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World Bank Document Report No. PID11534 Project Name ANGOLA-Emergency Demobilization and Reintegration Project Region Africa Regional Office Sector Other social services (100%) Public Disclosure Authorized Project ID P078288 Borrower(s) GOVERNMENT OF ANGOLA Implementing Agency Institute for the Socio-Professional Reintegration of Ex-Combatants (IRSEM) Address: Avenida Comandante Valodia 206, 10 Andar, Edificio da AP, Luanda Contact Person: General Ant6nio Andrade, Director General Tel: 244-2-448365 Fax: 244-2-441997 Public Disclosure Authorized Environment Category B Date PID Prepared December 9, 2002 Auth Appr/Negs Date October 17, 2002 Bank Approval Date February 27, 2003 1. Country and Sector Background A. Circumstances of the Conflict Angola has been at war since the 1960s, when competing national resistance movements, including the Movimento Popular de Liberta6ao de Angola (MPLA), and the Uniao Nacional para a Independencia Total de Angola (UNITA) began to challenge Portuguese colonial authority. Following a short-lived Public Disclosure Authorized attempt to establish a joint transitional government in January 1975, fighting among the independence movements resumed in advance of independence in November 1975. On independence day, November 11, 1975, control of Angola was divided. The MPLA held Luanda and other urban areas while UNITA held large parts of the rural south and east. In the following decade of warfare, the MPLA gradually asserted control over most of the country. The first attempt to secure peace culminated in the signing of the Bicesse Accords in May 1991, which called for multiparty legislative and presidential elections. However, when the leader of UNITA, Jonas Savimbi, lost the first round of the 1992 presidential elections, he rejected the outcome and took the country back to war. In response to UNITA's return to fighting, the United Nations (UN) in 1993 imposed sanctions against its arms and fuel trade. A second peace process resulted in the signing of the Lusaka Accords in Public Disclosure Authorized November 1994. Under the Agreement, UNITA agreed to demobilize and join a Government of Unity and National Reconciliation. This government was formed in April 1997, and demobilization was initiated under the supervision of a UN peacekeeping operation, UNAVEM II, which reached 7,500 personnel at its height. However, UNITA failed to demobilize completely and to implement other key provisions of the Agreement. As low-level fighting persisted, UNITA was suspended from parliament in August 1998, and in December of the same year the Lusaka Accords collapsed when the Government of Angola (GoA) attacked UNITA's headquarters. By mid-2000, UNITA had been pushed back into non-strategic rural areas, but remained a destabilizing guerrilla force. The third and most recent attempt to achieve peace began following a successful GoA offensive that culminated in the death of Jonas Savimbi on February 22, 2002. The GoA and UNITA signed the Luena Memorandum of Understanding (MoU) on April 4, 2002. UNITA forces were subsequently encamped in 36 quartering areas across the country. On August 2, 2002, UNITA military forces were formally dissolved. While 5,017 UNITA combatants have been integrated into the Angolan Armed Forces (FAA) for the longer term, the remaining 85,000 are to be demobilized and returned to civilian life. These developments represent the best opportunity since independence to resolve the Angolan crisis by demobilizing the former UNITA forces and reintegrating them into civilian life in Angola through an orderly process. B. Economic and Social Impact of the Conflict The long civil war has had a devastating impact on the population of Angola. Some 750,000 Angolans have died from conflict-related causes, including conflict-induced famine or disease; some 4.5 million are internally displaced; and another 450,000 are refugees. Key social indicators are very poor - Angola ranks only 146th out of 162 countries on UNDP's Human Development Index for 2001. Life expectancy is low; school enrolment rates are low; and infant and child mortality rates are extremely high. The Millenium Development Goals are distant. Food security has been precarious as able-bodied males have been conscripted into the armed forces, crops raided or destroyed, and input delivery systems neglected. Conflict, combined with corruption, macroeconomic mismanagement, and a severe shortage of technical and managerial capacity, has also resulted in the collapse of economic activity in all sectors except subsistence agriculture and the enclave oil and diamond sectors. Persistent instability in Angola has also helped to fuel conflicts in adjacent countries, especially the Congos. As a result of the continuing insecurity, defense spending fluctuated between about 15 percent and 40 percent of total public spending from 1999 to 2001. Defense expenditures remain a significant burden on the national budget and may hamper the Government's ability to implement its poverty reduction strategy. C. Government and International Response and Strategy Angola's civil conflict was escalated through Cold War sponsorship. The MPLA, which was allied with the Soviet bloc, invited Cuban troops into Luanda in October 1975, one month before independence. UNITA received military support from South Africa and financial aid from the United States. Cold War alliances also dragged Angola into wider regional conflicts, including in particular in the two neighboring Congos. The withdrawal of foreign sponsorship in the 1990s, following the collapse of the Soviet Union and the initiation of a transition in South Africa, created space for the Bicesse and Lusaka peace processes. Bicesse and Lusaka demobilizations (old caseload): Two earlier attempts to demobilize--the first following the Bicesse Accords and the second following the Lusaka Accords--ended in failure. Some 160,000 combatants were identified for demobilization and reintegration under these two accords and in some cases received benefits under previous programs. The demobilization of this old caseload was led by UN peacekeeping operations, -2 - with reintegration efforts co-financed by the GoA and various bilateral donors; the GoA did not request IDA financial assistance under these earlier processes. Post-Luena demobilization (new caseload): The April 4 MoU, signed by UNITA and the MPLA, indicates that all UNITA ex-combatants will be demobilized in 2002, except for 5,017 who will be integrated into the FAA and the police. The MoU also specifies that about 33,000 FAA will be demobilized, albeit by an unspecified (later) date. As of June 30, 2002, approximately 84,000 ex-combatants from UNITA had reported to 36 quartering areas across Angola in preparation for demobilization. By August 2, 5,017 combatants were integrated in the FAA for the longer-term, while all other UNITA combatants were incorporated into the FAA in anticipation of their demobilization. For this new demobilization caseload, the GoA has asked the World Bank to lead efforts to help it design the ADRP and to provide financial assistance, within the framework of the Multi-country Demobilization and Reintegration Program (MDRP). The Government's efforts are being supported by a multi-donor team comprising representatives of several MDRP partners, including: DfID, GTZ, USAID, ILO, UNOA, UNDP and UNICEF. 2. Objectives The overall goal of the new national Angola Demobilization and Reintegration Program is to help foster reconciliation in Angola and consolidate peace in the Great Lakes region. The three principle objectives of the program include: (i) the demobilization and reintegration into civilian life of some 85,000 UNITA and 33,000 FAA ex-combatants; (ii) the provision of reintegration assistance to new-caseload ex-combatants to be demobilized; and (iii) the reallocation of GoA expenditures from military to social and economic purposes. The ADRP is expected to have a significant impact on reducing poverty in Angola by: (i) helping ex-combatants to re-establish civilian livelihoods, thereby contributing to more secure conditions in the rural areas and encouraging internally displaced persons (IDPs) to resume productive lives in the rural economy; (ii) freeing up additional national resources for investment in social and economic sectors; (iii) investing in the human capital of ex-combatants; and (iv) enhancing the implementation capacity of community-based development organizations. 3. Rationale for Bank's Involvement Need for Emergency Assistance. The GoA's request for technical and financial assistance for the ADRP has come at a critical time in the consolidation of the Angolan peace process. The application of the Bank's emergency procedures under OP 8.50 is justified on the basis of the following criteria: (i) the program's impact on economic priorities and investment programs; (ii) its critical contribution to the stabilization of the society and economy, both in Angola and in the greater Great Lakes region, and (iii) the urgency to demobilize and provide reintegration assistance to the UNITA ex-combatants. Interim Poverty Reduction Strategy Paper (PRSP) and Transitional Support Strategy (TSS): As cornerstones of its poverty reduction strategy, the Government of Angola emphasizes improving economic policy formulation, strengthening public sector capacity and institutions, expanding the human capital base, rehabilitating social and economic infrastructure, and promoting pro-poor growth. The new TSS reflects the GoA's determination to overcome the legacies of the war, in
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