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World Bank Document PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB4192 Project Name PA (AF) Land Administration Region LATIN AMERICA AND CARIBBEAN Public Disclosure Authorized Sector General agriculture, fishing and forestry sector (100%) Project ID P110024 Borrower(s) GOVERNMENT OF PANAMA Implementing Agency Ministry of Economy and Finance Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared September 26, 2008 Estimated Date of October 27, 2008 Appraisal Authorization Estimated Date of Board December 11, 2008 Approval Public Disclosure Authorized 1. Key development issues and rationale for Bank involvement Panama is one of the fastest growing upper-middle economies in the Latin American Region, with a GNI per capita growth averaging 7% from 2004 to 2006 to reach US$5000 in 2006, the highest in Central America and the 6th in Latin America (WDI). With a real GDP growth of 11.2% in 2007, Panama will remain the fastest-growing economy in Latin America in 2008. Yet, it remains a country of stark contrasts with a large proportion of poor among its population and one of the most unequal distributions of income in the world. In the most recent survey carried out by the government, it was estimated that nearly 37% of its 3.3 million inhabitants live in poverty and nearly 17% in extreme poverty (MEF 2003). These percentages are higher in rural areas (54% poor and 22% extremely poor) but the urban poverty rate is on the rise (from 17% in 1999 to an estimated 20% in 2003). In terms of income distribution, Panama’s GINI figured last Public Disclosure Authorized year as the 12th highest measured worldwide (nearly equal to 56, WDI 2007). Inequality is clearly reflected in the distribution of cultivated land. For example, in 2001, one large third of the land holdings (35%) occupied altogether less than 0.2% of the total area that was partially or totally cultivated for agriculture (National Agricultural Census). In this context, land security and administration was placed by the GoP among the central elements of its Poverty Reduction Strategy. In 1999 the GoP requested a US$47.90 million Investment Loan (Loan 7045-PAN, approved in January, 2001) for a Land Administration Project (LAP), to be implemented by the Ministry of Economy and Finance of the Government of Panama (GoP) through the National Program for Land Administration (PRONAT). The project was restructured in June 2006 in order to address several implementation bottlenecks and its closing date was extended to December 31, 2009. Public Disclosure Authorized In addition to the LAP, PRONAT’s land regularization activities have also been financed through two Inter-American Development Bank (IDB) loans totaling US$27 million: (i) the Land Administration and Regularization Project (LARP, signed in March 2003), and: (ii) the Metropolitan Region Cadastre and Land Administration Modernization Program (CRM, signed 1 in October 2007). The the Panama Canal Authority (ACP) is also financing the regularization of the occidental part of the canal (ROC). All of these initiatives complement each other without any overlap. Yet, summing all operations, a portion of the national territory remains uncovered. The GoP has now requested a US$ 23 million Additional Financing (AF) loan to scale up the LAP activities to cover the remaining areas. Ultimately, this will allow Government of Panama to complete its national land administration program for the whole country and make Panama one of the first countries in LAC to have a national modern and comprehensive land administration system covering all types of lands: private and public, rural and urban, indigenous territories and protected areas. 2. Proposed objective(s) The Development Objective of the additional financing operation would remain the same as the restructured parent project: to modernize the land administration system, including priority protected areas and indigenous territories. 3. Preliminary description The parent project covers: (a) three provinces for rural and urban lands, namely, Bocas del Toro, Chiriquí and Veraguas (four districts only); (b) four indigenous peoples territories (two designated comarcas and two yet to be established comarcas); and (c) protected areas in Bocas del Toro, Chiriquí, Veraguas, Panama, Colon, Coclé, Herrera and Los Santos. The Government now proposes to expand the scope of the project to cover: (a) provinces of Panama and Colon for the rural and urban lands; (b) some additional urban lands in the province of Chiriquí; (c) some additional protected areas in Panama and Colon which were outside the scope of the parent project; and (d) three additional indigenous territories. All four parent project components are proposed for scaling up. Component 1: Land Policy, Legal and Institutional Framework: This component aims at providing the policy, legal and institutional framework, as well as the capacity needed by the project agencies to deliver land administration services. The original project envisaged actions on three specific sets of activities: (a) introducing a series of land policy, legal/regulatory, and institutional reforms to simplify land titling, enable land sales and rentals, consolidate protected areas and indigenous territories, and serve as a basis for land valuation and taxation; (b) establishing inter-institutional co-management mechanisms at the national and local level; and (c) building capacity in local level NGOs and municipalities. The AF operation will support the following: (a) studies on land valuation and real estate taxes (impuesto predial) and land markets, and any additional strengthening of institutions from the legal and regulatory standpoint; (b) continue to support the functioning of the Superior Council (CS), Operational Technical Committee (CTO), the Consultative Council at the national level, and the establishment and operation of at least three additional Technical Operating Units at the local level in the new areas proposed for coverage under the scaling up; and (c) 2 participation through local level civil society organizations and round table conferences, and strengthening municipalities in the new areas proposed for the scaling up. Component 2: Land Regularization: This component aims at activities required for the massive land regularization process in project areas. The original project envisaged actions in four sets of activities: (a) modernizing the geodetic network and generating maps and satellite images to identify parcels in rural and urban areas for regularization, and for demarcation of protected areas and indigenous territories; (b) carrying out cadastral surveys to feed ground truths into the satellite imagery and to resolve issues relating to property rights; (c) developing an integrated information system (SIICAR) and updating it with cadastral survey data; and (d) establishing alternative dispute resolution mechanisms. The AF operation will support the following in relation to the geodetic network: (a) limited strengthening of the mapping agency to improve its capacity to maintain the geodetic network and cartography; (b) generation of ortho-photos for the remaining 50% of the country. Cadastral surveys will be carried out to facilitate land regularization in the following areas in the proposed two provinces of Panama and Colon, namely, Panama East (Chepo, Chiman, Panama), Panama West (Chame, San Carlos, Capira, La Chorrera), and Colon (excluding coastal areas). It will also cover urban areas in Chiriquí which were not included in the original project, namely, David, Bugaba, Baru, and Dolega. Since SIICAR would be fully functional in the Property Registry and Cadastre under the original project, the proposed project would assist only with: (a) the integration into SIICAR of field information relating to the additional areas specifically covered by the AF operation; and (b) installation of, and training on, the SIICAR system in ANAM and participating municipalities. Component 3: Consolidation of Protected Areas and Indigenous Territories: Under the original project, this component aims at: (a) demarcation and consolidation of 25 existing protected areas and establishment of five new protected areas; and (b) demarcation of two already recognized and one new indigenous territory that needs to be established as an autonomous territory. The proposed AF will cover some existing and new protected areas in four specific zones: (a) Zone 1: Manglares de Chame; (b) Zone 2: RH Tapagra, RH Maje, AP Isla de Rey, Humedal Bahia de Panama; (c) Zone 3: BP and PP San Lorenzo, Donoso; and (d) Zone 4: PN Chagres. The nature and scope of activities relating to the demarcation and consolidation of protected areas will remain the same as in the parent project. The AF project also proposes to cover an additional three indigenous community groups: Embera (consisting of Maje Cordillera, Pirati and Ipeti), Wounaan (consisting of Chiman, Rio Hondo and Platanares), and Kuna (consisting of Madungandi, Wargandi and Kuna Yala comarcas). Following the methodology of the original project, the scope and nature of the activities relating to each community/territory will be decided in consultation with the participating indigenous communities. 3 Component 4: Project Management and M&E: The original project envisaged: (a) capacity building of land administration entities, including strengthening the entities to provide land administration services on a decentralized basis; (b) development of a land valuation and taxation system; (c) establishing the Project
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