Document of The World Bank Public Disclosure Authorized Report No: 30755-PA IMPLEMENTATION COMPLETION REPORT (SCL-41580 PPFB-P3060) ON A LOAN Public Disclosure Authorized IN THE AMOUNT OF 22.5 US$ MILLION TO THE REPUBLIC OF PANAMA FOR A RURAL POVERTY AND NATURAL RESOURCES PROJECT Public Disclosure Authorized December 26, 2004 Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective October 30, 2004) Currency Unit = Balboas 1 = US$ 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ABC Atlantic Biological Corridor AMI Agricultural Marketing Institute BC Biodiversity Conservation CAP Community Action Plan CAS Country Assistance Strategy CDD Community Demand Driven Comarca Indigenous Administrative District Corregimiento Smallest Administrative Division in Panama CTC Corregimiento Technical Committee FES/FIS Social Emergency Fund (Fondo de Emergencia 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 ICR Implementation Completion Report IDA International Development Association IDB Inter-American Development Bank IDIAP Agricultural Research Institute (Instituto de Investigación Agropecuaria) IFAD International Fund for Agricultural Development IICA Inter-American Institute for Agricultural Development INRENARE Institute for Renewable Natural Resources (Instituto de Recursos Naturales Renovables) IO Implementing Organization IPDP Indigenous Peoples Development Plan LIB Limited International Bidding M&E Monitoring and Evaluation MBC Mesoamerican Biological Corridor MEDUC Ministry of Education MIDA Ministry of Agricultural Development (Ministerio de Desarrollo Agropecuario) MINSA Ministry of Health (Ministerio de Salud) MOP Ministry of Public Works (Ministerio de Obras Publicas) NAPAS National Protected Area System NCB National Competitive Bidding NGO Non Governmental Organization PA Protected Area PAMBC Panama Atlantic Mesoamerican Biological Corridor Project PCU Project Coordinating Unit PPF Project Preparation Facility PRONAT Panama Land Administration Project PTC Provincial Technical Committee RUTA Regional Unit for Technical Assistance in Agriculture in Central America SA Special Account SDC Sustainable Rural Development Committee SINAP National Protected Areas System (Sistema Nacional de Área Protegidas) SOE Statement of Expenses SRD Sustainable Rural Development SAR Staff Appraisal Report UNDP United Nations Development Programme Vice President: David de Ferranti Country Director Jane Armitage Sector Manager John Redwood Task Team Leader Mark Austin PANAMA RURAL POVERTY AND NATURAL RESOURCES PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 12 6. Sustainability 15 7. Bank and Borrower Performance 16 8. Lessons Learned 18 9. Partner Comments 19 10. Additional Information 19 Annex 1. Key Performance Indicators/Log Frame Matrix 21 Annex 2. Project Costs and Financing 27 Annex 3. Economic Costs and Benefits 29 Annex 4. Bank Inputs 32 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 32 Annex 6. Ratings of Bank and Borrower Performance 35 Annex 7. List of Supporting Documents 36 Annex 8. Borrower Implementation Completion Report Summary 37 9. Partner Comments (a) Borrower/implementing agency: MIDA Dec. 10 2004 Ltr.pdfANAM Dec. 16 2004 Ltr.pdf (b) Cofinanciers: (c) Other partners (NGOs/private sector): Project ID: P007847 Project Name: Rural Poverty & Natural Resources Team Leader: Mark A. Austin TL Unit: LCSER ICR Type: Core ICR Report Date: December 27, 2004 1. Project Data Name: Rural Poverty & Natural Resources L/C/TF Number: SCL-41580; PPFB-P3060 Country/Department: PANAMA Region: Latin America and the Caribbean Region Sector/subsector: Other social services (46%); Central government administration (28%); General agriculture, fishing and forestry sector (26%) Theme: Biodiversity (P); Participation and civic engagement (P); Other rural development (P); Rural policies and institutions (S) KEY DATES Original Revised/Actual PCD: 06/06/1995 Effective: 03/09/1998 03/31/1998 Appraisal: 10/06/1996 MTR: 11/01/2000 12/08/2000 Approval: 05/08/1997 Closing: 06/30/2002 06/30/2004 Borrower/Implementing Agency: REPUBLIC OF PANAMA/MINISTRY OF AGRICULTURE/INSTIT. FOR RENEWABLE NATURAL RES. Other Partners: STAFF Current At Appraisal Vice President: David de Ferranti Shahid Javed Burki Country Director: Jane Armitage Donna Dowsett-Coirolo Sector Manager: Mark E. Cackler Michael Baxter Team Leader at ICR: Mark Austin ICR Primary Author: A team composed of Andres Lopez; Hernando Garzon; Alejandro Deeb; Teresa Roncal; Samuel Taffesse; and Mark Austin 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The project objectives, as defined in the Staff Appraisal Report (SAR), were 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 degradation of natural resources and migration; and (ii) promote the sustainable use and conservation of selected priority biodiversity areas. Special emphasis was to be placed on gender and indigenous aspects. More specifically, operational goals included: (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. The project development objectives were fully consistent with the Bank’s Country Assistance Strategy 1 (CAS) which identifies reviving sustainable growth and poverty alleviation as two key objectives of the Bank’s program in Panama. The project focused on the rural indigenous and non-indigenous who were included in the most vulnerable sectors of the population as defined by national household surveys. The project relied on a decentralized approach to implementation. The number of communities and NGOs responsible for implementation, and the self interest of these groups as beneficiaries, reduced risks and increased the favorable outcomes. The project also directly supported the Government of Panama’s (GOP) efforts for alleviating poverty and inequality and fulfilling the mandate for conservation and management of renewable resources. 1. Country Assistance Strategy for Panama (Report No. 13846-PAN), December 28, 1994. Discussed at the Board on February 7, 1995. 3.2 Revised Objective: No revision to the original objective was made. 3.3 Original Components: To meet these objectives, the project financed three closely related broad components: (a) Sustainable Rural Development (SRD). Implemented by the Ministry of Agricultural Development (MIDA), NGOs, and private community organizations. This component was designed to: (i) - 2 - promote community training and organizational assistance to communities to identify their needs, in activities related to production technology, production support, community organization and rural development, and to prepare community development or action plans (CAPs) using participatory methodologies; and (ii) establish a demand-driven Fund for Sustainable Agricultural and Rural Development (FUSARD) that was to provide matching grants to communities to help finance these plans in whole or in part (other sources of funds were to be used when available). Investments were supposed to 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 (BC). Implemented by the National Environmental Authority (ANAM) formerly the Institute for Renewable Natural Resources (INRENARE) and NGOs, this component supported activities in selected areas in the Pacific Zone and the Atlantic Biological Corridor (ABC) (the ABC became a separate stand along project financed by GEF). The component financed: (i) biodiversity research and planning, including baseline 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 process;