Results

US$330.0 million Development Policy Loan approved in April 2009, is the second in a planned series of three operations to support the Government of Peru (GoP) in strengthening the accountability framework and improving results in health, nutrition and education. The Peru REACT DPL series is supporting actions in primary education, health and nutrition to define standards and set goals for the outcomes which families should expect for their children. This is coupled with the development of robust monitoring systems which provide up-to-date information on the performance of health posts and schools and individualized data for parents on the health, nutrition and learning status of their children. The operation also supports actions to reduce exclusion, rationalize programs, improve targeting and increase the participation of poor communities in budget processes and program monitoring. The REACT DPL series is expected to lead to improved outcomes in second grade literacy; increased access to institutional birth services; and increased coverage of individualized growth monitoring and counseling services for children under 24 months of age in areas with a high incidence of chronic malnutrition, leading to better nutrition outcomes.

El Salvador: Supporting Crisis Response and Policy Development in Social Protection.

Estimated US$70.0 million loan under preparation.  This loan will support the Government of El Salvador with the implementation of a comprehensive Anti-Crisis Plan (ACP) to offset the impacts of the economic slowdown. Since 2008, the food, fuel, and international financial crises have hit Salvadoran households hard. The current crisis is having a particular impact on urban areas due to the location of expert oriented industries (maquilas) and the share of migrant remittances that go to urban areas. Urban areas are not only facing a relatively larger impact of the crisis, but also concentrate about 58 percent of the poor in El Salvador.  The ACP has the following objectives: a) protect the vulnerable population from the negative impacts of the crisis, with a particular focus on the poor and socially excluded population; b) protect existing jobs and create new employment opportunities; c) start the implementation of a universal social protection system; and, d) exploit the crisis to develop inclusive policies on economic and social issues.  Within the ACP, the loan will support the design and implementation of a Temporary Income Support program aimed at providing a temporary income transfer to targeted individuals in exchange for their participation in community activities and services, and their participation in training activities.  This will contribute both to achieve a short term impact on households’ wellbeing and to enhance their labor market prospects for the time when the crisis has subsided and economic growth has returned to the country.  As two other associated objectives, the loan will support efforts to improve labor market opportunities of Salvadoran households through: (i) improvements in the conditions in which individuals enter the labor market; (ii) improvements in the institutions that intermediate local labor markets; (iii) increase in the effectiveness of the existing employment training system; and (iv) increase in the quality of labor market information to guide policy making processes.  And it will strengthen the Government capacity to coordinate, design, implement and evaluate social policies and build medium term strategies on social protection issues, in particular through supporting the development of the Universal Social Protection System, a medium and long-term goal.  Approval is expected by November 2009.

Dominican Republic: Temporary Employment and Income Support Program (Proposal for restructuring the Youth Development Project)

Estimated US$2.2 million loan under preparation.

The proposed restructuring (of US$2.2 million) to the Youth Development Project (YDP) (total US$25.0 million) would support the implementation of a pilot temporary employment and income support program in the Province of Santiago, to mitigate the employment decline due to the recent international economic crisis. After four years of rapid economic growth (surpassing 5 percent per year), GDP is expected to decline in Dominican Republic by 1.2 per cent in 2009, and unemployment to rise from 15 to 18 percent. The economic crisis is already reflected in the declining performance of traditional economic indicators: a) exports fell by 24.1 per cent during the first quarter of 2009, compared to a year earlier; b) remittances also declined during the first quarter of 2009, by 7.1 per cent; and c) the number of tourist arrivals in the first quarter of 2009 fell by 5.7 per cent. The recession is also affecting the country capacity to collect fiscal revenues, which in nominal terms fell 17 per cent in the first quarter of 2009 (with respect to the first quarter in 2008). A particular sector that is being affected by the crisis is the maquila industry, which generates around 7% of formal salaried private jobs in Dominican Republic. Between April and October 2008 around 23,000 jobs were lost in this sector, mainly in Santo Domingo and Santiago. The Government of Dominican Republic requested Bank assistance in terms of technical advice and financial resources for this pilot experience, by restructuring the ongoing YDP. Approval is expected by September 2009.