IPP14 May 2002

MEXICO Municipal Development in Rural Areas Project Social Assessment and Indigenous Peoples Development Plan

This document presents, in two sections: (i) the general Social Assessment of the Municipal Development

Public Disclosure Authorized in Rural Areas Project, and (ii) the Indigenous Peoples Development Plan (IPDP). The social assessment deals with the general social conditions of all of the beneficiaries of the project in the four states. It also identifies among beneficiaries a significant proportion of indigenous peoples concentrated in two of the project states. The social assessment depicts an existing social participation strategy with strong emphasis on social participation, and community and municipal-level decision taking.

The Indigenous Peoples Development Plan details characteristics of the indigenous population, their social and cultural context and defines ways to strengthen a social and cultural participation strategy specific for indigenous communities and municipalities. One major finding is that indigenous communities' access to the benefits of the predecessor project, DRD II, have been more than proportional, though there are demands for more information and training to improve subproject execution.

1. Social Assessment This Social Assessment covers seven main points: 1. Introduction, 2. Project Objective, 3. Background and Public Disclosure Authorized Political Context, 4. Beneficiaries, 5. Social Capital, 6. Main Institutional and Economic Trends, and 7. Social and Cultural Strategy. 1.1 Introduction Main Social Assessment Activities. The axis of the social assessment was the field work performed by an interdisciplinary team of consultants integrated by specialists in social sciences with experience in rural development, indigenous culture and municipal governance. Some consultants were proposed by and recruited from civil society organizations with an important background as consultants to indigenous municipal governments. Field work included workshops and interviews in 23 municipalities of the four states in the project: Guanajuato, Puebla Veracruz and Zacatecas. Nine of these municipalities had important indigenous population. Main people consulted were 23 municipal presidents, 99 other municipal staff, 130 small community leaders, over 800 community beneficiaries and 26 representatives of local and national civil society organizations. Other

Public Disclosure Authorized consultations with state and federal staff and national scope civil society organizations were additional to the field work. For specific information on indigenous peoples (besides field work) the Indigenous Profiles, a World Bank supported study made by prestigious Mexican institutions and consultants, was amply consulted, particularly the well developed Veracruz Indigenous Profile. The Puebla Indigenous Profile is under preparation. In the second section of this document, the IPDP, there is a more detailed treatment of indigenous issues. Main Social Assessment findings. These findings correspond to inquiries made about the functioning of Ramo 33, which is the ongoing program that would be supported by the project. * After four years of operation, beneficiaries know about the program, its objectives and mechanisms, but requested fuller understanding of project mechanisms; * Marginal and highly marginal (poorer) population has benefited the most from the project.

Public Disclosure Authorized Nevertheless infrastructure investments are usually seen as grants from the government rather than a citizen or community right; * There was no major criticism on the basic structures for decision making and monitoring (COPLADEMUN, community assemblies, comites de obras). There was however criticism on operative issues such as: insufficient resources or actual community priorities. There was demand FIL COPYn for logistic support to participation (e.g., meals, transportation, compensations for time spent by representatives). * Participants in the consultation demanded more information and training on communities' rights and operational issues. * The social assessment identified a significant indigenous population concentrated on 111 municipalities of the States of Puebla and Veracruz. In the selected municipalities there is one million of Indigenous Language Speakers out of a total of 5.8 million inhabitants. According to indigenous representatives, experts and state governments the actual number of indigenous population is much larger. These consultation findings are considered in the design of the social and cultural strategy. 1.2. Proiect Obiective The Municipal Development in Rural Areas aims to reduce the incidence of rural poverty by (i) supporting investments in basic small-scale social and productive infrastructure, utilizing a proven effective community-driven development (CDD) approach, (ii) strengthening municipal administrative and technical capacity to increase the efficiency of municipal investments, and (iii) deepening the ongoing decentralization from Federal to State and Municipal levels. To achieve this objective, the Project main Component will finance creation, maintenance and rehabilitation of small-scale public and social infrastructure including: water supply, sewage, drainage and latrines, small scale electrification, health posts, schools and education facilities, rural roads rehabilitation, town markets, housing improvement, and rural productive infrastructure. Its Second Component will address institutional development issues, such as (i) dissemination of information (mainly on beneficiaries rights and operational issues); (iii) training for community capacity building and (iv) training for cultural and social participation awareness of key actors of the State and Municipal Administrations (including COPLADEMUN).

1.3. Background and Political Context. The project builds on the successful experiences of two previous decentralization projects and supports an ongoing federal, state and municipal program with four years of operational experience (1998 - 2001). This Project supports the trend, recommended by its predecessor Bank Project, of increased resources and decision taking capabilities transferred from the federal to the municipal level in a transparent way. Allocation of municipal funds is now done by formulas of general application instead of discretionary criteria. Furthermore, formulas are designed to compensate poverty indicators and therefore per capita allocation is significantly higher for municipalities with higher extreme poor and poor population. The new regulatory framework calls for ample social participation in the municipal decision making mechanisms.

The project is the result of deepening democratization occurring in the country in the last years. Ramo 33 was born out of a new balance of power among political parties in Congress that allowed for a big step towards decentralization. It agrees with other important political change related to the composition of municipal cabildos (governing structure integrated by representatives of the political groups that competed in the municipal elections) that took away the "governance clause" that gave majority voting to the largest party. Today political parties are represented at the municipal "cabildo" matching their percentage of votes. This change increased transparency and accountability by giving municipal opposition parties a saying (often a veto power) on municipal decision taking.

1.4. Beneficiaries. The project is targeted to the poorer population of the states of Guanajuato, Puebla, Veracruz and Zacatecas. Rural population is known to be the poorest in Mexico. Out of the 25.9 million Mexicans who live in communities of under 2,500 inhabitants, 37% are in extreme poverty, with incomes lower than one dollar a day. Extreme poverty reaches even higher figures in indigenous households.

The project will support infrastructure investments in rural and indigenous municipalities and the development of municipal institutions. The selected municipalities are those in which at least 50% of the population live in communities of less than 2,500 inhabitants. Total population in these municipalities is 5.8 million people in 344 municipalities.

According to their degree of marginality these municipalities are distributed as follows: DEGREE OF MARGINALrIY Guanajuato Puebla Veracruz Zacatecas Total Very High 2 51 61 0 114 High 3 35 41 4 83 Medium 22 56 35 24 137 Low I 0 1 8 10 Very low 0 0 0 0 0 Total 28 142 138 36 344 Source: Sistema Nacional de Informaci6n Municipal. CEDEMUN Web Page: www.cedemun.gob.mx

Rural municipalities largely coincide, in the states of Puebla and Veracruz, with a higher proportion of indigenous population. In order not to leave out an important segment of indigenous population, municipalities with more than 30% of indigenous language speakers (ILS) were also included (each of these municipalities under 15,000 inhabitants). The 5.8 million beneficiaries mentioned include one million ILS (an indicator of a larger indigenous population). However, the indigenous presence in the four states area is quite heterogeneous. The states of Puebla and Veracruz have high percentages of indigenous population in 111 municipalities in which there is a long indigenous history and persisting traditions; the other two states have very low percentages of indigenous population, most of them immigrants in the states larger cities.

1.5. Social capital Rural municipalities superpose different models of organization at local, regional and national levels. The most active and "natural" form of organization for municipal issues in the four states are communities themselves; the mere fact of inhabiting in a locality means the right to participate in community assemblies. Communities are entitled to: a) elect a representative to the Municipal Planning and Development Council (Comite de Planeaci6ny Desarrollo Municipal, COPLADEMUN), b) to present proposals for local investments in social and productive infrastructure, c) to appoint specific beneficiaries monitoring committees (Comites de Obras) to follow up implementation, and d) to administer and take responsibility for built infrastructure. Other important organizations in the four states are based on collective property or rights to land, like Ejidos, Comunidades Agrarias, Asociaciones Rurales de Interes Colectivo, Sociedades de Solidaridad Social, Sociedades de Produccion Rural, Uniones de Credito and numerous organizations of rural producers (coffee, pineapple, sugar cane, livestock and other specific associations). Leadership of this kind of local- regional organizations greatly overlap with community representatives.

There are organizations, in Puebla and Veracruz, with an ethnic identification. Examples of them are, in Puebla, Cooperativa Agropecuaria Tosepan Titataniske, Organizaci6n Independiente Totonaca, Organizaci6n Regional Nahuatl Independiente; in Veracruz, Consejo Regional Indigena, Coordinadora Regional de Organizaciones Indigenas de la Sierra de Zongolica, Consejo Indigena de Uxpanapa. Some represent alliances over ethnic differences like Comite para la Defensa de los Derechos Indigenas Chinanteco, Zoque, Totonaca, or Uni6n Pro Defensa de los Pueblos Indigenas Zoque - Popoluca - Nahuatl. In the State of Zacatecas organizations of absent migrants have an important role to play on local decisions due to the importance of their remittances and are promoting local organization. Guanajuato and Zacatecas have regional farmer organizations that tend to be affiliates of national organizations like the Confederaci6n Nacional Campesina or Uni6n Nacional de Organizaciones Regionales Campesinas Autonomas or Asociaci6n Nacional de Empresas Comercializadoras Campesina.

During the last years, due to higher municipal decision capabilities and higher resources, local politics have become more attractive for local and regional organizations. There are successful experiences of local organizations, some of them indigenous (in Puebla and Veracruz), winning municipal presidencies. Three organizations of municipal presidents tend to figure as increasingly important actors in promoting the general municipal interests at the state and federal levels: Asociaci6n de Municipios de Mexico, A.C. (AMMAC); Asociaci6n de Autoridades Locales de Mexico A.C. (AALMAC) and Federaci6n Nacional de Municipios de Mexico (FENAMM).

Some NGOs of urban origin are actively supporting rural development (like Fundacion Mexicana para el Desarrollo Rural, and Anadeges) and, more specifically indigenous municipalities' governments (like Equipo Pueblo).

1.6. Main Institutional and Economic Trends

FederalGovernment Withdrawal During the last twenty years there has been an important rationalization of field staff of public institutions in rural marginal areas. Communication channels between the federal government and rural population have become increasingly shallow. In the case of Ramo 33, as well as in other public programs, decentralization has implied an important switch of operational responsibilities towards municipal administration structures that have not fully developed appropriate capabilities. A general demand in municipalities is that the decentralization processes (not only of Ramo 33) be accompanied by additional transfers of human resources, technical and administrative capacities and financing. Economy Agricultural activities prevail in the selected municipal communities. In Puebla and Veracruz there are mainly traditional peasant economies; in Guanajuato and Zacatecas there is usually a more modem agricultural activity. In the four states (particularly in Zacatecas) the communities' income is increased with the remittances from migrants who have found jobs in the big US cities. A 20 years old rural impoverishment trend, particularly important in peasant and indigenous communities, is linked mainly to the growing isolation of rural producers from the market. Besides severe deterioration in their exchange relationships (diminishing relative prices for rural products) and a growing difficulty to place their production in the market (whether livestock, agriculture or rural industry products). Reduced opportunities of rural employment outside the communities (such as in coffee, cotton, sugar, fruits and vegetable crops) an in urb,an activities (construction) has translated into a sharp deterioration of their income level. Local oligopolies on commercialization and services (credit, technical assistance, transport) have been strengthened resulting in higher transaction costs. Reduction of local food self-sufficiency levels leads to increased need for external monetary input and growing emigration. 1.7. Social and Cultural Strategy The predecessors of this project, DRD I and DRD II, were essentially small-scale infrastructure investment projects. This Municipal Development in Rural Areas Project has a wider approach that includes a general but flexible social strategy designed to adjust to different social and cultural contexts. This is not an addition to the design but an intrinsic part directed to improved targeting and enhance the quality of small- scale municipal infrastructure investments. The project supports the continuation of the basic participatory design that was implemented under the DRD II. Its main features are: * Community assembly decisions on infrastructure investment proposals to be submitted to the COPLADEMUN. * Community assembly appointment of a representative to COPLADEMUN. * Infrastructure investment decisions taken by COPLADEMUN. Usually COPLADEMUNs have a majority (about 70%) of community representatives. * Transparency on budget allocations to Municipalities and on community allocations to subprojects. * Community appointment of Comites de obras (citizen's monitoring committee) for each of the infrastructure subprojects in the community. * Voluntary community counterpart investment, often in labor or local materials. (A way to secure individual and local ownership). Consultations on the project point out to opportunities of improvement; they are included in the project to open the way for increased decision-making participation of the poorest and most vulnerable groups, particularly indigenous peoples. The main activities of the social strategy are: Dissemination of citizens and communities rights and operational mechanisms under the project. Training on participatory mechanisms and building communities capabilities to contribute to the design, execution, monitoring and evaluation of the project. * Promotion of social participation. The axis of the specific design of the social strategy will be the systematization of a methodology to promote participatory social and cultural municipal self-diagnostics. CEDEMUN (National Project Coordination Unit) will develop the methodology, supporting materials and training to State Technical Units. STUs will promote the self diagnostics at the municipal and community levels and train COPLADEMUN representatives in the methodology. From the results obtained, they will develop and execute, in coordination with the municipalities, a municipal or regional strategy for information dissemination, training and promotion of social participation that is appropriate for a particular (municipal or regional) social and cultural context. COPLADEMUNs will direct the activity and community representatives will promote it at the community level. Special attention will be given to the development of socially and culturally appropriate regional/ municipal social strategies for indigenous peoples. These will be treated with higher detail at the following section dealing with compliance with the indigenous peoples policy.

2. Indigenous Peoples' Development Plan This second part of the document, the IPDP, is concerned with compliance with the Bank's O.D. 4.20 and covers the following aspects: 1. Introduction, 2. Legal Framework and Indigenous Rights, 3. Indigenous People in the Project Municipalities, 4. Indigenous People Participation in the Political Life of Municipalities, 5. Indigenous Peoples' Share of Benefits of DRD II and Ramo 33, 6. Indigenous Peoples' Development Plan. Development Plan. 2.1 Introduction This section is based on two main sources. One is the field municipal and community consultation already described in the introduction to the social assessment and, second, the Indigenous Peoples Profiles studies supported by the World Bank and conducted by highly recognized institutions and experts in Mexico. One of the aims of the Profile of the Mexican Indigenous People is reflect its lessons in ongoing and new operations. Main findings related to the indigenous population were similar to the general rural population plus: * Puebla and Veracruz have an important indigenous peoples population, concentrated in 111 municipalities where they are the majority. There were 91 municipal presidents that spoke an indigenous language in the year 2000 (no data for the current presidents). * Although there are one million Indigenous Language Speakers in the selected municipalities, state authorities, academics, and indigenous peoples consider a much bigger indigenous population. The Mexican legal framework states that self identification as indigenous is the main criteria to determine whether an individual or a community is indigenous. There is high cultural and language diversity among indigenous peoples with at least 10 different ethnic groups in both states. The Indigenous Profile for Veracruz indicates at least 50 dialects. * Ethnicity is an important basis for local and regional organizations in both states. * Indigenous communities have been benefited more than proportionally by DRD II and Ramo 33. There is, however, strong demand for better information and training to strengthen participation on design and execution of investments. 2.2. Mexican Legal Framework on Indigenous Rights Recent changes in the Political Constitution of the Mexico have resulted in the acknowledgement of the multi-cultural nature of the Mexican State and of the rights of indigenous peoples in the country. These changes have been driven by an increasing indigenous cultural awareness in large population groups. Currently there is an important discussion related to the legal status of indigenous peoples that will probably result in more legal reforms to their benefit. Article 2 of the Constitution states, among other elements, that: * The nation has a multi-cultural composition originally sustained on its indigenous peoples which are descendant of populations that lived in the current country territory when colonization started and who have maintained their own social, economic, cultural and political institutions or part thereon; * The conscience of an indigenous identity is a fundamental criterion to determine where the indigenous people dispositions apply; and * Indigenous peoples right to free determination will be exercised in a constitutional framework of freedom that will assure national unity. The recognition of indigenous peoples and communities will be made in the constitutions and laws of the federal entities.

The constitution recognizes and guarantees autonomy rights to indigenous peoples and communities to:

* Decide its internal manners of living together and its economic, social, political and cultural organization; * Apply its own regulatory systems to regulate and solve internal conflicts, abiding by the general principles of this Constitution, respecting individual guarantees, human rights, and in a relevant manner, women's dignity and integrity; * Elect their authorities or representatives according to their traditional rules, procedures and practices, to exercise their own type of internal govermnent, assuring participation of women in similar conditions as men; and * Elect representatives from indigenous communities to municipal town halls. * In order to promote equal opportunities to the indigenous populations, and eliminate any discriminatory practice, the Federation, the states and the municipalities will establish the institutions and determine the necessary policies to guarantee the effectiveness of indigenous rights and the integral development of indigenous peoples and communities, which must be designed and implemented with their participation.

Mexico has signed the 169 ILO (International Labor Organization) Agreement accepting the following as part of its own legal system:

* Self-identification as indigenous or tribal shall be regarded as a fundamental criterion for determining the groups to which the provisions of this Convention apply. * Governments shall have the responsibility for developing, with the participation of the peoples concemed, coordinated and systematic action to protect the rights of these peoples and to guarantee respect for their integrity. * Such action shall include measures for: (a) Ensuring that members of these peoples benefit on an equal footing from the rights and opportunities which national laws and regulations grant to other members of the population; (b) Promoting the full realization of the social, economic and cultural rights of these peoples with respect for their social and cultural identity, their customs and traditions and their institutions; (c) Assisting the members of the peoples concerned to eliminate socio-economic gaps that may exist between indigenous and other members of the national community, in a manner compatible with their aspirations and ways of life. In sum, the peoples concerned, through these various legal and institutional arrangements, have the right to decide their own priorities for the process of development as it affects their lives, beliefs, institutions and spiritual well-being and the lands they occupy or otherwise use, and to exercise control, to the extent possible, over their own economic, social and cultural development. In addition, they shall participate in the formulation, implementation and evaluation of plans and programs for national and regional development which may affect them directly.

2.3. Indigenous People in the Proiect Municipalities One of the most relevant indicators of indigenous presence in the selected states and municipalities is the percentage of "Indigenous language speakers" - ILS, among the population above five years old. According to census figures, indigenous language speakers -ILS- presence is as follows:

Indigenous Language Speakers State State Project % ILS in Project Municipalities Municipalities 1. Guanajuato 10,689 3,974 0. 29 2. Puebla 565,509 433,684 32.45 3. Veracruz 633,372 545,593 21.17 4. Zacatecas 1,837 692 0.13

The Political Constitution of the United Mexican States as well as other applicable laws consider that self- identification with, or the conscience of belonging to, an indigenous group, is the fundamental criteria to define someone as an indigenous population integrant. In general terms, indigenous organizations, public officials and experts in the subject reject that the number of indigenous language speakers is the only criterion to calculate indigenous population and recommend the inclusion of cultural criteria (food, health and sanitary habits, religious festivities, land attachment, clothing, housing features and others).

It is important to point out the gradual and subtle cultural continuum between the indigenous and the non indigenous, which renders its identification a complex task. The population census of the year 2000 indicates a total of 6.45 million of ILS, while the Instituto Nacional Indigenista, with additional criteria, considers there are no less than 10 million indigenous people. Other experts rise the figure between 12 and 14 million people. The census in the state of Veracruz registered 633 thousand ILS, while the state authorities and indigenous leaders speak of no less than 1.3 million indigenous people. An extrapolation of such estimates would lead into thinking that even municipal communities with only 20% of ILS could, in certain circumstances be identified as fundamentally indigenous. This would be the case when the difference between indigenous language speakers and non-speakers is fundamentally generational (grandparents are ILS), the community has an indigenous historical background, and other persistent indigenous cultural characteristics. This reasoning would not apply to areas with relatively recent indigenous migration, weak indigenous historical-cultural background and where ILS data could indicate a different social group. Because of its demographical background, culture, history and traditions, the indigenous presence can be considered a majority (at least more than 50%/o) in the municipalities of Puebla y Veracruz with over 20% of ILS. Thus there are a total of 49 indigenous municipalities in Veracruz and other 62 in Puebla. Veracruz. Indigenous language speakers of 5 or more years of age. -__ - _ Total 'ils'population in the 634 208 100.00 580 386 100.00 590 829 100.00 state Nahuatl 347 597 54.80 294 711 50.78. 314 121 53.16 Totonaca 117 533 18.53 111305 19.18 115 455 19.54 Huasteco 47 584 7.50 46 897 8.08 47 620 8.05 Popoluca 21 249 3.35 29 203 5.03 34 261 5.80 Zapoteco 24 631 3.88 22 180 3.82 20 151 3.41 Chinanteco 7 627 1.20 16 284 2.80 17 431 2.95 Otomi 17 995 2.84 15 986 2.75 15 688 2.65 Mazateco 5 766 0.91 6 533 1.12 8 247 1.40 Tepehua 6 489 1.02 5 742 0.99 5 937 1.00 Mixteco 5 747 0.91 3 674 0.63 3 311 0.56 Zoque 237 0.04 2 790 0.48 2 401 0.40 Mixe 1 379 0.22 1 559 0.27 1 467 0.25 Maya 2 042 0.3 1 318 0.23 964 0.16 Note: Only -the languages with a larger number of speakers are considered. The missing amounts and percentages to reach 100.00% represent languages with a small number of speakers an non-specified cases. Sources: Luz Maria Valdes y Maria Teresa Menendez. Dindmica de lapoblacion de habla indigena (1900- 1980). Mexico, SEP-INAH, 1987. INEGI. XI Censo de poblaciony vivienda, 1990. INEGI. Conteo de poblacion y vivienda, 1995. Resultados definitivos. Tabulador basico, 1996. 3 vols. (Veracruz, vol. 3).

Most rural indigenous inhabitants identify first with their community and with their ethnic group in a very close geographical area; then they identify themselves as Mexicans. The identification with their broad ethnic group is usually very weak. One of the reasons to explain this is that each indigenous ethnic group has its own cultural characteristics; even among communities of the same ethnic group there are important differences resulting from their degree of isolation, condition of their close environment, community background, access to mass media, regional trade centers, educational and health services. All literate population reads and writes in Spanish, and all monolingual population is illiterate. It is important to mention that each ethnic group has dialectal differences that make understanding difficult among speakers of the same language who live in distant villages. In the case of Veracruz some 50 different dialects are identified by in its Indigenous Profile (a study supported by the World Bank). On the other side 87% of ILS speak Spanish.

The indigenous profile of the State of Puebla is in its elaboration process. It may be said, however that the proximity of the two states results in the predominance of the same ethnic groups, (Nahuas, Totonacas, Tepehuas and Naffhus [Otomi] in the case of Puebla), and in similar socio cultural traits.

2.4. Indigenous People Participation in the Political Life of Municipalities

It has already been mentioned, in the first section of this annex, the existence of some experiences where indigenous organizations have arrived to the control of the municipal government through democratic competition. It should be also pointed out that according to a CEDEMUN survey on municipal presidents there were 41 ILS among them in the state of Veracruz and another 50 in Puebla in the year 2000. This number of a total of 92 ILS in both states, plus other indigenous municipal presidents that are not ILS, is an indicator of the very high possibility of indigenous municipalities having an indigenous municipal president. 2.5 Indigenous Peoples' share of the benefits of DRD II and Ramo 33. Indigenous peoples have been the most benefited group of DRD II and present Ramo 33 due to the following: * Poverty alleviation objective. DRD II expressly stated that Bank financed investments were to be directed to poverty alleviation. This now holds for all Ramo 33 investments. * Allocation formula. DRD II strongly recommended the use of a pro-poor formula for budget allocation. The formula favors highly marginal and marginal municipalities in a three to one ratio over low marginality municipalities. Most indigenous communities are located in municipalities rated as high or very high in the marginality indicators. * The states of Puebla and Veracruz have strongly promoted at the COPLADEMUN meetings investments in three "basic" investments: access to water, sewage and electricity. These states add significant state counterpart investment in municipalities that adopt these priorities. By their own nature (household and community located) these priorities usually mean small investments in disadvantaged communities; indigenous communities are more than proportionally represented in this segment. * Recent changes in the political context, (multiparty cabildos, overlapped multiparty executive and legislative powers at the federal, state and municipal governments) and increased awareness of indigenous rights translate into increased transparency and accountability.

2.6. Indigenous Peoples Development Plan

The project will support the definition of socio-cultural strategies at the municipal level. The strategies will help communities to make consistent use of municipal investments and programs to pursue their specific social, ethnic and cultural goals. The main device to start the preparation of these strategies are autodiagn6sticos(self-evaluations), conducted by the COPLADEMUNs. The methodological instruments for the autodiagnosticos would include sections to address the identification of ethnic, linguistic, and cultural traits.

Capacities required to perform this planning function already exist in Municipalities', STUs and CEDEMUN, and will be strengthened through Component Two over the life of the project. To start the process, the immediate strengthening of capacities will come from hiring extemal support, with funds allocated through Component Two.

CEDEMUN will play a key role initially in guiding the development of standardized tools and a viable methodology which could then be implemented in each municipality. For this purpose, CEDEMUN will deploy the services of specialists in socio-cultural assessment (e.g., anthropologists, sociologists) in order to (i) bring sufficient rigor to the overall exercise and (ii) ensure that culturally appropriate mechanisms are incorporated into the diagnostic kit to effectively reach the expected diversity in the project municipalities. Development of the diagnostic kit would also entail an ongoing dialogue with the COPLADEMUNs throughout the four states, to encourage a strong "buy-in" to the exercise and its intended product. Once developed, the diagnostic kit would become part of the project Operational Manual. Terms of Reference for the development of the diagnostickit would be preparedby CEDEM:UNand reviewed by the Bank prior to negotiations.

Subsequent to the development of the socio-cultural diagnostic kit, a series of intensive training activities would be conducted to properly equip both STU personnel and representatives of COPLADEMUJNs in the

' Among the studies to be performed within the context of Component 2, are those that allow each Municipality to update, upgrade or prepare its own development plan. [See table 9 of Annex 2 for data about how many Municipalities had Development Plans in 2000 survey]. This exercise is a continuous ones that will be repeated each time a municipal administration changes, to comply with Mexican legislation. elaboration of the municipal autodiagn6sticos. Given the extensive geographic coverage of the project, as well as the overall aim of strengthening federalism in Mexico, a "training of trainers" approach would be pursued. Under this approach, CEDEMUN would instruct selected STU personnel in the proper deployment of the diagnostic kit at the municipal level; then, STU staff would, in turn, carry out training activities with the COPLADEMUNs in their respective states. As stated earlier, the autodiagn6sticos would detail the specific socio-cultural characteristics of the municipality and provide inputs toward defining the basic needs at the community level. To this end, given that the COPLADEMUN is itself a representative council of community-level constituents, it is expected that these local-level representative will each play a strong role in consulting, identifying and expressing community basic needs in the COPLADEMUN and as part of the overall process of elaborating the autodiagn6sticos.

Once completed, the autodiagn6stico would be used by the COPLADEMUN to formulate Planes de Gesti6n Social (Social Action Plans). The formulation of these plans would be the responsibility of the COPLADEMUN, with guidance and technical assistance provided for its completion through the STU and other civil society organizations. At a minimum, the Social Plans would detail the actions and activities required to address the demands identified in the autodiagn6stico, specify those responsible for carrying out these activities, identify a timeframe for their completion, and stipulate the sources of additional resources (e.g., finance) that may be necessary for their attainment. The communication of the Social Action Plan will rely on culturally appropriate media for reaching all elements of municipal society (e.g., indigenous radio broadcasts, interpretation facilities for municipal-level meetings, etc.) Throughout this process, intense and frequent Bank supervision will be crucial in order to ensure the success of the approach.

Monitoring and Evaluation: Ramo 33 existing monitoring and evaluation system will be strengthened by: (i) Annual evaluation will include contracting an external and independent assessment of the participatory approach, particularly the impact of autodiagn6sticos on COPLADEMUN's activities and to develop recommendations and alternatives (as needed) to improve the participatory approach. Terms of referencefor the social participation assessment would be included in the overall evaluation framework, the completion of which, satisfactory to the Bank, is a condition ofLoan effectiveness. (ii) The monitoring and evaluation system will include representative statistical samples with the identification of beneficiary communities as indigenous or not indigenous. This will be included in the previously mentioned evaluation framework. Schedule of Activities and Budget: Table I provides details as to the substance, timing and costs of activities associated with completion the autodiagn6stico and the Social Action Plan exercise. It is expected that, once initiated, the process would require a period of nine to twelve months. Activities would be eligible for financing under Component Two of the project (with the exception of the Participatory Assessment, which would be financed through Component Three of the project). Timeline and Budget of Activities: IPDP Objective Activities Responsible Completion Budget Deadline Technical Guide for * TOR for development of diagnostic kit; CEDEMUN PY 1, Qtr 1 US$ 100,000 Autodiagn6stico * Contract specialists; * Development materials Training of STU staff * TOR for training module; CEDEMUN, PY 1, Qtr 2 US$ 60,000 * Select STU staff; STUs * Contract training specialist; * Conduct workshop Training of * TOR for training module; STU, PY 1, Qtr 3 US$ 160,000 COPLADEMUN * Development calendar of training activities; COPLADEMUJNs * Invite COPLADEMUNs; * Conduct workshops Conduct * COPLADEMUNs consult with localities; STU, PY 2, Qtr 2 US$ 760,000 Autodiagn6sticos and * Apply diagnostic tools; COPLADEMUNs develop Municipal * Prepare Autodiagnosticos Social Plans (IPDPs * COPLADEMUJNs use data gathered to program activities and actions to where indicated) address communities' basic needs and appropriate means for their achievement Execution of Municipal * Information Campaign STU, Ongoing US$1,000,000 Social Plans * Subproject proposals prepared and prioritized; COPLADEMUN * Implementation of subprojects; Monitoring and * Baseline Study STU, Ongoing US$1,500,000 Evaluation * Mid-term Review (Social Participation Assessment) CEDEMUN, * Analysis of statistically representative samples of investment allocation COPLADEMUJN among indigenous and non indigenous communities. * Final Evaluation US$ 4,480,000