Download World Bank Document

Public Disclosure Authorized
Public Disclosure Authorized
Report No.
PID99999
Project Name
Eritrea-Demobilization and Reintegration Program
Region
Africa Regional Office
Sector
Multi-sectoral
Borrower
(s)
Government of Eritrea
Project ID
ERPE73604
Implementing Agency
National Commission for the Demobilization and
Reintegration Program
Environment Category
B
Date PID Prepared
April 6, 2001
Project Appraisal Date
June 22,
Projected Board Date
September 12,
2001
Public Disclosure Authorized
Circumstances for the Disaster and Preliminary Damage Estimates
The border war between Eritrea and Ethiopia, which started on May 6, 1998,
was fought at severe humanitarian and economic costs. In Eritrea, some 1.1
million people were displaced and substantial damage was inflicted on social
and economic infrastructure. Loss of agricultural output and port revenues,
decline in private sector activity, combined with a doubling of military
spending, have put the economy under severe stress. The two countries agreed
to a Cessation of Hostilities on June 18, 2000, and signed a comprehensive
Peace Accord on December 12, 2000. The agreement calls for the withdrawal of
the Ethiopian army from Eritrean territory and the deployment of a UN
peacekeeping force along a 25 kilometer Transitional Security Zone (TSZ)
inside Eritrea until a neutral Boundary Commission can demarcate the border.
The UN Security Council authorized the establishment of a UN Mission in
Ethiopia and Eritrea (UNMEE) in July 2000 along with a peacekeeping force of
up to 4,200, which was fully deployed by March 2001.
Public Disclosure Authorized
1.
2001
Of a total estimated population of 3,1 million, as of January 2001, over 31t
are internally displaced or are directly affected by the war. Over 200,000
IDPs are still living in camps. In addition, 735,000 drought-affected persons
will require food assistance in 2001.
In total, 57T of the Eritrean
population in 2001 will receive either full or partial food assistance.
Direct war damage to roads and bridges, power and telecom installations,
schools, clinics, water supply and sanitation facilities, factories and farms
is estimated to total some US$582 million, about 88 percent of GNP in 1999.
During the two years of war the Government of Eritrea (GOE) mobilized a large
number of men and women to the armed forces. In November 2000, following the
deployment of the UNMEE peacekeeping force and prompted by significant
progress in the peace process, GOE announced its intention to launch a
demobilization and reintegration program, building on international
experiences and best practice.
GOE plans to reduce its army by two thirds and demobilize 200,000 troops
within a two year time frame. The troops to be demobilized consist of re-
mobilized ex-fighters, people serving in the mandatory National Service
program, and soldiers from the regular armed forces. Disabled soldiers and
female soldiers are expected to require special attention to be able to
reintegrate socially and economically. Special attention would also be given
to planning the return of demobilized soldiers to the war-affected regions of
Gash-Barka and Debub. Both areas incurred heavy damages in 1998 and during
the last offensive in May 2000. Hundreds of villages were occupied and
infrastructure destroyed. Many of the soldiers' families are displaced, and
damage has been incurred to their productive assets. The demobilized soldiers
can be an important resource for the recovery process.
2.
Potential Economic Effects
The war with Ethiopia has had serious consequences on the Eritrean economy as
funds have been diverted to military uses and personnel have been deployed to
the front.
This has resulted in a deteriorating fiscal position, increased
domestic and external borrowing to finance the budget, concomitant pressure
on the exchange rate, and a very low purchasing power in the local market.
This has impacted adversely on national income growth which declined from 8
percent in 1997 to 4 percent in 1998 and 3 percent in 1999.
In the medium
term, the economic effects are expected to be further compounded by the
significant damage inflicted on the country's infrastructure and the
substantial losses experienced in agricultural production as the best
agricultural areas were the most severely war-affected - still partly
inaccessible because of the Temporary Security Zone.
The specific economic effects of the mobilization and maintenance of the some
200,000 troops enlisted for the war derive from two sets of issues: (a) the
direct maintenance cost of the troops, and (b) the opportunity cost derived
by the absence of a substantial portion of the country's labor force from
active economic life (the country's armed forces represent more than six
percent of the total population).
The maintenance costs with regards to the
wage bill, for instance, (not including individual food and household
allowances) are estimated to average to US$60 million per year.
These
expenditures are a significant drain on the national budget, and a major
cause of the fiscal deficit which has ballooned from an average of 15 percent
of GDP in 1994-97 to 48 percent in 1999.
The other issue - the absence of a significant proportion of the labor force
from active economic life - is potentially equally devastating because of its
comprehensive and long-term impact on the economy. Many government offices
and public and private enterprises have come close to a standstill over the
last two years because a large part of the manpower, including staff in key
positions, have been at the front.
The manpower shortage, coupled with the
uncertainty arising from the war and a decline in aggregate demand, has led
to sharp declines in private sector activity.
Many private investments,
including foreign direct investments, have been postponed.
Planned joint
ventures to develop fisheries, mineral resources and tourist facilities have
been delayed.
3.
Response of Government and International Community
In contrast to its pre-war policy (it terminated the engagement of most
foreign NGOs in 1997-98), GOE appealed for foreign humanitarian and
reconstruction assistance in the wake of the cessation of hostilities in June
-2 -
2000.
GOE's overriding objectives are to rebuild the economy and restore
social services. In support of these, the Bank leads a US$288 million multidonor Emergency Reconstruction Program (ERP) to assist Eritrea rebuild its
physical and social infrastructure, help displaced and drought-affected
people resume economic activities and rebuild their lives, and assist GOE to
procure essential imports through balance of payments support. In addition to
an IDA credit of US$90 million, which was approved in November 2000, ERP is
financed by the European Union, Italy, Denmark, France, the African
Development Bank, and GOE. This is complemented by a US$15 million UNDP/GOE
emergency and rehabilitation program, and several NGO assisted projects.
The start-up of several internationally assisted recovery programs (of which
DRP is one) in a devastated Eritrean society - all to be led, managed and
implemented by a thinly staffed Eritrean government - warrants an
extraordinary level of coordination among the organizations involved,
including government institutions at central and regional levels and
international organizations.
Driven by the GOE, effective coordination would
imply that the different programs are planned, timed and resourced to
mutually benefit each other - e.g. that reintegration activities within DRP
can build on training and economic activities supported by other programs,
and that programs assisting economic activities can plan for manpower needs
to be covered through demobilization taking place under DRP.
Being a multidonor assisted program, coordination within DRP itself is key to successful
implementation.
Especially important will be to ensure compatible timing of
donor funds available for the different program components, and coherence of
policy and technical advice provided by the different assisting
organizations.
The DRP preparations started with an exploratory mission of UNDP in October
2000.
A small preparatory project in the amount of US$ 200,000 was prepared
by UNDP to immediately support the GOE planning process.
In November 2000,
GOE requested the Bank to provide technical assistance in the preparation of
a comprehensive Demobilization and Reintegration Program (DRP) for excombatants.
In its request the Government articulated the need for the DRP
to be well planned and consist of coherent actions, based on clearly stated
guiding principles and taking into account best international practices and
lessons of experience. An IDA identification mission visited Eritrea in
December 2000.
A Post-Conflict Fund grant of US$ 973,000 to assist the GOE
set up its institutional structure was approved by the Bank in January 2001.
The IDA mission that visited Eritrea in December 2000 reached a consensus
with GOE and the international donor community that the DRP is a crucial
element of the social and economic recovery of Eritrea, and that a
comprehensive approach to the DRP is essential. Following the signing of the
Peace Accord on December 12, 2000, GOE requested the international donor
community to launch a multi-donor assessment mission in the second half of
January 2001 to prepare the DRP, jointly organized by the Bank and UNDP.
The
mission provided technical assistance to GOE on the main components of the
program, and prepared a comprehensive program proposal with detailed
technical notes.
4.
Rationale for Bank Involvement
The border war with Ethiopia led to the diversion of scarce resources from
potentially productive (agriculture, industry and basic social services) to
-3 -
non-productive (military) sectors. The DRP is expected to facilitate the
reallocation of public resources from military expenditures to productive and
social investments, and thereby free up resources for reconstruction and
development.
Demobilization will directly help relaxing the manpower
constraints faced by the government and private businesses, and thus
contribute to a resumption of critical economic activity.
The reduction of
military spending will furthermore help ease the fiscal deficit, and is thus
crucial to achieving macroeconomic and fiscal balance in the longer term.
At a time when Ethiopia has successfully demobilized some 60,000 of its
troops, GOE will also be able to demonstrate its commitment to the peace
process through the effective preparation and implementation of the DRP.
The
Government's request for technical and financial assistance for the DRP came
at a critical time.
To grasp the opportunity that the potential peace
dividend presents, the Government has given high priority to the objectives
of the DRP and to integrating demobilized soldiers into sustainable
productive activities.
5.
Recovery Strategy
Following the disastrous humanitarian impact of the war and the near
devastation of the Gash Barka and Debub regions, Eritrea is trying to rebuild
essential elements of its physical infrastructure, its capacity to govern,
and its human capital. It has been making impressive progress despite
enormous odds. The task at hand is to integrate broader aims of social
reintegration, that is rebuilding social capital, into the concrete
reconstruction and rehabilitation programs that are urgently needed.
With
regard to the DRP a comprehensive approach is of the essence. Programs
supporting the transition of soldiers to civilians invariably cast their
shadow on all walks of life; from the economic dimension of assisting
demobilized soldiers to earn a living with peaceful means; to the social
challenge of helping civilians and demobilized soldiers live a harmonious
life without prejudice; to the political task of strengthening civil society
without compromising on the need for security.
Clearly, a DRP cannot substitute for a concerted effort involving all sectors
of the society and economy. In the given context, it cannot limit itself to
the technical process of discharging soldiers and subsequently transporting
them to their home communities. As hundreds of thousands of Eritreans are
still waiting to return to a safe home and may require assistance similar to
that envisaged for demobilized soldiers, the Government also needs to avoid
any social tensions resulting from an unsuccessful return of soldiers to
civilian lives.
Consequently, a program that has a chance of success, and at
the same time contributes to the rebuilding of the society and economy, has
to directly address the broader issue of successful social and economic
reintegration of demobilized soldiers.
The preparation and implementation of the Eritrea DRP will build on Eritrea's
own experience with demobilization and reintegration, and on international
best practices with such programs. Some important lessons learned from the
previous experience in Eritrea include: (i) despite their rural background
(809) most of the ex-fighters ended up in urban areas in search of training
or jobs; (ii) although 89% of the ex-fighters aimed at upgrading their
education, only some 15% managed to do so; (iii) many ex-fighters faced
difficulties handling the credit they received because of their inexperience
- 4 -
with money; and (iv) the reintegration program suffered from lack of funds
(less than a third of estimated cost) and experienced staff.
Some important lessons learned from international experience include: (i) the
full transition from demobilization to reinsertion and reintegration needs to
be supported in order to achieve primary objectives; (ii) to facilitate
sustainable reintegration, it is crucial to provide a short-term social
safety net to ex-combatants (i.e. reinsertion assistance); (iii) information
and referral systems can play an important role in linking ex-combatants to
existing employment opportunities; (iv) duplication of implementation
structures should be avoided; and (v) the creation of more viable long-term
employment is closely linked to a conducive macro-economic environment and
restoration of private sector confidence.
6.
Objectives of the Proposed DRP
The overall objective of the DRP will be to help consolidate peace and foster
reconstruction. The four principal objectives of the DRP will be:
? to contribute to economic recovery and fiscal stability through
reallocation of public resources from military to social and economic
investments;
? to demobilize and provide reinsertion support to up to 200,000 soldiers,
in a phased program expected to begin in July 2001, for a period of 18-24
month;
? to support the social and economic reintegration of demobilized soldiers
and other war-affected groups, in a phased program expected to begin in
July 2001 for a period of up to 3-4 years;
? to mobilize and strengthen the capacities of local implementing partners,
such as government ministries and departments, local and international
NGOs, private sector firms and community organizations, so as to improve
the efficiency and effectiveness of the delivery of services to
demobilized soldiers.
7.
DRP Components
In line with international best practice and taking into account the previous
Eritrean experience, the DRP would contain the following components:
Stages of the Eritrea Demobilization and Reintegration Program
Stage 1
Stage 2
Stage 3
-5-
Demobilization
Reinsertion
Reintegration
Civilian Identity
Package of
Benefits
Sustainable
Livelihoods
? disarmament
? socio-economic
profiling
? data processing
? health
screening
? hiv-aids
counseling
? information
dissemination
? pre-discharge
orientation
? civilian ID
card issuance
? discharge
? transportation
? arrival
counseling
? sensitization
of communities
? food
? shelter
? clothing
? health
? education
? household
effects
? local
transportation
? cash payments
? information,
counseling, and
referral
-6
? facilitation of
access to land
? facilitation of
access to credit
? apprenticeships/
vocational
training
? formal education
? employment
support
? micro-projects
? support to
special target
groups
? community
services
(i)
Demobilization
The objective of the demobilization component would be to reduce the number
of military personnel by approximately 200,000 over a 18-24 month period.
This objective would be achieved through a phased approach. Three phases of
60-70,000 soldiers would be envisaged, plus a pilot operation of
approximately 5,000 soldiers.
Activities under this components include:
determining the number and criteria for demobilization in the different
phases; collection of a socio-economic profile; identification of vulnerable
groups; assembly and disarmament, health screening, pre-discharge
orientation, HIV-AIDS counseling, discharge procedures, transportation to the
communities of choice, counseling and sensitization of host communities.
The
estimated costs of the demobilization component is US$10.5 million.
A socio-economic profile of soldiers is essential to plan targeted
reinsertion and reintegration assistance that meet the needs and aspirations
of the demobilized soldiers. The profile would include information on
demographic characteristics, assets, education level, health status, needs
and aspirations.
Identification of demobilization criteria is the critical
first step in the planning process. For phase I, demobilization would cover
special target groups (female, disabled, overaged and economically essential
soldiers) as well as soldiers of the general group (national service,
remobilized ex-fighters, etc.). The inclusion of the latter group would be
essential to create/strengthen the public and private sector capacities for
reintegrating demobilized soldiers, as well as for general reconstruction.
Demobilization would be carried out in specially prepared discharge centers.
Existing facilities, whether military or civilian, would serve as discharge
centers. The discharge centers would be prepared to process a large caseload
within a short time period.
The "discharge chain" would comprise the
following steps: arrival, identification, discharge formalities, medical
screening, pre-discharge orientation, payment of the first tranche of the
transitional safety net (reinsertion assistance), and assembly and transport
to the community of choice.
A special medical team would screen demobilized soldiers to identify serious
diseases or impairments that may affect an demobilized soldier's ability for
economic and social reintegration (cough, chronic diarrhea, symptoms of
-7 -
sexually transmitted diseases, alcohol and drug consumption, symptoms of
post-traumatic stress disorder, etc.). Furthermore, voluntary counseling and
testing (VCT) for HIV/AIDS would be offered.
Pre-discharge orientation would
provide demobilized soldiers with critical information about program
benefits, implementation arrangements at the central and zoba level,
reintegration opportunities, health issues (including HIV/AIDS, reproductive
health, etc.), civic rights and duties, gender awareness, etc. The
orientation program would be organized in modules and would be carried out by
a group of military and civilian staff.
(ii)
Reinsertion
Reinsertion support includes the provision of financial and/or assistance in
kind to cover basic needs of ex-soldiers' families (transitional safety-nets)
relative to the living standard of general population.
Upon discharge, a
demobilized soldier loses his/her source of (formal or informal) income.
Immediately thereafter, s/he is normally in a critical financial situation
until s/he can generate income through self-/employment. During this period
(the reinsertion phase), an demobilized soldier is in need of special
assistance (transitional safety net-TSN) to cover the basic material needs of
him/herself and his/her family.
The estimated cost of the reinsertion
component is US$85 million.
Criteria of eligibility (vulnerability) need to be identified and applied in
a transparent manner.
For the Eritrea DRP it is recommended to identify
three target groups (the first set of criteria): (i) those demobilized
soldiers who will have access to a steady income stream right after discharge
would not be eligible to receive the TSN (mainly those going back to the
civil service); (ii)
those without access to a steady income would receive
a base TSN (the vulnerable); and (iii)
those fulfilling other criteria
would receive an enhanced TSN. The base TSN could be based on the monthly
allowance a national service soldier receives. The base TSN amounts currently
to approximately $50 per month (500 Nakfa). The payment modalities (monthly,
tranches, etc.) should be the most cost-effective, given current capacities
and practices. The base TSN could cover a six-month period and would thus
amount to $300 per demobilized soldier household. The second set of criteria
that could be applied include: (i) service-related criteria and (ii) hardship
criteria to determine the enhanced TSN.
To apply the first criteria the
profile of those who may be demobilized needs to be available. The simplest
criterion may be rank. To apply the second criteria, the level of disability
needs to identified.
(iii)
Reintegration
The social and economic reintegration of demobilized soldiers occurs over
time. The principal protagonist and the active initiator of the process is
the individual soldier. Support for economic and social reintegration may
ease the process, but successful reintegration is dependent upon a dynamic
interaction of social, economic and political factors with the returning
soldiers. Family ties, community support, and economic circumstances and
opportunities play a critical role, and must be taken into account when
designing reintegration support programs.
? Social Reintegration deals with the issue of reintegrating groups with
different backgrounds, experiences, norms, expectations and capacities.
- 8 -
The objective of this component would be to contribute to continued social
cohesion in the communities and in the society at large. A lesson from
Eritrea's previous DRP experience is that social reintegration is a
special challenge which importance is often underestimated. Activities to
be carried out under this component include: information and sensitization
of the targeted combatants and society-at-large; social and economic
referral services; first line counseling (upon arrival in the zoba);
specialized counseling (on areas such as skills training, employment
opportunities, psycho-social, family, HIV-AIDS, disabled, and women);
strengthening of social capital, including associations and networks of
ex-soldiers. The estimated cost of the social reintegration component is
US$6 million.
? Economic Reintegration activities are designed to develop the financial
self-sufficiency of a demobilized soldier's household through productive
and gainful (self) employment.
The Eritrea DRP will provide economic
reintegration assistance and access to employment through: (i) referral
services on employment, micro-projects, apprenticeship, training and
education opportunities; (ii) the provision of skills development and
training opportunities; (iii) access to micro-enterprise support schemes;
(iv) initiating rural development activities, such as small scale
irrigation, small-holder livestock initiatives, cash for work, small scale
fisheries activities, rural trade promotion, and training in agricultural
production, processing and marketing; and (v) through employment promotion
and training in the construction trades. The estimated cost of the
economic reintegration component is US$66,5 million.
Unlike the reinsertion support (cash and/or material benefits) which are
directed at all ex-combatants according to an agreed upon set of entitlements
based on rank, years of service and special needs; reintegration programs are
opportunities that the ex-combatants choose to access. Typically, up to 25
percent of the ex-combatants may access reintegration programs. Some of these
opportunities may be designed in direct response to the needs and socioeconomic characteristics of the ex-combatants. Others may be services or
programs provided by a range of governmental entities, non-governmental
organizations, banking institutions or private enterprises to the excombatants as members of the society at-large.
Table 1 provides an overview of the preliminary costing of the DRP.
The
costing is based on unit cost per component and the number of soldiers
expected to be demobilized.
The unit cost are derived at on the basis of
international DRP experience and take into account local economic conditions.
The estimates are preliminary, since GOE has not yet taken policy decisions
on issues like who will have access to a reinsertion package, and for how
long reinsertion benefits will be granted, etc.
These policy decisions can
have a large impact on the overall resource envelope required for the DRP.
The costing will be agreed upon during appraisal.
Table 1:
Component
Preliminary Demobilization and Reintegration Program Costs
Unit Cost
in US$
Total
Millions US$
9
Percent
Demobilization
52.5
10,500,000
6%
Reinsertion
500
85,000,000
46%
Reintegration
300
60,000,000
32%
Disabled
500
12,500,000
Executive Secretariat 1,000,000
(capital)
Executive Secretariat
(recurrent)
1,000,000
2,000,000
Sub-Total
(estimated)
1%
8,000,000
4%
177,000,000
95%
9,000,000
186,000,000
5%
5%
100%
Contingencies
Total
7%
Executed by GOE, the program will require substantial technical and financial
assistance by international donors and NGOs. Table 2 provides an overview of
the preliminary financing plan for the DRP.
The total amount of financing
required is based on the above estimates. IDA has in principle committed to
provide US$40 million. The remaining resources are expected to be provided by
the donor community. A more detailed DRP financing plan will be agreed upon
during appraisal.
Table 2:
Preliminary Demobilization and Reintegration Program Financing Plan
Source
IDA
Millions US$
40
Others
Total (estimated)
146
186
8.
Project Implementation
Implementation Arrangements.
The Eritrea DRP would involve the largest
target group of all demobilization programs the Bank has been involved with.
The program would require a streamlined and well-prepared civilian
-
10
-
organization on the government side for successful implementation based on
the principle of central coordination and decentralized implementation. The
organization will as much as possible involve the strengthening of existing
structures rather than creating new ones. A focus on institutional
strengthening in preparation of DRP implementation is of critical importance
as government capacity, both in terms of manpower and facilities, has been
significantly weakened by the war.
Institutional Structures.
The DRP would be implemented at (i) the
national level and (ii) the regional and community levels. The guiding
principle for the program's institutional arrangements is the streamlining of
implementation responsibilities and activities into existing government
structures, in particular at lower levels of government. The Government of
Eritrea established the following institutional structures for preparation
and implementation of the DRP:
(i)
National Commission for the Demobilization and Reintegration Program
(NCDRP);
(ii)
Secretariat for the NCDRP;
(iii)
Regional DRP Offices;
(iv)
Demobilization Task Force within the Ministry of Defense.
(i)
The National Commission for the Demobilization and Reintegration
Program has been established by Presidential Decree #113/2001, to be
published on April 9, 2001. The Ministries of Local Government,
Defense, and Labor and Social Welfare, the International Cooperation
Macro Policy Unit in the Office of the President and the Head of the
Secretariat will be represented on the National Commission for the DRP.
The guiding principle for representation are those Ministries and other
government bodies who are directly implicated by the DRP.
The
Commission would hold meetings at least quarterly, but additional
meetings can be called if necessary. The main responsibilities of the
National Commission will include: (i) formulating and reviewing policy
and coordinating all activities for DRP implementation; (ii) taking all
necessary steps to promote the smooth transition of ex-combatants into
productive civilian life; (iii) supervising and monitoring any special
schemes of assistance to demobilized soldiers which may be entrusted to
the National Commission; and (iv) supervising and monitoring work and
performance of the regional DRP offices.
(ii)
The implementing body of the National Commission will be the
Secretariat. The Secretariat is a fully civilian body that would be
dissolved upon termination of the program. It shares the legal
framework and political mandate of the National Commission. The
Secretariat is charged with operationalizing the Commission's policy
instructions and prepare a costed technical proposal for the DRP as
well as annual detailed implementation plans for subsequent
demobilization phases.
The secretariat is expected to cover the following functions: (i)
demobilization and reinsertion; (ii) social and economic reintegration;
(iii) financial management; (iv) procurement and disbursement; (v)
monitoring and evaluation; and (vi) human resource management. There
would be close coordination with other programs covering aspects of
reconstruction, rehabilitation and reintegration. In so doing, the
-
11
-
Secretariat would cooperate closely with other relevant government
departments and NGOs.
The staff is largely expected to be provided on
secondment basis by government institutions, and as much as possible be
demobilized soldiers.
(iii)
The Secretariat will establish decentralized Regional DRP Offices to
execute the DRP.
These regional DRP offices will be attached to the
six zoba (regional) offices of Ministry of Local Government. The
regional offices will be responsible for (i) provision of information,
counseling and referral, especially of employment and training
opportunities, (ii) management of the reinsertion assistance, (iii)
coordination of community assistance and micro-projects with other
local government offices, NGO-partners and targeted communities, (iv)
monitoring, evaluation and financial control, (v) coordination with the
DRP Secretariat and other government institutions.
(iv)
The Ministry of Defense set up a Demobilization Task Force to manage
the military component of the DRP. The Demobilization Task Force is the
direct counterpart to the civilian Secretariat. The Demobilization Task
Force would be supported to properly carry out its responsibilities
during the registration and demobilization stages. Staffing and
managing the Demobilization Task Force is the sole responsibility of
the Ministry of Defense.
9.
Project Timing
The program will be implemented over a total period of 3-4 years, starting in
the second part of 2001. The Government of Eritrea anticipates that the
demobilization would take place at an accelerated pace, i.e. within 18-24
months, and that reintegration activities for demobilized soldiers could be
implemented within the 3-4 year time frame.
A pilot DRP exercise involving
5,000 troops, is scheduled to take place in July/August 2001.
10.
Environmental Category
OP4.01 applies for emergency recovery projects processed under OP8.50.
Compliance with any requirement of this policy [OP4.011 could prevent the
effective and timely achievement of the objectives of this emergency recovery
project.
The Bank, therefore, exempts the project from such a requirement.
It is recommended to rate the program as B, and to put in place a mechanism
to screen sub-projects.
The project team will prepare a Environmental and
Social Data Sheet (ESDS) shortly.
11.
Major Benefits and Risks
The proposed program is designed to provide Government access to an adequate
level of financing to demobilize 200,000 soldiers and initiate the social and
economic recovery following the border conflict with Ethiopia.
The major
immediate benefits are to: (i) assist the demobilized soldiers rebuild their
livelihoods and resume productive economic activities; (ii) reverse the
general slowdown of social and economic development due to the conflict; and
(iii) contribute to economic recovery and fiscal stability through reallocation of public resources from military to social and economic
investments.
- 12 -
The major external risks are:
(i)
the armed conflict resumes and this will lead to a suspension or even
reversal of the DRP; and
(ii)
even if conflict does not resume, delays in the peace process might
result in delays in the implementation of the program.
However, the
signing by both sides of the internationally-mediated peace agreement
and the full deployment of the UN peacekeeping force (UNMEE) reduce
this risk.
The major project-specific risks are:
(i)
as resources are fungible, there is the risk that program resources are
used indirectly for military spending or that savings from
demobilization would not translate into a reduction of military
expenditures.
However, safeguards with regards to financial
management, procurement and disbursement will be outlined in the
program documentation to prevent direct abuse of program resources.
Government expenditures will furthermore be monitored by the IMF and
IDA in the context of their assistance programs;
(ii)
given the limited human resources capacity in Eritrea's public and
private sectors, there is the risk that the social and economic
reintegration activities can not be implemented as planned.
The DRP,
therefore, has an essential focus on capacity building, and will
establish a lean institutional structure with highly qualified local
staff, supported if required by international technical assistance, and
will invest in strengthening the capacities of local implementing
partners, such as government ministries and departments, local and
international NGOs, private sector firms and community organizations,
so as to improve the efficiency and effectiveness of the delivery of
services to demobilized soldiers;
(iii)
financing needs for Eritrea's reconstruction are enormous and donors
have already provided substantial support to the ERP and other
activities, there is a risk that other donors will not provide
sufficient funding to fully fund the program.
Moreover, Government may
not be able to contribute its share.
In either case, further
prioritization will be required to fit the program to the available
resources.
For information please contact:
The Infoshop
The World Bank
1818 H Street, NW
Washington D.C.
Telephone: (202) 458-5454
Fax: (202) 522-1500
Task Team Leader
Wim Alberts
-
13
-
Note:
This is information on an evolving program.
not be necessarily included in the final program.
Certain components may
All figures are from the Report of the Joint Government of the State of Eritrea-United
Nations Annual Needs Assessment for Humanitarian Assistance to Eritrea (January 2001)
-
14
-