Finansman politik devlòpman pou rezilyans fiskal ak sosyal an Ayiti

FOR OFFICIAL USE ONLY Report No: ICR00005310 IMPLEMENTATION COMPLETION AND RESULTS REPORT D3790 - HT ON A GRANT IN THE AMOUNT OF SDR14, 3 MILLION (US$ 20 MILLION EQUIVALENT ) TO THE THE REPUBLIC OF HAITI Haiti Fiscal and Social Resilience Development Policy Financing (P162452) June 15 , 202 1 Macroeconomics, Trade And Investment Global Practice Latin America And Caribbean Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) CURRENCY EQUIVALENTS (Exchange Rate Effective June 30, 2020) Currency Unit SDR0.78 = US$1 US$ 1.38 = SDR 1 FISCAL YEAR October 1 - September 30 Regional Vice President: Carlos Felipe Jaramillo Country Director: Tahseen Sayed Regional Director: Robert R. Taliercio Practice Manager: Jorge A. de Thompson R. Araujo Task Team Leader(s): David Cal MacWilliam, Evans Jadotte ICR Main Contributor : Alexandre V. Abrantes The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) ABBREVIATIONS AND ACRONYMS ASYCUDA Automated System for Customs Dat a BRH Central Bank (Banque de La République d´Haiti) CPF Country Partnership Framework CPPR Country Portfolio Performance Review CSO Civil Society Organization DRM Disaster Risk Management EDH Electricity of Haiti (Electricité d ´Haiti ) EDU Education s ector at The World Bank EU European Union FNE National Education Fund (Fond National de l´Éducation) FSNIPH National Solidarity Fund for the Integration of People with Disabilities (Fond de Solidarité Nationale pour l´Integration des Personnes Handicappées) GDP Gross Domestic Product IMF International Monetary Fund HD Human Development sector at The World Bank MAST Ministry of Social Affairs and Labor (Ministère des Affaires Sociales et du Travail ) MEF Ministry of Economy and Finance (Ministère de l´Economie et des Finances) MINUSHTA United Nations Stabilization Mission in Haiti (M ission des Nations Unies pour la Stabili s ation d’Haïti ) MNE Ministry of National Education and Vocational Training (Ministère de l´Éducation Nationale et de la Formation Professionnelle NGO Non - Governmental Organization SIMAST Ministry of Social Affairs and Labor Information System (Système d´Information du Ministère des Affaires Social e s et du Travail) SMP Staff Monitored P rogram (with the IMF) SP Social Protection sector at T he World Bank PLR Performance and Learning Review of the CPF PREM Poverty Reduction and Economic Management sector at The World Bank The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) TABLE OF CONTENTS DATA SHEET ............................................................................... .............................................. ..... 1 I. PROGRAM CONTEXT AND DEVELOPMENT OBJECTIVES ................................ ..................... 5 II. ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES ............................................... 8 III. OTHER OUTCOMES AND IMPACTS ................................................................................... 17 IV. BANK PERFORMANCE ....................................................................................................... 18 V. RISK TO SUSTAINABILITY OF DEVELOPMENT OUTCOMES................................................ 21 VI. LESSONS AND NEXT PHASE ............................................................................................... 22 ANNEX 1. RESULTS FRAMEWORK ................................................................................................ 24 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES ......... 27 ANNEX 3. BORROWER, CO-FINANCIERS, AND OTHER DEVELOPMENT PARTNERS’/STAKEHOLDERS’ COMMENTS ................................................................................... 29 The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 1 of 31 . . DATA SHEET BASIC INFORMATION Product Information Project ID Program Name P162452 Haiti Fiscal and Social Resilience Development Policy Financing Country Financing Instrument Haiti Development Policy Lending DPF Options Programmatic Regular Deferred Drawdown Option Catastrophic Deferred Drawdown Option No No Crisis or Post Conflict Sub - National Lending Special Development Policy Lending No No No Organizations Borrower Implementing Agency Ministry of Economy and Finance Ministry of Economy and Finance Pro gram Development Objective (PDO) P rogram D evelopment O bjective (PDO) The operation is designed around two pillars: (1) strengthening fiscal management; and (2) enhancing the efficiency of social spending. The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 2 of 31 PROGRAM FINANCING DATA (US D ) FINANCE_TBL Approved Amount Actual Disbursed World Bank Administered Financing IDA - D3790 20,000,000 19,952,075 Total 20,000,000 19,952,075 KEY DATES Concept Review Decision Review Approval Effectiveness Original Closing Actual Closing 10 - Aug - 2018 10 - Aug - 2018 20 - Sep - 2018 26 - Sep - 2018 30 - Jun - 2020 30 - Jun - 2020 RATINGS SUMMARY Program Performance Overall Outcome Relevance of Prior Actions Achievement of Objectives (Efficacy) Moderately Unsatisfactory Moderately Satisfactory Moderately Unsatisfactory Bank Performance Moderately Unsatisfactory RATINGS OF PROJECT PERFORMANCE IN ISRs No. Date ISR Archived DO Rating IP Rating Actual Disbursements (US$M) 01 19 - Apr - 2019 Moderately Unsatisfactory Moderately Unsatisfactory 19.95 02 03 - Aug - 2019 Moderately Unsatisfactory Moderately Satisfactory 19.95 03 30 - Jun - 2020 Moderately Unsatisfactory Moderately Satisfactory 19.95 The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 3 of 31 SECTORS AND THEMES Sectors Major Sector/Sector (%) Mitigation Co - benefits (%) Adaptation Co - benefits (%) SECTOR 0 _TBL Public Administration 50 0.00 0.00 Central Government (Central Agencies) 50 0 0 SECTOR 0 _TBL Education 17 0.00 0.00 Other Education 17 0 0 SECTOR 0 _TBL Social Protection 33 0.00 0.00 Social Protection 33 0 0 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Economic Policy 17 Fiscal Policy 17 Tax policy 17 Public Sector Management 50 Public Finance Management 50 Public Expenditure Management 17 Domestic Revenue Administration 33 Debt Management 17 Social Development and Protection 33 Social Protection 33 Social protection delivery systems 17 Disability 17 Human Development and Gender 17 Education 17 Education Financing 17 The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 4 of 31 ACCOUNTABILITY AND DECISION MAKING Role At Approval At ICR Regional Vice President: Jorge Familiar Calderon Carlos Felipe Jaramillo Country Director: Anabela Abreu Tahseen Sayed Khan Director: John Panzer Robert R. Taliercio Practice Manager: Stefano Curto Jorge A. de Thompson R. Araujo Task Team Leader(s): David Cal MacWilliam, Fernando Andres Blanco Cossio, Evans Jadotte David Cal MacWilliam, Evans Jadotte . The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 5 of 31 I. PRO GRAM CONTEXT AND DEVELOPMENT OBJECTIVES A. Context at Appraisal Context Country context . The Haiti Fiscal and Social Resilience Development Policy Financing (DPF) was prepared during a period of violent social unrest resulting from the failed attempt to eliminat e fuel price subsidies o n July 6, 2018. Th e fuel price reform was deemed necessary to help close an expected financial gap of USD 60 million during the fiscal year and create fiscal space for better public service delivery. The proposed fuel price subsidy reform implied an increase in retail price s at the pump of 46 percent on average . The population reacted with v iolent protests that threatened the stability of the one - year - old government, elected after a long period of political instability and delays of the electoral calendar. The a uthorities were forced to reverse the measure the very next day following violent civil unrest and protest , including the loss of life and sizeable property damage . Haiti had been facing serious long - term economic , fiscal , political, governance, and social difficulties . T he sudden and significant increase of the price of fuel at the pump served as the trigger for the violent unrest , though the underlying issues had been ripe for a triggering event of this nature . The frequency and seriousness of riots had been growing over the p revious months and there was serious concern with the possibility of the now rapidly worsening situation turning into a major humanitarian crisis, as the Government had no resources or capacity for provi ding any sort of safety net for the poor . Given the seriousness of the crisis, the I nternational M onetary F und (IMF) and the World Bank Group (WBG) respond ed promptly with new financing . The thought was that resources could be used to address the social pressures and serious economic issues arising from the crisis. At the time , Haiti had not concluded a n economic program with the IMF and, therefore, had no access to funding from that institution . After considerable internal debate , the Bank decided to proceed with the preparation of a US $ 20 million grant . Given the urgency , the Bank us ed accelerated processes to ensure approval and rapid disbursement . Meanwhile, t he European Union (EU) prepared a parallel US $ 40 million equivalent budget support operation to close the anticipated US $ 60 million financing gap. T o reduce the risk of further deterioration of the economic and social situation, and to protect the poor and vulnerable , the Bank decided to proceed with the rapid preparation and disbursement of the Grant. The operation was prepared in little over 4 weeks, with limited opportunity for pursuing, discussing , and supporting substantive reforms with the authorities. Nonetheless, it was possible to identify several financial management and social reforms around which the DPF operation could be structured. The G rant was approved and quickly disbursed so that the Authorities could receive the funds before the end of the Haitian fiscal year to meet urgent financing needs (Haiti fiscal year runs between October 1 st through September 30 th ) . The support by the World Bank and the EU was seen largely as providing necessary resources to address the causes behind the social unrest , through the potential delivery of strengthened social services and transfers to the most vulnerable households , to ease some of the underlying r oot causes of social tensions. The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 6 of 31 Haiti is one of the poorest and most economically u nequal countries in the w orld. In 2018, when this operation was prepared, income per capita was estimated to be at US$738 (or US$1,575 in purchasing power parity terms) ; the overall poverty headcount rate was 59 percent (2012) ; and the extreme poverty rate was 24 percent . Over 6 million Haitians were unable to meet their basic consumption needs and about 2.5 million could no t cover their essential food needs. Poverty rates were highe r in rural areas and recent gains ha d benefitted mostly urban areas. Social development i ndicators were low : Haiti rank ed 163 rd out of 188 countries on the U nited N ations D evelopment P rogram (UNDP) Human Development Index . This dire situation was the result of a combination of a long history of political instability, weak capacity of the state to ensure the safety and rights of its citizens , failure to deliver basic public goods and services, repeated recurrent fiscal cris e s , extreme vulnerability to natural hazard shocks followed by humanitarian cris e s , and slow economic growth punctuated by frequent economic contractions. Macroeconomic context . In 2018, real GDP growth had gradually recovered to 1.6%, driven largely by private consumption, supported by increasing remittance inflows that account for more than 30 percent of Haiti´s GDP, and favorable weather conditions. The structure of the economy had not significantly changed in the previous 5 years : consumption , fueled by remittances, drove growth based on commerce, restaurants, and hotels; the agricultural sector had shrunk, while industrial and manufacturing output stagnated. Rec urrent government spending remained low and unchanged at around 13.1 percent of GDP, while capital investment had fallen from 12.9 percent in 2015 to 7.4 percent of GDP in 2017, narrowing the fiscal deficit from 4. 2 percent to 1.9 percent of GDP. F iscal revenues remained low and unchanged from previous years, at around 1 2 percent of GDP. External development assistance went down from 5.6 percent of GDP in 2015 to 4.6 percent in 2017 . 1 Public expenditures were rising to finance operating outlays, subsidies, and public debt service. Subsidies and transfers were a major component of current expenditures . Transfers to the state electricity utility (E DH ) amounted to 1. 6 percent of GDP in FY2017 and fuel subsidies totaled 3.7 percent of GDP . In May 2017, the Government had commenced a reduction of subsid ies on fuel products causing fuel retail prices at the pump to rise by 1 8 percent on average . O n July 6, 2018 , a decision was made to eliminate fuel price subsidies, implying a 46 percent increase in retail prices at the pump . The population reacted swif tly with violent protests and civil unrest that threatened the stability of the democratic political system and the collapse of the state´s capacity to ensure security and deliver y of public services . The Government did not have the political capital n or the capacity to control the civil unrest . It had no choice but to reverse the fuel price subsidy elimination decision . F uel subsidies were reinstated the next day and the Prime M inister and the entire cabinet resigned one week later . Faced with rigid expenditures and limited financing options, the Government turned to the Central Bank ( BRH ) to finance the fiscal deficit. In addition, l ow fiscal revenues and declining donor assistance forced the Government to cut capital expenditures and social spending, which were already low to begin with, with negative implications o n medium - and long - term growth. The Haitian Gourde depreciated continuously over the years, except for a short period in 2017 , while the Central Bank intervened in foreign exchange markets to smooth short - term exchange rate volatility . Annual 1 Haiti culminated the rebasing of its GDP in July 2020. All ratios involving GDP in the document relate to the non - rebased GDP , and therefore are higher . The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 7 of 31 inflation rate was rising since 2016 and averaged 14.0 percent i n 2017 . Central Bank financing of the fiscal deficit increased pressure on the Gourde, further fueling inflation . On the external side, Haiti’s structural trade deficit kept the current account balance negative despite the growth of remittance inflows. In 2017 exports declined by 1.2 percent of GDP, due to lower apparel exports, while imports rose by 2 percent . The current account deficit narrowed from - 3 percent in 2015 to - 1 percent of GDP in 2017, partly due to increased remittances. Foreign exchange reserves remained at around 5 months of imports, above the critical 3 months of imports, mostly due to an exceptional one - time foreign d irect investment (FDI) related to the acquisition of a loc al petroleum distribution company. The banking sector was relatively well capitalized and profitable. The ratio of non - performing loans (NPLs) to total loans declined from 3.4 percent in 2016 to 2.9 percent in 2017, while provision s to NPLs increased from 88 to 91 percent. In February 2018, the Government agreed to a Staff Monitored P rogram with the IMF to address some of these challenges. The program ´s objectives included: a) improving solvency and efficiency of the public electric ity utility (EDH) ; b) strengthening government revenues by phasing out domestic fuel subsidies ; c) a road map for tax reform ; d) safeguards for the c entral bank operations ; and e) social measures to protect the most vulnerable. These measures were viewed as important to allow increased spending on infrastructure and on the social safety net, while containing monetary financing of the fiscal deficit. S ector al context. Poverty. Haiti is one of the poorest and economically unequal countries in the World. Yet, since the year 2000 , the situation has improved, namely in terms of the proportion of the extremely poor, which fell from 31 percent in 2000 to 24 percent in 2012, due to increases in non - agriculture labor income of urban workers in construction, telecommunication, and trans port. In 2018, these gains were at risk due to political instability, repeated weather shocks and the worsening macroeconomic context. Social Development. Haiti social safety nets are limited and insufficient to meet the basic needs of the poor and the economically vulnerable population, including targeted social protection services or insurance schemes. As a result, frequent natural disasters and economic shocks have impacted the country. The poor and vulnerable were hit the hard est , forcing them into selling productive assets, reducing consumption, taking their children out of school or foregoing necessary health care. Education , health, and disability . As with poverty, education and health indicators ha ve improved since 2000 , even if progress was disproportionately in urban areas . In 2018, children aged 0 - 6 years of age were in school in greater percentage s than ever before , 90 percent of pregnant women reported attending prenatal consultations , while maternal mortality fell from 389 maternal deaths per 100,000 live births in 2010 to 359 in 2015. Again, in 2018, these gains were at risk due to sharp cuts in funding for basic services. The W orld Health Organization estimates that the 2010 earthquake left behind more tha n 800,000 people with physical or psychological The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 8 of 31 disabilities. A significant number of people were left with m edium - or long - term disabilities, often associated with social stigma, who have very limited opportunities in the education and job market s and little support from social protection systems. Program Development Objective(s) (PDO) The Grant was a stand - alone development policy financing operation meant to support the government ’ s efforts to : a) Strengthen fiscal management, and b) Enhance the efficiency of social spending, to better protect the poor and vulnerable households. Progress towards these objectives was to be measured by the following result indicators: a) Custom s revenu e as a percentage of GDP, b) Number of annual updates of the data base on tax exemptions published in the Ministry of Economy and Finance (M E F) website, c) Number of accounts of government entities integrated into the Treasury Single Account, d) Percentage of beneficiaries of social program registered in the SIMAST (located at the M inistry of Social Affairs and Labor - M AST) that would be the backbone of the United Social Registry, e) Number of students receiving school fee waivers financed by the National Education Fund ( FNE ) , f) Number of National Solidarity Fund for the Integration of People with Disabilities job placement programs. Original Policy Areas/Pillars Supported by the Program (as approved) The operation was structured under two pillars: Pillar 1: Strengthen Fiscal Management Economic policy, fiscal policy, tax policy; and Public sector management, public expenditure management, Domestic revenue administration, debt management. Pillar 2: Enhance the Efficiency of Social Spending Social development and protection, social protection delivery systems and d isability ; and Human development and gender, education and education financing . B. Significant Changes During Implementation During the implementation of the operation there were no changes in the overall objectives, pillars or project performance indicators. II. ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 9 of 31 A. Relevance of prior actions Overall Rating: Moderately s atisfactory Prior actions we re relevant to the achiev ement of the overall objectives of the operation , as they are cr i tical to strengthen fiscal management and enhance the efficiency of social spending , while recognizing that the level of ambition was limited . However, during a crisis, i dentifying substantive prior actions that could be completed within the 4 - to - 6 - week timeframe that would allow for rapid disbursement before the end of the Haitian fiscal year (September 30) was challenging . As such, p rior actions had to be selected among policies that were already very well advanced , required little additional action on the part of the authorities or had already been completed. Nonetheless, while perhaps not the most critical of reforms, the p rior actions selected were grounded on several analytical underpinnings, as described in the Program Document (pages 17 and 18) and were based on long - term sector dialogue that had been ongoing for several years . Prior actions show moderate shortcomings : while they are critical for the achiev ement of the overall objectives , they are not in themselves sufficient to achieve the specific objectives contained in some of the said prior actions or to fully achieve some of the associated results , more so within the short timeframe of this operation. This is because the associations between the activities described in each prior action, the objectives set in the same prior action and the respective results are not direct. Given the context in which the operation was being designed and implemented, and weak government capacity, it mi ght have been more realistic to set the overall objective s, prior actions and results just in terms of creating adequate management information systems that are critical for efficient and effective financial management , namely in the social sectors . A lternative financing instruments could have been considered in principle, but options were constrained by the perceived urgent need to provide financial support to Haiti. Alternative instruments could have included a multiphase programmatic approach that would give the Government more incentives to follow up on policies, an investment project financing operation that would allow better control over resources and use of funds, or a program for results (P4R) that would condition disbursements on results. Given the weakness of the public financi al management systems and institutions, the existing governance, social and political crises, any operation would have been a high - risk investment . N one of the alternati ves would h ave been able to deliver the funds in time to prevent the risk of further deterioration of the fiscal position and to meaningfully protec t the poor and vulnerable . There was limited scope for engaging the Government in substantive reforms and ambitious targets for the results indicators in light of the compressed timeframe available for project preparation. With more preparation time the team could have engaged with the authorities on a more meaningful and substantive reform program and supported prior actions that would have had a more substantive and lon g er - term impact on stated objectives. Under the challenging circumstances, the preparation team opted for picking up on ongoing economic and social sector dialogue in support of ref orms that were well - advanced or indeed already completed. M odest targets for the results indicators were set . Limited scope existed for considering reforms that were not already well advanced The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 10 of 3 1 and establishing more ambitious results indicators and targets . Focusing the operation on just improving the financial management information systems might have been more realistic. PILLAR 1: Strengthen Fiscal Management Rating: Moderately un satisfactory Prior action 1 , 2 and 3, to install an automated system for customs data ( ASYCUDA ) , publish tax expenditures arising from customs and tax exemptions , and consolidate bank accounts held by different government entities into a Single Treasury Account , respectively, are relevant to the overall exp licit objectives of the operation and are critical to s trengthen ing fiscal management , as stated in the respective prior actions . Yet, a lthough such actions are necessary and critical instruments to improve fiscal management , they are not sufficient in themselves to increase revenue mobilization . G overnments do not necessarily act on available management information , due to political or other constraints. In addition, any of the prior actions 1, 2 and 3 will take time to mate rialize in terms of outcomes (increased collection of custom revenues, control of tax expenditures and savings from cash management) , which extend well beyond the time frame of this operation . Prior action 1: Installing the ASYCUDA custom revenue management information system is critical to improve transparency and accountability of fiscal management but does not necessarily lead to increased collection of custom revenues , as stated in the prior action . Furthermore, there would be a wide range of o ther variables that could independently lead to higher or lower customs revenue over the period. Prior action 2: Publishing tax expenditures arising from custom s and tax exemptions on the Ministry of Economy of Finance website is critical to improve the transparency and accountability of fiscal management , but does not necessarily lead to better control over tax expenditures , as stated in the prior action . Moreove r, there was no continuation by the authorities in the outer years, since the tax expenditures arising from custom s and tax exemptions has not been published since 2018 . Prior action 3: Consolidating existing individual bank accounts held by entities and agencies within the administrative jurisdiction of the Recipient central government into a Treasury Single Account is critical to improve the capacity for exercising sound fiscal management but is not necessarily enough to generate savings from cash management , as stated in the prior action . PILLAR 2: Enhance the Efficiency of Social Spending Rating: Moderately unsatisfactory Prior action s 4 , 5 and 6, c onsolidating the registries managed by the Fund for Social and Economic Assistance and the United Nations Development Program into one Unified Beneficiary Registry, e nacting a law establishing the National Education Fund (NEF) and s ubmitting to Parliament draft legislation establishing and regulating the operations of the National Solidarity Fund for the Integration of People with Disabilities (FSNIPH) , respectively , The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 11 of 31 are c ritical instruments for better social spending management , but do not in themselves lead directly to more efficient social spending. None of the prior actions contributes directly to more efficient social spending, i.e., through increasing the output , improving targeting or quality of social services , or reducing cost s , as stated in the respective prior actions . Again, although such actions are critical instruments to improve social spending management, they are not sufficient in themselves to enhance the efficiency of social spending meaningfully or substantively . It is well known that governments do not necessarily act on available management information due to political or other constraints. In addition, the outcomes of prior actions 4, 5 and 6 (improved efficiency of social spendin g, stabilize education financing, or significantly increase the supply of programs benefiting vulnerable groups ) would take time to be realized, well beyond the time frame of this operation. Prior action 4: Consolidation of the registries managed by the Fund for Social and Economic Assistance and the UNDP into the Unified Beneficiary Registry are critical to increase transparency about who benefits from education subsidies, exposing accidental or fraudulent duplicates, but does not in itself lead directly to an increase in the efficiency of the education system , either by increasing the number or targeting of the system ’ s beneficia ries, or by reducing education spending. Prior action 5: Enacting a law establishing the National Education Fund (NEF) with a mandate, institutional and governance structures and operating rules provides an institutional framework for enhanced management of the education sector and may lead to improved transpare ncy and accountability in the allocation of resources in the education sector but does not necessarily lead to stabilizing education financing . Establishing a NEF does not by itself lead to an increase in the number or improved targeting of students receiving school fee waivers , or to a reduction in the respective operational costs. Prior action 6: Submitting to Parliament draft legislation establishing and regulating the operations of a National Solidarity Fund for the Integration of Peopl e with Disabilities provides an institutional framework for enhanced social protection programs and may result in improved livelihoods for people with disabilities but will have a marginal impact on the overall Haiti social protection system inefficiency, as described on pages 14 and 15 of the Program Document. The legislation might not be adopted by Parliament or, it may be adopted but never implemented o n a significant scale. Supporting job placements for two hundred people with disabilities c ould make a difference for the beneficiaries but would only have a marginal impact on the overall efficiency of social spending or the welfare of hundreds of thousands of people with disabilities living in Haiti (Project document page 6 ) . B. Achievement of Objectives (Efficacy - the ability to achieve the desired result ) Rating: Moderately un satisfactory The operation can be rated as moderately un satisfactory in terms of its ability to achieve its desired results : strengthen fiscal management and enhance the efficiency of social spending, to better protect the poor and vulnerable households . At the end of the operation : The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 12 of 31 a) Pillar 1: The G overnment ´s capacity for fiscal management was strengthened with the creation of new management information systems and institutions ; y et there is no evidence of improved performance of the overall fiscal management . In the years following the operation, there has been a marginal improvement in the collection of customs revenues , but the control of tax revenues and cash management have deteriorated further . As a result, t he efficacy of this com ponent can be rated as moderately unsatisfactory . b) Pillar 2: The Government ’s capacity for social spending management has been stren g thened with the creation of new management information systems and institutions, but t here is no evidence to claim enhanced efficiency of social spending, measured by either the allocation of social spending to more cost - effective interventions, lower cost per beneficiary or improved targeting to the poor and vulnerable households. In the y ears following the operation , financing of the education and social sectors declined and the overall efficiency and effectiveness of both sectors deteriorated. The efficacy of this component should therefore be rated as moderately unsatisfactory . The Grant supported the creation of m anagement information systems and institutions, but it will take time and political determination f or changes in the system ´s inputs and processes to bring about improved fiscal and social spending management . Based on the outputs of the project as stated in the pillars and associated results, b y the end of the operation, out of the expected 6 results 1 ( one ) was rated satisfactory , 1 (one) was rated moderately satisfactory because there were slight shortcomings in terms of results, 1 ( one ) w as rated moderately unsatisfactory because of significant shortcomings and 3 (t hree ) were rated as unsatisfactory because there were major shortcomings in relation to the stated targets ( see T able 1 ) . Table 1. Prior actions, results indicators and efficacy Prior Actions Results Indicators Efficacy PILLAR 1: Strengthen Fiscal Management : Moderately un s atisfactory Prior Action 1: To improve the collection of customs ´ revenue, the Recipient has installed the ASYCUDA in the Recipient´s custom s offices and industrial parks Result Indicator 1: Custom s duties as a percentage of GDP Baseline 2017 = 3.50 Target 2019 = 4.00 Current status on September 30 , 2019 = 4.9 S atisfactory 1 - Custom duties as a percentage of GDP Result indicator improved by 40 percent 2 - Recipient installed ASYCUDA 3 - Target judged modest Prior Action 2: To strengthen control over tax expenditures, the Recipient ´ s Ministry of Economy and Finance has published on its website the amount of tax expenditures arising from customs and tax Result Indicator 2 : Number of annual updates of the database on tax exemptions on the MoF Baseline 2017 = 0 Target 2019 = 1 Current status on June 29, 2019 = 0 U n s atisfactory The Recipient did publish in its website the amount of tax expenditures arising from custom and tax exemptions in 2019 . Result indicator was not accomplished The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 13 of 31 exemptions, disaggregated by economic sector, for the past five (5) years (2012, 2013, 2014, 2015, 2016, and 2017) Prior Action 3: To generate savings from improved cash management, the Recipient has expanded the coverage of the Treasury Single Account by consolidating existing individual bank accounts held by entities and agencies within the administrative jurisdiction of the Recipie nt ´s central government into said Treasury Single Account. Result Indicator 3: Number of accounts of government entities integrated in the Treasury Single Account Baseline 2017 = 0 Target 2017 = 872 Current status on June 29, 2019 = 796 Moderately un satisfactory 1 - 7 9 6 accounts held by different government agencies were consolidated into on Treasury Single Account , representing 92 percent of the target . 2 - C ash management has deteriorated further, and no significant savings have been realized PILLAR 2: Enhance the Efficiency of Social Spending : Moderately unsatisfactory Prior Action 4: To improve the efficiency of social programs, the Recipient has designated its Ministry of Social Affairs and Labor as the institution responsible for the consolidation of the registries managed by the Fund for Social and Economic Assistance (Fonds d´Assistance Economique et Sociale) and the United Nations Development Program (UNDP) into the Unified Beneficiary Registry (Regis tre Unique du Bénéficiaire). Result Indicator 4: Percentage of beneficiaries of social programs registered in SIMAST Baseline 2017 = 15.00 Target 2019 = 30.00 Current statu s on June 29, 2019 = 19.00 Unsatisfactory 1 - The recipient registered 19 percent of beneficiary households into SIMAST of the Fund for Social and Economic Assistance against the target of 30 percent . Result indicator improved by 27 percent 2 - The Recipient has designated the Ministry of Social Affairs and Labor as the institution responsible for consolidating the registries managed by FAES and UNDP 3 – Financing and performance of the sector have deteriorated further Prior Action 5: To stabilize education financing and improve transparency and accountability in the allocation of resources in the education sector, the Result Indicator 5: Number of students receiving school fee waivers financed by FNE Baseline 2017 = 0 Target 2019 = 997,272 Moderately satisfactory 1 - In 2020, about 940 thousand students received fee waivers through the FNE 94 percent of target result indicato r The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 14 of 31 Recipient has enacted a law establishing the National Education Fund (Fond National de l´ Éducation) with a mandate, ins titutional and governance structures and operating rules. Current status on June 29, 2019 = 939,96 2 2 - The Recipient did create the National Education Fund 3 - The allocation of student fee waivers is more transparent and accountable. 4 - E ducation financing and performance continued to decline Prior Action 6: To increase the supply of programs benefiting vulnerable groups, the Recipient has submitted to its Parliament, for the approval thereof, draft legislation establishing and regulating the operations of the National Solidarity Fund for the Integration of Pe ople wi t h Disabilities (Fond s de Solidarité Nationale pour l´Integration des Personnes Handicappées) Result Indicator 6: Number of FSNIPH job placement program beneficiaries Baseline 2017 = 0.00 Target 2019 = 200 Current status on June 29, 2019 = 49 Unsatisfactory 1 - Forty - nine (49) persons with disabilities were placed in job programs. 25 percent of target result indicator 2 - The recipient has submitted to its parliament the approval of draft legislation establishing and regulating the operation of the National Solidarity Fund for the Integration of People with Disabilities 4 - There has not been any significant increase in th e supply of programs benefiting vulnerable groups Pillar one deal t with economic policy and public sector management and all three results are rated as moderately unsatisfactory, though based on strict achievement of the results indicator s, two of the three were achieved . Yet, if one considers the prior actions to which these indicators are associated, we can say that the results are less positive: the collection of custom duties improved, but only marginally so , but the control of tax exemptions an d cash management have continued to deteriorate, and no savings have been realized Pillar two , which dealt with social protection and education , had one result rated as moderately satisfactory and two rated as unsatisfactory . E ven though the result indicator , related to the number of students receiving fee waivers was met, the financing of the education sector continued to deteriorate. This disconnect could have been avoided if the association between the prior actions and the respective stated result indicators had been stronger . It might have been more realistic to set objectives, prior actions and results around the establishment of critical management information systems critical for improved financial management systems and more efficient social spending , as discussed above . The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 15 of 31 Result Indicator 1: Custom s duties as a percentage of GDP Rating: S atisfactory . At the end of the operation, the Recipient had installed the ASYCUDA in the Recipient´s custom offices and industrial parks , and custom duties as a percentage of the GDP improved from 3.5 to 4.9 percent, 40 percent above baseline . Result Indicator 2: Number of annual updates of the database on tax exemptions on the MoF. Rating: U n s atisfactory . Government did publish on its website one satisfactory custom and tax exemptions report in 2018 , for the past five years 2013 - 2017 . The report was not disaggregated by economic sector because the available information did not allow for such breakdown. Instead, it was broken down by source, i.e., NGOs, multilateral and bilateral agencies, etc. Yet, the control over tax expenditures continued to deteriorate . Moreover, publication was discontinued thereafter. Result Indicator 3: Number of accounts of government entities integrated in the Treasury Single Account. Rating: Moderately un s atisfactory . By the end of the operation, Government had included into the Single Treasury Account 796 accounts of different government agencies, that is 9 2 percent of the target. Yet , cash management continued to deteriorate and no significant savings were realized. Result Indicator 4: Percentage of beneficiaries of social programs registered in SIMAST Rating: U nsatisfactory. By the end of the operation 19% of beneficiaries were registered in SIMAST . S ocial spending continued to decline, and the performance of the sector continued to deteriorate . Result Indicator 5: Number of students receiving school fee waivers financed by FNE. Rating: Moderately satisfactory . By the end of the operation 97 percent (927,272) of the target number of students receiving school fee waivers (997,272) were financed under the FNE. E ducation spending continued to decrease . Result Indicator 6: Number of FSNIPH job placement program beneficiaries. Rating: Unsatisfactory . Government officials informed the Bank that 49 persons with disabilities had benefited from the job placement program, 25 percent of the target 200 placements. There is , howeve r, one caveat to this Unsatisfactory rating: 25 percent of the target (or 50 job placements) were to be filled by state entities, while the private sector would absorb the remaining 75 percent (or 150 job placements). Due to the hardship sustained by the p rivate sector during the implementation period of the program no job placement materialized in that sector. All the 49 job placements were in the public sector , which met 98 percent of its target . Ex post interviews of the economic, social protection and education teams offer important qualitative information that add depth to the more traditional qua nt itative picture described above . The WB macro - economic and poverty teams recognized that the formal short - term prior actions and results were achieved for The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 16 of 31 the most part but were pessimistic in terms of the prospects for medium - term improvement of fiscal management and progress in the sector dialogue. While recognizing that Haiti is a fragile state in need of long - term technical and financial support, the team expressed doubts o ver whether the USD 20 million grant had any mid - or long - term development impact in Haiti . They also expressed concerns about whether the proceeds of the Grant were ever used to address the economic and social causes for social unrest, as intended. On the positive side, they argued that none of the agreed objectives and prior actions were reversed , apart from the annual publication of the customs and tax exemptions on the Ministry of Economy and Finance website , which was published just once in 2018 and discontinued thereafter . The social protection and education sector management and teams were more optimistic about th e impact of this operation . The team stated that the operation had a significant positive impact in the development of sector dialogue in social protection and education, namely in transparency and accountability. They were also happy to say that there had been no going back on the agreed reforms. Efforts to improve targeting and efficiency will come next, based on the systems and institutions supported by this operation. On the social protection side, the task team considers that the operation contributed to: a) T he development of SIMAST, the unified household data base infrastructure organized by means testing that will allow for better targeting social programs for those in need, b) The development of an upcoming social protection operation that will finance the replacement of cash handling by digital transfers, allowing for improved transparency and accountability, c) The creation of a first and very important demonstration soc ial protection project for people with disabilities. Despite progress, social protection programs remain few and fragile . B udgetary allocation s to the Ministry of Social Affairs (MAST) declined from 1.9 percent of FY19 budget to 1.2 p ercent of FY2020 budget and keep ing track of the sources and destination of resources in the social protection sector remains difficult . Also, the private sector ’s effort s to place people with disabilities into jobs, appeared lower than anticipated. On the education side , the task team pointed out that, for the first time, the National Education Fund (FNE) website publishes the sources and destinations of resources in the education sector . This has been a breakthrough in terms of transparency and accountability. Better t argeting and efficiency based on this platform will come next. Yet, the team was disappointed with the fact that the Ministry of Education budget suffered a further cut from 11.6 percent in FY2019 to 9.4 percent in FY2020. The decrease in the budget allocation to the ministries of social affairs and education is at odds with broad objectives of the operation of sustained investments in enhancing the efficiency of social spending, to better protect the poor and vulnerable hou seholds that had been subscribed to by the Government. C. Overall Outcome Rating and Justification Rating: Moderately un satisfactory The World Bank Haiti Fiscal and Social Resilience Development Policy Financing (P162452) Page 17 of 31 The overall outcome of this operation is rated as moder ately unsatisfactory , based on the following criteria : a) T he perceived urgency of the operation, which was a primary factor in the decision to proceed with the quick disburs ement of the development policy financing , is questionable. The Government of Haiti took five months to use a part of the Credit and most funds remained idled for months after effectiveness. b) The project strengthened the Government´s capacity for fiscal management by creating new and critical management information systems and procedures . Yet , in the years that followed the operation, overall financial management continued to deteriorate, namely in the control of tax expenditures and improve ment of cash management . It should be acknowledge d that even in the best circumstances such institutions, systems and procedures would take time to produce the desired results. c) The project created institutions, management information systems and procedures that are critical to enhanc ing the efficiency of social programs . These institutions, systems and procedures increased the transparency and accountability of the education and social protection sectors . Yet, in the years that followed the operation, financing and performance of the edu cation and social sectors continued to deteriorate and there has not been any significant increase in the availability of programs that benefit vulnerable groups, namely those with disabilities. Again, even in the best circumstances, such institutions, sys tems, and procedures would take time to produce the desired results . d) Some progress was achieved in relation to some of the specific prior actions and the operation did provide an opportunity for increased and more meaningful engagement in some of the supported areas ; and e) While progress may have been slow , n one of the major policies concerned by the project objectives and prior actions was reversed . III. OTHER OUTCOMES AND IMPACTS A. Poverty, Gender and Social Impacts It is unlikely that this operation had a significant impact on any poverty or gender indicator s . The operation created a new job placement program for people with disabilities, the National Solidarity Fund for the Integration of People with Disabilities. This program has a great potential for changing the economic and social situation of many people left with disabilities after the 2010 earthquake. So far it has been able to place 49 persons with disabilities in the public job market. This may look like a small achievement, when compared with the magnitude of the problem. Yet, this had a demonstration value besides the great impact in the beneficiaries ´ employability . Unfortunately, the private sector did not come forward with job placement opportunities, as was initially envisaged. B. Environmental, Forests, and Natural Resource Aspects This operation did not include any policies that could directly or indirectly influence the environment, forest or natural disasters . It did not mean to have one. C. Institutional Change/Strengthening The World Bank Haiti Fiscal and Social R