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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 -