 4 of 18 with seedlings grown utilizing improved technologies (e.g., root trainers). In addition, fruit trees would also be raised for sale; (iii) reforestation schemes for individual and collective farms; and (iv) small portable saw mills. INRENARE would provide the technical criteria and assistance for the timber reforestation, while MIDA for the fruit trees. 12. Estimated demand is 3 seed processing facilities owned by 10 families each, 9 commercial nurseries, owned by approximately 45 families each which would produce about 250,000 trees each, and reforest about 6,000 ha of which 2,000 would be with native species, and 4,000 ha in pine, benefiting 5,000 families. Total estimated costs of this sub- component are $1.5 million, of which $22,000 would be used for training and the rest to finance reforestation subprojects, principally purchased inputs. Production Support 13. Marketing. This is seen as a crucial aspect of income generation as the market drives the financial viability of increased production. Several actions would be promoted: (i) strengthening public and private institutions related to the provision of this service, including for market price information, market intelligence, contracts with buyers, increasing supply by bringing together various producing communities; (ii) strengthening the managerial capacity of farmers marketing groups in such skills as management, negotiations, legal aspects, and accounting; (iii) promoting farmers markets in regional and subregional towns and cities, which is a proven way to increase prices to farmers if appropriate access to the towns is available (as well as adequate roads to get to market); and (iv) assisting provincial municipal markets, which are often an important bottleneck to increasing flows of products to local and national markets. 14. It is estimated 40 producer marketing groups would have been trained and another 100 formed; 90 farmers markets assisted and created; five subregional market centers improved or built; and improved layout and operating plans would be developed for most of the provincial markets, including improved administration. This would cost an estimated $1.72 million, of which $81,000 would be utilized for technical assistance, and the rest for investment sub-projects. 15. Cottage Agroindustries. The objective is to increase value added at the local level, increase farmers income, and promote improved links with the marketing channels. Significant training is required for these projects as these tend to be more complex, dealing with production, collection, processing, storing, and marketing of products. Criteria for approval of these subprojects would therefore be more demanding. Specialized technical assistance for management, technical aspects and marketing would most likely be required as part of subproject financing. Previous successful experience would be an important asset. Individual ownership, possibly a more successful form of management than community, would be assisted as well, although not with purchased assets. The establishment of agroindustries would be on a sub-regional or regional basis to avoid duplication. ANNEX A Page 5 of 18 16. It is estimated 80 pre-investment studies would be completed ($2,000 each), 35 community level ones actually set up and running ($15,000 each), 6 regional agroindustries (up to $100,000), and 6 small saw mills for the communities which have mature reforestation schemes ($60,000 each), for a total cost of $ 1.96 million. 17. Rural Roads Rehabilitafion. The objective is to improve roads to improve access to social services, markets, and create employment. Given the generally low financial viability of major rehabilitation of feeder roads for small rural communities, a system of spot improvements would be utilized to eliminate bottlenecks and increase the average speed at which vehicles can drive. These improvements include drainage, small bridges, cover material improvement, and reducing slopes. The communities would be responsible for maintenance through a "community road worker" who would eliminate smaller problems such as pot holes, drainage problems, etc. 18. Approximately 400 kms. would be rehabilitated, which represents about 30% of feeder roads in the project area. Funds for this sub-component would be provided by the FUSARD, but actually implemented by the FES which has considerable experience in this field. The indicative estimate is $5.8 million, including $162,000 for the FES's supervisory role, and the rest for subproject implementation. ANNEX A Page 6 of 18 Appendix 1 PANAMA RURAL POVERTY AND NATURAL RESOURCES PROJECT Fund for Sustainable Agricultural and Rural Development (FUISARD) 1. The Fund for Sustainable Agricultural and Rural Development (FUSARD) would be the mechanism responsible for financing-on a matching grant basis-rural development activities and investments subprojects. FUSARD would be a financial intermediary, involved with different levels of responsibilityin subproject selection, appraisal, approval, implementation, disbursement, technical follow-up, monitoring, and evaluation. It would be located in the Project Coordinating Unit (PCU) under the Rural Development Department. On Government's request, to increase agility in the use of project resources, the funds would be controlled by an external administrative agent such as UNDP or IICA (see Figure 1). 2. FUSARD would have a Board composed of six Directors, representing MIDA, MIPPE, and INRENARE, the NGO's, the municipalitiesand the communities. This Board would approve the FUSARD Operational Manual and meet a on a regular basis, to take strategic decisions, and approve subprojects with total cost above US$20,000 (see Table 1), but would not be involved in day-to-day decision making. The operational management of FUSARD would be carried out by the PCU, whose Director would be responsible for the funds' overall operation. A Fund Administrator would be hired for the day-to-day operations, and would be responsible for its administration and operation. 3. Eligibility criteria for subprojects are detailed in the Operational Manual, of which a draft has already been discussed with different stakeholders, and are based on the following principles: (i) focus on a specific geographical area (see Table 2) and target group, which is defined as peasant families associated in communities or productive groups, and with a limited access to resources and services; (ii) selection through participatory demand-driven mechanisms; (iii) possibilityto be managed by beneficiaries or the designated executing agencies; and (iv) technical, economic, social, and environmental feasibility and sustainability. Table 1. Subproject Approval Thresholds Estimated Total Cost Institution in charge of Final Approval of the Subproject :Corregim4entoA ! Populatiom Poverty* # Co,retimhntoA Populhtim. Povertv* .. . e :.1 . :. 1 .:...... tIndicator Calobre District Montijo District 1 Monjaras 580 52.00 34 Arenas 1,459 25.22 2 San Jose 649 0.00 35 Gobernadora 1,785 34.75 3 Barnizal 521 23.47 36 La Garceana 382 0.00 4 El Cocla 608 36.13 37 Leones 284 3.84 5 El Potrero 687 51.98 38 Llano de Catival 2,052 14.06 6 La Laguna 1,033 54.01 39 Quebro 1,050 9.60 Caiiazas District 40 Tebario (Mariato) 615 30.06 7 Agua de Salud 3,032L 0.00 Ocu District 8 Cerro Plata 3,5631 27.15 41 Cerro Largo 2,121 0.00 La Mesa District 42 Los Llanos 3,166 28.81 9 Bisvalles 2,370 54.94 Rio de Jesus District 10 Bor6 2,158 0.00 43 Cabecera 3,602 45.38 11 LLano Grande 776 18.17 44 Las Huacas 1,044 0.00 12 San Bartolo 2,411 23.01 45 Utira 393 42.96 Las Minas District San Francisco District 13 Chepo 1,457 0.00 46 Panamaes 416 58.46 14 El Toro 1,073 12.16 47 Los Hatillos 1,472 0.00 15 Leones 1,193 24.31 48 Romance 1,806 25.34 16 Quebradadel Rosario 2,090 15.16 49 San Juan 3,797 18.81 Las Palmas District Sonii District 17 Zapatillo 1,521 39.23 50 El Marafn6n | 2,126 28.64 18 Cerro de Casa 2,465 0.00 51 Guarumal 3,726 54.60 19 El Piro 2,099 34.62 52 La Soledad 1,589 37.62 20 El Prado 4,971 19.22 53 Quebarada de Oro 1,037} 25.27 21 ElRinc6n 2,118 44.53 54 Rio Grande 3,3051 46.06 Los Pozos District 55 Rodeo Viejo 2,558 3.30 22 Capuri 458 23.22 56 Bahia Honda 1,297 9.45 23 ElCedro 543 32.13 57 Cativ| 1,296| 0.00 24 La Pitaloza 1,656 18.03 Santa Fe District 25 Los Cerros de Paja 1,0751 0.00 58 El Alto 2,242 49.37 Macaracas District 59 El Cuay 1,558 16.26 26 Bahia Honda 648 26.72 60 Gatuncito _ 1,670 0.00 27 Mogoll6n 359 0.00 61 Calidonia 1.805 14.14 28|Bajos de Guera 897 21.58 T 0 T A _ 95,224| 29 Corozal 591 33.22 30|El Cedro 461 51.91 31 Espino Amarillo 254 13.471 32 La Mesa 675 50.411 33 Las Palmas 579 31.20 | Notes: ^ Corregimiento is the administrativesubdivision of a district. * The poverty indicator is a weightedaverage of health, education,and householdindexes. Zero representsthe worst situation,and 100 representsthe best situation. ANNEX A Page 8 of 18 Appendix 1 4. FUSARD would finance subprojects up to a maximum total cost of US$ 100,000 each. The subprojects would be selected and prioritized according to participatory demand- driven mechanisms carried out through committees at community, corregzmiento, provincial, and national levels, according to the thresholds of Table 1. The FUSARD administrator in the PCU will always be responsible that the approved subprojects respects the rules established in the FUSARD Operational Manual. The SDC would combine the Community Action Plans (CAP' s) and design a strategy at corregimiento level according to pre- set budgetary limits (FUSARD indicative budgetary allocations by district are shown in Table 3). With an equity objective, an annual limit of US$800 per beneficiary would be enforced, subject to review over time considering overall FUSARD expenditure. Table 3. FUSARD - Indicative Allocations by District' (US$) District Year I YearII Year m Year IV Year V Total Calobre 76,308 152,615 248,000 295,692 181,231 953,845 Cafiazas 65,004 130,008 211,264 251,891 154,385 812,553 La Mesa 90,100 180,200 292,825 349,137 213,987 1,126,250 Las Minas 87,528 175,057 284,468 339,173 207,880 1,094,106 Las Palmas 130,018 260,036 422,558 503,820 308,793 1,625,224 Los Pozos 68,949 137,897 224,083 267,176 163,753 861,857 Macaracas 112,033 224,067 364,108 434,129 266,079 1,400,417 Montijo 128,371 256,742 417,206 497,438 304,881 1,604,638 Ocu 58,954 117,908 191,601 228,447 140,016 736,925 Rio de Jesiis 57,995 115,989 188,482 224,729 137,737 724,932 Sn Fco 87,281 174,561 283,662 338,212 207,291 1,091,007 Sond 186,897 373,793 607,414 724,224 443,879 2,336,208 Sta Fe 90,563 181,126 294,330 350,931 215,087 1,132,037 Total 1,240,000 2,480,000 4,030,000 4,805,000 2,945,000 15,500,000 Per capita 13 26 42 50 31 163 average 5. The type of subprojects to be financed by FUSARD would concentrate on productive investments with the objective of sustainable rural poverty alleviation. A list of possible subprojects includes: (i) production support including basic infrastructure, such as access/feeder road rehabilitation, bridges, small irrigation schemes, rural markets, and crop storage structures; (ii) production technology, such as technical assistance and extension to farmers, revolving funds, small agro and cottage industries, and selected farm inputs; These allocationswere calculatedusing a mathematicalformula which estimates the needs by district/corregimientoaccording to the followingindicators and weights:population 30%, poverty50%, and numberof communities20%. The total of $15.5 millionis indicative.In addition,INRENARE would have accessto US$400,000for subprojectsin the BiodiversityConservation Component. ANNEX A Page 9 of 18 Appendix 1 (iii) environmental investments, such as land improvement and drainage subprojects, watershed management, agro-forestry, and eco-tourism; and (iv) institutional strengthening for executing agencies and communities, and pre-investment studies2 6. A measure characteristically used to ensure ownership is beneficiaries' participation in subproject finance which they can contribute in labor, cash or kind, between 10 and 30 percent of the subproject costs (see Table 4). These differences in cofinancing contributions have been designed as an incentive for environmental subprojects. Table 4. Cofinancing Matrix Type of Subproject FUSARD Beneficiary Contribution Contribution (%) (%) Infrastructure 70 30 Technology services 80 20 Environment 90 10 Institutional 70 30 Strengthening Pre-investment 90 10 studies 7. Executing Agencies. FUSARD would have the possibilityto channel financial resources through Implementing Organizations (1Os), such as NGOs, cooperatives, farmer associations, and, in case of need, Government agencies. The 10 must meet FUSARD eligibility criteria detailed in the Operational Manual which include technical and financial capabilities and experience with the beneficiary community and region. The 10 can be a public or private institution, with legal status, capable of implementing investment subprojects. The 10 would accompany local communities through the Participatory Microplanning process, and from project conceptualization to implementation (see below). IOs would help the communities identify and rank investment needs, formulate Community Action Plans and present the investment needs to the appropriate funding agencies for consideration. IOs would be primarily drawn from local NGOs and producer organizations. 2 Whenthe pre-investmentstudies themselves are sufficientlycomplex to be treated as subprojects. ANNEX A Page 10 of 18 Appendix I Figure I - FUSARD Flow of Funds a World Bank Project Coordinating c External Administrative Counterpart Funding Unit1 (FUSARD) Agent + (Finance and Planning Unit (FUSARD) Agent Ministry) Executing Agenci Financial Intermediaries Province Technical Committees (PTCs) _ Corregimiento Technical Committees (CTCs) Subprojects . Notes: Flowof Funds Flowof Decision/Approval a = withdrawalapplications b = submission/approvalof subprojectproposals c order to transfer fundsto executingagency/financial internediary 8. Participatory Microplanning. This is a process designed to seek the active participation of the rural population in planning, design, negotiation, execution and supervision of rural investments. Participatory Microplanning is designed to facilitate community and grassroots organizations to be effective players in their own development. The objectives of this planning process are to: (i) contribute to the decentralization of decision-making; (ii) stimulate grassroots participation in local planning and demand ANNEX A Page 11 of 18 Appendix 1 generation; (iii) help rural communities formulate investment strategies and development plans; and (iv) increase investment sustainabilityby intensifying stakeholders' commitment in the execution and supervision of rural investments. 9. The Participatory Microplanning methodology has been developed drawing on the practical experiences in various countries, and has benefited from the procedures developed by the Bolivian Fondo de Desarrollo Campesino, the Latin American Faculty for Social Sciences, and the GTZ's Goal-Oriented Project Planning (ZOPP). It consists of the organization of community and district workshops over the course of several weeks. At the workshops, project field promoters and Executing Agencies help the communities formulate a development strategy, by applying methods of groups dynamics. Workshop participants are community delegates (two people, a woman and a man), representatives from development organizations, and interested individuals. After each workshop, time is allotted for the community delegates to return and inform the community of the workshops proceedings, and receive community feedback. As some communities decisions are taken by consensus, this process can be lengthy. The duration and cost of this process are variable and depend on: (i) maturity of the local organizations; (ii) homogeneity of the rural communities; (iii) time availability of community members, which is a function of interest, cropping seasons and employment patterns; and (iv) IO capabilities and commitment. 10. The Participatory Microplanning would be carried out at community and corregimiento levels and has seven stages: (a) Preparatory phase. Project staff would participate in the training of NGOs and other executing agencies to explain its programs and procedures detailed in the Operational Manual; (b) Promotion. The NGOs would disseminate FUSARD purposes and methodology and in particular: (i) the eligibility criteria for subprojects; (ii) the processing steps for eligible subprojects identified in their corresponding action plans, including sample documentation and approximate times of processing, and (iii) execution and supervision mechanisms applied by FUSARD; (c) Constitution of the Sustainable Development Committee at community and corregimiento levels; (d) Self diagnostic to help the communities better perceive their economic and social strengths and weaknesses with a view to formulating achievable socio-economic goals. Participatory rural appraisal techniques-such as participatory mapping and seasonal calendars-are used to assist the community in the identification of constraints, causes and solutions; (e) Preparation of a Community (CAP) Action Plan, which is a ranked list of subprojects screened according to development strategy, requirements, technical feasibility, and funds availability or potential suitabilityfor funding (from FUSARD or other sources); (f) Plan adjustment; and ANNEX A Page 12 of 18 Appendix I (g) Subproject formulation to transform subproject ideas into financiable proposals. 11. The participatory rural appraisal techniques and tools would include, among others: (i) interviews, whose flexible agendas permit the participants guided discussion topics; (ii) participatory mapping exercises, which positions socio-economic information on a map, creates consensus and facilitates communications; (iii) seasonal calendar, showing rainfall patterns, crop sequencing, seasonal labor demand and availability;(iv) historical profiles and time trends, concerning changes in social organization, income opportunities and natural resource use; and (v) short, simple questionnaires, concerning socio-economnicsituation to be completed by the whole community before the following workshop. 12. The subproject preparation consists of three stages: (a) Subproject Profile/Idea. This is a first description of the subproject, its rationale and an approximation of its cost; (b) Subproject Proposal. It is an economic, social, environmental, and financial evaluation of the subproject, with a detailed estimation of its costs. The format of the Proposal is suitable for presentation to funding agencies; and (c) Subproject Design. It is a detailed technical description of the subproject. The Design is necessary only for technically complex subprojects, such as agroindustries or irrigation systems. The preparation of subproject profiles begins in parallel with the preparation of the action plan, as the ranking process requires an approximation of the costs and feasibility of various subproject options. The final development contains a profile for every proposed subproject. ANNEX A Page 13 of 18 Appendix 1 Table 5. Indicative Expenditure of FUSARD Funds3 Subproject FUSARD ReferenceCost by Sub-Project(US$) andnumber of Expenditures possiblesub-projects (US$ millions) a. Rural Roads 5.80 14,220 /Km. (400 kms) b. Marketing 0.91 100.000 per rural concentration market (5 markets: 13,500 for equipment x 5, 5.200 for technical assistance projects x 5 5.000 per training project (5 x projects) 1.613 per municipalities technical assistance project (13 projects) 1.310 per municipality training project (13 projects) c. Agroindustry 1.36 15.000 per small project (35 projects) 100.000 per regional project (5 projects) 60.000 per silvoindustrial project (6 projects) d. Production 2.86 700 per PRI project (1.100 projects) Systems 1.500 per PR2 project (660 projects) 2.500 per PR3 project (440 projects) e. Environmental 0.40 20.000 per project (20 projects) f. Mini-Irrigation 0.46 6.850 per community project (10 ha.) (40 projects) 1.903 per mini-irrigation (1 ha.) (100 projects) g. Reforestation 1.52 45.000 per nursery (9 projects) 8.000 per seed processing (3 projects) 280 per ha. of wood species 700 per ha. of fruit trees (4000 ha. for both categories) h. Preinvestment 0.03 3% of total cost project (5% includes detailed designs) Studies i. Others 2.16 TOTAL 15.50 13. The Subproject Cycle. Once the Community Action Plan (CAP) has been finalized, and reviewed at the appropriate level for technical requirement and for 3 These amounts do not represent an earmarking of funds, which would go against the demand-driven principle of FUSARD, but a preliminary estimation of the demand in the project area. ANNEX A Page 14 of 18 Appendix 1 coordinating with neighboring communities,with the possibility of consolidating projects (e.g. watershed management, agroindustries, nurseries), the processing procedures for eligible subprojects would consist of the following phases: promotion, identification, preparation, appraisal, approval, execution, monitoring, acceptance of works (for infrastructure projects), and ex post evaluation: (a) Identification. FUSARD processes subprojects originating from: (i) district or community action plans; and (iii) eligible executing agencies. All proposals should demonstrate community participation and consensus in the prioritization and identification of the subprojects. (b) Formulation. The primary responsibilityfor subproject formulation lies with the executing agency and project field staff The preparation process may take one of three possible courses: (i) the subproject profile is duly prepared according to FUSARD requirements and guidelines and requires no further work prior to appraisal by FUSARD; (ii) the subproject profile complies with general eligibility criteria but requires a feasibility study; this study would usually be financed under the Sustainable Rural Development Component; and (iii) the subproject profile does not meet eligibility criteria, requiring the executing agency to redesign it with guidance from FUSARD. (c) Appraisal. FUSARD, supported by project specialists, appraises the subproject, including discrepancies between proposed unit costs and standard costs by project category. Subproject appraisal takes into account the subproject's prioritization process, cost-effectiveness, poverty focus, and sustainability. In addition, the institutional capacity of the executing agency is evaluated. FUSARD also evaluates the significance of the counterpart contribution. Approval criteria includes analysis of alternatives, social impact and multiplier effect. Some subprojects require an environmental analysis (see below). Any subproject deemed unfeasible on appraisal may be rejected. The executing agency may then consider redesigning the subproject and submit it again to FUSARD. (d) Approval. Subprojects are approved according to thresholds set in Table 1. Approved subprojects are then included in FUSARD annual operating plan. When funding is approved, FUSARD and the requesting agency (or community, if provided with legal status) enter into a contract. For some kind of subprojects, when a contractor is required (such as for infrastructure subprojects), the contract would also involve the contractor. (e) Execution. The responsibility for subproject implementationlies with the executing agency. Subproject implementation rules include: (a) FUSARD signs a contract with the executing agency, in which the executing agency commit itself to follow FUSARD procurement procedures; (b) the target community approves the hiring of external consultants/sub-contractors by the executing agency; (c) where applicable, the executing agency would enter into a contract with the construction contractor or supplier of goods or services; and (d) the executing agency would ensure proper subproject supervision as per its contractual obligations in (a). ANNEX A Page 15 of 18 Appendix 1 (f) Disbursement. Disbursements would be made against the contract signed between FUSARD and the executing agency. Full disbursements could be done in advance only in the case of small subprojects, while in other cases the disbursement would be divided in tranches. (g) Subproject supervision and technical follow-up. Responsibilities for these activities are divided among beneficiaries and field personnel under the MIDA Department of Rural Development. Participatory supervision and social monitoring are the pillar of the FUSARD approach. However, given the difficult technical aspects in some subprojects (e.g. agroindustries), the involvement of technically prepared professionals would be essential. For the agricultural and marketing subprojects, MIDA has a major comparative advantage over other institutions in Panama: more than half of his 2,500 staff are based outside Panama city, in provincial and district offices composed of multi- disciplinary teams. In some cases, additional contracts between an independent supervisor and FUSARD might be required. (h) Monitoring. The monitoring of the subproject is shared by the executing agency, the target community, and FUSARD staff, in a pre-determined written arrangement. All three parties issue an approval and formal certification of due and proper project subproject performance. FUSARD has a planning, monitoring, and evaluation system detailing the specific instruments and the responsibilities. The long term objective of FUSARD is to emphasize ex-post monitoring, though at the beginning a more intense follow up would be necessary. A list of monitoring indicators is in Annex F. (i) Operation, Maintenance and Ex-post Evaluation. The target community holds the primary responsibility for subproject operation. However, the executing agency would maintain a presence throughout this phase to ensure due and proper subproject operation, the provision of technical assistance services if required, maintenance and ex- post evaluation. Environmental Impact and Mitigation Measures 14. The project would contribute to the implementation of various kinds of subprojects, some with possible negative impact on the environment and others with clear positive impact. The rehabilitation of rural infrastructure such as access roads, small scale irrigation works, processing and market facilities, etc. could create localized environmental problems. Subprojects of integrated watershed management, reforestation, pasture management, etc., would generate a positive environmental impact. The training and capacity-building components would include sustainable natural resource management, thus generating long- term benefits for the environment. 15. Environmental aspects of all subprojects would be reviewed during feasibility studies and, when appropriate, mitigating measures would be designed for implementation. IOs would prepare an environmental description of every infrastructure and production support subproject. This information would be reviewed by INRENARE, which would be responsible for the screening and which would assign the subproject to one of the following ANNEX A Page 16 of 18 Appendix I categories: (i) full environment assessment required; (ii) specific environment assessment required; (iii) although an environment assessment is not required, environmental analysis is suggested; and (iv) no environment assessment or environmental analysis required. Besides, subproject identification and preparation through the participatory community-planning process would help avert negative impact on human and social environment. 16. Access Road Rehabilitation. FUSARD would finance only rehabilitation and spot improvement of existing roads. A simplified environmental analysis would carried out for each subproject of this kind as the roads are already in existence. This analysis would take into account not only the disturbance to natural environment caused by soil erosion, changes to stream and underground water, interference with animal life, deforestation on the road blade, but also the increases in agricultural production. These consequences are inherent with agricultural growth and intensification. Access roads would not be rehabilitated in forest reserves and other environmentally sensitive areas or where they would encourage settlement. Table 4. Environmental Impact of Access Road Rehabilitation Subprojects Im act Likelihood of Occurrence Miti ation Measures Natural Environment Borrow-pits in the vicinity of Likely: but with labor intense Includes the contract the roads construction methods, the pits necessity to re-vegetate borrow are shallow and small. pits and practice soil stabilization in areas with steep _slopes(valleys). Soil erosion through water run- Likely if appropriate Provide adequate side drainage off procedures are not followed. and dispersion of drains by means of culverts in appropriate areas. Correct camber placement to improve local run-off. Opening of environmental Not likely Only rehabilitation of existing sensitive production areas. access roads. Increased agrochemical Likely Extension services for farmers application for the in (i) application and storage of intensification of crop and chemicals; (ii) Integrated Pest livestock production Management (IPM); and (iii) organic agriculture Deforestation to increment Not likely Only rehabilitation of existing agricultural production. access roads. Human and Social Environment Involuntary settlement or None resettlement Encroachment of historical- None cultural areas ANNEX A Page 17 of 18 Appendix 1 17. Small Scale Irrigation. As only small-scale irrigation would be introduced, the subproject would not have a significant environmental impact. However, some problems, such as water quality degradation because of chemicals used in the more intensive irrigated agriculture, might occur at the local level. In Table 5 the likelihood of occurrence and eventual mitigation measures are highlighted. Table 5. Environmental Impact of Micro-Irrigation Subprojects Impact | Likelihoodof Occurrence MitigationMeasures Natural Environment Disruption of river hydrology None: subproject are small- scale (max. 100 Ha, average 40 Ha). Reduction of downstream flood Likely The effect is positive as flows and consequent reduction conserving water in rainy of low lying areas flooding season would improve downstream flows in dry season. Waterlogging and salinity Not very common in highlands Drainage networks where problems and valleys necessary. Control of water __uality at feasibility. Water quality degradation Likely: but the effect is Extension services to train through chemicals minimal because of small-scale farmers in application and storage of chemicals Encroachment into forest or None: irrigable areas have swamp land been already under rain-fed cultivation Soil erosion Likely: only localized erosion Proper construction procedures during construction Free-ranging livestock causing Very likely. Perimeter fencing allowed in damage to dikes, canal and subproject design crops Change in wildlife and bio- Not a major problem because diversity of small scale. Minimal improvement of vegetation. _- Water borne disease Possible in areas with high Drainage system Itemperatures I Human and Social Environment Impediments to movement - Very little The participatory micro- transportation. planning would resolve this ____ probleminadvance. Involuntary settlement or None resettlement _ ANNEX A Page 18 of 18 Appendix 1 Conflictwith existingwater Likely,but not a major The participatorymicro- users problembecause of small-scale planningwould resolvethis probleminadvance Encroachmentof historical- None culturalareas 18. Processing and Market Facilities. Environmental problems related to these kinds of subprojects are mainly health and sanitation related: water supply, refuse collection, sewerage, and clean-up facilities. Poor hygiene and lack of water supply can turn out into food contamination and health hazards. Some kind of processing, such as cheese processing, could produce polluting sewerage, while others, such as brick production, might cause borrow-pits. In all these cases, appropriate mitigation measures would be a condition of financing the project. O:\LAT\LATAD\MAURIZIO\PANAMA\BUFF\ANNEX-A.DOC ANNEX B Page 1 of 20 PANAMA RURAL POVERTY AND NATURAL RESOURCE PROJECT Biodiversity Conservation Comnonent I. BACKGROUND Introduction 1. The proposed, integrated Rural Poverty and Natural Resources/Biodiversity Conservation Program (IBRD/GEF) deals with the root causes leading to migration to the agricultural frontier and invasion of public forests and protected areas while enhancing on- site protection of areas with biodiversity values of regional and global importance, assisting local and national government and communities to internalize the costs of natural resource degradation and biodiversity loss, and improving the conservation and management of biodiversity inside and outside of protected areas. The program includes two associated components whose objectives are: (i) to pilot methodologies that direct resources for investment and technical assistance towards priority areas of rural poverty and natural resource degradation in order to reduce their incidence and outmigration; and (ii) to conserve priority biodiversity in areas of global, regional and national interest. 2. THEsecond component is still under preparation to meet the Global Environmental Facility's priorities to provide a grant to finance the incremental costs of protecting the National Biological Corridor. Although conceptually and administratively part of the same project, the GEF grant, which would co-finance with Government and communities the Panamanian portion of the Mesoamerican Biological Corridor (herein called the Atlantic Biological Corridor), would be managed as a separate financial operation, with different timing, documentation, legal agreements and supervision reports. The GEF activities are still under preparation and subject to GEF council approval; the GEF- supported components are expected to be submitted for Board approval in the second half of calendar 1997, and if approved, implementation could start about four months after the IBRD loan is effective. The description presented below of the Corridor related activities is preliminary and could be changed during the on-going preparation of the relevant subcomponents. Biodiversity and Threats in Panama 3. Biodiversity In Panama. The Isthmus of Panama is the terrestrial bridge which has united the continental masses of North and South America and separated the waters of the Pacific and Atlantic oceans since the Pleistocene. These and other biogeographic and climatic factors combine to make Panama a high biodiversity country. The other factors include: Panama's location at the juncture of the Caribbean, Northern Andean, and Central American bioregions; its narrow mass between two oceans and sharp attitudinal gradients compressing life zones and causing rapid changes within and between habitat- types; and the influences of the strong climatic gradients created by the Trade Winds ANNEX B Page 2 of 20 encountering the central cordillera. These factors create the multiple habitats and microhabitats which greatly enhance this small country's (75,517km2 ) biological diversity and importance. The former Canal Zone, which transects the country along the types of gradient described here, represents the only location in the Americas where an inter- oceanic biological corridor is still practically uninterrupted. 4. From a conservation perspective, a recent study identifies Panama' as the one country in the Central American Isthmus with areas of globally important Tropical Moist Broadleaf Forest (Choc6/Darien moist forests). It places these forests in "highest" priority category in Latin America for biodiversity conservation. This study also notes that the Tropical Moist Broadleaf Forests of the Talamancan mountain range and the mangroves of Bocas del Toro/Bastimentos Island/San Blas are considered to be "high" priority for biodiversity conservation. Indeed, two-thirds of the Panama falls either into the "highest" or "high" priority category. 5. Three major habitat types are found within Panama: (i) Tropical Moist Broadleaf Forests; (ii) Tropical Dry Broadleaf Forests, and (iii) Mangroves. There are 12 confirmed Holdridge Life Zones 2. The existence of a 13th, Subalpine Wet Paramo, awaits confirmation. A total of 24 distinct landscape units are recognized, within which a considerable number of endemic species are found. In terms of species diversity among mammals, birds, reptiles and amphibians, Panama is first among the countries of Central America and the Caribbean; and in terms of vascular seed plants it is second only to Costa Rica (Winogad, 1995). 6. Aside from biodiversity values, Panama's forest areas are also of incalculable economic importance to North, Meso-, and South America. The so-far inaccessible and untransversed forests of the Darien have served as an effective biological barrier to the interchange of economically important crop and livestock pests and diseases (e.g., foot and mouth disease). In addition, one-half of the Panama Canal's watershed is protected by national parks, an act of conservation which protects the water supply of a $400 million per year operation (shipping fees and Canal related services) of tremendous global economic importance. Dinerstein,et al. 1995. A ConservationAssessment of The TerrestrialEcoregions of LatinAmerica and the Caribbean. The WorldBank, Washington,D.C. 2 (1) TropicalDry Forest; (2) TropicalMoist Forest; (3) TropicalWet Forest;(4) PremontaneDry Forest; (5) PremontaneMoist Forest; (6) PremontaneWet Forest;(7) PremontaneRain Forest; (8) LowerMontane Moist Forest; (9) LowerMontane Wet Forest; (10) LowerMontane Rain Forest; (11) MontaneWet Forest;and (12) MontaneRain Forest. ANNEX B Page 3 of 20 Table 1. National Protected Area System - by Category ManagementCategory No. Area (ha) No. And TotalArea, ProtectedAreas Within L ______Proposed Atlantic Biodiversity Corridor National Parks 14 1,357,084 10 with 77% of NationalParks area Forest Reservesl 5 89,194 4 with 89% of ForestReserves area WildlifeRefuges 8 40,349 2 with 24% of WildlifeRefuges area ProtectionForests 1 125,000 I with 100%of ProtectionForests area Wetlandsof International 3 119,3823 with 25% of Wetlandsarea Importance National Wetland __ 1 143 none Natural Monuments 2 5,404 none Natural Areas I 265 none RecreationAreas 2 348 none HydrologicProtection Zones 1 2,520 none Wildlands I 1; area unspecified Biological Corridors 1 31,275 1 with 100%of BiologicalCorridors area Total 40 1,770,96322 with 78% of protectedland area Source: INRENARE, 11/96 1/ the Forest Reserves of Tonosi, Chepigana, Caraila, Filo del Tallo, and the Protection Forest of Alto Darien are not included due to present-legal,tenure, and land use conflicts. 2/ category included by INRENARE 7. To protect what remains of the country's healthy ecosystems, government has set aside 23% of the national territory to form the National Protected Area System (NAPAS) as shown in Tables 1 and 2. A review of the conservation status of the life zones represented in the NAPAS shows: * There is relatively little which is intact within the tropical dry forest zones, and premontane dry forest (being zones traditionally favored for human settlement); * Significant areas of humid tropical forest, premontane wet forest, premontane rain forest, lower montane wet forest, lower montane rain forest, and montane rain forest remain, which have been little altered; * Some small areas of montane rain forest remain unaltered; * The conservation status of premontane moist forest, lower montane moist forest and montane wet forest is uncertain, as well as subalpine wet paramo, which is in fact unconfirmed. ANNEX B Page 4 of 20 Table 2. Panama's National Protected Area System - Detail CATEGORY AREA LEGAL BASE LOCATION (hectares) Date of I Law No. # Gaceta Date Creation oriciI Gaceta Parques Nacionales 1,359,647 Altos de Campana 2,630 6/28/66 Dec. 153 15.655 7/6/66 Panama 4,816 4/28/77 Dec. 35 18.645 8/21/78 Volcan Baru 14,000 6/24/76 Dec. 40 18.619 7/13/78 Chiriqui Portobelo 35,929 12/22/76 Law 91 18.252 1/12/77 Colon Soberania 22,104 5/27/80 Dec. 13 20.333 6/24/85 Panama y Colon Darien 579,000 7/8/80 E.D. 21 19.142 8/27/80 Darien Sarigua 8,000 10/2/84 E.D. 72 20.231 1/24/85 Herrera Chagres 129,000 10/2/84 E.D. 73 20.238 2/4/85 Panama y Colon Cerro Hoya 32,557 10/2/84 E.D. 74 20.245 2/13/85 Los Santos y Veraguas El Cope 25,275 7/31/86 E.D. 18 21.211 1/12/89 Cocle La Amistad 207,000 9/2/88 INRE 21-88 21.129 9/9/88 Chiriqui, Bocas del Toro Marino Isla Bastimiento 13,226 9/2/88 INRE 22-88 21.129 9/6/88 Bocas del Toro Coiba 270,000 12/17/91 INRE 21-91 21.958 1/23/92 Veraguas Camino de Cruces 4,000 12/30/92 Law 30 22.198 1/6/93 Panama Interoceanico de las Americas 5/25/93 INRE 28-93 Panama y Colon Marino Golfo de Chiriqui 14,740 2/8/94 INRE 019-94 Chiriqui Reservas Forestales 346,494 La Yeguada 7,090 09/28/60 Dec. 94 14.258 10/20/60 Veraguas Tonosi 09/28/60 Dec. 94 Los Santos Fortuna 19,500 09/21i76 86 Chiriqui La Tronosa 20,579 12/02/77 Law 55 18.483 12/22/77 Los Santos El Montuoso 10,375 05/15/78 Law 12 Herrera Cangion 31,650 02/10/84 Dec. 75 Darien Chepigana 257,219 09/25/84 Dec. 94 Darien Filo del Tallo Darien Finca Carana 81 Chiriqui Refugios de Vida Silvestre 40,348.5 Cenegon del Mangle 1,000 10/07/80 M.R. 5 Herrera Isla Iguana 53 06/15/81 E.D. 20 21.235 02/20/89 Los Santos Penon dela Honda 2,000 12/10/82 M.A. 14 Los Santos 3,900 05/03/85 M.A. 10 Taboga 257.5 10/02/84 E.D. 76 20.258 03/06/85 Panama El Penon del Cedro de los 30 06/26/91 M.R. Herrera Pozos Pablo Arturo Barrios 02/11/92 M.A. 4 Los Santos Isla de Canas 25,433 06/29/94 1NRE010-94 Los Santos Playa de la BarquetaAgricola 5,935 08/02/94 INRE 0 16-94 Chiriqui Playa de Boca Vieja 3,740 08/02/94 INRE 017-94 Chiriqui Bosques Protectores 326,000 Palo Seco 125,000 09/28/83 E.D. 25 19.943 11/24/83 Bocas de Toro Alto Darien 201,000 Darien ANNEX B Page 5 of 20 Table 2. Panama's National Protected Area System - Detail (con'd) CATEGORY AREA LEGAL BASE LOCATION (hectares) Date of Law No. # Gaceta Date Creation Ofcial Gaceta Humedales de Importancia 119,524.5 Internacional Golfo de Montijo 89,452 11/26/90 RAMSAR Veraguas 07/29/94 INRE 015-94 Lagunas de Volcan 142.5 08/02/94 INRE 018-94 Chiriqui San San Pond Sak 16,125 08/02/94 INRE 020-94 Bocas de Toro Punta Patino 13,805 08/02/94 INRE 021-94 Darien Monumentos Naturales 5,403.5 Barro Colorado 5,400 --1-123 Panama Los Pozos de Calobre 3.5 07/29/94 INRE 013-94 Veraguas Areas Naturales 265 Pargue Natural Metropolitano 265 07/05/85 Law 8 20.352 07/19/85 Panama Areas Recreativas 348 Lago Gatun 348 07/30/85 Dec. 88 20.395 09/19/85 Colon El Salto de las Palmas 07/29/94 INRE 014-94 Veraguas Proteccion Hidrologica 2,520 Tapagra 2,520 04/14/93 INRE 22-93 Panama Areas Silvestres Corregimiento Nargana (# 1) 08/02/94 INRE 022-94 San Blas TOTAL 2,200,550.5 Source:INRENARE 4/95. See footnote1 of Table I for explanationof total areadifferences. Dec. = Decree M.R. MunicipalResolution MA.A MunicipalAgreement INRE Resolutionof Directorsof INRENARE E.D. = Executivedecree RAMSAR= InternationalWetlands Convention 8. Within the above areas, there are yet some outstanding examples of relatively intact and healthy areas of global and regional biodiversity importance. Areas of note include: (i) the Darien region's lowland rainforests, riverine systems -- including the country's largest river system (Tuira River), wetlands and coastal areas; (ii) the Province of Bocas Del Toro whose archipelagos have been described as the "Galapagos Islands" of the next century due to their geologic history and current conservation status; significant elements of primary humid and wet tropical, Premontane and montane forests, inland marshes and coastal wetlands, healthy coral formations and transient populations of manatee and green turtles yet exist; (iii) the Talamanca Range, crossing the border between Panama and Costa Rica, which is estimated to be the region of highest biodiversity on the Central American isthmus (source: WWF, 1991); an area of extremely high endemism, it encompasses the largest complex of protected areas within one bioregion in Central America (La Amistad International Park) and it is one of the most diverse, virtually intact ecosystems in Central America encompassing a variety of habitats including lowland rainforest, cloud forest, subalpine plains, high marshes and glacial vestiges. 9. These areas are all included in the Panamanian Atlantic portion of the Meso- American Biodiversity Corridor, a regional project which aims at conserving a series of high biodiversity areas of global importance extending from Southern Mexico to Northern ANNEX B Page 6 of 20 Colombia, thus providing a critical biological link between the continental masses of North and South America. UNDP is now finalizing a Central American study to refine the definition and priorities of the MBC. In Honduras the World Bank and UNDP are collaborating in the preparation of the GEF/IDA Biodiversity Conservation Project which supports Honduras' contribution to the MBC; in Nicaragua the GEF/IDA Atlantic Biodiversity Corridor project is under preparation to support Nicaragua's contribution to the MBC. In Costa Rica the protected areas system has recently been restructured with explicit "biological corridor" objectives. GEF is also supporting projects, through UNDP, in Guatemala and Costa Rica. 10. Threats to Biodiversity. Threats to these ecosystems comes from diverse anthropogenic influences. The first is reflected in the advance of the agricultural frontier. The existence of the rich biodiversity described above contrasts sharply with the land use situation. Over half of the forests of Panama have disappeared and deforestation rates are estimated to be in the order of 50,000 ha/yr. The causes of deforestation and land degradation are in no way unique to Panama and their roots are to be found, among others, in extreme poverty (a highly rural phenomena in Panama), lack of economic opportunity in the rural zones, and government policies that in the past have favored urban over rural zones and larger-scale, export-oriented agriculture (e.g., livestock) to the exclusion of more balanced resource management. Soil degradation and the lack of viable economic resource management alternatives in the traditional agricultural zones continually propel the rural poor outward in search of new lands at the agricultural frontier. In most cases, those frontiers have or are rapidly closing in on the country's forests and protected areas. With both the population of poor and the percentage living in poverty increasing, so apparently are invasions of protected areas. Increased ease of access into the Darien region has in recent years further fueled this phenomena. 11. Other threats to biodiversity include (i) new road projects, which, under frontier conditions, would offer improved access into unprotected, intact ecosystems of the Atlantic; (ii) mining in the Cordillera Central of Panama, which is included in the Atlantic corridor, and which is considered to be one of the last major unexplored porphyry copper- gold belts in the world; (iii) native forest exploitation through extraction permits given to individuals or community groups and logging concessions; (iv) wildlife-habitat conversion, fragmentation and hunting; and (v) contamination of fresh and coastal waters from non-point source pollution from agriculture, rural processing facilities, urban wastewater, petroleum wastes and spills in the canal and the cross-country pipelines. 12. GOP Strategy to Manage Threats to Biodiversity. In spite of these threats, Panama has been more successful than most other Central American countries in preserving biodiversity and an almost uninterrupted corridor of yet relatively intact ecosystems along the Atlantic coast and inland defacto exists. Three of the most important biodiversity areas of the country discussed above, the Dari6n, Bocas del Toro and the Talamanca range, are outstanding examples of relatively intact and healthy areas included in the corridor. ANNEX B Page 7 of 20 13. Panama's successes in preserving the Atlantic coast and its most important biodiversity in spite of the serious threats stem from a combination of national policies and projects, namely: (i) a services based economy that was able to absorb considerable surplus labor from rural areas into the Panama City, which contains today about half of the Panamanian population; (ii) the inaccessibility of most of the Atlantic coast due to the non-existence or poor state of roads and which helps reduce migratory and logging pressures since economic activities have low profitability; (iii) protected areas that for the most part are not "paper" parks and count with a minimum administrative presence, including the Darien, Bocas del Toro and the Talamanca Range; (iv) the Kuna reserve which is a world recognized success in giving indigenous communities (the Kunas) full territorial and natural resource rights and which has been protected by the Kunas from potential threats; (v) the Panama Canal watershed which protects the water supply of a $400 million per year operation of tremendous global economic importance and where GOP and donors have invested considerable resources for protection; (vi) pro- biodiversity national legislation including the legislation creating the National Protected Area System (1994), the Forestry Law (1994), the Environmental Impact Assessment- Environmental Framework Law (1994) and the Wildlife Law (1995) and adherence to international treaties (see below); and (vii) several on-going conservation and sustainable development projects that directly or indirectly contribute to biodiversity conservation including the GEF/UNDP project focused on the Darien buffer zone, the USAID- PRONATURA fund for the Panama Canal watershed, two buffer zone IFAD projects, and ITTO forest management project, and others discussed above, all within the biodiversity corridor. 14. Role of Proposed Project in Reducing Threats to Biodiversity. Today, however, there is a perception that some of the threats are becoming more serious and that unless incremental interventions are put in place global biodiversity will suffer from the degradation of important sites and the breaking of important portions of the corridor. These increased threats include the asphalting of a road into the Darien area, a new road planned for the Bocas del Toro region, increased outmigration due to a crisis of the rural economy in the Pacific, and the threats from an expansion of the mining activity. To mitigate these threats the government has devised a three-pronged strategy that aims at (i) reducing the push and (ii) pull factors underlying the advance of the agricultural frontier; and (iii) minimizingthe threats from on-going economic activities in the Atlantic. 15. The proposed project is an integral part of this strategy. The project focuses one set of instruments on the poorer and more populous southern provinces of the Pacific to reduce outmigration from poverty and resource degradation leading to migration that pushes the agricultural frontier and leads to subsequent invasions of public forests and protected areas; and another set within the Mesoamerican Biological Corridor, closing access to high biodiversity areas thus reducing the pull factors and controlling in situ threats to biodiversity. This would be accomplished by (i) investing heavily in areas of origin of poor migrants; (ii) improving protection of protected areas; (iii) helping ANNEX B Page 8 of 20 indigenous and non-indigenous dwellers of the Atlantic coast to protect their community lands from external threats and assisting them with biodiversity conservation activities, (iv) enlisting local governments in the Atlantic behind the principles of the corridor, (v) ensuring that planned public development projects such as roads appropriately internalize the corridor concept and include mitigating measures; (v) building partnerships with mining interests in the Atlantic to involve them in biodiversity management activities; and (vi) helping coordinate other on-going projects and ensuring that all contribute coherently to the objectives of the corridor. H. PROJECT OBJECTIVES AND DESCRIPTION 16. The Rural Poverty and Natural Resources Project has been developed to provide the Government of Panama with a coherent, multi-sectoral response to the interrelated issues of rural poverty, natural resources management, and biodiversity conservation. The rural development component focuses on the poorer and more populous southern provinces of the Pacific where root causes of poverty and resource degradation lead to migration to the agricultural frontier and subsequent invasions of public forests and protected areas. The Biodiversity Conservation Component is described below. 17. The principle objectives of the project are described in Chapter 2 of the main text. To meet these goals the project would have three closely related components: (a) Sustainable Rural Development (See para. 2.12, and Annex A). (b) Biodiversity Conservation. Implemented by the Institute for Renewable Natural Resources (INRENARE) and NGOs, this component would include two subcomponents: (a) Pacific Zone Protected Area Management; and (b) Panama Atlantic Biological Corridor, including (i) biodiversity information and planning from the Atlantic Biodiversity Corridor, including base studies, community, municipal, provincial land use planning, monitoring and environmental impact assessment; (ii) capacity building for relevant actors in biodiversity conservation and sustainable use including modernization of protected areas management; and (iii) Atlantic Biodiversity Investment Program, which would cover support to government biodiversity subprojects and protected area management activities that contribute to biodiversity conservation and sustainable use within the framework of the biological corridor; including protected areas delimitation and infrastructure and environmental projects in the buffer and biodiversity corridor zones, such as ecotouristic activities that would generate income for the neighboring communities, as well as the PA system. These actions would be carried out in the context of the Mesoamerican Biological Corridor and their incremental costs are expected to be funded by the Global Environmental Facility (GEF). (c) Project Coordination. (See para. 2.14 and Annex C). ANNEX B Page 9 of 20 Detailed Description of the Biodiversity Conservation Component 18. INRENARE, as part of the Mesoamerican Biological Corridor study assisted by GEF/UNDP, has recently completed its study "Panama: National Protected Areas and Biological Corridor Plan ". This study provides an approximate delineation of the biological corridor and a diagnostic of the issues relevant to its conservation, including a diagnosis of potential gaps in the current National Protected Areas System. Previous work under the preparation of the Rural Poverty and Natural Resources project completed a detailed diagnostic of the National Protected Areas System. The perspective of the latter is on improving NAPAS management, prioritizing activities within NAPAS based on conservation status and adequacy of management, identifying operational gaps and weaknesses in the management of the priority protected areas and minimum necessary investments to attend to the gaps and weaknesses. Further preparation is required to complete what would be the proposal for Panama's contribution to the Mesoamerican Biological Corridor. This includes preparing the overall corridor strategy, review of the proposed protected area investments in light of the strategy, preparation of the non- protected area corridor investments, and ongoing participation and consultation processes with stakeholders to ensure proper design. 19. The corridor strategy would cover those areas of the country where a de facto corridor still exists - within the Atlantic watershed and along the borders with Costa Rica and Colombia. The proposal being developed includes a preliminary strategic definition of feasible land uses that draw on the natural strengths conferred by the legal, conceptual or physical existence of such features as protected areas, buffer zones, indigenous territories, forest lands, critical municipal watersheds, wetlands, and economic development activities. The final product would be a first approximation of an Environment and Land Use Plan for the corridor. Secondly, from this plan priority corridor elements would be defined where: (i) coordination with existing efforts and donors is essential; and (ii) defined types of subprojects would be promoted and financed to support initiatives consistent with the maintaining corridor integrity and biodiversity conservation. The Environmental Plan, combined with outputs from the targeted social assessment, finalized Indigenous Peoples Development Plan (Annex D), and additional stakeholder consultations, would provide the basis for developing the broader strategy for the promotion and negotiation of the corridor in its entirety. Thirdly, the proposal will define the capacity building investments required to support both the specific subprojects and the broader corridor promotion. Fourth, it will define the processes to be implemented during the project life to harmonize the definition of the corridor with local, provincial and national interests, including ensuring the evolution of the corridor strategy consistent with lessons being learned. 20. Some aspects of this component are still under preparation to meet the Global Environmental Facility's (GEF) priorities. IBRD and GOP would finance INRENARE strengthening and the investments in the protected areas outside the Atlantic Biological Corridor, which total US$2.2 million. The preparation of these latter investments has been finalized and would be included for financing by the IBRD loan. The full component, divided ANNEXB Page 10 of 20 into three areas of action described below, would be implemented by INRENARE, NGOs and other implementing organizations, under INRENARE supervision. (a) Panama Atlantic Biological Corridor (PABC) Information and Planning (US$2.1 million; GEF tentatively US$1.5 million) would focus on filling in gaps in knowledge critical to refining and negotiating the corridor framework with national and local level actors would include: (i) Rapid Biodiversity Assessments (US$0.4 million; GEF tentatively US$0.3 million) with biological, as well as economic and socio-cultural valuation, for specific sites which are threatened by economic developments from mining, transport, forestry, tourism, and fishing. The information generated would be essential to build consensus around appropriate land uses to mitigate biodiversity loss of key sites and reduce potential fragmentation of the corridor; (ii) Corridor Land Use Planning (US$0.6 million; GEF tentatively US$0.4 million) for continued participatory planning of the corridor. The PABC is perceived as a matrix of land uses agreed with key stakeholders at the local, regional and national levels. Those agreements would be formalized through a series of instruments, including participatory environmental land use planning, within which roles, rights and responsibilities would be defined for local communities,NGOs, private sector, and national and local government; (iii) Biodiversity Monitoring (US$0.6 million; GEF tentatively US$0.5 million) for establishing a "minimum required" system for biodiversity monitoring, which can detect changes in vegetative cover/land use, and population trends of key indicator species, in order to more efficientlyfocus limited resources on threats to the PABC. This system would be linked to both ongoing (e.g., standardized reporting by park guards and field foresters) and ad hoc (e.g., Rapid Ecological Assessments, discussed above, and biodiversity/ecological research) data collection mechanisms. This national monitoring effort would be closely coordinated with a regional scheme for the MBC supported by GEF/CCAD/UNDP; and (iv) Corridor Promotion and Information Dissemination (US$0.5 million;GEF tentatively US$0.3 million) to ensure high visibility for the corridor as a concept and a strategy for the integration of biodiversity concerns within national, regional and local development. Activities would be focused both at the general public as a means of creating public support for the corridor, as well as at key stakeholders to create an incentive for their participation within planning processes, partnerships and strategic alliances built around the conservation of key elements of the corridor (e.g., indigenous lands, protected areas, primary forests, critical watersheds, etc.). (b) Capacity Building For Biodiversity Conservation and Sustainable Use (US$2.2 million; GEF tentatively US$1.5 million) would focus on strengthening of government and non-government organizations and communities for the conservation and sustainable use of biodiversity resources in the PABC: (i) Training and Assistance to Government and Non- government Organizations and Communities (US$1.7 million, GEF tentatively US$1.2 million) strengthening of key stakeholders through environmental education and selected training and capacity building exercises in order to facilitate their assumption of responsibilities in PABC corridor conservation and protection activities (e.g., in indigenous lands, protected areas, primary forests, critical watersheds, coastal zones, etc.). Specific programs would be targeted at (a) indigenous and non-indigenous communities in support of pre-defined, eligible activities clearly related to the conservation and sustainable use of ANNEX B Page 11 of 20 biodiversity; (b) NGOs, private sector, and local governments in support of the PABC strategy; (c) central government (non-INRENARE) on incorporation of biodiversity and corridor strategy into sectoral planning; and (d) human resource development for protected areas administration and management, including private sector partners, NGOs and local governments and communities. Specific efforts will be made during preparation to create alliances within the mining sector to strengthen environmental oversight and integration of biodiversity issues into mining practice through the private sector Mining Board and promotion of "model" practices; (ii) Modernization of Protected Area Management (US$0.5 million; GEF tentatively US$0.2 million) includingupgrading of management norms, assistance in development of decentralized and participatory management and management planning systems, training of personnel, and development of a revenue capture and financial management system for protected areas. (c) Panama Atlantic Biological Corridor Investment Program (US$6.8 million; GEF tentatively US$5.2 million) would provide grants to finance eligible costs of securing the long term protection of the corridor and biodiversity, including equipment, consultants, operational expenses, studies, workshops, training, study tours and development and dissemination of materials: (i) Indigenous Lands (US$1.6 million; GEF tentatively US$1.3 million) would include assisting indigenous communitiesin critical areas of the corridor in managing their lands in order to ensure their access to them and the biological resources they contain, according to community needs and principles of sustainable use. In some cases, activities may include assisting communitieswith regularization of land tenure and resource user rights; (ii) Local Biodiversity Conservation and Management (US$2.0 million; GEF tentatively US$1.7 million) would support a grant program targeted at incremental costs of biodiversity conservation and management activities in pre-defined, high priority areas of the corridor, to be carried out by indigenous and non-indigenous communities, NGOs, municipal governments and the private sector. In all cases, grants would be conditional on explicit quidpro quo agreements that establish the responsibilities of grant recipients as regards sustainable resource use. As a complement, the FUSARD mechanism set up under the associated IBRD-financed project would provide US$2.9 million in financing for productive activities associated with poverty alleviation and sustainable resource management along the agricultural frontier currently threatening to break through into the PABC in northern Veraguas (Districts of Calobre, Cafiazas and Santa Fe). The CAPS activities (community action plans) to be developed as the guide for FUSARD investments, would support local corridor planning and would potentially identify eligible subprojects for GEF grant financing. The Indigenous Peoples Development Plan, being finalized under project preparation, where appropriate, would also identify priorities to be financed; (iii) Protected Area Management (US$3.1 million; GEF tentatively US$2.2 million) would include financing of the management of globally important protected areas located within the PABC but which lack adequate protection and management or that are potentially threatened by uncontrolled economic development activities and lack the tools to respond. Three areas have been selected as priorities, representing together, a range of ecosystems: (a) Darien, to build on the GEF-financed project being implemented through UNDP; (b) Omar Torrijos-EI Cope, a key link in the ANNEX B Page 12 of 20 center of the PABC currently facing potential threats from mining and, within the medium term, advance of the agricultural frontier; and (c) the altitudinal ecosystem complex extending from La Amistad/Volcan Baru to the Isla Bastimentos/San San Pond Sak covering a range of habitats from mountain ecosystems to coral reefs and seagrass meadows. Eligible investments would include: demarcation, management plans; infrastructure and equipment for protection, rudimentary research and visitor facilities; and direct involvement of non-government actors including private sectors in administration, management and protection. (d) Project Management (US$4 million;GEF tentatively US$0.3 million) would contribute toward financing the incremental costs of project administration, coordination, and management related to GEF-financed activities. 21. A preliminary identification of the protected areas to be included in the Mesoamerican Biological Corridor and within the Atlantic watershed are listed in Table 3 below. Table 3. Preliminary Proposal of Protected Areas For Strengthening Under Mesoamerican Corridor Sub-Component PROTECTED AREA PRINCIPAL ECOSYSTEMS AREA (HA) PROTECTED AREAS ll Darien Lowlands and low hills with humid tropical forest, 579,000 rainforest and undisturbed wetlands, on Miocene sediments; among the oldest vegetative communities in the country. Large riverine systems (Tuira, Balsas and Sambu rivers). Contains excellent examples of coastal cliffs and associated, small, protected beaches. La Amistad Humid tropical forest, rainforest, cloud forest and paramo. 207,000 Riverine systems (Chaquinola, Teribe, and Culubre rivers. High elevation wetlands and natural lake. Volcan Baru Montane tropical forest, paramo and native grass meadows. 14,000 Main cover type is evergreen forest, dominated by Lauraceae and Fagacea (Quercus spp.). Protected area with greatest life zone diversity. Isla Bastimentos Humid tropical forest, lagoons, coastal wetlands, beach, 13,226 coral reefs and seagrass meadows. 80% marine Omar Torrijos-EI Premontane humid tropical forest and rainforest, montane 25,275 Cope humid tropical and cloud forest WETLANDS OF INTERNATIONAL IMPORTANCE an an Pond Sak Lagoons, coastal wetlands, beach, coral reefs and seagrass 16,125 I meadows. ANNEX B Page 13 of 20 Further Preparation of the Component 22. A Block B grant has been requested by Government and approved by GEF to cover further project preparation costs. During preparation, mechanisms for increasing direct contributions from the private sector NGOs, local communities and beneficiaries would be explored, as would the potential for cost recovery into local or national biodiversity conservation revolving funds for certain investments. The following list of studies include much of the future preparation work; they are detailed in the above grant document: * Atlantic Biodiversity Corridor Planning; * Preparation of Monitoring and Biodiversity Assessment Activities; * Training Needs for Protected Areas, * Preparation on Non-protected Area Activities and Identification of Economic Incentives; * Strategy for Managing Mining and Roads Threats; * Social Evaluation and Participation Strategy for Indigenous and Non-indigenous peoples; * Analysis of Legal Framework for Indigenous Lands; * Incremental Cost Analysis; * Institutionalization of the PABC within INRENARE and the Protected Areas System; - Promotion and Dissemination of the MBC and PABC. Institutional Framework and Project Implementation 23. The Institute of Renewable Natural Resources (INRENARE) would be responsible for the implementation of the component with its Department of Parks and Wildlife (DPW) taking direct responsibilityfor the project's execution. These would receive assistance from the Project Coordination Unit (PCU) which would manage disbursements and procurement and channel funds to the project based on an approved annual work plan. The PCU would also coordinate between agencies (INRENARE and MIDA) to assure coherence in annual work plans and geographic and thematic focus, particularly as relates to activities within and around protected areas and other critical elements of the biological corridor. Implementation in the field would be mostly carried out by local organizations in accordance with community and protected area action/management plans; a critical element of which would be through stressing the formation of strategic partnerships between the main stakeholders; such as formation of public/private park management committees (committees involvinglocal citizens, NGOs, and private sector in fund raising and decisionmaking) for the management of biodiversity inside and outside protected areas. ANNEX B Page 14 of 20 HI. RELATED ACTIVITIES Parallel Projects 24. Present efforts of note directly related to biodiversity conservation include: (i) the Natural Resources Subcommittee in the Colombia-PanamaBorder Commission where INRENARE (for Panama) and the Ministry of Environment (for Colombia) are working on furthering exchange and scientific cooperation between the GEF-financed Bio-Darien and Colombian Bio-Pacific projects; and (ii) the development of a national Biodiversity Strategy, which is as yet in its initial stages, with assistance through UNEP. 25. The parallel projects, which contribute directly or indirectly to biodiversity and the Atlantic Biodiversity Corridor, include: (a) Eastern Panama: (i) Sustainable Rural Development, Darien (IFAD): a six years (1996-2002), US$14.3 million project for communities along the six main rivers in and around the National Park.; (ii) Biodiversity Conservation, Darien (GEF/UNDP): a five years (1994-99), US$2.5 million project with activities focused on the identification of options for sustainable development which take into account management and conservation of biodiversity inside and outside of protected areas, involvement of indigenous communities, and supporting research and monitoring activities; (iii) Community Management of Cativo Forest: a US$1.6 million project in the provinces of Darien and Panama. (b) North-Central Panama: (i) Natural Resource Management (Nature Conservancy/USAID): a US$44 million project over seven years (1991-98) which has established a US$25 million trust fund and foundation to assist INRENARE with protected areas financing and financing of community-based natural resource management focused primarily on the Canal Zone; (ii) The 'Triple-C' (IFAD): a proposed project which would start in 1997 or 1998, with objectives similar to those of the Sustainable Rural Development, Darien, with the inclusion of a central objective on natural resource management and focused on the provinces of Cocle, Col6n and Panama; (iii) Portobelo National Park project (SICA): a US$1.1 million which is providing assistance to the national park and within its buffer zone; (iv) Sustainable Forest Management Donoso District, Col6n (ITTO): a one year project to develop forest management planning approaches for sustainable forest management in the humid tropical zone of Panama. (c) Western Panama: (i) Ngobe-Bugle (IFAD): a six year project (1994-2000), US$14.0 million project working with indigenous communities in sustainable livelihood and rural development; (ii) Conservation for Sustainable Development (CATIE/OLAFO): a three year (1993-95), US$0.7 million project focused on community and smallholder resource management; (iii) Cooperative Agroforestry, Bocas Del Toro (CATIE/GTZ): a four year (1995-98) US$0.35 million project; (iv) Ngobe, Development of Forestry and Agroforestry Systems (GTZ): a four year (1992-95) US$0.35 million project. ANNEX B Page 15 of 20 26. The proposed IBRD/GEF projects would be a Panamanian contribution to the integrated MesoAmerican Biodiversity Corridor (MBC). Ongoing projects alone would be insufficient to bring about the conservation of the Atlantic Biodiversity Corridor which covers 30% of the country, but with the complementary activities to be supported by the proposed IBRD/GEF projects, the chances of success are optimistic. Baseline Situation vs. GEF Alternative 27. In terms of the Atlantic protected areas and their buffer zones within the areas proposed under the Biodiversity Conservation Component, in 1996 a total of about US$6.3 million (of which 80% was donor funding) was budgeted. The major financing source is the Natural Resource Management project (USAID) accounting for over 60% of 1996 donor financing. Of these funds, about 60% went into the Panama Canal watersheds, 17% into the Daridn, 8% to Portobelo National Park, 8% to the protected area system in general, and the remaining 7% more or less equally to La Amistad and Isla Bastimentos. For 1997, a very rough estimate of potential total financing (GOP and donor) directly for natural resource management in what would be corridor areas outside of protected areas and buffer zones would be US$1 million. This does not include the 1997 IFAD project financing of productive agricultural activities. 28. While all these projects contribute to the biological corridor by promoting rational land uses and resource management activities, alone they would not do the job. The role of the IBRD/GEF project would be to cover existing gaps, of which the most important ones are: (i) the need for a corridor planning and monitoring framework to guide public investments; (ii) the need to involve a large number of public, private, NGO and community stakeholders in the corridor concept; (iii) the need to enhance coordinating mechanisms among the various initiatives; and (iv) the need to enhance biodiversity conservation investments in areas of the corridor not well covered by the above projects. These areas are (Table 1): (i) in the East: Darien, where there is already a GEF/UNDP project, focused on community involvement primarily in the buffer zone, but where additional resources are needed for activities inside the protected area; (ii) in the Central Region West of Panama Canal: Omar Torrijos-El Cope; and (iii) in the Western Region: La Amistad-Volcan Baru, Bastimentos and San San Pond Sak as detailed in Table 3. Eligibility for GEF Grant 29. Panama ratified the Convention for Biological Diversity on January 12, 1995. The project is eligible for GEF funding under three of the four operational programs within the Operational Strategy for Biodiversity: Mountain, Forest, and Coastal Wetlands, the project would also strengthen protection of freshwater ecosystems. In accordance with Article 8 of the Convention on Biological Diversity, the project focuses on in situ conservation and sustainable use of biodiversity in the Atlantic watershed and along Panama's borders with Costa Rica and Colombia. It would protect biodiversity across a ANNEX B Page 16 of 20 diverse range of ecosystems and sharp altitudinal gradients encompassing tropical lowland and montane tropical forests, coastal wetlands, reefs, and major riverine systems; including the globally distinct Choc6/Darien moist forests, Bocas del Toro archipelagos, and areas of the Talamanca Range with the highest levels of biodiversity on the Central American isthmus. 30. The participation of GEF within the project would be consistent with the First Conference of the Parties (COP I and COP2) guidance as it: addresses in situ conservation; includes institutional capacity building; strengthens conservation management, and suitable use of ecosystems and habitats, including coastal and marine ecosystems and mountain regions; strengthens the involvement of local and indigenous peoples and integrates social dimensions, including those related to poverty. The proposed GEF is also part of a larger GEF-supported strategy for an integrated Mesoamerican Biological Corridor which is included in the GEF Operational Strategy. Other related projects are currently under preparation with IDA and GEF support in Honduras and Nicaragua; this project would complement those efforts in securing the integrity of the Mesoamerican Biological Corridor. 31. The project has been a priority on the national natural resource agenda for the last five years, the development of which has included support from the Tropical Forestry Action Plan process. Preliminary discussions on the National Biodiversity Strategy have also noted the national contribution to the Mesoamerican Biological Corridor (MBC) as a high priority. In 1994 Panama signed the Central American Alliance for Sustainable Development which included objectives of guaranteeing the conservation of regional biodiversity. The proposed project builds on UNDP/GEF-supported planning activities, carried out by CCAD under a PDF Block B, to define the Mesoamerican Corridor and the respective national contributions. The first phase of the UNDP Regional PDF has been completed and has generated outputs of high relevance to the proposed project; these include: (i) more precise definitions of the Panamanian biological corridor and planning elements, to enrich the current national protected areas system plan; and (ii) an articulated framework for compatibilizingnational interests with regional priorities. National Level Support 32. The current government has an adopted policy of integrated development whose elements include the promotion of social development within a context of economic efficiency and support to those mechanisms which provide environmental oversight of development and economic activities. Specific to biodiversitythese latter are: (i) the 1994 resolution creating the National Protected Areas System and defining the norms, regulations and management categories for its administration, (ii) the 1994 Forestry Law providing the regulatory framework for the conservation of forests; and (iii) the 1995 Wildlife Law providing the regulatory framework for the conservation of wildlife. Bio- logical corridors in Panama have been identified as priorities on the national natural resource agenda for the past five years. ANNEX B Page 17 of 20 33. Panama is a signatory to a number of regional and international agreements, in addition to the Convention on Biological Diversity: RAMSAR (on wetlands), CMS (international trade in migratory species), CITES (international trade in endangered species), Central American Agreement for the Conservation of Biodiversity, and the Central American Alliance for Sustainable Development; Panama is also a member of IUCN (International Union for the Conservation of the Nature). Panama has participated actively in the UNDP/GEF/CCAD regional corridor planning exercise, and the proposed project would implement its major recommendations. ANNEX B Page 18 of 20 Apendix 1 PANAMA RURAL POVERTY AND NATURAL RESOURCES PROJECT Biodiversity Conservation Component Activity: Land Titline 1. The purpose of this activity is to regularize land tenure of private properties that adjoin the protected areas (PA) as a means to better define the PA's limits, rather than rely only on demarcation from within the PA. Thus, it would title only those properties that directly touch the PA - perimeter titling. Properties inside would be dealt with differently: they wouldn't be titled, but rather the settlers would, through a negotiated process with INRENARE, enter into an agreement which would define permitted activities and area of action. No resettling would occur as Government has a stated policy against it. Rather, through concession to use of the land, the settler would be enlisted to help protect the PA from further encroachment. This appendix describes only the land titling process which would be coordinated by MIDA's National Land Reform Office (Direcci6n Nacional de Reforma Agraria) and INRENARE. 2. Field Surveys. Field work would be carried out through the hiring of companies specialized in topographic surveys with GPS capability. They would carry out the following activities: (i) parcel survey and census-taking of owners, noting existing infrastructure (roads, channels, populated centers and natural details as rivers and streams); and (ii) tour property with the owner or petitioner; adjacent neighbors to establish the boundaries of the parcel as well as agreement on the spot where the stakes are to be placed. The team members would carry, as part of their working equipment, a compass and hand level, a GPS station, and a measuring tape to locate any spot, to mark any identifiable site to reference. Farms would be numbered following a cadastral geographic code that identifies the province, district, and corregimiento, so that one property can have only one number which would be used for all legal matters and registration of the property in the public registry, cadastre and all institutions linked with titling procedures. 3. Preparation for Parcel Registration. The field team would prepare the parcel registration documentation, including the signature of the property owner or occupant, as well as signature of each adjacent neighbor. If litigation problems arise with one of the adjacent neighbors, the property could be registered with a margin annotation indicating conflict. Properties would be numbered and the team would hand over the file to a Land Reform inspector, notifying the interested parties to meet with the inspector. If no agreement is reached, an administrative conflict resolution team would be set up in order to proceed with reconciliation; the registration of the boundary under discussion would be held back until the conflict resolution team solves the conflict. If not solved, then its resolution would proceed to the judicial system. ANNEX B Page 19 of 20 Apendix 1 4. Request for Adjudication. The field team, after the conclusion of the definition of the property boundaries, would prepare a file with its corresponding number and regional code, and hand it over to the Land Reform inspector. The inspector would be supervising the work in each cadastral corregimiento. This working methodology, carried out for all individual properties in the project area, would form the property field map, equivalent to the property's inventory or cadastre at the corregimiento, district and province level and at the national level. 5. Mapping the corregimiento and generating individual maps for each property. The contractor would prepare the cartographic base defining property including limits, boundaries, roads, topographic accidents, infrastructures. Once maps for each corregimiento are prepared, the contractor would send optical disks of the general property maps to the computer center which would be installed in MIDA's office and to the Geographic Information System offices, where the information gathered in the field would be checked for correctness. This process would be done through a computerized system that uses as reference the geographic coordinates obtained by the GPS. The final result would be a basic cartography at a desired scale, which in this case would be property maps at a 1:10,000 scale, and individual maps of all farms including all their details. 6. The Geographic Information System, given the information received from the company and the lists of files received from the Land Reform institute, would generate a data base including all the information related to the property and its owner. The purpose of this data base is to be able to locate the farm through a geographic code defining the property as belonging to a sole individual and enable access to search for and annex any information through this number, as well as the registry number. The data base and maps would constitute the basic cadastre information of this sub-program. 7. Adjudication. The Land Reform Office would prepare an adjudication form in the computer's data base, in which all information related to the property to be adjudicated as well as its beneficiary would be included, in order to produce a computerized adjudication form in which only basic information would be added; this form would be sent electronicallyto the Public Registry's regional office in order to issue the property deed and register the farm appropriately. MIDA and the Ministry of Justice would sign an agreement through which the Public Registry would have to keep the cadastre up-dated immediately after every registry transaction. 8. Disclosure. An extensive advertising procedure is foreseen (via local authorities and communications channels, radio stations, newspapers and television), in order to guarantee broad participation during the titling process; working areas, as well as the dates in which work would be carried out in an specific corregimiento, would be announced with sufficient prior notice to allow maximum participation of stakeholders. ANNEX B Page 20 of 20 Apendix 1 9. Once the legal file is established, the regional land reform office, in coordination with the company that would work on titling, and with support from the mobile offices, would carry out the advertising established by law for land adjudication purposes (Advertising of Summons). It is estimated that the whole titling process of a given property could be carried out in 30 to 45 days, except in areas of conflict. O:\LAThIATAD\MAURIZIO\PANAMA\BUFF\ANNEX-B.DOC ANNEX C Page 1 of 6 PANAMA RURAL POVERTY AND NATURAL RESOURCE PROJECT Proiect Orzanization. Administration and Coordination 1. The field organization of the project is described in greater detail in Annexes A and B (description of the two components). Project planning, budgeting, monitoring, evaluation and supervision is in Annex F. This Annex concentrates on the organization of the Project Coordinating Unit (PCU), and the project's implementation schedule. 2. The PCU headquarters would be located in the Sustainable Development Component area, near Santiago, Veraguas, and the Biodiversity Conservation Component would be located in INRENARE in Panama City where more of its project and administrative staff are located. INRENARE project staff would liase regularly with the PCU, and would have at least one person assigned there permanently. Most staff would be reassigned MIDA and INRENARE staff, outside personnel would only be hired when necessary skills are not available from the two institutions; at project appraisal, this was estimated at ten people. 3 . Figure 1 of this Annex provides a functional organigram of the PCU. The project would be made up of a Coordinator chosen through competitive procedures, who would be approved by the project's Technical and Operational Coordination Council, and with the Bank's no-objection. Two heads of department would be appointed to coordinate the implementation of each component. Both departments would be supported by a part-time legal advisor, and two central units: i) a administrative-financial-accountingunit made up of an administrator and two assistants who would be in charge of the administrative and accounting registries, contracts and payments, and the purchase of office equipment and materials; and ii) a programming and liaison unit with the FUSARD (also located in the PCU--see Annex A), headed by a business administrator or agricultural economist, whose function would be the programming of activities and monitoring their progress, the disbursement of funds for project activities, and a lawyer to draw up the Subproject Agreements (grant administration contracts) with implementing organizations that would administer FUSARD subproject funds. 4. The Sustainable Rural Development Department would be headed by a management specialist with considerable experience in training staff that operate in rural areas, as well as communities. The Department would be divided into three units: Community Organization, Productive Technology Development (agricultural technology, mini-irrigation, soil conservation and social reforestation), and Production Support Services (marketing, agroindustry and rural roads). ANNEX C Page 2 of 6 5. Theirresponsibility would be to providetechnical services to the communities, local organizations,and implementingorganizations/service contractors (e.g., NGOs, governmentdepartments, individual technicians) in the promotionand organizationof communitiesand contractors;community planning which would culminate in communityaction plans and investmentsubprojects to be submittedto the FUSARD;and supervise,monitor and controlthe executionof implementingorganizations. 6. The Biodiversity Conservation Department's Head would liase with regional INRENAREdirectors (Chriqui, Bocas del Toro, Los Santos, Veraguas,Cocle, Panama Metro and Darien) to executeproject actions in the protected areas. There would also be a person responsiblefor the ecotourismsubcomponent who would be chosenwith IPAT's (tourisminstitute) no-objection. In INRENAREheadquarters, the institutionhas built up an effectiveadministrative structure to executethe USAID supportedNatural Resources Management(MARENA) Project. As the project is windingdown, this same structure would be used for this proposedproject. Onlyan incrementalaccounting assistant and a secretarywould be requiredto implementthe component. 7. The PCU would be providedwith the necessarystaff, equipmentand vehiclesto properlyimplement the project. They would also have the funds to hire consultantsfor project start-up, creatingthe administrativeand operationalmanuals and trainingPCU staffas required. The projectimplementation schedule is in Appendix1 of this Annex. Project monitoringand evaluationwould be carriedout by a contractedspecialized agency (AnnexF); reportingis also coveredin AnnexF. ANNEX C Page 3 of 6 Figure 1. Functional Organigram of the Project Ministryof Agriculture Technicaland Operational (MIDA) CoordinationCouncil (MIDA,INRENARE, MIPPE, SDCs,Private Sector) |Proje CoordinatingUnit (PCU) Sudainable------Ruradit..n.g Sustainable Rural Biodiversity Conservation Development Component(INRENARE) Component(MIDA) ProductionTechnology SevenRegional Units Development Community Ecotourimsand Small Organization _ Environmental ______Investm ents ProductionSupport FUSARDBoard of Directors FU|ARD _...._._....._._... FUSARD O:\\ AN UANNEX-C .DOC MRaineApril 9, 19972:17 PM ANNEX C Figure 2 PANAMA RURAL POVERTYAND NATURALRESOURCE PROJECT-PROJECT IMPLEMENTATION SCHEDULE 1 9-96- - I 99-7_ 1 199-8 _ 9-99--I _F ---- F*0~ Task Name 01 020 10340 2 0401 : Q202 3 10C4 _02031 2 103 C4 Q1 |Q2 |Q3 h04 01 2 Q304 1.PREPARATORY 01 Approval PPF 02 Sign agreement with InternationalAdministratve Agent H 03 Creation Proect CoordinabonUnt (PCU H 04 NegotiationWBGoverment H 05 ApprovalWB H 06 Loan Effeciveness H 07 National CounterpartDeposit H 08 Creation of Technical and OperationalCoord. Council H 09Creation Fund AdministrationCommittee FUSARD H II. PCU START-UPIFUNCTIONING 10 Contracbngand/or reassignmentPCU staff H 11 ContractngfexecubonPCU organizationalconsultancy H 12 Contracting/executionwith Local Exec. Agencytraining mgmt.system 13 Contracting/ene.with Local Exec. Agencymonitoring and evalsystem h 14 PCU Installabonand equipping H IIIFUSARD START-UPIFUNCIONING 15 Approval of FUSARD Fund OperationalRegulabons H 16 Agreements with local financial intermediaries 1 IV SUSTAINABLE RURAL DEVELOPMENTCOMPONENT 17 Contracting and/orreassigment of staff (chief and responsiblestafl) 18 Installabonand equipping V. RURAL ORGANIZATIONTRAINING SUBCOMPONENT 19. Identificabonltrainingof 30 technical promoters 20 Contracting/execubonof consultancy for tech. promoterstraining H H 21 Identicationftraining 440 communityprnmoters 22 Identification/pnomotio/organizationidevelopmentof 220 SDCCs 0' ANNEX C Figure 2 Fi996 i97 m FF 2000200 Task Name 01 102 1004 a Q11]Q3 2 103 104 Ql10 2J1 104 |02 0Q3 104 01 102 J103 C4 01 102 103 104 IV PRODUCTIVEDEVELOPMENT SUBCOMPONENT 23 Establishment of intkrdisciplinaryag technology teams H 24 Agreementswith specialized agencies IDIAP, NGO,etc.) 25 Tech.Assisttraining to families/productionsystems PRI, PR2.PR3 26 TechAssittren in ffigabon (100small Irrigationproj.and 50 communityprn.) 27 Tech.Asssttraning in socialretorest(seed processing. nurseries, plantitks) 28 Contractng/executionof social reworestaionconsultancy |H VIl. PRODUCTIONSUPPORT SERVICES SUBCOMPONENT 29 Identificabonltrainingof 8 commercial extension agents H 30 Identttrainingof 25 privateand community commerc.extensionagents I 31 Systemstraining to 40 producerassociabons t 32 Contractng/e)xecutionof instiutional strengtheningconsultancies 33 Contractng/execuion of consultancies for crommercialext program H H 34 Contractingexecuton of consultancies for commercial infras.develop. 35 Contracting/exeutionof consultaxc.s to a5ss provincialmunicipalities 36 Tech.Assist/training associations, retailers,fairs, municipalities 37 Identificationltrainingof 6 rurl agroinrdustrialtechnical promoters H 38 Idenaticationtraining of community promotersin rural agroindustry 39 Conlrscigxeculn d constaracles in agon&project, preiwjwest. H H H 40 Assistancettrain.80studies,45 small projects a regional,6 ind.forestry 41 MOP supervisionagreement for rehab of rural roads 42 Identiulcationftrainingof road workers 43 Assist/raining communities in implementabonvworks Vlil. SBODIVERSITYCONSERVATION COMPONENT 44 First Draftof the GEF cofinancedcomponent H 45 POF preparationgrant proposal H a Contacting|| H 47 Peappraisal H 48 Appraisal H 49 Negotiation H 50 Contractingand/o staff reasnment (chief andresponsible stat)PCU H 51 Installabon and quipment |H O X all t, ANNEX C Figure 2 19_7_1 8I2__ I 999 L 202 _ Task Name Q JQ2 JQ3| 4 Q J 13 l Q2 13 Q4 010 03 1 01 1023 104 Q J JQ3|Q2 0Q41 0Q2 03 04 IX. NAPAS MODERNIZATION 52 Designingrimplementmanag. plans, operational plans il- 53 Designing/implement.national training program i -. 54 Designing/implementNAPAS financial program 55 Modemization,system, planifc.iinform./coord.and regulatoryftramework 56Contracinxeaceculiontech.assistandlor NAPAS moderfizaton consuit. X BIODIVERSITYINFORMATION AND PLANNING 57 Supportingstudies | _ 58 ParticipatoryPlanning 11nformation Xl CAPACITY8UILDING FOR SIODtVERSITYCONSERVATION 59 IdentWPromotlorganiz.PA's commuties committees 60 Designing/implemet.,environmental educabon program XIl BIODIVERSITYCONSERVATION INVESTMENT * 61 CorridorSubprojects 62 Demarcationfritfing 'These subcomponents are expected to be co-financed by the GEF and are still under preparation , thus not all tasks have been identified. Napas Modernizationforms part of Task XII Siodiversity ConservationInvestment 0 ' b ANNEX D Page 1 of 6 PANAMA RURAL POVERTY AND NATURAL RESOURCES PROJECT Indi2enous Peoples Development Plan 1. The following is a summary of the Indigenous Peoples Development Plan (IPDP), which is detailed in document No. 18 of Annex H, Project File. It was prepared by the Government of Panama with guidance from the Bank, and involved a participative approach, including information sharing of project proposals with the principal indigenous peoples represented in the project area, as well as staff and specialists from Government, NGO and other institutions that deal with the indigenous communities in question. Literature and census reviews and a wide range of interviews were carried out. Although five ethnic groups exist in the project area, the great majority are Ngobe-Bugle and Embera-Wounaan which were the two groups dealt with principally for the preparation of the IPDP. Background 2. In the Sustainable Rural Development Component area (Provinces of Veraguas and Herrera), the Ngobe-Bugle people, totaling approximately 7,006 inhabitants, live in 66 scattered communities. In the second component, Biodiversity Conservation, there are four ethnic groups. The Ngobe-Bugle, the Terire and Bribri in the western part of the country, in and around the protected areas (PA) of Amistad and Bastimento. In the Darien PA, the ethnic group in and outside the Park (including its buffer zone) is the EmberA-Wounaan,with approximately 18,000 people. 3. The majority of the Ngobe-Bugle and the Embera-Wounaan are located in remote rural areas. Of the five poorest areas in the country, four are in Ngobe-Bugle territory. The statistics are appalling: 89.6 percent of these households are poor, 76 percent are in extreme poverty, over 90 percent of households are headed by women; of every ten children between six and nine years of age, seven are in a very critical nutritional state. In Caflazas district, of 427 indigenous households interviewed in the last census, 426 had no electricity, and 395 no potable water. In indigenous lands in the poverty area, eighty percent of the land has been deforested, and while there is considerable community interest in reforestation, there have been instances of lack of agreement as to ownership of reforested lands outside the Comarcas (indigenous governed lands) as the State considers lands reforested with Government financial assistance but without formal tenure to belong to the Government, whereas the indigenous groups claim it is theirs. Sources of income include: employment in commercial agriculture, mostly by men who migrate to these areas, artifacts sales, and some sales of agricultural produce. The report stated in para. 1 provides more details of the basic needs situation in indigenous communities. ANNEX D Page 2 of 6 4. Due to legal ambiguity, the Embera-Wounaan Comarca is superposed on the Darien National Park, as 44 percent of the Comarca is within the Park's boundaries. At present a solution is being negotiated with INRENARE which must be satisfactory to both sides, and in particular the indigenous communities which have lived there before the Park was created. 5. Many of the above problems are structural, and represent the meeting of two very different cultures. The indigenous communities economies--although technologically still at a subsistence level--have been selectively penetrated by certain aspects of the market economy. These two systems, subsistence and market, which coexist in time and space in the indigenous communities, despite the fact that they are so different culturally as well as chronologically, places these communities in a difficult situation. On the one hand, they can no longer continue with their traditional subsistence economy, as they have lost much of the material base for such a system (e.g., land degradation which reduces productive capacity). On the other hand, they cannot relate effectively to a market economy whose principles (e.g., generate profits in a private property system, access to credit and technologies) and levels of complexity, values and beliefs are so foreign to their own. 6. Thus, the communities are trapped between a past that they can no longer preserve as they do not have control over all the necessary elements, particularly the economic ones, and a present which they cannot control as the market economy has excluded them from many of its benefits. 7. The result of these structural contradictions has been, among others, increasing material poverty and the consequent social decay. Some of the indigenous groups are no longer able to relate to the forces of nature in a culturally, socially and economically congruent fashion. Their culture, traditions and territories are converted to merchandise in a market economy increasingly out of their control and comprehension: the trees are extracted as timber often without their approval, and portions of their land have been deforested and taken over by latino (colonist) farmers. 8. There has been a considerable number of assistance programs to indigenous peoples, increasing during the last thirty years. Most of these programs have had limited success however, because they have not responded to the basic problems mentioned above. These programs have either tried to glorify the past and tried to reconstruct it (the separatist model), or alternately have stressed modernization and tried to insert the communities directly into the market economy (the assimilative model). Neither of these are adequate or effective in assisting the communities in a sustainable fashion, nor do they take into account their basic structural configurations. 9. Despite these difficult problems and subsistence economies, indigenous people still retain much of their culture, considerable unrealized economic potential exists in their areas, and they are gaining increasing political awareness. Their lands are rich in ANNEX D Page 3 of 6 biodiversity, energy, minerals and the groups have a great reserve of knowledge on sustainable development as demonstrated by the fact that they have been managing forest resources for centuries. 10. These problems have resulted in a number of basic principles which many indigenous peoples are now trying to follow to guiding their development. These would also help guide the project's specific areas of action. * The recognition in principle and practice, of the indigenous peoples basic human rights to their culture, their lifestyle and their ancestral territories. Effective administration of indigenous reserves and their natural resources, according to current Comarca and national legislation. * The adaption of selective practices from the market/western economy at their own speed. In this context, training becomes of great importance, in particular to strengthen the organizational structures to better deal with western society, as well as to introduce new technologies and management skills. * In development actions, dealing withboth the immediate problems faced by indigenous groups (e.g. poverty, lack of technology, degradation of resources), as well as the more structural/societal problems related to maintaining their cultures and forms of government. Plan of Action 11. Goal: Improvement of the living conditions of indigenous peoples based on the sustainable development of natural resources and culturally appropriate benefits, including technical assistance and training on legal and natural resource management issues, and investment funds both for income producing activities, particularly the revitalization agricultural and agroforestry systems, as well as small basic infrastructure. Although the legal context is different inside a Comarca, which, within the Panamanian legal system has certain autonomous attributes, the same developmental principles would be applied to indigenous communities or population outside the Comarcas. 12. Objectives: * Provide technical assistance and training in order to: i) promote the general awareness of indigenous rights to members of the communities in the project area, both indigenous and non-indigenous; and ii) improve their livelihoods systems (be they forest based, on-farm or off-farm). In concordance with the project's participatory and gender approach, the beneficiary population would be involved in the design and implementation of specific project activities. To facilitate such participation, the project would also help strengthen indigenous ANNEX D Page 4 of 6 communities' local organizations by providing training on organizational matters and project management. * Improve general knowledge related to legal matters affecting indigenous peoples. ' * As a complement to training/extension efforts, the project would seek to facilitate the access to its financial and technical resources so the indigenous communities can plan, coordinate and execute small infrastructure and productive activities in an economically and environmentally sustainable fashion. For the implementation of the above activities it is important to keep in mind gender, age and cultural considerations, among them: i) increasing women's participation in all activities and decision-making; ii) to plan, design and execute training programs that integrate indigenous values and beliefs, with special emphasis on indigenous youth; and iii) in as much as possible, utilize indigenous project staff from similar ethnic groups, increasing their numbers over time as local community members are trained. 13. Strategies/Operating Principles The proposed project would, where practicable, utilize the following basic strategies for implementing the project with indigenous communities: (a) A participatory approach. Starting from information sharing and consultation, the project will promote a process which include the gradual appropriation by the indigenous communities of the resources that have been facilitated by the project, with increasing autonomy from the project. The transfer of resources (by the project) and its appropriation (by the recipients) would be conducted in a manner consistent with the cultural capacity defined by the communities' ability to assimilate project resources. (b) Institutional Strengthening. This includes: planning and executing mechanisms to strengthen traditional structures and institutions; guiding and training communities relative to the operation of the market economy; support to community leaders to participate in wider national and international forums so that they may familiarize themselves with ethno- development issues in other areas; training leaders to assume representative roles. Capacity building is needed in the fields of administration, technology, finance, leadership and vocational skills. Members of the ' The WorldBank is in conversationwith the Governmentto undertakea national-levelland administrationproject which could deal with the modernizationof the registry and cadastreand major land regularization/titlingactivities, including the Comarcas.The RPNRProject's possibilitiesin this field are more limited, as clarified in the project description ANNEX D Page 5 of 6 communities that have, or acquire the skills through project training, would participate in project implementation as extensionists, administrators, agricultural technicians, financial administrators, etc. (c) Development respecting cultural diversity. Modernization programs must not imply a threat to the continuity of the indigenous culture. Channeling funds to the community is not the end in itself, but rather it is the community-lead process of diagnosis, identification and preparation of investments, and their continued use and increasing autonomous management of these investments in a culturally sustainable fashion, that is the project's principal objective in these communities. Reducing external dependence is equally important to achieve self-sufficiency. Indigenous cultures have a great deal of knowledge related to sustainable development which, given the juncture at which many communities find themselves, between one culture and the other, can, at this time, disappear, or be revitalized and utilized not only by the participating communities, but other communities in the country as well. This is true for all the project components, not just the investments/subprojects, but also training, organization, institutional strengthening, and other proposed project activities. It is equally important for indigenous youth. (d) A gender approach. Special efforts will be made in order to target resources to indigenous women. Women's role in the communities is becoming increasingly important, considering that many of the men must travel away for long periods for employment purposes, leaving women to head most of the households. They are particularly adept at various activities including: diversifying from agriculture to e.g., artisanal and ethno- and ecotouristic activities. Contact with the market economy has brought a change in economic activities towards commerce and interchange with other communities: women have taken the lead in these new activities. Additionally, women are assuming more important political and representational roles which should be encouraged through proper training. (e) Awareness of Indigenous Space and Time Dimensions. The above described operating principles are all theoretical if indigenous space and time dimensions are not properly understood and applied in practice. Such notions as efficiency, effectiveness, rationality, fixed time periods have very different meaning in each culture. As an example, time is seen in indigenous cultures as the movement created by the encounter between the past and the present, whereas in western culture "time is money". A development strategy, a subproject, a training course, a type of organization which has been very successful in other market/western type ANNEX D Page 6 of 6 communities, may be an utter failure in indigenous communities. Thus, project promoters, which as much as possible must be from the same ethnic group, must allow the communities great freedom in developing their plans and projects, and avoid at all costs trying to impose outside ideas. They must be facilitators of the communities expressing their own ideas within the values of their culture. 14. Components Most activities in the project areas, including the indigenous areas, are demand-driven by the communities, so as to respect their priorities and cultural sensitivities. Thus, it is not possible to detail exactly what the project actions would be. However, from the meetings held with indigenous groups during project preparation, the following are likely or indicative areas of project action. 1. Technical Assistance and Training Training of indigneous NGO's or NGO's that assist indigenous groups; Participatory planning in indigenous communities to produce community action plans and priorized investment needs; Legal Aspects (land tenure, natural resources use, indigenous rights); Technical Aspects (productive activities, project management); Institutional development and strengthening of indigneous organizations (planning, decision-making, strenghtening leadership). 2. Project Preparation and Investment (Subprojects) Productive infrastructure and income-producing activities (agriculture, agroforestry, ecotourism); Reviving and utilizing traditional knowledge; Buffer Zone management; Study tours, participation in national and international fora that deal with indigenous issues; 15. Institutional Issues and Budget. The above component and institutional issues and budget must be worked out in greater detail. Funds in the proposed Project Preparation Facility (PPF), which would begin activities before the project is actually declared effective, would be utilized to complete these aspects of the IPDP. annexdl.doc; tresierra/raine/uquillas3/19/97 Annex E Page 1 of 5 PANAMA RURALPOVERTY AND NATURAL RESOURCES PROJECT Project Componentsby Year - Totals Including Contingencies (US$Million) Totals IncludingContingencies 1997 1998 1999 2000 2001 Total A. Sustainable Rural Development 1. Institutional and Community Training, Organization and Planning a. Training and Rural Organization 0.8 1.5 1.0 0.0 0.0 3.2 b. ProductionTechnology Development 0.7 0.8 0.6 0.5 0.4 3.0 c. ProductionSupport 0.3 0.3 0.3 0.4 0.3 1.6 Subtotal Institutional and Community Training, Organization and Planning 1.8 2.6 1.9 0.9 0.7 7.9 2. Fund for SustainableAgricultural Rural Development 1.9 3.4 3.8 3.7 2.9 15.7 Subtotal Sustainable Rural Development 3.7 6.0 5.7 4.6 3.6 23.6 B. Biodiversity Conservation 1. Pacific Zone ProtectedArea Management 0.3 0.1 0.1 0.2 0.1 0.9 2. AtlanticBiological Corridor 1.7 2.2 2.5 2.5 1.9 10.8 Subtotal Biodiversity Conservation 2.0 2.3 2.6 2.7 2.0 11.6 C. ProjectCoordinating Unit 1.0 0.7 0.7 0.6 0.6 3.7 Total PROJECT COSTS 6.7 9.1 9.0 7.9 6.3 39.0 Annex E Page 2 of 5 PANAMA RURALPOVERTY AND NATURALRESOURCES PROJECT ExpenditureAccounts by Years - Totals Including Contingencies (USSMillion) Totals Including Contingencies 1997 1998 1999 2000 2001 Total L Investment Costs A. Civil Works 2. Buildings 0.0 0.1 - - - 0.1 3. Facilities 0.2 0.3 0.4 0.2 0.2 1.2 Subtotal Civil Works 0.2 0.3 0.4 0.2 0.2 1.3 B. Equipment 1. Computerand OfficeEquipment 0.3 0.3 0.2 0.1 0.1 1.0 2. OfficeEquipment 0.1 0.1 0.0 0.0 - 0.2 3. ConununicationEquipment 0.0 0.0 0.0 0.0 0.0 0.1 4. Machinery 0.0 0.0 - - - 0.0 6. Training Equipment 0.0 0.0 - - - 0.1 7. FieldEquipment 0.1 0.1 0.1 0.1 0.1 0.5 8. Fumniture 0.0 0.0 - - 0.0 Subtotal Equipment 0.6 0.5 0.3 0.3 0.2 1.9 C. Vehicles 0.7 0.5 0.2 0.1 0.0 1.5 D. Training 0.6 0.6 0.5 0.2 0.2 2.1 E. Consultants and Technical Assistance 1. Studies 0.7 0.5 0.1 0.1 0.2 1.6 2. InternationalTechnical Assistance 0.0 0.3 0.4 0.6 0.3 1.7 3. Local TechnicalAssistance 1.2 1.7 2.3 1.6 1.3 8.1 Subtotal Consultants and Technical Assistan 1.9 2.5 2.8 2.3 1.8 11.3 F. Rural Developmentand BiodiversitySubpro 1.9 3.4 3.8 3.7 2.9 15.7 Total Investment Costs 5.8 7.9 7.9 6.9 5.2 33.8 IL Recurrent Costs A. IncrementalSalaries 0.3 0.4 0.5 0.4 0.4 1.9 B. Inputs 0.0 0.1 0.0 0.0 0.0 0.2 C. Transportacion 0.2 0.4 0.3 0.2 0.1 1.2 D. Operation and Maintenance 0.3 0.4 0.4 0.4 0.5 1.9 Total Recurrent Costs 0.8 1.2 1.1 1.1 1.0 5.3 Total PROJECT COSTS 6.7 9.1 9.0 7.9 6.3 39.0 Annex E Page 3 of 5 PANAMA RURALPOVERTY AND NATURAL RESOURCES PROJECT Expenditure Accounts by Financiers (US$ Million) Local IBRD GEF Communities GOP Total For. (ExcL Duties & Amount % Amount % Amount % Amount % Amount % Exch. Taxes) Taxes A. CivilWorks 1. CW- SustainableRural Development 0.0 80.0 - - - - 0.0 20.0 0.1 0.1 - 0.0 0.0 2. CW-Biodiversity Conservation 0.2 17.0 0.9 73.0 0.0 4.0 0.1 6.0 1.2 3.1 - 1.2 0.1 Subtotal CivilWorks 0.2 19.6 0.9 70.0 0.0 3.8 0.1 6.6 1.3 3.3 - 1.2 0.1 B. Goods /a 1. Equip.-SustainableRural Development 1.2 82.2 0.2 11.5 0.0 0.7 0.1 5.7 1.4 3.6 1.3 0.0 0.1 2. Equip-Biodiversity Conservation 0.3 17.0 1.1 73.0 0.1 4.0 0.1 6.0 1.6 4.0 1.5 0.0 0.1 3. Equip.-PCU 0.2 75.0 0.0 7.0 - - 0.0 18.0 0.2 0.6 0.2 0.0 0.0 Subtotal Goods 1.6 50.0 1.3 41.0 0.1 2.2 0.2 6.8 3.2 8.2 3.0 0.0 0.2 C. Consultant Services 1. Consultants-SustainableRural Development 3.6 45.5 3.6 46.3 0.2 2.8 0.4 5.4 7.8 20.1 2.1 5.7 - 2. Consulltants-Biodiversity 0.3 17.0 1.1 73.0 0.1 4.0 0.1 6.0 1.5 3.9 - 1.5 0.0 3. Consultants-PCU 1.3 75.0 0.1 7.0 - - 0.3 18.0 1.7 4.5 - 1.7 - Subtotal Consultant Services 5.1 46.2 4.9 43.8 0.3 2.5 0.8 7.5 11.1 28.4 2.1 9.0 0.0 D. Training 1. Training - SustainableRural Development 1.3 78.7 0.2 14.0 0.0 0.9 0.1 6.4 1.7 4.3 0.0 1.6 0.1 2. Training - Biodiversity Conservation 0.0 17.0 0.1 73.0 0.0 4.0 0.0 6.0 0.2 0.5 - 0.2 0.0 Subtotal Training 1.3 72.2 0.4 20.2 0.0 1.2 0.1 6.4 1.9 4.8 0.0 1.8 0.1 E. Fund 0.3 76.0 - - 0.1 19.0 0.0 5.0 0.4 1.1 - 0.4 0.0 F. Rural Development and BiodiversitySubprojects 1. Rural Development Subprojects 10.3 72.6 - - 3.2 22.4 0.7 5.0 14.2 36.4 0.0 13.5 0.7 2. BiodiversitySubprojects 0.4 76.0 - - 0.1 19.0 0.0 5.0 0.6 1.4 - 0.5 0.0 Subtotal Rural Development and BiodiversitySubprojects 10.7 72.7 - - 3.3 22.3 0.7 5.0 14.8 37.8 0.0 14.0 0.7 G. Incremental recurrent costs 2. Operation and Maintenance O&M-SustainableRural Development 0.6 22.6 - - - - 2.2 77.4 2.8 7.2 - 2.8 0.1 O&M-Biodiversity 0.2 23.0 0.6 64.7 0.0 4.0 0.1 8.3 0.9 2.2 - 0.8 0.0 O&M-PCU 1.1 75.0 0.1 7.0 - - 0.3 18.0 1.5 3.8 - 1.5 0.0 Subtotal Incremental recurrentcosts 1.9 37.7 0.7 12.9 0.0 0.7 2.5 48.8 5.2 13.2 - 5.1 0.1 H. PPF 1.2 96.4 - - - - 0.0 3.6 1.2 3.1 0.2 1.0 0.0 Total 22.5 57.7 8.1 20.8 3.8 9.8 4.6 11.7 39.0 100.0 5.3 32.5 1.2 \a Includingvehicles. Annex E Page 4 of 5 PANAMA RURAL POVERTY AND NATURAL RESOURCES PROJECT SuggestedAllocation of LoanProceeds (USS W00) Disbursement Loan Amount % A. Civil Works 1. CW-SustainableRural Development 50.0 80.0 2. CW-BiodiversityConservation 200.0 80.0 B Goods/a 1. Goods- Rural SustainableDevelopment 1,100.0 100 FE, 80 LE \a 2. Goods- BiodiversityConservation 300.0 100 FE, 80 LE \a 3. Goods- PCU 200.0 100 FE, 80 LE \a C. ConsultantServices 1. Consultants-SustainableRural Development 3,000.0 100.0 2. Consultants-Biodiversity 500.0 100.0 3. Consultants- PCU 1,700.0 100.0 D. Training 1. Training - SustainableRural Development 1,200.0 100.0 2. Training- BiodiversityConservation 200.0 100.0 3. Training - PCU 100.0 100.0 E. Rural Developmentand BiodiversitySubprojects 1. Rural DevelopmentSubprojects 9,600.0 100.0 2. BiodiversitySubprojects 400.0 100.0 F. OperatingCosts 1. SustainableRural Development 650.0 90, 60, 40 \b 2. Biodiversity 100.0 90, 60, 40 \b 3. PCU 800.0 90, 60, 40 \b G. PPF 1,200.0 Unallocated 1,200.0 Total 22,500.0 Loan amountsfinanced by IBRD a\ FE: ForeignExpenditures, LE: Local Expenditures b\ 90% the first two years after EffectiveDate, 60% third and fourthyear, and subsequently40% Annex E Page 5 of 5 PANAMA RURALPOVERTY AND NATURALRESOURCES PROJECT Estimated Disbursements (US$Million) Standard Disbursement IBRD Semester Disbursement During Semester Cumulative Disbursement Profile /b FY Ending Amount % of total Amount % of total % of total 1997 /a Jun-97 - 0% - 0% 0% 1998 Dec-97 0.7 3% 0.7 3% 3% Jun-98 1.5 7% 2.2 10% 10% 1999 Dec-98 3.7 16% 5.9 26% 26% Jun-99 2.7 12% 8.6 38% *38% 2000 Dec-99 3.5 16% 12.1 54% 54% Jun-00 2.8 12% 14.9 66% 66% 2001 Dec-00 3.5 16% 18.4 82% 82% Jun-01 1.9 8% 20.3 90% 90% 2002 Dec-01 0.9 4% 21.2 94% 94% Jun-02 1.3 6% 22.5 100% 100% Total 22.5 100% a/ The Loan is assumed to become effective during the last quarter of FY 1997 or the first quarter of FY98. b/ Standard Disbursement Profile for all sectors in Panama (June 1995) o:\Uat\Uatad\maurizio\panama\buff\annex-e.xls TRoncal,MGuadagni 4/17/97 14:42 ANNEX F Page 1 of 4 PANAMA RURAL POVERTY AND NATURAL RESOURCE PROJECT Plannine. Budeetine, Monitoring and Evaluation and Regorting 1. Due to the pilot nature of some of the methodologiesutilized in this project, effectiveplanning and activemonitoring are essentialto guide adjustmentsduring project implementationand evaluatesuccess relative to project objectives. Planning,monitoring and reportingwould be the responsibilityof the Project CoordinatingUnit (PCU) with MIDA and INRENARE. FinancialIndicators, Status of Legal Covenants,Key PerformanceIndicators for each component,and Project ImpactIndicators are in Appendixes1 through 4.of this Annex 2. Planning and Budgeting. The PCU would prepare an AnnualOperating Plan (AOP) for each project year based on the phasingof project objectivesas indicatedin the project cost tables and implementationschedule (Annex C). The AOPswould includea detailedlist of activitiesto be carriedout for each componentand subcomponent,their timetable,physical inputs required,updated unit pricesand total costs, and counterpart fundingrequirements, based on the disbursementpercentages of the Bank Loan for each category of expenditure. MIDA and INRENAREwould includethe resource requirementsfor this project in their annualbudget submissionto the Ministryof Finance. The PCU would submitthe AOPs and budget requeststo the Bank by October of each projectyear. 3. Monitoringand Evaluation. Monitoringand evaluatingproject activitiesis one of the most importantmanagement tools particularlyfor the rural development component. The differentiationbetween the two would be clearlyestablished from the beginningas there is often confusionon this theme:monitoring corresponds to the continuousassessment of project implementationin relationto agreed schedules,and the use of inputs,infrastructure and servicesby project beneficiaries.Evaluation is the periodicassessment of a project's relevance,performance, efficiency and impact(both expectedand unexpected)in relationto stated objectives. 4. While the project would have a smallM&E unit madeup of the unit head, with considerableproject fieldexperience, and an assistant,most of the projectmonitoring would be carriedout on contract by a specializedinstitution who would also assist in settingup the systemsfrom the beginningof the project. In additionto the project's M&E, two other supervisionlevels would also exist:at the communitylevel by the SustainableRural DevelopmentCommittee, and by the NGOs, governmentagencies, and executingagencies that would assist in project implementation.From a financial standpoint,use of funds would also be supervisedby the communities,project auditors (internaland external),and the NationalControllers Office. ANNEX F Page 2 of 4 5. In addition to monitoring information collected for progress reporting as described below, the project would carry out base-line surveys to measure changes in the target population. 6. The PCU would prepare cummulative quarterly reports at the end of each calendar year. The quarterly reports would provide evaluations of progress and impact per quarter, which would enable MIDA and INREANRE to fine-tune activities, in agreement with the Bank. The quarterly reports would be submitted to the Bank within 45 days of the end of each quarter. 7. Quarterly and annual reports would include the following sections: (a) Summary of project implementation would give a general description of project implementation during the period under review, by component, including the project's overall status, adherence to the AOPs and development impact to date. In addition, this section should comment on project administration issues, including fund flows, government budgeting, disbursements, procurement, accounts and audits and technical assistance. The status of actions proposed and issues unresolved from the previous quarterly report, and actions proposed for the following period, would also be included. (b) Physical indicators would provide quantitative indication of project implementation by component and subcomponent as identified in Appendixes 3 and 4. (c) Financial performance. This section would provide a summary of funds released by each financier, including government, during the quarter by project componentand disbursementcategory (Appendix 1). Procurement methodsand status by disbursementcategory, estimated future disbursement,status of accountsand audits would also be providedin section(a) above. (d) Status of legal covenants. This section would representa summaryof compliancewith the project's legalcovenants with cross-referenceto the legal documentsand the SAR. The informationwould be presentedas shown in Appendix2. 8. The format of quarterlyand annualreports would be agreedupon with the Bank at Project start-up. A draft outlineof quarterlyreports follows: ANNEX F Page 3 of 4 A. GeneralStatus 1. Major recent events 2. Adherenceto AnnualOperating Plans 3. Developmentimpact to date B. Project administration 1. Fund flows and governmentbudgeting 2. Disbursements 3. Procurement 4. Accountsand audits 5. Technicalassistance C. Monitoringand evaluation(by subcomponent) 1. Progress on achievementof physicalindicators 2. Progress on achievementof financialindicators 3. Progress on achievementof impactindicators D. Componentby componentand subcomponent,discussion of status, problemsand recommendedactions (who shoulddo what, by when) Attachment1. Summarystatus of recommendedactions from last report Attachment2. Tableson physicalindicators Attachment3. Tablesof FinancialIndicators Attachment4. Table showingstatus of legalcovenants. 9. In additionto the abovesections, annual reports would includean analysisof changesbetween the AOPsand the activitiesexecuted during the period under review. The annualreview would have more elementsof measuringproject impact(evaluation) and would includesuch elementsas the status of: * Communityparticipation and role of the project and executingagencies in promotingit; * Technicalassistance and trainingprograms for the communitiesand particiapting agencies; * Functioningof all aspects of the subprojectcycle; * Participationof bufferzone communitiesin the managementof protectedareas throughthe joint community/INRENAREmanagement committees; * Participationof womenin project activities; * Acceptanceof indigenousgroups of project activitiesand the methodologiesused to includetheir participation. 10. A list of monitoringand impactindicators is presented in Appendixes3 and 4 respectivelyfrom whichthe followingten have been condensedas prime indicators of projectprogress in meetingits objectiveand ensuringsatisfactory implementation. ANNEXF Page4 of 4 Quantitativeindicators are in the Appendices. It shouldbe noted that as much of the project actionsare demand-oriented,many of the indicatorsin the rural development componentare indicative. (a) Performancedegree of the organizationalstart-up and operationof the agriculturalfund for sustainablerural development'sproject coordination unit. (b) Number of SDCs organizedand trained. (c) Number of technicians,promotors, NGOs and service enterprisesinvolved in SDCstraining and organizationalactivities, as well as eventscarried-out and beneficiariesattended. (d) Number of projectsidentified, prepared under negotiationand approvedby the Fund, and funds disbursed. (e) Number of projectsunder executionwith Fund resources. (f) Womenand Indigenousgroups participationin subprojects. (g) Mitigationdegree of degradingeffects in protectedareas and the MesoamericanCorridor. (h) Meetinginfrastructure targets in protected areas and constitutionof public/privateprotected area managementcommittees. (i) Increasein soil surfacethrough recoveryand conservationmeasures. (j) Numberof ecotourismprojects identified, prepared, under negotiation approvedand under execution. ANNEXF AppendixI Page 1 of 1 PANAMA RURAL POVERTY AND NATURALRESOURCES PROJECT FinancialIndicators 1. Expenditureduring periodand to date by projectcomponent and subcomponents. 2. IBRDdisbursements during period and to date by componentand subcomponents. 3. Procurementby category:actual, in process and planned. 4. Contributionsby local beneficiaryorganizations during periodand to date. 5. Status of current audit reports. 6. Status of actions taken followingthe previousyear recommendationsas expressedby the auditingfirm in its managementletter. annexf raine 17/1/97 ANNEX F Appendix2 Page 1 of 1 PANAMA RURAL POVERTY AND NATURAL RESOURCE PROJECT Status of Legal Covenants Agreement Section Covenant Present Status Original Revised Description of Comments Type Fulfillment Fulfillment Covenants Date Date Covenant Type Present Status: I = Accounts and Audits C = Covenant complied with 2 = Financial performance/revenuegeneration from beneficiaries CD Compliedwith after delay 3 = Flow and utilizationof project funds CP = Compliedwith partially 4 = Counterpartfunding NC = Not compliedwith 5 = Managementaspects of the project of executing agency 6 = EnvironmentalCovenants 7 = Involuntaryresettlement 8 = Indigenouspeoples 9 = Monitoringreview and reporting 10 = Projectimplementation not coveredby categories1-9 > 11 = Sectoralor cross-sectoralbudgetary or other resourceallocation , 12 = Sectoralor cross-sectoralpolicy/regulatory/institutaional actions m m > 13 = Other o x Annex F Appendix3 Page 1 of 6 PANAMA RURAL POVERTY AND NATURAL RESOURCES PROJECT KEY PERFORMANCE INDICATORS Note: Indicators for subprojects are indicative and will depend on priorities defined in demand-driven CommunityAction Plans. ..^. COMPO...T/SU.-..MP...... N.T...... 1. RURALDEVELOPMENT COMPONENT Community Organization and Training Sub-component Communitv Oruanization Creation of Sustainable DevelopmentCommitees SDC unit 20 100 100 220 Trainina Technicians beneficiaries people 4 16 10 30 Promoters beneficiaries people 40 200 200 440 Productive Technology Development Sub-component Agricultural Producton System Prototype Equipment Validation Parcels unit 40 60 60 60 60 280 Germoplasma maint. uni 4 6 6 6 6 28 Seed beds unit 4 6 6 6 6 28 Goat Mod. uni 12 12 Difussion Crops & pasture unit 180 180 90 50 500 Goat Mod. uni 12 24 36 Training Courses unit 24 36 11 71 Seminars uni 56 36 29 10 131 In-service training people 12 20 20 8 60 Field trips uni 28 12 12 6 58 Days in the field unit 8 6 14 S Producive Projects PR-1 unk 200 225 225 225 225 1100I I t PR-2 uni 120 135 135 135 135 660 'fi PR-3 unit 88 88 88 88 88 440 O X Small IrrigationWorks Communitary irrigation Project uni 5 5 15 15 10 50 Small irrigation Project unit 20 30 30 20 100 Annex F Appendix 3 Page 2 of 6 SM ~~~~~~~~~~~~~~~~~N ...... ACTM1Y ~~~~~~~.e.*...... OM SocialReforestation Plantationsand enterpnses Woodproducts plantations Area has 1000 1000 1000 1000 4000 FruitPlantations Area has 250 250 250 250 1000 Nurseryenterprises Project unit 3 6 9 Seedenterprises Project unit 3 3 Training Internationaltechnical assistance Consultant rn/rn 2 2 Training Seedgathering and processing Courses unit 2 2 2 6 Seedproduction Beneficiaries families 30 30 30 90 Nursering Beneficiaries families 30 30 60 ForestEnterprises Management Technicians people 3 6 9 ProductionSupport Services Sub-component Agriculturalmarketing services Institubion-building Supportto ProducerOrganizations Training Technicians Beneficiaries people 6 6 Otherpublic and private Beneftciaries people 5 5 5 5 5 25 Trainingaboard Travel unit 1 3 4 Observationtrips Assistantships unit 2 2 Extensionfor producers Buyersdirectory: By district Directories unit 2 2 At the nationallevel Directories unht 1 1 Informationsystem Systems unit 1 1 e Determinationof marketableoffer Study unit 1 1 0 Assistanceto P0 in purchaseand sale contracts Contracts unit 6 8 15 11 40 t TechnicalAssistance. Intern. consultants IOX Internationalconsultant F Informationsystem operation Consultants in/in 1 1 w% Classificationstandards Consultants in/in 1 1 Annex F Appendix3 Page 3 of 6 ~~~~~~~...... COMPONENTfSUB-COMwM- ...... l N .....::A...... : -. :.::...... -f4...... IT. ACTIVtY ...... T... t.2 Supportto RetailerGroups Promotionof RetailerChains Organizations unt 2 2 1 5 Internationaltechnical assistance Nationalconsultant I Warehouseadministration Consultants in/in 2 2 Supplyplant Consultants m./m. 2 2 Internat.consultant I Retailerchains Consultants n/n 1 1 MarketingExtension Service Promotionand organization of: Newgroups Organeations unit 10 20 45 25 100 Newassociations Organizations unit 2 4 9 5 20 Neworganizations strengthening and support Organizaitons unit 4 4 6 6 20 Trainingof extensionists Beneficiaries people 5 11 18 6 40 Supplyingagreements Agreements unit 4 4 4 4 4 20 Establishmentof 2nd.degree marketing P0 Organizations unit 1 1 LocalTechnical Assistance and Training CommercialExtension System Consultant m/m 1 1 2 Trarning Assistantships Beneficiaries Prod. 1 1 Coursesfor REs Beneficiaries unit 2 4 4 4 14 Radioprograms Global $ thous. 10 10 10 10 10 50 FarmersFairs Establishmentof fairs At the locallevel Fairs unit 4 11 14 25 54 At thedistrict level Fairs unit 8 14 24 18 26 90 Participationof POsin fairs Organizations unit 4 16 34 60 114 RutralConcentration Markets Markets unit 1 2 2 5 e Technicalassistance an TiZ Consult.in RuralMarkets(ont.-) Consultant m/m 1 1 2 (D :1X Consult.in Designand localiz (nat.-I) Consuitant m/m 2 2 4 u-~ z Training Assistantships.Market operation Beneficiaries people 4 4 Seminar:UrbanFood Planning Beneficiaries unit 1 0 Annex F Appendix 3 Page 4 of 6 Support to Municipalbtes Developmentof MasterPlans Plan unit 6 7 13 Plandesign for typicalpublic markets Plans unit 1 1 InternationalTechnical Assistancse Mabrketmanagement Consultant mn/m 3 3 Training Seminar.Market Urban Pbanning Seminars unit 1 1 Courseswithin the country Courses unit 2 2 2 2 8 Beneficdaries peopbe 50 50 50 50 200 Publications Marketingguirelines Copies unXt 250 250 MunkcipalMarkets Master Plans Copies unit 325 325 RuralAAro-indsr Trainingand TechnkcalAssistance RAI Promoters Beneficiaries peopie 6 6 RAIVolunteers Beneficiaries people 40 40 Investm7entPromnoton SmallDevelopment Operations SDO project 5 15 13 2 35 RegionalProjects RPs project 2 2 2 6 ForestryProjects FPs project 2 2 2 6 ProductiveInfrastructure Service Communal Trainingof roadworkers Beneficiaries people 10 23 23 23 23 102 Rehabilitationand Maintenanceof ruralroads Extension kms. 40 92 92 92 92 408 2. BIODIVERSITYCONSERVATION COMPONENT NAPASModernization (Formnspart of BiodiversityConservation : Component) ¢ 3 >c Strenatheninaof NAPA'sPlannina gf Informnatonsystem Study unit 1 1 o X Equipment lot 2 4 6 4 2 18 o Materials lot 2 6 12 16 18 54 SlNAP'sCoordination and Planning Workshops unit 1 1 1 1 1 5 Annex F Appendix 3 Page 5 of 6 .~~~~~~'--G.M' '' ON' NTUB&COMP. -C.,,,,. M 4NTENT '-- ININi-'DICATOS A.5-----01 ...... - -- UNIT - 4 TOA ...,...... ,...... , ...... ,Cg...... Systematization,up-dating and compatibilization of the regulatoryframework ManagementPlans LargeAreas Studies unit 1 2 3 SmallAreas Studies unit 1 2 2 5 Executionof OperationalPlans Workshops unit 4 6 8 12 10 40 NationalTechnical Training Program Evaluationof needs Study unit 1 1 TechnicalTraining DAPVSand Regional staff Courses unit 1 1 1 1 4 Workshops unit 2 2 4 Scholarships unit 2 2 2 1 7 Coordinationand ProgrammingSystem Financingmechanisms for PL Study unit 1 1 Unitfor SINAP'sfinancing to PL Office lot 1 1 Provisionof Infrastructure Adm.and Protec. Infrastructure Workscontract Contract unit 9 9 9 9 9 45 Maintenance Contract unit 9 9 9 9 9 45 Design Contract unit 1 1 Equipment,maint. for eq. adm.and prot Contract unit 9 9 9 9 9 45 HumanResource Strengthening TechnicalTraining PAStaff Workshops unit 1 1 2 2 6 Scholarships unit 4 4 2 2 12 Fireprevention and control Equipment lot 1 1 oq o z Q0 z GCsPromotion Workshops unit 1 2 2 2 1 8 unP.QM '*ti Environmentaltraining and education Study unit 1 1 oX Workshops unit 4 4 Modules unit 12 12 12 12 48 Annex F Appendix 3 Page 6 of 6 .MPONENT/SUB-CO~MPON1...~~~~~~~~~~~~~~~~~~~~~~~~~...,..s IND...... & ...... ---- ...... R PA'sLimits and demarkation Titling Farmtitling Titles unht 350 1000 1000 1000 3350 Delimitationof farmswithin the PAs Measurement unit 200 500 400 1100 Mapssurvey Maps unit 1 2 3 Delimitatbonin PA s Demarkationplan of prioritylimits Study unit 1 1 Negotiationand demarkation Contract unit 1 3 3 7 Demarkationof limits Paths km 200 540 200 940 Buoys unit 60 30 90 Maintenanceof limits Paths km 195 400 595 Buoys unit 60 90 90 240 BiodiversityInformation and Planning* CapacityBuilding for Biodiversity ConservationSustainable Use * BiodiversityConservation Investment Program * 3. PROJECT COORDINATION UNIT Localand international assistance Establishment,organization and start-up of the PCU Contracts Period 1 1 Managementand Training System Contracts Period 1 1 2 Managementand Evaluation System Contracts Period 1 1 1 1 1 5 Pzr Promotion,establishment of rural banks Contracts Period 1 1 1 3 oQ t e ExternalAudit Contracts Period 1 1 1 1 1 5 oy X *Thesethree Subcomponents, with the exceptionof the NAPASmodernization which forms part of the BiodiversityConservation Investment Subcomponent F S (to befinanced by IBRDand GOP) are still underpreparation for GEF Co-Financed,thus indicators are not yetavailable. PANAMA AnnexF RURAL POVERTY AND NATURALRESOURCES PROJECT Appwxix4 PROJECT IMPACT INDICATORS Page 1 of 5 COMPONENT 1: SUSTAINABLERURAL DEVELOPMENT SUBCOMPONENT: COMMUNITY ORGANIZATION(Rural Training and Rural Organization) Comnunity trainig undorganization to udetake Technical assistance, labor,trainig See Anm= A a. Bneficiaries (CDS, independent BE-line swwys conmunal planning includirg diagnosis,then a vehicles, equipment(office) producen or other type of benefictaiecs) cOmmunityaction plan (CAP), and finallyspecific who hve received seghening from investments or sub-project that would operationalize the RPNR Project the CAP. b. Relation bdwee bencficiaics who have Annual monitoring recived sngthening and thoee who hvey (AMS) hAvevsbmitted project propoas. c. Rclation between beneficiancs who have AMS recoved engthening and tbese woe ptojects and donatios or credits hve been approved. d. Relation between beneficiaries who have AMS received strengthening and those who have undeaken contrcts with NGOs, telioca asistance saerviceenterprie. e. Events which hve been carried out, Quately Reports per type of training and topics presented (QR) £ Participants per event and uwfines. QR g. Number of trained technicians and QR irplementation of ctivities in which they have received training. h. Familiy income level, labor use, net Living Standard caniing levels and satisfaction of basic Measurement Survey needs of RPNR Project beneficiary families. (LSMS) i. Relation between women who were QR organized to benefit from the RPNR Project and total potential beneficiries. j. Relation between women who have QR received ognizational support d CD number of conolidated groupn l k. Relation betwe the nmber of QR > organized woman and donaons or o x1 credits grted " X 1. Relbtion bdween the ntaber of orgoiized AMS ul women (groups) aNWrpdymet of credits grasted or fidfillnct of comsttments related to donations mL Ecoomic rsult of projects implemented AMS by wonn groups Annex F Appendix4 Page 2 of 5 SUBCOMPONENT:PRODUCTION TECHNOLOGYDEVELOPMENT (Agricultural and Agroforestry Production System; Mini-Irrigation; Social Reforestation) .. *.*.*.* ..... *.*.. ~~~~~~~~~~~~~~~~~~~~~~...... W~MPUT _- Annual MonitoringSurvey To facilitatethe adoption process of agrnculural Technicalassistance, labor, tools and SeeAnnex A a. Degreeof Adoptionof productionsystems. AMS andagroforestry lechnologies, tailored to the equipment,inputs (seeds, others), b. Adoptionrate of key technologies. systems AMS economic,natural resources, labor andpossibil- vehicles,training. c. Land coveredand farms adopting Riesof the producerand his family. and/or key technologies. and economic AMS the CAP. d. Productionper farm/systerms results for beneficiaries(CDS, independent producersor othertype of beneficiaries). e. Productionincreases per farm. AMS/Base-lineSurvey f. Investmentscarried out at the farm lvel. AMS/Base-lineSurvey g. Numberof partkcipantbeneficiaries. QuarterlyReport (QR) h. Numberof beneficiariesper production QR and/ortechnology system. 0 tZ o X Ln Annex F Appendix4 Page 3 of 5 SUBCOMPONENT:PRODUCTION SUPPORT(Marketing; Agro-industries; Feeder Roads) ~ ~ ~ ~ ~ ~ ~ ~ ~ ~...... Strengtheningof pubic andprivate institutions Technicalassistance, training, labor, SeeAnnex A a. Numberof commercialand agro-industrial Quarterly Report reated to the provisionof this serviceand the vehicles,equipment (office), advertising, projectsimplemented by beneficiariessupported (QR) managerialcapacity of farmermarketing groups; trainingmaterial, civil works. by the RPNR Project. promotingfarmer markets in regionaland sub- b. Adoptiondegree of technical recommend- Annual Monitoring reginal townsand cities and to assistprovincial tions in commercializationand agro-industry. Survey(AMS) munkipalmarkets. c. Numberof beneficiaries(CDSs, independent QR To increasevalue added at iocal level,increase producersor oher type of beneficiaries)who farmers'income and promoterimprove links with comnercialize or have developedagro-industrial the marketingcircuits. projects. To improveroad access to socialservices, d. Numberof small enterprie. OR marketsand create employment. e. Increasein the volume of agro-transformed AMS productionat the farm kvel. f. Numberof participantbeneficiaries. OR g. Kilometersrehabilitated. OR h. Communitiesand producersbeneftted. OR i. Increasein transportedproduction. AMS j. Reductionof transportcosts. AMS k. Irrigatedarea. OR fD(D x x o X Annex F Appendix4 Page 4 of 5 COMPONENT 2: PROTECTED AREASMANAGEMENT SUBCOMPONENTS:(i) Strengthening of the National Protected Area System (NAPAS);(ii) Protected Strengthening of Priority Areas (PAs); (iii) Buffer Zone Development;(iv) EcotourisnL .~~~~~~~ ~~~~~~ ...... ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ :.::::...:~ ~ ~~~~~~~~~~~~~~~~~~~.....~ To promoteinsitutional strengthening of INRENARE Technical assistance,training, labor, SeeAnnex A and in particular, the NAPAS;to a. KmTS.of PA boundares which are develop and vehicls, civil veks, equipmrrent ckarly QuarterlyReport (QR) implementmanagement plans andproperly demarcated. por prionary PAs; (office,communications, country, to establishin them b. Mitigationof degradation basicinfrastructure (e.g., training,electric), effects In protected Annual MonitonngSurvey adverising, areas. administrative,scientific, ecotouristic); to clarify (AMS) c. Recommendations theland tenure situation of theprotected areas on the conservationof AMS throughthe titlingof contiguousproperties and protectedareas, included and executedin individual stoppingthe expansion of setters insidethe productionplans. d. PAs; to promoteenvrnmental projectsin the Increasesin soil surface with conservation AMS bufferZones, including ecotouristic activities and recoverymeasures. e. whichwould generate inrcome or theneighboring Increasesin soil fertility,improved and AMS comrnwnities,as wel as the PAsystem. recovered. f. Number of ecotoursticprojects implemented OR by beneficiaris (CDS, indepenrentpoducers or oter typeof befaries) suported by the RPNR Project. 9. Adoptionrate of tecdnicalr AMS on ecotourisi. h. Numberof wnmlecoturisc terpris OR in operation. 1.&1 Annex F Appendix4 Page 5 of 5 FUND FOR SUSTAINABLEAGRICULTURAL RURAL DEVELOPMENT(FUSARD) . :...... ~ ~ ~ ...... , :'.'... OBJECTIVE INPUTS OUTPUTS INDICATORS MEASUREMENT To financeon a matchinggrant basis, rural Financialresources for subprojects, SeeAnnex A a. Grant or credit beneficiaries. QuarteriyReport (QR) developmentactivities and Investment sub- technicalassistance, training, equipment b. Grant or credit women beneficiaries. QR projects. (ofrice,communications), vehicles. c. Sub-projectsfinanced or donated in QR FUSARDwill be involved,with differentlevels agriculturalproduction systems, small irriga- of responsiblity,in sub-projectseletion, tion works and social reforestation;area appraisal,approval, disbursemnt, monito4ing covered. andtechnical follow-up. d. Sub-projectsfinanced or donatedin OR commercialization,agro-industry and communal infrastructure. f. Paymentdelay situations Annual MonitoringSurvey (AMS) g. Paymentdelay causes. AMS h. Revolvingfunds operating. AMS k.n 0. H. ~ °X ul ANNEX G Page 1 of 5 PANAMA RURAL POVERTY AND NATURAL RESOURCES PROJECT Economic Analysis of the Community Subvrooects and Protected Areas 1. The Sustainable Devepment Component is demand-driven, thus it is impossible to accurately determine the allocation of project funds and thus carry out economic analysis for the full project. However, indicative economic analysis was carried out on specific subproject models identified by communities as being of interest to them during project preparation. In addition, the analysis of selected protected areas was also carried out. Environmental analysis is further detailed in document 13 of Annex H. 2. The analysis results showed the economic feasibility of specific subprojects. Real market prices were used for purchased inputs, as well as conservative levels of plant capacity use; a conservative 12 percent discount rate; labor costs at official prices' assuming that opportunity cost is the same as the official minimum wage. The models (except forest plantations and agro-industries) were designed for a five-year period, corresponding to the Project period; however, the working life of these models is generally longer. The models' analyses are summarized in Table 1. Forestry Subprojects 3. Timber Seed Enterprises. A plant to process 100 kg. of seeds during a four months/year period at real sale prices of $130/kg was designed. A 20 percent initial capacity (considering staff inexperience) and a 70 percent final capacity yields an IRR of 22.2 percent and a $2716 net present value of that investment at a 12 percent discount rate. The enterprise could bear a 25 percent price reduction, and an increase to 100 percent of its productive capacity and still yield an IRR of 15.6 percent, a benefit/cost ratio of 1.14, and generate more than 400 workdays per year. 4. Commercial nurseries. Nurseries having a capacity to produce up to 250,000 seedlings/year (200,000 timber-yielding and 50,000 fruit trees) would be established. Data are based on the increase of the real demand under the incentives provided by the Reforestation Law No. 24 of November 23, 1992. The initial fixed investment is estimated at US$7,063, and the working capital for the first year would be financed. Production would start at a 30 percent capacity and reach full production by the third year; sales have been estimated at $0.15 per forest seedling and $0.50 per fruit seedling (prices are below commercial prices2 ), in order to better access the market. At these prices, the enterprise would yield a robust 24.3 percent IRR, and a $15,823 net present Minimumwages are frequentlynot paid in the region. 2 The commercialprice of the seedlingsis $0.20 for timber-yieldingseedlings and $0.60 for fruit tree seedlings. ANNEXG Page 2 of 5 valueat a 12 percent discountrate. Whenestimating sales at marketprices, a 36 percent IRR is obtained,and a benefit/costratio of 1.77. Table 1. Analysisof IndicativeCommunity Subproject (US$) Activity Plant FixedInvest- Average Averap Man RR NPV Codt Cacity mnot cost income Days (%) (12%/yr.) Benefit Usage %l p/yr.(US$) r P/vr. No.} - Raio SeedsProcesskn 20-70 5,810 2,490 5,460 433 22.1 2,715 1.36 Nursery 50-100 7,063 24,8S0 48,500 790 24.3 15,823 1.36 PinePlantatn. (1ha) n.s. 930 51 660 38 16.7 1,133 6.57 CedarPlantatn(1 ha) n.s. 930 930 577 38 13.8 467 12.73 Plantat.(4000 has.) n.a. 2,576,100 2,576,100 2,713,043 29,287 18.8 25,040 9.94 Agrolndustry Cheeseprocessor 70-96 12,372 150,225 64,966 1,248 20.0 7,091 1.31 CoffeemIlN 55-75 26,604 53,186 157,265 624 12.5 2,178 1.03 Fruit processor 60-80 110,910 310,241 348,507 3,120 16.1 27,140 1.20 Wood 22-66 34,350 175,546 194,400 2,400 18.9 11,686 1.17 Agrculture Technology n.a. n.a. 746 1,113 109 49.0 1,290 1.48 SquashProd. (Iha) n.a. n.a. 619 1,000 61 .. 340 1.61 OtoeProd. (1 ha)*' n.a. n.a. 581 1,000 52 374 1.61 * Frameworkfor 1 ha. or productionin crop succession(rice, corn, beans, and cassava) ** Otoe is a vegetableproduced for the local or exportmarket. Annual models;IRR was not calculated. 5. ReforestationSubprojects. The econormicfeasibility of one hectare plantationof pine trees (exotic speciesalready introduced in the regiontwo decadesago) and one of cedar (cedro - a native species)was analyzed,as well as a 4,000 ha. plantationwhich approximatestotal demandfor establishingcommunity forests (these are areas that already have matureforests being harvested). First revenueswould be obtainedas of year 12 (pine)and 15 (cedar). This is not economicallysustainable for the average project beneficiary,if they are not supportedwith alternativeswhich generateshort and medium term revenuesor associatedactivities (for example,agro-forestry). Reforestation is the onlyactivity considered in the model, and combinationswith other short-termmodels has not been carriedout. 6. Sales pricesper square meter of wood are marketprices 3, as well as the cost of the seedlings($0.20). In a one ha. pine plantation,retums would be obtainedat year 12 through thinningof thin and medium-sizedtrees whichcan be used in construction. The zone's vegetationis herbaceouswith degradedsoils, and therefore there are lower clearing costs than those associatedwith other types of soils and vegetation. A 20 year felling period is estimated,obtaining a 17% internalrate of return (IRR) and a benefit/costratio of 6.57. In a one ha. cedar plantation,although gross revenuesare largerbecause the 3 US$10per square foot of thin wood,US$60 per square foot of medium-sizedwood and USS80per square foot of thick wood. ANNEX G Page 3 of 5 wood volumeincreases and is quoted at a higherprice, the economicreturn is lower (14 percent IRR) becausethe periodto harvest is longer (years 15 and 22) as well as the fellingage (30 years). Greater incentivesto developthese projectswill be providedby combiningreforestation with shorter-termproduction models (para 5). 7. In the 4.000 ha. plantationmodel, regular intervalplanting of 1,000 ha./yearis considered. Initialinvestment includes only basic tools (hoe, machete,pruner) assuming that all tasks will be manual;labor representsmore than 90 percent of operationalcosts. Re-plantingcosts will be US$2.7 millionand maintenancecosts (thinning,wood joint, pruningand felling)represent US$2.2 million. At year 13, the first thinningsare obtained, with increasingrevenues as of that year. At year 23, revenueswould amount to US$62.0 million,which representsa 19 percentIRR and a net present valueof US$25,040at a 12 percent discountrate. Agroindustries 8. Agro-industrymodels were costed at marketvalues and reasonableestimates of productivecapacity in the region; operatingcosts correspondto real prices (raw materials and inputs,transport, etc.) for the three plant models: 9. Rural Cheese Production. Macaracasand Sona are dairy districts;most of productionis sold as fresh milk. The cheese plant was designedwith a capacityto process up to 156,000Its. of milk/year,starting with a 50 percentcapacity, and reaching96 percent in fiveyears. The equipmentis simple,and may be adapted to manufactureother products (yogurt, ricotta, etc.). Whenestimating wholesale prices at marketprices ($0.85/12ounce cheese) a 20 percentIRR is obtained, with a net present value of $7,091 at 12 percent. The activityis quite sensitiveto price modifications:a fivepercent price reduction bringsabout a 90 percentreduction in the IRR (0.92) and a negativeNPV (- 8.000), with a benefit/costratio less than one. Its positiveeffect is significantin terms of employment,since each plant could generatemore than 1,200workdays per year; furthermore,it would reduce fresh milklosses reported in the region. 10. CoffeeProcessing Plant. Thisenterprise is feasiblein the highlandsof Veraguas and Los Santos, where coffee is producedbut not processed. Consideringa 55 percent initialplant capacitywhich reaches 75 percent by year five, a fixed investmentof $26,604, in a 10-yearproduction period, the plant yieldsa 30 percent IRR, sellinghusked coffeeat US$70/qq, whichis lower than the marketprice (US$75/qq). In the sensitivityanalysis, estimatinga 5 percent reductionon a US$70/qqprice, the enterprisewould continueto be profitable(a 12.6 percent IRR with a net present valueof $2,178 at 12 percent and a benefit/costratio of 1.03). 11. Fruit ProcessingPlant. The regionproduces local and export fruits (cantaloupes, watermelons,pineapples). This activitygenerates a considerablequantity of rejectedfruits which could be used as raw materialfor ice-creammanufacture, restaurants, refreshment stores, pastry shops, etc. A plant with a 1,420metric ton capacityof fruit per year was ANNEX G Page 4 of 5 designed, with a US$110,900 investment, including a refrigerated truck to transport the processed product (excluding the truck, the investment would amount to US$85,900). 3120 workdays per year would be created, which increases as the plant use does (starts at 25 percent and reaches 60 percent). This yields a 16.1% IRR and a present value of $27,140 at a 12 percent discount rate. The sensitivity analysis showed high susceptibility to price variations of the final product. A five percent reduction in the final product price, not increasing the production capacity, would reduce the IRR to 11.0 percent. 12. Wood Industry. There are 7,500 state-owned ha. of pine trees in the region, which were planted in the 1970's and are only just beginning to be industrialized (by a local cooperative); furthermore, the country annually imports around US$2.0 million of pine wood, thus demand seems secure. The mobile sawmillwould require a fixed capital investment of US$53,456. Using market prices for the raw material (US$118 per square meter of wood at the sawmill) and a real market price (US$200/sq. meter) a 18.9 percent IRR is obtained, with a net present value of US$11,686. At present, INRENARE (the only owner of pine plantations of felling age) is selling the wood to the cooperative at a symbolic price of US$21 per sq. meter (which only represents 17 percent of the market price). Agricultural Subprojects 13. Productive Projects: three models were developed: one with a low technological level and two with medium technological levels in order to evaluate the technical and economic feasibility of options which promote a self-sustainableproductive system, with minimum changes to existing agronomic cultural practices. (a) Low Technology Model. Production in crop succession (rice/corn/beans/cassava) for marginal subsistence producers (PR1). Contour lines and organic fertilizers are introduced; prices of inputs, labor and final product are market levels. Improved auto-consumption is an objective (especially in indigenous communities) as well as the generation of small surpluses for sale. Between 50 and 75 percent of operating costs are labor (family) costs. A five-year period is estimated to incorporate productivity increases generated by the technology. The average annual operating costs are US$746, obtaining a 49 percent IRR and the creation of more than 100 workdays per year, with small, realistic increases in productivity. At the end of the period, a US$1,290 net present value is obtained. (b) Medium Technology Models. Options for PR2/PR3 and/or PRI with better soils, commercial orientation, and some chemical inputs are incorporated. In these cases, labor represents between 35 and 55 percent of the total cost: a) Squash production (1 ha.): for the export market. Approximate costs per ha/year is US$619 with yields of 200 qq which generate a 61 percent IM; b) Otoe production (1 ha.): has good market ANNEX G Page 5 of 5 demandboth in the local and export markets. Annualcosts would amount to US$581, obtaininga present valueof US$374 at 12 percent and a 72 percentIRR. annexg.doc utnpty/gundaker/raine12/02/97 Rsptk of POanam ANNEXG Rural Povwty and MaturalReaotoet Pro/ltN Tabl z - FIanchnl Antalas br FoUr PRotwtoedAreas "S or t3|}s OptionA- Rapmant of 30%o tlnvabrent Coata 1 LoNaIS. .OvuTv 15,000 15.750 16.53 i17.34 1.233 1914* 21.059 23.165 25,441 2t029 30 35.457 40,77 46642 53,25 6201 1 LocdtV,e.hw Enk eFe" 2 2 2 2 2 a 2 2 2 2 2 2 2 2 Be4w._ce~ 31,5C0 33.075 24.729 J6,as5 31284 42,117 JC,329 50.t62 56,054 61 tt4 70.934 81,551 i3.7U! 107.4Sf 124.026a Peeei,i 1 a 4'T Wv.c 12,075 13.446 15.969 '6,365 21.1:4 25,343 30,412 34.494 43.793 52.551 63,042 75.674 90,Ju 106,971 130.7 F.wag44055 nfrw.Fee 5 5 6 5 5 5 5 5 5 5 5 5 5 5 eaw 1bb1Pe" 60,375 59,431 79,446 91,823 105,596 126,716 152,054 192,470 218.964 262.757 315,306 378.370 454,045 544,453 653,624 -7i r F&.. I000 1,000 1,000 1,000 1,000 1.,O0 1000 1,000 1,000 1,000 1,000 1,Ooo h1000 1,00 F*nmg bthsW :.000 1000 `.000 1,000 1:,000 1.000 1.000 10,000 1,000 1000 1000 1'000 1Q0 .0,00I Cnnpng Fe 1.000 1,150 1,323 1.521 1,749 2,011 2.313 2,660 3.059 3,516 4044 4.652 5,350 elS3 7,07 I Entrle Gross omae 94,4875 105,656 117,497 131,509 147.634 172,644 202.701 236,042 240,042 329.939 342,268 444573 555,17' 640W,6 766.92 I. Operes.n cot.. *214,630 -214,630 -214.630 *214,630 214,630 -214,640 -214,6tO -214,630 *214,630 -214.630 -214,630 -2146W30 214,630 -214,630 .214, III Cpwiwr t119,755w 108,474 -96,733 -42,621 66,N94 41,746 -11,929 23,462 65,452 115,309 177,634 251.943 340,.44 444,227 572,290 ,smws: V. t,we.bnevs -150.500 60,000 -120,000 -5,700 -S,OC0 0 0 -5,700 0 5,000 0 0 -5.700 0 -5,00 Fkm; VI ROi" PrqectVe" 5t5. VI lNMcet low (270.255) (164,474) (216.733) (44.52:) (71,996) (41,76) (1I."29 17,762 65,452 114,409 177,636 251,W43 334,648 4465227 623,76 INAMUt UACATOU6 1o l. perF t.) htrd RntFn Rem 5.41% Nie Pr_r4 V . (i NA4 ($16,454.75) CeeI- tt ltFln 1.67 Vill. Delere llO,00000 (51151) ($1151) (616,151) ($16,151) (451) ($16,151) ($16,151) (S16,151) ($16,151) ($16,151) ($16,151) (S16,151) (S16,151) (S16,151) ($16,151) Pqms a ($295047) (t($3,304.75) (SJ3,701.32)(54,145.47) (64,642.3) (5200W.06) (55,424.04) (56,522f, (5(,305.74) (44,162.43)(59,144.32) 6m4464 (SI1,4ff.73) (112.675.21)(514,420324) lnhrrob (132200) (12.446) tl2,449) (12.005) (111,561 110,951) (10,327 (4.2) (8,46) (7.946) (649' (5.4471 (4.656 (3,275) (1,730) iX WAcnsh go. t26.406) (185,12.) %2,464) (104.672) (44,147% 157,937) tz0s0) 1,611 49,301 4,654 161,487 235.792 3:8,697 430,076 607.447 MISICIAL hluATOMN* n ltem pennq ht rnS Re_in RAte 640% cotpo Bt AstFon 1,.30 e ~ ~ . .iag Ht3T 0tX NOC^ R.pdbll of Panamm ANNEX0 Rtal Pove$yand MaturalReoUcJ Proecd Table3 Finanlal AnalI/l for Four ProtcW ArIs IUS1or "thtte" Option a- RMp.yment of 100 oton veo nt Costs .96p :- .~... :-:Vw1?w -w -. m ?§w ?w h:o i Ya ~Y*t 1. t.a-r -4t- .t, a^§;;. tw .wt.wa-tU M . " 5 152730 165338 1 7,364 18.Z33 It9..u 1! 2505IA 236s 1.13,000 E5.48t MA02 30.832 35,487 40.773 40.82 33.85 82.0 LocalVlOOWS En ha Fc 2 2.22 2 2 2 2 ft*tr F.. 2 2 2 2 3R500 33.075 34.729 36,465 36.266 42.117 46,329 50.962 56.058 61,664 70.914 81.551 93.7BJ 107,51 t24.021 F4Aw1 Wjt6trW,Ovaty 10,500 12.075 13.896 15.969 Ia,365 21.119 25,343 30.412 36,494 43,793 52.551 63.062 75,674 90,0 1011.971 130,7t lo,.gn VoclohEnh nc.Foo 5 5 5 5 5S hWoo.porenftWl 60,375 69,431 79,646 91.923 105.6S# 126,716 152,069 192,470 216.964 262.757 31S,306 378.370 454,04 S44.853 653.62 09mwhwcow Anch 9gF. I,000 .000 0000 1.000 1,000 10 00 1.000 1.000 1.OOo .000 F6In,(iFb0h1000 d 1,000 1.000 ,000 I.0 00 1,000 1.000 1,000 ,000 10 Cu".romgF. 1.000 ,000 l,O1.000 1,040 I, 1.200 I,tSlt t,323 t,02t 1,749t Z,Ott 23t3 2,960 2,059 3,56 4.046 4<,652 5.350 6,tSJ T.0 I WEnonc G,a., I.,o.ooe 94.675 105,656 117,897 131,809 147,634 172.844 202,701 23,092 280,062 329,939 392,268 466,573 555,176 t060,657 786692 It C.,.%nl Col .214.630 *214.630 -214,630 -214,630 -214.630 214.63 .214,630 214,630 -214.630 .214,630 *214.630 -214,l30 -214,630 -214,tl30 214.6 IH tmOono. 6e.96t -119,755 *108974 -96733 -U.821 66.996 41,786 -1t,929 23,462 65,452 115,309 177.63 251,943 340.548 446t227 572 IV hcapm.m,w 150,500 -60,000 -120,000 A C700 5.000 0 0 -. 700 ,ob. 0 -5,000 0 0 -,700 0 5,eo VI Rmjl Pmq.ct Vok. NcO h kw 270.255 .16.5974 -8.5212216,733 71.96 41.786 11.26 17,762 65.452 110.309 177,636 251.943 334,9 446.227 623.N RM4IKAL It4CATOM InsundR6..n A.% 6.39% No PF.__ VA.4112& 59,S-".90763) Cotl-sw4 Rb5on I 75 VII DWle.svwo (tVAl.O0) (VI.24,776) (67.30.407) (61.37,7"6) (51.30.761) (67.34.9611)(01.32.66111) (1.34394 (1V.2,1683) (6/26.620) (6V23,34) (E16) (51.11,G23) h1n9t . (11.060 (/V.11.424) (51.6,035 00 (24.71600) (36,40(o0) (37,79600) (30.76100) 134,11,.00) (32.968001 (31.439.00) (26.6611300)12660.00) 523.340.00)(19,666.001 16.23500) (lI,424.001 (6.03600 P.ywnl o.-.*. la1/037! (6 6.2/4 (/1,.420)8 (&13.0261 (I114.5900 (116.340) (5.16.301 (5.20.204) (-23.412) (1.326,924) 51.30,1655 (51.233.774)(51.39.3046 (6l.44,025) (5146.306) Notc_hn w (5/28,31 5) (51193,750)(V.265,140) (67.126,307)(8V1106757) (B1.76.767) (1.44.917) (1.13.677) 1.36.560 t63,689 V1.154,6 11.232,27761.316.613 NN*L tlNCATOS V1.434,t03 9.617,783M inlU Rnd6 P%R1 5.23% Cot6 R4dcn 51.305 wo p n,q*nW 2 gak F-A; ANNEXG PANAMA RURAL POVERTY AND NATURAL RESOURCEPROJECT Table4'. Protected Area. Descriptionof Coots tor P.M. Bhatimentos, LakAmlstad, Volcn Baru, andIsli Tabopa (US$) Concept YearO Yearl Year2 Ya r3 Yet4 YeuS YovrS Yarl'e YeatS YearSY Ys Ystr11 YeV 12 Yearl1 Y.ar14 Yeasri InvestniontCosts a. Visistor Sites (400 m2 construction;I per park) 60000 600Do 120O0O b. Field Equipment 5500 1200 1200 1200 c. Anchorage (3 in Darkibr 6000 d. Divingequipment (2 In thel park ib) S000 5000 5000 e. Boat and Out of Board (1-ib)(1-it) 9000 45rt 4500 4500 I oadingCapacity Study 40000 q NaturePaxths (1 per park) 30000 TOTALS 0 150b00 BO0C0 120000 5700 50O 0 0 5700 0 50D0 0 0 5700 0 5000 OperationalCosts h Fuel and Luoricating aorlB and IT (1) 19200 19200 19200 19200 19200 19200 19200 19200 19200 19200 19200 19200 19200 1920i0 1920 i Fuel and Lucricatirig for rnotorcyclesin VB and AM (2) 4380 4380 4380 4380 4380 4380 4380 4380 4380 4380 4380 4380 4380 4380 4380 jStaff Park Chief (1 pay park; B/1,.000monthly/each) 52000 52000 52000 52000 52000 52000 52000 52000 52000 52000 52000 52000 5200o 52000 52000 Secretary (1 per park;BI.300 rTionthlyIoach) 15600 1500o 15600 15000 150o0 15600 15000 ts5oo t50 15000D 15000 15600 15600 156O0 15600 EnvironmentalEducator (1 per park, B/Y600monthly/each) 31200 31200 31200 3t200 31200 31200 31200 31200 3t200 312D0 31200 31200 31200 31200 31200 Forest Ranger (B/.250monthly average/each ) (3) 87750 87750 87750 87750 87750 877s 87750 877t0 87750 S85 87750 87750 87750 87750 h Forest Rangers Clothing (I for each forest rangor4year) 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 45D0 4500 4500 GRAND TOTAL 214630 214630 214630 214300 214 216430 214630 214630 214830 214630 214630 214630 214630 214630 214830 Investmnrt Coaf. Total 36Ua Opwationsl Costs Total Z351 incraud I tent 3 kn"e*w, 3 znrbforne, 3 lantems,compsa, 3 wler bAils, 1 aIt-aidkit (v s5o och pui adge) La Ami ted.a6) N P. VoicanBne. (2) len Tabga, ll) lot 8eabmnto (21 lrciudm33Shrht.3T-Shrtb.3Psntte,2psirCdbooti. lshatdcapd5(0 Sterpackag.) (I)El1erlOWprmnoh(1200inleand4tOOM;3niBwouidbi2oga onvdaytof2OdaysperrnonherB/3.00/gRaon.tsriT rsudt*l0gYdayfrw20dsprrmonthat8E.200p rg bon z (2)8iY355 p.r month (22anAM and1 45 V); ia AMU t duly vSnnunion 013 iunvtorycsiS o2 gJi*. , 120gil p.r manikat 51.16001B in ve9 r tea nqryd.. wuthlbssat AMScci.d t rti (3) ish Bastimnn (2). La Arrisld (17),VoxcAn Bu (B).Taboga (2) la:.Pac0 rinobw~ B-emnts t IT:BlugiodeVda Sh*s9tr WeTht n VBrParqu NacionslVal-in nBau Am PtWea lhr Le Arrist_d _cirna_l **a ttV.x ANNEXG Panama Rural Poverty and Natural Resources Project Table 5 - Financial Analysis, Isla Bastimentos Marine Park (in USS) NumberafNafoni Vistors * 1,0100 1,050 1,103 1,158 1,216 1,276 Nationalvisitors entrance fee 2.00 2.00 2.00 2.00 2.00 Incomeper entrancefe. 2,100.00 2,205.00 2,315.25 2,431 2,553 Numberat ForelgnVisitors * 3,0C10 3,450 3,968 4,563 5,247 6,034 Foreignvisitors entrance fee 5.00 5.00 5.00 5.00 5.00 Incomeper entrnce fee 17,250.00 19,837.50 22,813.13 26,235 30,170 OtherlIncomes AnchoringRight (1) 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 FilimingRight (2) 500.00 500.W0 500.00 500.00 500.00 CampingRight(3) 750.00 862.50 991.88 1,140.66 1,311.75 I. Netincome per entrance fee 21,600.00 24,405.00 27,620.25 31,306.76 35,534.68 minus, II. Operationalexpenses -12,300.00 -12,300.00 -12,300.00 -12,300.00 -12,300.00 equal; IllIOperational benefits 9,300.00 12,105.00 15,320.25 19,006.76 23,234.68 minus; IV. Investments (92,400.00) plus; V. Rescuevalue of fixedand intangib.e assets. 72,531.68 Vl. Currentbalance (92,400.00) 9,300.00 12,105.00 15,320.25 19,006.76 95,766.36 FINANCIALINDICATORS OF THE PROJECT InternalRetum Rate 12.87% NetPresent Value PROFIT (12%) 2,569 Benefit-CostRebation 1.03 ^ Theamount for year0 is the currentamount per annum. Incomes are not takeninto account during this year, since no entrancefee is currentlybeing charged at the Park. a A 5%annual increase is takeninto account for nationaltourists, and 15%for foreigntourists. crz *'Investmentis not takeninto consideration to calcubatenet incomes. wcX ''The IntemnalReturn Rate is negativesince the investmentcarried out is greaterthan revenuesreceived during the 5 years nC (1) AnBchoringrelates to 24 feetlong boats, 100 boats per yearat B/.1 0.00 Per boat. (2) Conudstsin 30minutesof editedvideo per year (B/.5C10) l (3)Capn has a costof Bfi.00 er tent. Aproximatelv150 tents durin thefirst vear;a 15%annual increase is takeninto consideration. l ANNEX H Page I of 2 PANAMA RURAL POVERTY AND NATURAL RESOURCE PROJECT Documents in the Project File 1. Alvarado, Ram6n. Forialecimiento del sistema nacional de areas protegidas silvestres. Diagn6stico de dreas y su priorizaci6n. Enero/mayo 1996. 2. Ampuero, Luis; Morcillo, Jose; Castillo Pedro, Armas, Antonio. Comercializaci6n de Productos Agropecuarios. Febrero/abril 1996. 3. Arce, Jose; Pezo Danilo; Moreno Raul; Gonzalez Tomas; German, Irving; Chavez Victor. Sistemas de Producci6n Agropecuario y Agroiindustrial Dic 1995/Junio 1996. 4. Boucher, Francisco; Rivero, Hernando; Calder6n, Alexis.Agroindustria Rural. Marzo/mayo 1996. 5. Caliva, Juan; Ramirez Jos6; Espino, Pablo. Programa de Capacitaci6n. Marzo/mayo 1996. 6. Colindres, Ibis y Ortiz, Ligia (Colaboraci6n MIDA, MIPPE, INRENARE, RUTA III). Diagn6stico Rural Participativo. Octubre 1995/ener) 1996. 7. Detailed Cost Tables. 8. Escobar, German y Urefia, Roger. Propuesta de Gest.on Institucional. Mayo/junio 1996. 9. Forno, Eduardo, Alvarado Ram6n; de Sosa, Alma. Fcrtalecimiento de Areas Protegidas. Dic. 1995/mayo 1996. 10. Grimshaw, Richard. UPP/UTN/MIDA. Conservacion de suelos y aguas. Octubre 1995. 11. Jones, Norman. Geneica Forestal. Diciembre 1995. 12. Meassick, Mark y Gonzalez, Crist6bal. Organizaci6n Rural. Marzo/junio 1996. 13. Romero, Arturo y Rodes, Manuel. Sistemas de produ .ci6n y aprovechamiento forestal. Dic.1995/mayo 1996. 14. Sallier, Jean Claude y Gonzalez, Giolis. Guiapara la elaboraciosnde los expedientes t&nicos del componente de rehabilitaci6n de camino * rurales. Marzo/abril 1996 15. Sousa, Donaldo. Andlisis del marco de politicas que aifectan el manejo y la conservacion de los recursos naturales / Marco legal. Febrero/marzo 1996. 16. Stewart, Rigoberto y Morcillo, Jose. Politicas, Pobre. ay el uso de los recursos naturales en Panamd. Febrero/abril 1996. ANNEX H Page 2 of 2 17. Tovar, Dario, Sistema Regional Mesoamericano de Areas Protegidas, Zona de Amotiguamiento y Corredores Biologico; INRENARE/PNUD. 18. Tresierra, Julio. Propuestaprogramaticapara pueblos indigenas ubicados dentro del area delproyecto. Junio 12, 1996. 19. UPP-RUTA III / MIDA-INRENARE-MIPPE. Proyecto de Pobreza Ruraly Recursos Naturales Versi6n Final: a) Informefinal, y b) Anexos. 20 de julio 1996. 20. UPP/MIDA/INRENARE/MIPPE. Propuesta de Orientacion del Proyecto de Pobreza Ruraly Recursos Naturales. Mayo/agosto 1995. 21. Watson, Le6n y Gutierrez, Rafael (colaboraci6n INRENARE/IPAT). Diagn6stico de las areas protegidas para ecoturismo. Interpretaci6n ambiental de las areas protegidas. Estrategia para la implementaci6n de acciones de educaci6n e interpretaci6n ambiental en las areas protegidas de Panama. Lista de posibles fuentes de trabajo en la industria turistica. Anexos. Dic. 1995/mayo 1996. OA\LA A A W UFFANNEXH.DOC March20, 1997 11:24AM MAP SECTION 1 13RD~~~~~~~~lE28335 n .3 -w ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~7r Et ~~ ~ ~~~~~ ~ ~ ~~ a3- 82 31 RICA tir,:i f~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Sw ' 7r 73,77 al' 30 33 32 Mosquito,q \ - P-I.~ ~~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~ 7 PACFI OCA N A rA o- STATSO A,EIC Golf. d. CA-9.i EIM - NITED ORN t, - TEIEBA°AMAS OCEAN PANA MAC - TOWNSAND VILLAGES RAILROADS Ma <~j~- DOMINICAN TRANSPORTATIO N AND RELIEF 0~~~~~~~PROVINCE CAPITALS PAVED ROADS * NATIONAL CAPITAL - ~GRAVELAND DIRT ROADS MEVICCO \ -ELE JAMAICA Cib £1 PORTSOR LANDING PLACES ELEVATIONSIN FEET BHAAS t 0/ 3RAZIL~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~THEA 3 2U aD D so 30 KILOMETERS O C EA N occoPhtnce ol suchwnd7r1es. + t AiRPORTS/LANDING STRIPS 100GLUATEA7,.- RIVERS I~~~~~~~~~~000-3,050 ELSALVAD0OXN}CAIRAGUA -A-- . 3 DUD-ITUDSCOSTA 0a TO.. "OP~~aDrOAAM8YV*MOpDO..QiLLA,OITO.WoVDEoCL RRA5,000K EEZEA Thebocc,,.co' daoo,ono, cd nyccar,cF,oo,o._ao - INJTERNATONALEOUNDARIES A,I COLOMBIA ofrib-d-- cnadn.a,, 0 ,oo-h.aqIrN BRAZIL APRIL ROT~ IBRD28336 RICACIFIC OCEAN - .> .AA P/A N A M A ' ' l ArLANric RICA~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~A 4,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~NTDSTTSO9RC COSTA 7 .4 ~~~~~~~~~~~~~~~~COLOMBIA1 PACIFI C OCEAN 79 79-" - S3- ~~~~~~~~82-91 C ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~UNITEDSTATESOP AMERICA P AN A MA - A L AN T' FORESTCOVER AND APPROXIMATIONOF THE ' THEBAHAMAS OCEAN i CUBA- DOICNICAN 20 40 0 80 IO 81109-eTeRS ATLANTIC BIOLOGICAL CORRIDOR CO N7'BELIZE JAMAICA FORESTEDAREAS i PROVINCE CAPITALS -- APPROXIMATE DELIMITATION OF MEX ATLANTIC BIOLOGICAL CORRIDOR >HONURAS CoAbb.eo. S.. M E E-PROVINCE C i- 8 Tb',mop p7a1pxd. by he ap D...g,, , Uat ofThe 9-aM Sa HEAVILYY FORESTED AREAS N ATIONCAPITALAL 80UNDARIES Th. baaada,.., cobaM d.a.anaa, aMnany 6. afar nanbmor4ha.s COSTAREKA -R- AREASWTI FOREST INTERNATONALBOUNDARIES on thfl-m,p TnHOUTd oh poTrdMA G =r VENEZUELAm o udgm.a. onre .I,gaaataa 'nra,y ay PceohbadaP.i F I C PANAMAh -hp COLOMBIA - - -' Nol TCOOAlIaIAc 8aIagcaI Carr'darbon,lhM Ills Panomaaiaacaaw,bohoaIONS Ms a,wca8lagrcal Car,dornder A,I p9--cl S.-rceINRENARE GOearphi,c or-laon Tysy, C EA N r / /RAZIL APR51997 IBRD28337 S3- SP &1. IXP ~ ~ ~ ~ ~~~7t ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~797 CARIBBEAN '''d s: : : ' 'SEA COSTA ~so~d~%%&&, 8 , 5 0 0 ' S '' jLSI RICA zA a ~--SWi So. P P-R O J k1s E C T A R A *.&. P A N A M A - ft-I Fitod9 . MC CL E RJ d j Doo,d Q _~~~~~' 0 X~~~~~~~ ,D ,0 .0 so l CLORs , A -PastaPAt,nd ~f G do.& o.o -j' / - ~~~~~~~~~~~~~~~~~~~eLo,Toblos Ahos~ on ~ 1~Fs*, oon ingoLoMogoo.- BoCm fore R a PR T C E Fo Res T I N E N T O A PA R Ko nGolk s, OS - ,Is; H ND RA C ~~~~~~~~~~~~~~~~~~~~~COi LOMBIe - -CPorto-A, QC5-N _ , ~ IJN'TED STATES OF AMERICA - PROJECTAREAS PANAMA -A T A N TI C NATIONALPARKS HYDROLOGICALRESERVES WILDLIFEREFUGES P O E T D A E S' H AAA Altosdo Cos,pon BoYano C o-o,o Lo, M-osao Conona doCrooo Go.f d. M-flils 0 5 oo PROVINCE CAPITALS --- PROVINCE BOUNDARIES - CUBA_ DOMINICAN C."o H0- Son S., P-n, Sak oo AT REP.- Chor- NATURE 5 RESERVES P.m.. do lo H-nac NATIONAL CAPITAL INTERNATIONAL BOUNDARIES HII Frlod.I Tol11Taog RIVERS MXC f APRI. 1997 IBRD28338 PANA M A ~~~~~~~~~~~~~~~(INDEX): ~ ~~~~~~~~~~~~LEVEl-S03 PROVINCECAPITALS o60~ O 0 99)RVR RURALDEVELOPMENT COMPONENT ARE-AS -VR MUNICIPAL sATisFACTION)FLOW (20 -39.99) ONDRE ANDRURALPOVERTY(BASIC NEEDS __PROVINCE 73 Zj MID-LOW(40 - 59.99) 0 ~~~~~~~~~~~~~BOUNDARIES I '1 1Z MID-HIGH(60 - 79.99)INE ATNL ITENDARISTIONALBOU~~~~~~~33 T 0 20 40 60 KILOMETERS 78 *72 ) \24 HIGH (80 - 100) BUDRE IST PROJECTAREAS Golfo ~ o ~ ~ S 336 I 92jj~~n, 228 Chepo 459 San Bartolo 230 ElT6or 461 Cerro de Casa 57231 LeOhes 464 El Piro 'N 355 232 Quebrocda Del Rosario 465 El Prado 490 ~~~ Caui~~ ~ ~~~~~~~~~~~234470 Zapotillo < 236 C~~~~~~~ ~ ~ 472~~~~~~~~~~~ElCedro Arenas D E La Pitalozai 474 La Garceana A L ~~~~ 371~-~0~~~~~~30 238 24>23 63~362 240 LosCerros de Pa1a 475 Leones 242 Cerro Largo 476 IJanode Catival Guebro 4 ~~~~~~~~~21 243 Los Jaons 478 31 BahiaHonda 479 Teboria 464 37~~~~~~~~~~~~~7309 27 21 ~8~310419\ BCajode GiJera 480 Cabecera(Rio de Jes6is) \~ 48311 Coozol 481 LasHuacos 157~~~~~~~~~~~~8e2 ~~ 313 ElCedro 483 Utira 26 \~\314 EspinoAmarillo 485 Corral Falsoa Panamoes 487 Remance 171 22 ~ ~~~~~~~~~~~~~LasPalmas ~ ~ ~~~~~~~~~~~316 318 Mogoll6n 488 San Juan 435a La Montar9uelo 491 El Alto 17 ~~~~~~~~~~~~~436ElBarrito 492 El Cuoy 439 Bornizal 500 Ponuga 503 Bahia Honda 165 15A ~~~~~~~~~~~~El Cocla ~ ~~~~~~~~~~~~~~441 496 Santa499 ~~~~~~u IF442 ~~~~G ElPot-ero 504 Calidonia 496 499 -- ~~~~~~~~~~~~~~~~~~~443LaLoguno 505 Cativ6 19 460A55 Monjri 506 ElMarah6n Santta~~~~~~~~~~~~~ 9K o F448 SanJose1 507 Guarumal 154 ~~ ~ ~ ~ 42449 2352 < - 20P a n a m a 451 Agia de Salud 508 La Soledadi 452 Cerro Plato 509 Quebrada de Oro -8o"I 46 245--,' 2 7 251 2AO 2~ 471 8~~~~~~~~~~~~~~~-~~456 Bisvailes 510 Rio Grande 24 ~~~~225'306 ~~~~~457 Bor-6 511 RodeoViejo 241 - ~~~~~~~~~~~~~458LOanoGrande 5~~~~~~~~~~~~~4268l UNITEDSTATES OF AMERICA 468 9 <6~8 ~ 70-- AA T L ALN T IC - 'K 7~~~~~~~3013 ->264- 2-77 o 2809 - G9 of THE BAHAMAS OC A 4 3 ~ ~~~~~~~~~2-295~432 CUBA -- DOMINICAN 329I~~~~~~~2~~aJ ~~~MEXICO~'' r(ELIZE JAMAICA ONDURASH~~~~~~~~~~~~~~~~~~~~2 Car~bbecan Sea A73 GUATEM4ALA7 473 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~330 Ths nap an, pnndaa.d by 6. ~~~~~~~~~~~~~~~~~~~~ELSALVAIDO~ NICARAGUA ajt Wand Sa4_28COT AreaofMap '- M Unt- dTh. VEEZEL Th. b-n ant- -olo, d.naonnaCOSTA RICAI~ .6 tt6nSca-66 VEEUEA .di,npd .y,an. nnl. - 3 SU5E mnn-Msl And -nydan~;nta,n,oa b-n as, PolakaEnanna 1993. Rosi Noont iP N M 473 Th. WantdSank Gnnp, any adgn-a enodascse,osna t CIF COLOMBIA an -d.-b a an-asen Maay on I hh, ,,d h..aag - pan IJ sad,haandan,es ~~~~~~~~~~~~~~~~~~~~~80,C E A r -> `BRAZIL APRIL1997 Al igand"K ~~~~~~~~~~~~~~IBRD28339 'J~~~~~~~~~~~~~~~~ ~~~~UNITED STATESOF AMERIC AEANI C, ~ ~ ~ ~ ~ Oufo THEIBAHAMAS OCEAN' ~~tL MEXICO4EUZE DOMINICA If IO~~~~ ~ 0 RA ~~~~~~~UATEe'arblbean Soo RIO 'A r .. -- '-1 I SA-VA NI ,,_=_ ,, ,, ,,, ,, , ,, . - -,, ulatup , ~~~ ~~ COSTA ~~~~~VENEZUELACa f-A . AAM x COLMBIA I ~~ ~ ~~ ~~ ~~~~~~~~~~-~~~~~~~~~~~BRAZIL -- f ,) o.-,- aIt \ DARIEN P Coribbean S:a / COMARCA EMBERA2Gulf of a.- n .\>.tam o '4 ~~~~~~~~~~~~~~~~~~~~~Panama 0 0 20 4p K ItS - - RIV ER SA re a o f M .j'n0 _-)-\ \m,"/X LS- - -0t- - -'= MUNPACIPICOCEAN E'S 0It9_ .. i *\)producmop dwos oyIhc Mop DsignUmil of Thn Warid Bon#; A~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ /~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 7 PANAM - .' ; Av PC A LIOB S an M ig l ' /1 , ~ ~ ~ t / I aI / .- f *. %, / COM~~~~~~~~~~~ ANC EMEA 1 _ e C,0 L A I 997 Gutiapd ?notimpy on th oto h ol iGopoyi' 1 DARIEN PROVINCE ofuc,{pus ouraori6- -78 4 ,X 1/;; (I ~~~~~~~~~~~~~~~BIOLOGICALCORRIDOR G ulIf jaq J6 PUNTA PATINOCNATURE RESERVE of ~ ~~ ~ ~ ~ ~ ~~~~~~~~ ~~~COMARCAEMBERA 1 COMARCA EMBERA 2 a noa m a * DARItN NATIONAL PARK a SELECTEDTOWNS 0, 20 40 KILOMETERS4, RIVERS ---- MUNICIPALBOUNDARIES u;szmp wasproduced by thoMap DesignUnit of TheWorld Bank.'11v, boundories,colors, dnornlmnotions and anyotherinformation show PROVINCE BOUNDARIES ithis mapdo not imnply,on thopart of TheWorld BankGroup nP,- - ITRNTALBUD IE ,dgmenton the legals#okls of anyterritory, or any endorsementorENTOA OUDRE cceptanceof suchboundaries. 7 APRIL1997 e -- ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~PAN A MA CA RI BBEA N \2( $3 COz A | =/i - i * U< ~~~~~~~~~~~~~~POVERTY:BASIC N EEDS SATISFACTION S EA ,_ i'~~~~~~~~~~~~so)OMMM PACI F C C E N 7 ,,_,,,, _i ,.-<; COSTAHI09t EABlE oL G_RIC 5 2 A U E`OAC 9~~~~~~~~~~~\ _ G C, I IF __CN_,d I . *4'IVe i1 ~ A-_I ac[u 6 0 ANFLS d An2 P dt 3 ws A n .3 s u0 Lr 27~~~~~~~~~~~~~~~~~~ 0 z_bBEC CARSB0U9NC 0EbN.AL A DiEF'212. 32 _ 5 U .osMos 7s bA OF 2 2 d 2 SAs 2 2 S > 3 +~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~GIf fP na NATIONAL~~~~~~~~~~~~~~~~~~~~~~~~~~lCArrA IMAGING Report Type:. No.:SAR 16090 PAN