PROJECT INFORMATION DOCUMENT (PID) Report No.: AB942 Supplemental to the Community Development Project Project Name Public Disclosure Authorized Region AFRICA Sector Social Protection Project ID P088978 Borrower(s) GOVERNMENT OF MADAGASCAR, Attention: Mr. Davida RAJAON, General Coordinator, Address: Lot III M 39 Ouest Ambohijanahary, Antananarivo 101, Rez de chaussée Email: [email protected] / [email protected], phone : 22 257 60, 032 07 604 94, fax 22 258 09. Implementing Agency Fonds d'intervention pour le développement (FID) Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Safeguard Classification [ ] S1 [ ] S2 [ ] S3 [ ] SF [X] TBD (to be determined) Date PID Prepared May 26, 2004 Public Disclosure Authorized Date of Appraisal May 20, 2004 Authorization Date of Board Approval July 6, 2004 1. Country and Sector Background Madagascar is among the poorest countries in the world. National per capita income is around US$240 and approximately 70 percent of the population is estimated to be poor. Forty-eight percent of children under five are stunted. Infant and under five mortality rates are very high at 85 percent and 142 percent respectively. Education outlook is also bleak, with a national gross enrolment rate standing at 70 percent, and barely reaching 50 percent in rural areas (2002). Only Public Disclosure Authorized about one third of children complete primary school, and just over half the population can read and write. Access to safe drinking water is limited to 35 percent of the population, and electricity connectivity is only 15 percent. After having been one of the most rapidly growing African economies in recent years, Madagascar plunged into a deep political crisis in 2002. However the new Government introduced an ambitious reform program. In August 2003, it finalized its Poverty Reduction Strategy Paper (PRSP) following a broad and inclusive participatory process. The overarching goal of the PRSP is to cut the poverty rate by half in ten years, from 70 percent in 2003 to 35 percent in 2013. To achieve this objective, the strategy has three main axes based on the principle of public private partnership: (i) restoring rule of law and ensuring a well-governed society; (ii) promoting economic growth with a large social base; and (iii) establishing human security and enlarging social protection. The November 2003 Country Assistance Strategy Public Disclosure Authorized (CAS) is designed to support the implementation of Madagascar’s PRSP. The Community Development Project supports the strategic orientations of the CAS by financing: (i) community investment in rural areas where 77 percent of the population is poor (2001); (ii) support to local governments; and (iii) safety net activities. Between January 26 and February 4, 2004, tropical cyclone Elita hit Madagascar several times causing havoc in a number of districts, leaving 29 people dead and 100 injured. Barely a month after cyclone Elita, intense tropical cyclone Gafilo hit the country on March 7, 2004 killing 76 people. It is estimated that the cyclones left 305,812 people homeless. Gafilo is one of the strongest cyclones to have hit Madagascar in twenty years. The cyclones caused serious damage to the agricultural production system in large areas of the country. In addition to damaged rural infrastructure and cereal crop losses, the loss of export earnings from vanilla producing areas, livestock and the impact on fisheries will have a devastating impact on the economy. Around 1,150 economic infrastructures (bridges, irrigation schemes etc.) have been damaged or destroyed. With respect to social infrastructure, it is estimated that around 3,977 schools have sustained some type of damage, primarily water damage from the flooding and the loss of roofs due to wind, but in some cases complete destruction of the building. An estimated 637 health centers have also been damaged or destroyed by high winds and subsequent flooding. Access to safe drinking water and adequate sanitation conditions have been severely compromised, increasing public health risks in the most affected districts. Sanitation is likely to become an even more critical problem in these flooded areas, increasing the cases of diarrhea and other communicable diseases and the risk of a cholera outbreak. Finally, about 1,040 administrative buildings have been affected. 2. Objectives The development objective of the Community Development Project is to contribute to the improved use of, and satisfaction with, social and economic services in participating rural and urban communities. The project also seeks to (i) improve local governance and local capacity; (ii) establish participatory and decentralized mechanisms for selecting, funding and implementing rural community investment programs; and (iii) implement basic infrastructure in rural communities across the country. As a result of the cyclones, the achievement of the development objectives became at risk. The supplemental credit will cover the cost overrun associated with increased number of development targets and hence, higher cost of inputs. The additional financing will be used to assist in the post-cyclone reconstruction efforts, targeting communities in the affected areas. 3. Rationale for Bank Involvement The Community Development Project is the ideal vehicle for responding rapidly to the stricken population. The project has developed into a key instrument for intervention in the health, education, nutrition, agricultural and transport sectors. IDA has financed three social fund projects in Madagascar over 10 years which have specialized in the construction and rehabilitation of community infrastructure. The executing unit of the Community Development Project, the Fonds d'intervention pour le développement (FID) has gained extensive experience and built solid capacity in managing community development projects and rehabilitating social and economic infrastructure. In addition, buildings built by the project in recent years have not been destroyed by cyclones because the project was able to enforce adequate quality standards for design and workmanship. The project has completed 1,447 sub-projects (mostly new infrastructure). To date, approximately 418 primary schools, 140 health facilities, 589 kilometers of feeder roads and 9,135 hectares of agricultural lands have been rehabilitated. As a result, 4,503,752 million person days of temporary employment have been created. Currently, there are another 804 sub-projects underway. More importantly, the project is experienced in working with community associations, NGOs and local governments and only supports rehabilitation or construction requested by the communities. The project can serve the damaged areas from six regional offices. On this basis, FID is well-placed to respond to emergency situations quickly and efficiently. 4. Description The proposed credit would provide supplemental financing to the existing Community Development Project (Cr. No. 3498-MAG) to cover the additional costs that were incurred to address the emergency situations that arose from the Elita and Gafilo cyclones. The credit would support cyclone-related rehabilitation and reconstruction works, labor intense safety nets interventions as well as special interventions such as limited distribution of food and non-food items by specialized UN agencies. The supplemental would finance 5,507 sub-projects, 60 percent of which would be rehabilitation (mostly roofs, windows, and upper walls), and 40 percent new constructions, benefiting 1.2 million people. Social and economic infrastructure to be rehabilitated or reconstructed include schools, health centers, rural water supply, slaughterhouses, markets, and feeder roads. 5. Financing Source: ($m.) BORROWER/RECEPIENT 0 INTERNATIONAL DEVELOPMENT ASSOCIATION 50 Total 50 6. Implementation The FID is an autonomous implementing agency that has ten years of experience and demonstrated capacity to effectively and rapidly intervene at the community level and to undertake large scale interventions. Further, FID can take advantage of its autonomy to (i) enforce certain minimum standards of implementation; (ii) adhere to a tight timetable; and (iii) undertake timely procurement following Bank rules but without be going through Central Procurement Board and contracting out major emergency activities to civil society partners and international organizations. The project unit employs well defined and transparent management and accounting procedures; and undertakes regular and frequent financial, managerial and technical audits. There is also strong support from high-level government officials on the use of FID to implement these types of activities in urgent circumstances. The supplemental credit would be implemented by FID through contracting of partners (private sector, NGOs, engineering firms, UN agencies etc.) under the same arrangements as the current project. 7. Sustainability Under the proposed Supplemental Credit, FID will continue to deepen its focus on sustainability. The sustainability of FID sub-projects is achieved by ensuring maximum community involvement at implementation, and post-completion stages. Special IEC activities will be carried out by NGOs on operations and maintenance including though user fees when applicable (e.g. water schemes). In addition, beneficiary communities contribute in cash, in-kind, through labor, or a combination thereof, which further ensures ownership and sustainability of projects. Finally, FID will systematically use post-completion visits