Report No. 7271-CO

ColombiaSocial Programs and Poverty Alleviation:An Assessment of Government InitiativesDecember 2,1988

Latin America and the Caribbean Region

FOR OFFICIAL USE ONLY

Document of the Wbrld Bank

Tnis document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosed without World Bank authorization.

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CURRENCY EQUIVALZNTS

(as used in this report)

Currency Unit - Colombian Pesos (Col$)US$1 - Col$250

VEIGBTS AND MEASURES

Metric System

GOVERNMENT OF COLOMBIA FISCAL YEAR

January 1 - December 31

This report is based on the findings of two World Bank missionsthat visited Colombia in November 1987 and March 1988. The twoteams comprised Messrs/Mesdames. Kazuko Uchimura (LA3C1, missionleader), Robert Buckley (INU, housing finance), Xavier Coll(LA3HR, health and nutrition), Nancy Gillespie (PHR, maternalhealth), Fernando Vio (consultant, nutrition), Anna Kathryn Webb(consultant, community participation), and Stuart Whitehead(LA3IE, low-income shelter). Ms. Kathy Richman (consultant)carried out a survey of the existing literature on poverty andincome distribution in Colombia. The report has also benefitedfrom the advice and guidance of Mr. Marcelo Selowsky whoparticipated in the November mission.

FOR OFFICIAL US ONLY

PRINCIPAL ACRONYMS AND TERMS USED IN THE REPORT

BCH Central Mortgage Bank("Banco Central Hipotecario")

CAVs Housing and Loan Associations("Corporaciones de Ahorro y Vivienda")

CENAC National Center for Construction Studies("Centro Nacional de Estudios de laConstruccion')

DANE National Statistical Department('Departamento Administrativo Nacional deEstadistUca")

DNP Natlonal Planning Departmer:t('Departamento Nacional de Planeacion")

DRI Inte!rrated Rural Development Program("Desarrollo Rural Integrado")

FPDU Financial Fund for Urban Development("Fondo Financiero de Desarrollo (rbano")

FIA liational Savings Fund("Fondo Nacional de Ahorro")

lBI Community-based Day Care Centers("Hogares de Bienestar Infantil")

ICBF Colombian Institute of Family Wellbeing("Instituto Colombiano de BienestarFamiliar")

ICT Land Credit Institute("Instituto de Credito Territorial")

ISS Social Security Institute("Instituto de Seguros Sociales")

NBI "Basic-Needs-Not-Met" Index (a Poverty Measure)("Necesidades Basicas Insatisfechas")

PAN National Food and Nutrition Plan("Plan de Alimentacion y Nutricion")

PLPGE "War on Poverty"("Plan de Lucha contra la Pobreza y para laGeneracion de Empleo")

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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PNR National Rehabilitation Plan("Plan Nacional de Rehabilitacionn)

SIM& National Vocational Training Institute("Servicio Nacional de Aprendizaje")

Supervivir The National Child Survival and Development Plan

UPAC Unit of Constant Purchasing Power("Unidad de Poder Adquisitivo Constante")

"Vivienda A Low Income Housing Program under the BetancurPopular' Administration

TABLE OF CONTEWNtSPage

EXECUTIVE SUMMARY ix

CHAPTER ONE: INTRODUCTION 1Transformation of the Colombian Economy 1Persistence of Poverty 1Government's Commitment to Social Programs 2A Macroeconomic Framework for Poverty Alleviation 3Priorities in Public Expenditures 4Limited Absorptive Capacity in the Social Sectors 6

CHAPTER TWO: THE DIMENSIONS OF POVERTY IN COLOMBIA 7A. Measurement of Poverty 7

NBI--Government's OfficialPoverty Index 7

Recommendations 8B. Spatial Distribution of Poverty 9

Households "In Misery" as Definedby NBI 9

Access to Public Services 10Economic Dependence Ratio 15

C. Characteristics of the Poor 15Poverty and Malnutrition 15Inadequate Housing and Services 20Education and Literacy 20Employment 20

D. Recent Changes in Income Distribution 20

CHAPTER THREE: AN AGENDA FOR ACTION 23The Government's Action Program 23General Comments on New Basic NeedsInitiatives 24

CHAPTER FOUR: A NEW APPROACH TO NUTRITION INTERVENTION 29A. Community-based Day-Care Centers 29B. Financing of Nutrition Programs 31C. Recommendations on Program Design 33

Coverage of Children Between6 and 24 Months 34

Nutrition Interventions in Rural Areas 34Treatment of Serious Malnutrition Cases 37Role of Land Credit Institute ('CT) 37Fostering Community Support 37

D. Policies on Bienestarina 38Securing Adequate Supply 39Distribution and Storage 41

E. Information System 41Absence of Surveillance 41Work in ProgressRecommendations on Establishing aSurveillance System 42

CHAPTER FIVE: STRENGTHENING INTEGRATION WITHTHE HEALTH SYSTEM 43Coverage and Access 43Problems with Primary HealthDelivery System 44

Government Proposals on Health andBank Recommendations 46

CHAPTER SIX: MEETING THE SHELTER NEEDS OF THE POOR 47Background 47Government's Policy on Low Income Housing 50Main Issues 50Size&and Feasibility of Implementation 55

Role of Government in Low IncomeShelter Provision 56

Agua Blanca--a New Approach toSlum Upgrading 59

Use of Interest Subsidies 61Priorities for Government inLow Income Shelter 61

CHAPTER SEVEN: BASIC EDUCATION FOR ALL 63A. Background 63

Prevalence of Illiteracy and LowEducational Attainment 63

Government's Response 66B. Univer:sal Primary Education 68

D..;ssemination of the "Escuela Nueva" Model 68Assessment 69Improving Access in Urban Areas 69Scbool Feeding Program 70

C. Continuing Basic Education 71

ANNEX I: SOCIAL PROGRAMS OF PAST ADMINISTRATIONS 73National Food and Nutrition Plan (PAN)-Integrated Rural DevelopmentProgram (DRI) 73

National Rehabilitationi Plan (PNR) 75Low Income Housing ("Vivienda Popular") 75National Child Survival and DevelopmentPlan ("Supervivir") 77

ANNEX II: THE EVOLUTION OF THE WAR ON POVERTY (PLPGE) 79Its Origin 79Evolution of Program Content 80

REFERENCES 83

TEXT TABLESICRARTS

Page

Table I-ls Macroeconomic Framework 4Table I-2: Public Investment Program 5Table 1-3t Public Expenditures on Principal Poverty

Programs by Sector during 1987-1990 6Table II-ls Distribution of Household Incomes and

Expenditures on Food by Income Strata 15Table II-2s Calorie and Protein Intake Per Adult

Equivalent by Income Strata 16Table II-3: Distribution of Household Incomes 1976-1985 21TAble IV-1: ICYoF--Projectecl Revenues and Expenditures

1988-1990 32Table IV-2: Assumptions Regarding Program Costs and Number

of Beneficiaries 33Table IV-3: A Comparison of Bienestarina with Other Foods

in Terms of Nutrients and Calories 39Table IV-4: Bienestarina Requirements through 1990 40Table V-ls Patient Consultetions by Distance to the

Closest Health Post 44Table V-2: Hospitalization Rates by Region, Income Levels

and Degrees of Urbanization 197o,-1990 45Table VI-1s Relative Shares of Legal and Illegal Housing 48Table VI-2s Low-Ircome Shelter Plaa 50Table VI-3: Anticipated Financing Sources for the Low-

Income Shelter Plan 1987-1990 54Table VII-l: Changes in Illiteracy Zqwe among Population

10 Years and Older 63Table VII-2s Illiterate Population 12 Years and Older

by Age Group 66Table VII-3: Share of 'Basic Education for All' Program in

Total Education Sector Expenditures 68Table VII-4: School Feeding Programs 71

Chart I: New Initiatives in Poverty Alleviation--ASummary of Recommendations 26

HAPSPage

Colombia: Househol's "Con Miseria" 11Colombia: Households without Basic Services 12Colombia: Death Due to Intestinal Infection 13Colombia: Households with High Economic Dependence 14Colombia: Physically Inadequate Housing 49Colombia: Level of Public Services -- Households with

Sewers 51Colombia: Level of Public Services -- Households with

Electricity 52Colombia: Level of Public Services -- Households with

Piped Water 53Colombia: Households with Children Not Attending School 64Colombia: Illiteracy 65Colombia: Hultisectoral Development Programs in

Rural Areas 86Colombia: Spatial Distribution of Poverty by

Jurisdiction 87

FIGURES

Figure 1: Characteristics of Low-Income Housing 17Figure 2: Employment Among the Poor 18Figure 3: Employment of Low-Income Heads of Families 19Figure 4: Coverage of Hogares de Bienestar Infantil Program 30Figure 5: Primary School Enrollment Rate by Departments 67

KCUTm SUDIRY

Persistence of Poverty Amid Growth

1. Colombia has experienced dramatic changes in its economy and society sincethe 1960s. The economy has grown steadily and has become progressively diversified.helped in no small part by the country's rich natural resource base and theGovernment's sound economic management. Furthermore, Colombia, once a predominantlyagrarian society, became highly urbanized as rural-urban migration proceeded at arapid pace In the 1960o and 19708. This process was accompanied by dramatic changesin the country's demographic characteristics--steady declines in fertility andpopulation growth rates as well as in the incidence of infant and maternal mortality.On the educational front, primary school enrollmentAdoubled during this period andthe illiteracy rate among those 10 years and older dropped significantly.

2. Serious problems of poverty have persisted throughout this period ofsustained economic growth and social change. Income distribution remaina skewed withincomes of the top 202 of households six to seven times those of the bottow 202.Moreover, impressive gains in the social indicators bely the sharp differences inhealth and educational status among socio-economic groups--fertility is estimated tobe three times as high among the poor as the non-poor, and the higher fertility amongpoorer women is accompanied by shorter birth intervals and higher infant mortality.A high proportion of children from poor communities still have no access to any kindof schooling, and the incidence of i!titeracy is concentrated among adults at thelower end of the income strata.

3. Poverty is as significant and complex a problem today as it was in 1949 whenthe Bank's first economic mission to Colombia emphasized the need for a coordinatedstrategy to deal with poverty. Available data suggest that approximately 202 ofColombians live below a conservatively defined poverty line. Nevertheless, as theColombian economy and society have changed, so has the nature of poverty. The plightof landless peasants remains in many aspects unchanged still. Their situation is tosome extent overshadowed by the miserable conditions of the urban and peri-urban poorfound in growing numbers in city slums and squatter settlements. Of particularconcern are the prevalence of malnutrition as well as the high incidence of infantand maternal mortality among these poor households. Inadequate access to eanitationand safe drinking water perpetuate health problems in poor communities.

The Government's Response

4. The Government, recognizing that poor people were not sharing equitably inthe benefits of development, has over a period stretching back several decades triedto reduce income disparities. In particular, poverty alleviation has been set as thesingie most important item on the policy agenda of the Barco Government (1987-90).

5. The Government's anti-poverty strategy is based on three major elements.First, the strategy is explicitly set within the framework of overall macroeconomicpolicies. On the premise that the country can best eradicate poverty by custaining

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high economic growth and thereby expanding the overall demand for labor, theGovernment seeks to achieve steady GDP growth (around 5Z per annum during 1987-1990)combined with continued sound fiscal and external management. Secondly, beyondattaining the overall growth targets, the Government plans to expand specificprograms designed to increase the productivity and employment opportunities of thepoor, such as land reform, rural development projects and education and training.Thirdly, in order to directly tackle the worst aspects of poverty and to achieve amore immediate impact, the Government is stepping up the pace of basic needs programsspecifically aimed at improving the access of the poor to key social services (i.e.,health, education, nutrition, and basic utilities) and to adequate shelter.

6. The specific poverty alleviation interventions include (a) programs carriednv'r from previous administrations such as PNR and DRI; (b) the ongoing agrarian landreforms; and (c) a large number of initiatives (both short- and long-term) thatcollectively fall under a new national program called the 'War on Poverty.' Thefinancing of these poverty-oriented interventions involves shifts of publicinvestments and expenditures away from large capital-intensive infrastructureprojects (e.g. power generation) toward the social sectors.

7. The Government's overall approach to poverty appears coherent and sensible.Nevertheless, many new initiatives under the 'War on Poverty' have progressed littlebeyond the conceptual stage: substantial work needs to be done to translate the stillgeneral proposals into specific action programs. To do that, a two-pronged approachis required. The Government needs to implement quickly those programs that can haveimmediate impact on the most critical and urgent problems facing poor communities(health problems, malnutrition, unsanitary living conditions, illiteracy) whilecontinuing to develop medium- and long-term action programs aimed at achievingproductivity increases and job creation. Particular attention needs to be paid toinstitution builAing. Institutional weaknesses, particularly in the health sector,llmit the pace of poverty program implementation.

Obiectives of the Study

8. This study was designed to help the Government focus on designing andimplementing short-term, quick-impact, basic needs types of programs. Its objectivesare to evaluate and make recommendations on the Government's new short-terminterventions in the areas of nutrition and health, low income housing and primaryeducation. Our assessments of four programs under the 'War on Poverty" aresummarized below in paras. 9 to 13. This study has intentionally left out discussionof what the Government needs to do in the medium to longer term for employmentgeneration and productivity improvements. The study also focuses on the statisticalwork underlying the Government's poverty interventions and emphasizes the need fordeveloping and refining the statistical tools. The Government needs more operationalcritnria for defin!ng poverty, measuring its magnitude and targetting programbeneficiaries more selectively.

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Interventions in Nutrition

9. The most innovative and promising among the Government's new basic needsinitiatives is a program called 'Hogares de Bienestar Infantil' (HBI) which combinesthe objectives of supplemental feeding of children in poor neighborhoods withcommunity-based day care organized by volunteer mothers. A government agency, theColombian Institute for Family Wellbeing, provides the necessary food and thenucrition supplement called lienestarina, trains the volunteer mothers, pays themnominal stipends, and helps them get house improvement loans. An important featureof this program is that the day-care facilities are located in poor neighborhoods sothat the beneficiary families can have easy access. Moreover, in addition todramatically improving the nutritional status of those children covered by theprogram, HBI frees up their mothers to seek employment outside their home or theirolder sisters to attend school. The program is targetted largely at single motherswith young children, the most vulnerable poverty group in Colombia. The program nowserves nearly 400,000 children across the country. The study concludes that theGovernment should promote this program as a center piece for its short-term *basicneeds" poverty programs.

10. Nevertheless, there are some areas for improvement in the program design.Firstly, the coverage of infants between the age of 6 months to 2 years is low.Since the problem of malnutrition is generally most acute in this age group, theGovernment should quickly devise new modalities for ensuring adequate provision ofBienestarina for infants in poor communities. The Government might consider a systemof home delivery of food and Bienestarina for targetted families or establishspecialized day- care facilities for lafants to operate under closer supervision thanthe regular nEI. Fxcondly, the design of nEI is not well suited to rural communitieswhere settlements are dispersed. In such localities, the Government must developother approaches including the use of rural school restaurants to feed pre-school agechildren. Thirdly, as the coverage of HBI is extended, it would become necessary tomobilize the communities more forcefully to participate in the administration of theprogram. Fourthly, a much closer coordination with the country's primary health caredelivery system is crucial to permit the screening and treatment of seriousmalnutrition cases. Finally, ICBF needs to incorporate an effective informationsystem into the program, not only to monitor nutritional impact, but also to targetbeneficiaries more selectively and to help make adjustments in the design andadmlnistration of the program.

Assessment of Government Proposals in Health

11. The main thrust of the Government's poverty alleviation strategy in healthis to achieve universal primary health care and to extend the coverage of the socialsecurity system to reach low-income families. These objectives do not appear to beattainable in the short-term. Firstly, given the poor utilization of existingprimary health care facilities, there is little point in tryin- t, expand coverage bybuilding additional health posts or training more paramedici. Secondly, the proposalwith respect to social security is unrealistic; its implementLtion would require far-reaching reforms of the financially-troubled and administratively weak SocialSecurity Institute which is not likely to be achieved in the foreseeable future.What would benefit the poor is for the Government to try to make the public health

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system function effectively in its current capacity by shifting resources from thehospital-based tertiary care to the commmity-based primary health care. Over themedium term. the Government should make a concerted effort to undertakeadministrative reforms in the Ministry of Health to improve its implementationcapacity and rationalize what hba become a complex and unmanageable system ofearmarked revenues. The first necessary step is to promptly complete the ongoingstudy of the health services andertaken jointly by the Ministry of Health, ColombianInstitute of Family Wellbeing and the National Planning Department which focuses onthe administrative and financial management problems of the sector.

A New Approach to Low-Income Shelter

12. The Government's approach to low-income shelter, which focuses on slumupgrading represents a sharp departure from the earlier policy based on direct publicsector development of heavily subsidized low-cost housing. This latter policy hadtotally failed to address the housing needs of the poorest households. The currentstrategy is to improve the quality of housing in the unregulated housing subdivisions(unauthorized private developments and squatter settlements) through provision ofbasic services (water, sanitation and electricity) and the upgrading of housinglargely with self-help construction to reduce costs. The approach is sensible.However, the prograa 'Human Settlements' as proposed is too large and itsimplementation will present a challenge both to the Government and local communities.The upgrading of homes in poor neighLorhoods will be a complex process. It involveslegalization of land tenure, coordination among numerous public agencies andmunicipal governments in planning, financing and managing infrastructuralinvestments, and the mobilization of the beneficiaries to undertake self-helpconstruction and to organize various community-based services. Since shelterupg&.c''` has never been tried in Colombia on a large scale, public agencies andcommunities will need to proceed cautiously, making adjustments in project designs tosuit local conditions. The Government should reduce the physical targets for theprogram and concentrate on formulating an integrated approach to community-baseds'um upgrading. Over the past few years, the Central Mortgage Bank, in collaborationwith a number of public agencies and non-governmental organizations, has beeninvolved in such an experiment in community building and housing improvement in Cali.While these pilot projects have not been implemented on a large enough scale to testtheir replicability, they merit a closer examination for their potential for reachingmuch poorer households than is normally possible under traditional housing programs.

Universal Primary Education

13. In the field of education, the Government's explicit priority isuniversalizatio.a of primary education, with emphasis on extending coverage in ruralareas using a system of multi-grade instruction and flexible grade promotien calledthe 4escueia nueva' model. By comparison, little attention is given to poor urbanneighborhoods where large numbers of school-age children do not have access to formalprimary education. In many poor communities, the parents pool their resources toorganize informal classes (the so-called 'escuela de banco") but the results aregenerally unsatisfactory. The teachers, poorly qualified to start with, must make do

without the necessary teaching materials. Classes 'lso take place in poor facilitieswithout desks or blackboards. Moreover, sisnce these schools are not officiallyaccredited, those students completing an equivalent of primary education in "escuelade banco" have no chance of advancing to the formal seccndary school system. TheGovernment might consider moving towards standardizing the curricula and the qualityof instruction in "escuelas de banco" by distributing free textbooks and offeringperiodic training for the teachers. Students from these schools might be integratedinto the formal system upon passing a specified examination, and over time, theMinistry of Education might take steps to accredit those schools that meet theminimum necessary standards. Alternatively, the Ministry might authorize additionalformal primary schools in poor urban neighborhoods. The Government does not accordhigh priority to adult education which includes skill training and literacycampaigns. This approach is sound because in the long run, it would be much morecost-effective to concentrate on the formal primary education system as the principalvehicle for disseminating literacy and for imparting basic communication andproduction skills to the poorer segments of the population. In addition to improvingaccess, it is also important to enhance incentives for (or lower the cost of) schoolattendance for children from low income families. This can be achieved mosteffectively by expanding the existing school feeding program and implementing thefree textbook program proposed under universal primary education.

A Summary of Recommendations

14. Statistical Data Base. The poverty measure that the Government utilizes--the NBI (or the "Basic-Needs-Not-Met" Index)--is based primarily on physical,housing-related indicators and is inappropriate for drawing poverty lines ortargetting beneficiaries. What Colombia needs is a system of periodic surveys togenerate reliable and relevant data (including those of household incomes andexpenditures, employment and nutritional status) in a form that permits a wide rangeof applications and analysis at a sufficiently disaggregated level. The Governmentmight consider utilizing the Living Standards Survey, a methodology for datacollection and generation, developed by the World Bank. The National StatisticalOffice shoulc be able to tailor the Living Standards Survey to its needs and generatepoverty data to complement the NBI measure.

15. Nutrition. Improvements need to be made in taie design of 'Hogares deBienestar Infantil" program to permit greater coverage for infants between the agesof 0 and 2 years and to accomodate children in rural areas. The year-by-year targetsof the program are ambitious. Care should be taken that the pace of implementationdoes not outstrip the administrative capacity of the Colombian Institute for FamilyWellbeing (ICBF), the executing agency. In addition, a greater effort should bedirected at mobilizing community support and participation to lessen ICBF'sadministrative burden. ICBF also needs to adopt a reliable information system thatpermits more selective targetting of beneficieries and monitoring of program impact.

16. Health. Proposals for universal primary health and social security coveragewill be difficult to implement in the short term because of institutional weaknessesin the sector. What the Government needs to do is to make the existing primaryhealth delivery system work by shifting recurrent funding from the hospl al-basedtertiary care to the community-based primary care. Health sector finance is one ofthe key topics of the health sector study currently undertaken by the Ministry ofHealth. A concerted effort should be made to complete this study promptly and toundertake administrative and financial reforms of the health sector.

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17. Housing. In the area of shelter, the re-orientation in Government policyfrom new construction to rehabilitation of existing housing in poor neighborhoods issensible and commendable. Given that public agencies have had little experience inshelter upgrading programs, the Government ought to proceed cautiously with theimplementation of the 'asentamientos humanos" program. Its ambitious targets for1987-1990 ought to be scaled down. Interest subsidies must be phased out over timeto reduce the burden on the financial sector. To make home upgrading affordable tothe poorest families without interest subsidies, it is essential to rely on self-helpconstruction; this in turn entails training, technical assistance -nd effectivecommunity organization. The most Important first step should be develop a new andinexpensive formula for slum upgrading and site servicing similar to the approachpioneered by the Central Mortgage Bank in Cali.

18. Education. In the field of education, the Government's basic strategy isuniversal primary education with emphasis on improving access to schools in ruralareas. However, large numbers of school-age children in urban and peri-urban areashave no access to formal primary education. To remedy this situation, the Governmentmight authorize (ormal primary schools in those poor urban neighborhoods where nopublic schools operate today. In communities where private, non-accredited communityschools ("escuelas de banco') operate, the Ministry of Education might try to improvethe level of instruction in these schools by distributing free text books or offeringtraining to teachers, many of whom are not sufficiently qualified. Furthermore, theexisting school feeding program should be expanded to improve incentiveb for schoolattendance.

Chapter 1

Introduction

Tran-rormation of the Colombian Economy

1.01 Over the past two to three decades, Colombia has madeimportant economic gains. The country's wealth of resources hasprovided a solid base for development and growth. The Colombianeconomy has grown steadily, weathering cyclic swings and downturnsthat have accompanied fluctuations in coffee prices due in large partto the Government's prudent economic management. During 1960-1985 theincomes grew at around 5Z annually in real terms. Since the sixties,the country has also experienced a dramatic transformation. Theeconomy has become increasingly more broad-based as its reliance oncoffee has been offset by the growing importance of petroleum, mineraland industrial sectors. Sizeable investments have taken place ininfrastructure, especially in power and roads, and social serviceshave been developed throughout the country. Far more Colombians todayattend schools and have access to health services, safe drinking waterand other basic services than ever before.

1.02 During this period, the Colombian society changed profoundlyas the rural urban migration which had started ia the 1930s continuedat a rapid pace and pushed the urban share of the population from lessthan 30Z in the 1950s to 702 in 1985. Improvements in socialindicators during this period have also been quite spectacular. Totalfertility rate declined by about 45Z from the early 1960s to the mid-19808 and is currently estimated at 3.5Z. This sharp reduction infertility, attributable to successfttl family planning campaigns aswell as to the spread of education, urbanization, and greater femaleparticipation :ates in the labor force, served to lower populationgrowth rates from a high of 3.72 between 1964-1978 to less than 1.8Zbetween 1978-1985. This fertility decline has been accompanied by asimilarly rapid decline in rates of maternal mortality (from 254 per100,000 live births in 1964 to 107 in 1984). Estimates for infantmortality (deaths per 1,000 births) went down from 81 to 61 during thesame period. On the education front, primary school enrollment morethan doubled, and secondary school enrollment increased six-fold.

Persistence of Poverty

1.03 Despite overall economic growth, benefits of developmenthave not accrued to large groups of the poor in both rural areas andcities. Poverty ib as intractable a problem in Colombia today as itwas in 1949 when a Bank mission led by Lauc*hlin Currie proposed a"coordinated attack on poverty," mainly in the form of a publicinvestment program. It is as critical an issue today as in 1972, whena report by the Bank's Operations Evaluations Division pointed out

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that 20 years of agricultural development had made no significantdirect impact in alleviating the poverty of the rural population.lIncome distribution also remains skewed today with incomes of the top202 of households six to seven times those of the bottom 202. It isworth noting that the focus of poverty programs has shifted over theyears. In the fifties and sixties, the emphasis was on ruraldevelopment. Since the seventies, as urbanization progressed andshantytowns and illegal squatter settlements proliferated on theoutskirts of large cities, poverty alleviation came to be associatedincreasingly with the provision of low-income urban housing andrelated services. These shifts reflected the demographic changes andthe increasing concern with urban poverty.

1.04 The impressive gains made in the social sectors also belythe sharp differences in health and educational status among socio-economic groups. For instance, fertility is estimated to be threetimes as high among the critically poor as among the non-poor, and thehigher fertility among poorer women is accompanied by shorter birthintervals, higher infant mortality, and generally poorer health amongboth mothers and children. Moreover, a high proportion of childrenfrom poor communities still have no access to any kind of schooling,and the incidence of illiteracy is high among adults at the lower endof the income strata. (See Chapter 7.)

Government's Commitment to Social Programs

1.05 The Government has, for decades, tried to reduce thedisparities in social indicators and income levels. Successiveadministrations since the sixties have actively implemented socialprograms, especially education and health. In the seventies, povertyalleviation became a more specific goal. The Lopez Michelsenadministration (1975-1978), for instance, emphasized the importance ofimproving nutrition and incomes in rural areas and developed trogramsthat came to be known as the Integrated Rural Development Program(DRI) and National Food and Nutrition (PAN). The Betancuradministration (1983-1986) actively promoted a policy of nationalintegration and peace and sought to achieve its goals by extendingpublic services and productive opportunities to the more remote andunderdeveloped regions of the country. This policy was translatedinto the National Rehabilitation Plan (PNR) in 1986. The Betancurgovernment also implemented a low income housing program refered to asthe 'Vivienda Popular' program directed primarily at the urban poor.2

1.06 Under the present Government, poverty alleviation is thesingle most important policy agenda and the central theme of its four-year Development Plan ('Plan de Economia Social"), covering the1987-1990 period. The development plan builds on two related national

1/ International Bank for Reconstruction and Development: "BankOperations in Colombia--An Evaluation," May 25, 1972. See alsoLauchlin Currie: Evaluacion de la Asesoria Economica a los Paises enDesarrollo--el Caso Colombiano, Bogota, 1984.

2/ Brief descriptions of these poverty programs are provided in Annex I.

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programs: the PNR (a carry-over from the previous Government) and thenew initiatives--"War on Poverty" or 'Plan de Lucha contra la PobrezaAbsoluta y para la Generacion de Empleo" (PLPGE)--announced early in1987.3 The importance attached to poverty alleviation clearlyreflects a preoccupation with the growing violence and social unrestin the country which many attribute to the persistent disparities inincome distribution and poverty.

A Macroeconomic Framework for Poverty Alleviation

1.07 The Government's overall approach to poverty is coherent andsensible. In essence, the Government has adopted a strategy aimed atraising the productivity and income of the poor and improving theaccess of the poor to key social services. It proposes to do so byshifting public investments and current expenditures increasinglytoward social sectors. The poverty alleviation goals are to beaccomplished within the context of steady GDP and export growth andprudent demand management.

1.08 On the premise that sustained growth and sound economicmanagement are among the most important pre-requisites for povertyalleviation the government has established the following macroeconomictargets:

- real GDP growth averaging 5Z a year;

- total investment as a percentage of GDP rising from 17%in 1986 to 202 in 1990;

- current account deficits of the balance of paymentsmaintained below 3Z of GDP;

- consolidated public sector deficits not exceeding 32 ofGDP; and

- inflation rates stabilized at recent levels (22% ayear).

The viability of the macroeconomic scenario, as summarized in Table I-1, depends crucially on the willingness of the private sector to raiseinvestment to around llZ-12 of GDP throughout this period. Given thedeclining trend for private investment in recent years, policy makerswill need to focus on providing adequate incentives for privateinvestors. In this context, the uncertain security situation presentsan increasingly serious constraint. Furthermore, the Government needsto continue to exercise restraint on total public sector spending andstep up resource mobilization efforts in order to keep the deficitswithin manageable magnitudes. Fiscal stability will be crucial,particularly because poverty-oriented programs have tended to bevulnerable to fiscal pressures in the past. A good example of this isPAN (para. 1.05), an innovative nutrition program which was launchedin the mid-1970s and discontinued for fiscal reasons in the early1980s when economic growth began to slow down (See Annex I for a briefdescription of the program.).

/ Tn 44 F 4 v t tinl r PT Prv ,4 4' T

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Priorities in Public Expenditures

1.09 The 1987-1990 Development Plan outlines quite specificsectoral priorities that reflect ongoing sector programs. In socialservices (health and nutrition, education and water supply), theemphasis is on the expansion of basic services. Great importance isattached to the expansion of primary health care delivery and theextension of social security to poorer segments of society. Universalprimary education is also an explicit goal. Investments in water andsewerage are likewise designed to support the Government's basic needsstrategy. While agriculture is seen as a key sector, publicinvestment levels remain low and secto- policies are not sharplyarticulated. Priority goes to programs under the ongoing DRI and PNR(para.1.05) aimed at raising productivity and incomes of small farmersand ensuring food security. Significant investments in basicinfrastructure (e.g., feeder roads) are envisaged under these ruraldevelopment projects.

Table I-1: Macroeconomic Framework

1986 1987 1988 1989 1990actual ---------projections---------

GDP Growth (Z) 5.1 5.0 5.0 5.0 5.0

As X of GDP:

National Savings 22.0 15.6 16.6 17.9 17.2Public Savings 6.2 4.3 4.2 4.9 4.9Private Savings 15.8 11.3 12.4 13.0 12.3Total Investment 18.0 18.0 19.6 19.8 19.7Public Investment 8.6 6.8 7.0 7.4 7.4Private Investment 9.4 11.2 12.6 12.4 12.3Foreign Savings =

Current AccountDeficit -4.0 2.4 3.0 1.9 2.5

Public SectorDeficit 0.5 2.5 2.8 2.5 2.5

Financed by:

Net Ext. Borrowing 3.6 0.8 0.8 1.0 1.3Net Dom. Borrowing -3.1 1.7 2.0 1.5 1.2

Source: Plan de Economia Social, 1987-1990

1.10 To make room for increases in expenditures on poverty-oriented programs, the Development Plan aims explicitly to reduce theshare of investments in the energy sector while maintaining a lid onoverall spending. A particular importance is attached to

-5-

rationalizing investments and expenditures in the power sector wherean adjustment program currently underway involves financial andinstitutional rehabilitation and a shift in investments fromgeneration to transmission and distribution. In transport, inaddition to directing road investments to rural areas under DRI andPNR, the Development Plan emphasizes improved utilization of existinginfrastructure through maintenance and more effective coordinationamong and use of the various transportation modes.

Table I-2s Public Insvstment Program(In Z Shares)

1986 1987-1990Actual Plan

Social Infrastructure 14.3 26.8Water and Sewerage 5.3 9.9Education 4.5 7.0Health and Nutrition 4.5 9.9

Energy 50.3 34.1Power 25.7 17.6Petroleum 20.0 14.6Coal 4.7 1.9

Physical Infrastructure 19.7 28.3Transportation 16.3 19.7Communication 3.3 8.6

Agriculture 1.0 10.0

Others 14.7 0.7

TOTAL 100.0 100.0

Source: DNP: Plan de Economia Social 1987-1990, and World Bankestimates

1.11 The Government's efforts to change the focus of investmentsand ensure efficient resource use are rendered difficult by therigidities in the budget process (e.g., complicated earmarking ofrevenues). Institutional weaknesses also limit the pace at whichsocial sector investments can be accelerated in an efficient manner.This is true particularly in the health sector (see paras. 1.12,3.06). Meanwhile, the momentum of programs in power andinfrastructure is strong a:id thus could potentially undermine theeffort to control expenditures.

-6-

Table 1-3: Public Expenditures on Principal PovertyPrograms by Sectors during 1987-1990

(In 1987 Col$ Million)

Expenditures Shares inon Poverty- TotalOriented SectoralPrograms Expenditures

(Z)

Health and Nutrition 455,951 33.0

Education 458,000 38.0

Water and Sewerage * 230,000 85.5

Agriculture * 272,787** 41.2

L Limited to public investment figures** DRI and PNR

Source: Plan de Economia Social 1987-1990

Limited Absorptive Capacity in the Social Sectors

1.12 The Goveranent has made considerable progress in re-orienting the focus of ongoing sectoral programs to fit its overallanti-poverty strategy. Table I-3 shows that the poverty-orientedprograms account for relatively large shares of the sectoral totals.However, it is by no meins certain that the Government would be ableto achieve these planned expenditures. The cost of these programs andtheir financing arrangements are not likely to be the principalobstacles; what is more likely to constrain the implementation ofthese programs is the limited absorptive capacity in these concernedsectors. For example, the Government's new initiatives in the healthsector (i.e., expansion of primaiy health care) are important from thestandpoint of the basic needs of the poor but little thought has beengiven to the enormous institutional and financial m!inagement problemsin the Ministry of Health and the Social Security 'nstitute.Moreover, many programs under implementation or ir advanced stages ofpreparation (e.g., nutrition, education) have physical targets thatappear ambitious relative to the proven institutional capacity of theexecuting agencies. The issue of implementation is discussed furltherunder individual programs in Chapters 4 through 7.

1.13 In view of the institutional constraints, it is importantthat the Government first clarify the nature of the poverty problem,secondly, set explicit priorities, and thirdly, design a program ofaction to address a set of clearly defined issues, distinguishingbetween those initiatives that can have an immediate impact and thosethat take longer for their impact to be felt.

- 7 -

Chapter 2

The Dimensions of Poverty in Colombia

A. Measurement of Poverty

2.01 Poverty persists despite the 30 years of economic gains thathave helped raise the living standards of Colombians. As mentioned inChapter 1, poverty alleviation has been high on the policy agenda ofsuccessive administrations and the 'War on Poverty' is the centraltheme of the development plan for 1987-1990. However, to support itsinitiatives, the Government must first define the concept of povertymore clearly and second refine its statistical tools for determiningits magnitude and geographical distribution and for targettingbeneficiaries for poverty programs. The Government now definespoverty primarily in terms of housing-related criteria, based on datafrom the 1985 Population and Housing Census and estimates that 43Z ofColombians live in 'absolute poverty.' (See paras. 2.02-2.03) Thisis not an appropriate definition of poverty. It is also unrealisticto target such a large segment of the population for povertyalleviation programs.

NBI--Government's Official Poverty Index

2.02 The DANE employs a measure called the 'Basic Needs Not Met'Index (NBI). Using the results of the 1985 Population and HousingCensus, the NBI methodology defines poverty primarily in terms ofthree shelter-related indicators, namely, (a) the adequacy of housingjudged on the basis of types of materials used on walls, roofs andfloors; (b) the minimum occupation density, and (c) the access topublic utilities such as electricity, potable water, sanitation. Itfurnishes two indicators that serve as proxy for income data; namely,(d) number of dependents per wage earner in the household and (e)number of school age children in a household not attending school.1 Ahousehold is defined as living in absolute poverty ('pobrezaabsoluta") if it meets one of the five indicators mentioned above.Furthermore, a household is said to be in dire misery ('en lamiseria') if it meets two or more of the five indicators ofpoverty. Using these criteria, 38.12 of households (or 43Z of totalpopulation) are classified as living in 'absolute poverty', and 17.6?of households (or 21.42 of total population) in a state of misery.The Government uses the first definition in all its officialdocuments.

2.03 The NBI index has a number of serious shortcomings.Firstly, it has a strong bias towards housing and housing-relatedpublic service indicators. The problem with using the availability of

11 This methodology is described fully in DANEt Boletin de Estadistica(411/junio 1987).

services as criteria is that, in rural areas where infrastructuralinvestments tend to iag behind, the lack of access to electricity orsanitation does not necessarily in itself indicate poverty. Povertyis more aptly characterized by other conditions such as malnutrition,illiteracy and unemployment or underemployment. Secondly, NBI doesnot include data on household incomes and expenditures. In largepart, the choice of indicators for NBI was dictated by the type ofinformation available from the 1985 Population and Housing Census;questions on household incomes and expenditures were not included inthe Census that year. There is no other recent source of informationwith a nationwide coverage that can be used to analyze the livingstandards of Colombians.

2.04 Thirdly, and most importantly, NBI does not permit analysisat sufficiently disaggregated levels. The departmental or municipalaverages of the various NBI indicators show in global terms theregional patterns and magnitudes (See maps, pages 11 - 14).Nonetheless, they fail to highlight what is probably the mostimportant dimension of poverty in Colombia, i.e., the tremendousdisparity in living standards that exists between communities within asingle department or a municipio. Pockets of extreme poverty areobserved alongside relative affluence in economically advanceddepartments such as Bogota, D.E., Antioquia or Valle. With this typeof information base, it is impossible, for example, to compare therelative deprivation of people living in urban slums with that oflandless peasants in a remote rural village, and to decide which groupneeds assistance more urgently.

Recommendations

2.05 The Government urgently needs to further develop thestatistical framework for supporting its poverty interventions. Werecommend that DANE incorporate in the poverty index all the relevantinformation for measuring living standards (e.g., household incomesand expenditures, employment, and health and nutrition). WhatColombia needs is a system of permanent household surveys to generatereliable and relevant data in a form that permits a wide range ofapplications (e.g., drawing poverty lines, targetting beneficiaries,monitoring programs, etc.) and analysis at sufficiently disaggregatedlevels.

2.06 DANE has a great deal of experience in collecting householdsurvey data through periodic wEncuesta de Hogares' but the design oftheir surveys needs to be modified. Firstly, modules on health,nutrition, expenditure, education, hours of work at home and labormarket should be permanent features of DANE's household surveys.Secondly, the coverage of household surveys must be expanded from thecurrent 13 cities to include additional urban areas and rural areas.Thirdly, in view of the additional demands that the inclusion of newmodules and expanded coverage place on DANE, serious considerationshould be given to reducing the sample size of household surveys fromthe current 30,000 households. It is not necessary to have a samplethis large to obtain accurate results.

- 9 -

2.07 The Government might consider utilizing the Living StandardsSurvey (LSS), a system of data collection and data generationdeveloped by the World Bank. The Bank established the LivingStandards Measurement Study (LSMS) in 1980 to explore ways ofimproving the types and quality of household data collected bystatistical offices in developing countries. The objectives are todevelop methods, specifically tailored to the needs of each country,to monitor progress in raising levels of living and to identify theconsequences for households of past and proposed government policies.The primary instrument for LSMS is the Living Standards Survey,designed to collect information oi a whole range of indicators foreconomic wellbeing at the household and community level. The LivingStandards Survey is ideally suited for building on and integratingexisting household surveys and should serve DANE well in generatingadditional poverty data to complement the NBI indicator. The Bank'sexperience with LSS in coumtries like Peru and Ivory Coast indicatesthat the system is capable of generating high quality data veryqui:kly and in a cost effective manner.

B. Spatial Distribution of PovertZ2

2.08 This section discusses the geographical distribution of NBIindicators by departments based on the 1985 Census data. The resultsindicate considerable regional differences.

Households ̂In Miser4' as Defined by NBI

2.09 Reflecting the bias of the NBI measure towards physicalindicators, the incidence of poverty indicators tends to be high insparsely-populated and predominantly rural parts of the country whereinfrastructure is still relatively underdeveloped, namely, Sucre,Cordoba, Cesar, La Guajira, and Magdalena in the Atlantic Region,Choco, Cauca and Narino in the Pacific Region, Caqueta in the CentralRegion, North Santander and Boyaca in the Eastern Region as well asthe whole of 'Intendencias' and 'Comisarias' with the sole exceptionof San Andres, an island and a popular tourist resort (See the map onpage 11). There are exceptions such as Bolivar where some 40Z ofhouseholds are classified as poor though nearly 702 of thedepartment's 1.2 million population live in urban aseas. On the otherhand, poverty tends to be least widespread in departments that ars

2/ The analysis in this section is based on DANE's poverty mappingexercise using NBI indicators at the level of departments. Spatialdistribution of poverty by 'municipios' is shown on page 87.

- 10 -

highly urbanized, e.g., Bogota, D.E.; or in those that have sizeablecoffee production, e.g., Antioquia, Caldas, Risaralda. or in thosethat have both large urban centers and significant coffee production,e.g., Quindio and Valle.3

Access to Public Services

2.10 On the basis of the public services coverage indicatoralone, the departments that lag significantly behind the rest of thecountry include Cordoba (54Z of households without any publicservices), Sucre (51Z), Bolivar (45Z), Boyaca (442), Choco (692) aswell as the wIntendencias' and 'Comisarias' where more than 402 ofhouseholds have no access to any kind of public services (See the mapon page 12). This lack of access to public services (and inparticular, the availability of sanitation) in less developed parts ofthe country is clearly reflected in the prevalence of water-bornediseases among young children. The map entitled 'Death Due toIntestinal Infection' shows that the geographical differences in theincidence of deech due to gastro-intestinal diseases among children of0 - 4 years of a3e are closply correlated with the degrees of accessto public servicas.

!3/ Coffee production makes an important difference in these regions, notonly because it ensures a steady source of income for the population,but also because the Coffee Federation, in agreement with theGovernment, sets aside a fixed proportion of its export earnings tosupport social services and to invest in social infrastructure incoffee growing areas.

-1 1 _ . IBRD 20735R

COLOMBIA -. Car;bbeon SoeNICARAGUA

HOUSEHOLDS "CON MISERIA" COSA.E

I?~~~~~~~~~~~~~~~~~~~~OPANAAAUCOLOMBIA VIA

/ \*fF I ~~~~~~~* I\ IT-* ('

k~~~~~~~~~~~~~~~~~~~~~~~~- , RAZILt

PANAMA

I,'-~~~~~~~~~~~~~~~~~~~~~~~~~~~0

~~ _ AN4TIOQIUIA

Pacific

CHOC6Ocean 6 CA<A

META

C A4JAId/ ae( K J, )\ t\\ \

UCA / !4~~ ~ ~~~~ ' do-*-' < rUt,:'\ o.

f CA U CA J \ 1A E>A a U) s

C'

4 BRAZIL

PERCENTAGE OF HOUSEHOLDS *LES"CON MISERIA"* dIgo o 50 100 t5040% - 50% (Highest volue:.C6rdo.o-50.1%) AA.AZONAS 6 ° 200

30% - <40% KILOM TEtS

20% - <30%Ea: 10% - <20% <

0% - <10% (Lowest value: Bogot6 - 4.4%) / *- /

All Intendencias averaged to one value. 33.8% /

All Comisrias averged to one value: 22.1% PERU* National Capital

--- Doeportrent, intendencia, and Comisoria Boundaries / t ,4.--- lntational Bundaries

* 1985 Census 74'

JUNE 19S

-12 - IBRD 20737R

7fr 7I4_--

COLOMBIA , Ca'ibbean SeaHCARAGUA

HOUSEHOLDS WITHOUT A,cosrA^A

BASIC SERVICES I? PAN Coto,8ii

ECADOS'I(

UM. ~ P-& PE*u N

SOtMYAPAN~~~~~~~~~~~~~~~~~~

VAJ.LE Off. ~ ~ ~ ~ MUR )\f c

a~~~~.- J W I / d-- 4

O4IAV-AR( -

Pacific 4r \CALPT

| & 4 ~ ~ ~~~~~ 3 , H ~~~~~BRAZIL

PERCENTAGE OF HOL'SEHOLDS * -WITHOUTBASIC SERV12VS* si . o so 100 150

_ 56%.-70% (Highest value; Chioc6 -69.4%) AA 1ZONAS ., .o 10 20

F128% -<42% 8

*= 14% -<28% 5 All Intendencias avergd to one vause A9.O% -> |-w°awAll Comisonosaverogea nae value: 38.4% P E RU U as

* NotiondO Capital 1 -Deportmnent, Intendencia. aind Camisaria lloundaries / '

- - - International 80undarie5 ~t oi

~~~~~~~~~~JUNI1f 9tl

-13- IBRD 20740R

COLOMBIA NICARAGUA4S

DEATH DUE TO INTESTINAL INFECTION , R UIAE-12' s e 12°- 1N -I %

ANTiOUN JI6RA Z 1-k

CALOAS ~ ~ ~ ~ ~ ~ ~ ~~~COOB

40 ERotL4IA 4U

CAUCA82't < Ocea_

W 9 D \ > /~~~~~~~C&RDOBA 7 \A0e;

FRE Y OF D H DE TOVENEZUELA

, ~~~ANrioQUIA )SANTANDERa ,,

Ii] LoCAtOA\-ta/'t. .C

_4 ~ ~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ 0co. -r cAt -

CAUCAIJA/*MFr

AW4O"%~~~~r. - - -o..

2 ct -Xw ~~~~~~~~~~~~~BRAZIL

INTESTINAL INFECTION IN THE 0 5 10 15

H igh tI higKILOMETERS

ModeraFtely low _

PERU _cl

e Nrninol Copital _;,,,,,Department, Intendencia, and Comisaria Boundaries -

-- nternational Boundories

780 74DDECEMBER 1988

-14- IBRD 20738R

C O L O M B I A ,7 ~~~~~~Caribboon SaoCOLOMBIA NCUU

HOUSEHOLDS WITH HIGH-12' ECONOMIC DEPENDENCE ,AA12-

Mwoco.bo ~~~~PERU *.*

70W

VENEZUELA

X. .xt , ,S J @ t@APACA\

Pacific CASA. REysJ

|Ocean Aj )CA$ANlARE A4.~~~~~~~~~~~~~~~~~~~~

g A>' '- : -'''- UA W Al

;t'1

PERCENTAGE OF HOUSEHOLDS WITH HIGH - - . = W4ECONOMIC DEPENDENCE* (Defined as having MIS - - .more than 3 dependents per wage eIrner 9 ., 10,0 150

16% - 20% (Highest value! Sucre - 18.2%) - SMAZONAS- 6 100 26012% - <16% KILOMETERS

8% - <12%4% - <8% %

;E g;0% - <4% (Lowest value: Bogot6 - 3.8%

All Intendancias averaged to one value; 13.5% wb. -*

All Comnisarias averaged to one value: 10.6% PERU

0 National Capitol / - ]Deportment, Interdencio, and Comisaria Boundaries [ 4 C,-Iternational Boundaries - -

1985 Census 74o -

JUNE 1988

- 15 -

Economic Dependence Ratio

2.11 The geographical distribution of economic dependence ratios(defined as the number of dependents per wage earner and a proxy forhousehold income information) shows a pattern distinct from what wasdescribed above. While it is not surprising that Bogota fared mostfavorably (with only 42 of households having high economicdependence), those reporting largest proportions of households withhigh economic dependence (15Z-202) were predominantly in the AtlanticRegion. The departments in the Pacific Region did almost as well asthe coffee growing areas of the Eastern and Central Regions (around10Z) and the Ointendencias" and 'comisarias3 showed unexpectedlyfavorable results with fewer than 102 of households reporting higheconomic dependence (See the map on page 14).

C. Characteristics of the Poor

2.12 In this section, an attempt is made to present thecharacteristics of the poor in Colombia using the 1985 Census data aswell as the 1981 Survey of Food, Nutrition and Housing conducted byDANE in collaboration with DNP and PAN-DRI. This latter surveyrepresents the most recent published source of information onhousehold income, diet and nutrition.4

Poverty and Malnutrition

2.13 The 1981 Survey results show that the poorest 202 ofColombian households spend most of their incomes on food and still

Table 11-1: Distribution of Household Incomes andExpenditures on Food by Income Strata

(In 1981 Colombian Peso)

Income Quintiles I II III IV V

Average Monthly 6,049 9,485 11,244 14,347 35,666Household Incomes

Average Monthly 5,507 8,512 9,386 10,496 11,583Household Food Expenditures

Share of Food 91.0 89.7 89.7 73.2 32.5Expenditures in Household Incomes

(Percentage)

Source: DANE-DNP-DRI-PAN, 1981

i/ A 1986 national survey 'Situacion Nutricional de Ninos Colombianosentre 3 y 35 Meses" published in 1988 focuses more narrowly on thenutritional status of children three years old and on the status offamily planning and maternal and child health in Colombia.

- 16 -

fall significantly short of both caloric and protein requirements.Table II-1 shows the distribution of monthly household incomes andfood expenditures by income strata for the whole country in 1981 basedon the DANE-DNP-DRI-PAN survey. The first income quintile (or thepoorest 202 of those surveyed) had an average monthly household incomeof Col$6,049 and spent 912 of that income on food; the second quintilehad an average income of Col$9,485 and spent 89.7Z of it on foodexpenditures. Judged against any criteria, households that spendclose to 90Z of their income on food must be considered very poor, andwell below the poverty line. (In per capita terms, this distributionof incomes and expenditures would become even more skewed because thepoor on the average have larger families than the non-poor.)

2.14 Not only did households in low income strata spend aninordinately high proportion of their incomes on food, but they alsofailed to meet the recommended levels for protein and energy intake.Table II-2 shows the calorie and protein intake per adult equivalentcalculated by income strata and compares the results with dailyrequirements. Applyinig the generally accepted norm of 62g of proteinper day per adult, the poorest 202 of households

Table 11-2: Calorie and Protein Intake Per Adult Equivalentby Income Strata

Income Quintiles I II III IV V

Protein (g/day) 40.3 60.0 74.3 82.8 84.92 of Requirement a/ 65.0 96.8 119.8 133.5 136.9

Energy (cals/day) 1904.5 2576.3 2961.1 3197.1 3118.82 of Requirement b/ 63.5 85.9 98.7 106.6 104.0

a/ 62 g of protein per day per adultb/ 3,000 cals per day per adult

Source: Sanin L., Rivas L., Duque M., Sere C.: 'Food ConsumptionPatterns in Colombia: A Cross-Sectional Analysis of the 1981 DANE-DNP-DRI-PAN Household Survey', Mimeograph PAN-503

surveyed reported an average protein deficit of 35? while the nextincome quintile is barely meeting the protein requirement. Withrespect to calories, using the requirement, estimated by DRI-PAN, of3,000 cals/day, only 50? of all households surveyed nationwide met thenorm. Households in the first income quintile showed a caloriedeficit of 36S while those in the second quintile were 15? below therecommended requirement. These findings indicate that the poorest 20(of households in Colombia run a clear risk of malnutrition, whilethose in the next income quintile barely meet the recommendednutritional norms.

Flgure 1: CHARACTERISlICS OF LOW INCOME HOUSING

100 -

90

80

70-

60

so-

40-

30-

20-

10

0

Houses Wih Houses With Houses lithout Houses With Houses WithoutSemi-Permanent Two or More Piped Water Electrity Sewers

Walls Persons Per Room

Source: Census 1985, DANE. 8

Figure 2: EMPLOYMENT AMONG THE POOR(PERCENTAGE)

DOMESTICEMPLOYEE

INDEPENDENT INFORMATION

CLERK

WORKER 4.80/o~~~~~~~~~~LBOE

FAMILY LABORLAOE

11.2% EMPLOYER3.9%

Total Number of Employed Persons 10 Years and Older - 1,628,160.

Source: The DANE-DNP-DRI-PAN Survey of 1981. aw118

1hkb~~~~ah4118

Figure 3: EMPLOYMENT OF LOW INCOME HEADS OF FAMILIES(Percentage)

All Households Households Headedby Women

2) 7.6%2) 21.4%

3) 25.5% _

1) 16.1% 1) 12.6%

7) 1.0% 7) 0.7%6

6)7.2% -W

5) 7.3% i

5)13.9%

4) 20.5%4) 28.7% 3) 33.3%

Monthly Household Income (C$1981)* 1) Without Information OM 3) Up to 5,3101/ * 5) From 10,001 to 20,000* 2) Without Income * 4) From 5,311 to 10,0)0 f 6) From 20,001 to 60,000

* 7) More than 60,000All households samples 4,772,231.All households headed by women samples 977,681.

1/ Monthly minimum wage for unskilled labor.

Source: The DANE-DNP-DRI.PAN Survey of 1981.

cdC4171q

- 20 -

Inadequate Housing and Services

2.15 An analysis of the 1985 Census data shows that of the 5.7million Colombians classified as poor (i.e.,'con miseria"), 632 livedin houses with semi-permanent walls and 652 lived more than twopersons to a room, that 882 of low income houses had no sewers, 772had no piped water, and 392 were without electricity connections(legal or otherwise).

Education and Literacy

2.16 Lack of schooling and illiteracy are closely correlated withpoverty. On the basis of the 1985 Census information, some 30Z ofthose classified as poor (15 years and older) were illiterate.Moreover, 442 of children from poor households in the 7 to 11 agegroup did not attend school.

Employment

2.17 Economic activity among the poor tends to be concentrated inthe lower paying occupational categories. The 1985 census data showthat of some 920,000 heads of households classified as 'con miseria",732 (or 677,000) had jobs, although more then one-third of thesepeople were underemployed, working less thMn sni months out of a year.Some 252 of poor households were headed by women. Out of the employedheads of households, 432 worked as unskilled labor, 32Z describedthemselves as independent workers, 102 held clerical jobs, 72 ownedtheir own business, 3Z engaged in family labor without remuneration,and 22 were domestic employees (See Fig.2.). Households headed bywomen make up the most disadvantaged groups among the poor. Fig.3,based on the 1981 DANE-DNP-PAN-DRI, survey shows that significantlylarger shares of households headed by women reported no incomes (21Z)and incomes below legal minimum wages (332) compared to the respectiveshares (82 and 252) for all households surveyed. These women aregenerally single parents with sole responsibilities for child raising,rendered difficult by having to wor&; long hours in low paying jobs.

D. Recent Chantes in Income Distribution

2.18 As pointed out in Chapter I, the problem of absolute povertyhas persisted in Colombia despite impressive economic gains during thepast two to three decades. In the country's development literature,there has been an active debate on how income distribution had changedor not changed over the years. There is a body of empirical data thatimplies that the poor have benefited very little from the country'seconomic growth. However, a general consensus among recent studies onthis subject is that income distribution did indeed improve throughthe 1970s, the decade of the coffee boom and economic expansion. This

- 21 -

was particularly true in the rural sector. Recent studies also showthat the income shares of households in the lower income deciles didnot deteriorate noticeably in the 19809 even aster the economy plungedinto a recession. This can be attributed to the fact thatexpenditures of the poor, consisting of basic necessities of life,could not be cut back further, so that during the recession householdswere forced to maintain their real incomes by working longer hours inloer maying ,obs.

2.19 A leading proponent of the view that income distributionimproved in favor of the poor in the 1970s is Miguel Urrutia. His1985 study 5 focusing on the decade of the 1970s concludes thathousehold incomes improved at the lowest and highest ends of thedistribution while the relative position of the middle class declined.Firstly, the real wages of the very poor--landless agriculturallaborers--increased substantially during the 1970s, as the demand foragricultural labor rose to sustain the expanding exports of coffee andcut flowers. Furthermore, brisk economic activity in the urbancenters helped absorb the rapidly increasing

Table 11-3: Distribution of Household Incomes1976-1985

(Seven Cities)*

Deciles 1976 1980 1985

I 1.23 1.45 1.41II 3.71 4.49 4.44III 7.03 8.17 8.14IV 11.36 12.15 12.76V 16.90 18.91 18.63

VI 23.71 26.15 25.89VII 32.53 35.35 34.97VIII 44.30 47.38 46.86IX 61.38 64.62 63.93

X 100.00 100.00 100.00

Gini 0.496 0.461 0.474

* Bogota, Medellin, Cali, Barranquilla, Bucaramanga, Manizales andPasto

Rource: Reyes, 'Tendencias del empleo y la distribucion deli, so% El Problema Laboral Colombiano, 1987

supply ou urban unskilled labor and lowered the rates of unemploymentand underemployment. TLis undoubtedly reduced the proportion ofhouseholds living below the poverty line. But the most significant

5/ Miguel Urrutia, Winners and Losers in Colombia's Economic Growth ofthe 1970s.' published for the World Bank by the Oxford UniversityPress, 1985.

- 22 -

factor here was the increasing participation of women in the laborforce as secondary wage earners. According to Urrutia, the economicimprovement of households in the lowest decile of distribution wasbrought about by the expansion of employmernt opportunities and thehigher earnings of secondary workers during this period of economicgrowth.

a.z0 More recent studies by Ayala and Reyes6 support Urrutia'sconclusions on trends in the 1970s, and furthermore demonstrate that,at least in the urban areas, the relative income shares of the poorremained virtually unchanged in the first half of the 1980s, e periodof declining coffee prices and slow economic growth. Table II-3 showsthe distribution of household incomes in 1976, 1980 and 1985 in sevencities, i.e., Bogota, Medellin, Cali, Barranquilla, Bucaramanga,Manizales and Past. Whereas the poorest 20Z of households received3.7Z of income in 1976, this group's relative share increased to 4.5?in 1980 and dropped only marginally to 4.4Z in 1985. The changesbetween 1980 and 1985 are insignificant.

2.21 It is clear why poor households had maintained theirrelative income shares during 1981-1984. The poor could not cut backon household expenditures because their spending was largely on basicnecessities. Even during this period of recession, unemployment amongthe poor did not increase noticeably because they took whatever jobswere av-ilable to maintain the real level of household incomes. Whilereal wages in the informal sector dropped during 1981-;985, householdsat the lower end of the income strata compensatod for this decline inwage levels by having their principal wage earners work longer hoursor hold multiple jobs and relying more heavily on the contributions ofsecondary wage earners. All indications are that during a recession,the poorest households barely survive.

6/ Ulpiano Ayala, "Hogares, participacion laboral e ingresos' and AlvaroReyes Posada, "Tendencias del empleo y la distribucion del ingreso'from El Problema Laboral Colombiano, Informes de la Mision Chenery,1987.

-23-

Chapter 3

An Agenda for Action

3.01 The analysis in Chapter 2 indicates that while the generaleconomic prosperity during the 1970s undoubtedly helped to lessenincome disparities in Colombia, those in the lowest quintile of incomedistribution have continued to live in conditions of critical poverty.Hence, in addition to promoting high economic growth, it is necessaryto direct special social programs designed to alleviate the worstaspects of poverty. The Goveranment must implement quickly thoseprograms that could have {imediate impact on the most urgent povertyproblems, such as poor health, malnutrition, unsanitary livingconditions and illiteracy, while continuing to develop medium- andlong-term action programs aimed at income generation and productivityincreases. On that premise, this study was designed to help theGovernment focus on putting in place short-term, quick impact, basicneeds types of programs.

The Government's Action Program

3.02 The Government's poverty alleviation strategy is to satisfythe basic needs of the poor by providing essential social services andgenerating productive employment opportunities. It seeks to attainthese goals by shifting public expenditures increasingly towardssocial sectors. The key components include the PNR and DRI programswhich have been carried over from previous administrations; thesenational multi-sectoral programs remain the principal vehicles foraddressing rural poverty. The newly prmulgated Agrarian Reform Law,designed to strengthen and streamline procedures for land distributionand legalization of title, is also expected to play an important rolein the eradication of rural poverty.

3.03 In addition, the Government has adopted a series of newinitiatives grouped under the so-called "War on Poverty* (PLPGE) (SeeAnnex II). The programs under PLPGE are numerous, diverse in scopeand objectives, and at varying stages of preparedness, unified only byone common goal--alleviation of poverty. The next step in theimplementation of PLPGE is for DNP and line agencies to establish anagenda of action. Here a two-pronged approach is required. TheGovernment needs to (a) quickly and selectively implement those basicneeds programs (health, nutrition, education and shelter) that addressthe most critically urgent problems of poor communities while (b)continuing to develop medium- and long-term action programs aimed atachieving productivity increases, job creation and institutionbuilding. The remainder of this report will be devoted to evaluationand making recommendations on the essentially short-term and urgentmeasures designed to help the most critically affected groups. Thesewill consist of new interventions in the area of nutrition and health,primary education and low-income shelter.

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3.04 While employment generation and productivity improvements arekey components of any poverty alleviation plan, these topics are notcovered in any depth in this report. The ongoing PNR and DRI programsaddress the issues of productivity and employment in rural areas. Onthe other hand, no cohesive strategy has yet emerged within theGovernment to address the basic emplovment and productivity issuesunderlying urban poverty. The Bank plans to work closely with theColombians during the coming year in developing policies and programsdesigned to create jobs and improve productivity in the urban informalsector. The Bank also plans to undertake a survey on the role of non-governmental organizations in the provision of social services and thepromotion of productive activities in poor communities.

General Comments on New Basic Needs Initiatives

3.05 The Government's new initiatives in the areas of nutrition,health, shelter (including housing-related services) and education areexamined in Chapters 4 through 7. The objectives of these programs,the Bank's assessment, and the statement of issues and recommendationson these programs are summarized in Chart 1 at the end of thisChapter. The Chart also offers some recommendations on DANE'sstatistical methodology. In the area of nutrition, the Government hasstarted implementing the "Programa de Hogares de Bienestar Infantil,"an innovative program that combines supplemental feeding and day carefor children in poor communities and the education and training oftheir mothers. This program, initiated early in 1987, has beenextended with great success to about 400,000 children in poorcommunities across the country. While there are areas forimprovement, the program has a great potential and should be givenhigh priority and support (See Chapter 4).

3.06 In contrast, there is little that the Government can do in thefield of primary health care delivery in the short term. The poorcommunities have very limited access to health services and proposalsare under review to extend the coverage of primary health care bybuilding a large number of health posts and training additionalparamedical staff. However, given the poor capacity utilization ofexisting health posts and health centers (resulting from underfundingof recurrent expenditures and inadequate management), it makes littlesense to try to extend coverage. The emphasis should rather be onmaking the existing system function more efficiently. What is neededis a strong commitment to institutional reforms within the healthsystem, with particular attention given to improving financialmanagement. Another initiative now under study is to expand thesocial security system (from less than 20Z to 80Z) to include low-income households. While the reform of the social security system isimportant for Colombia's health sector as a whole, this goal is notattainable in the short-term. The coverage of Colombia's socialsecurity system is among the smallest and its cost is among thehighest in Latin America (See Chapter 5).

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3.07 There is a pressing need for adequate housing and basicservices in poor communities across the country. The conditions areparticularly critical in urban and peri-urban areas. As urbanizationproceeded rapidly during the last two decades, large shantytowns andsquatter settlements have sprung up on the outskirts of cities. Inthe recent pEst, the Government had tried to meet the shelter needs ofthe poor through public sector construction of low cost housing andinterest subsidies but failed to target the program on the poorest andneediest. The Government has since turned its attention to improvingthe quality of existing housing in poor neighborhoods throughcomprehensive upgrading. This is an area where the public housingsector in Colombia has had very limited experience. Upgrading will bea complex undertaking requiring time-consuming coordination among theconcerned Government agencies and with the various community and civicgroups involved in the projects. To make home upgrading affordable tothe poorest households, it is essential to rely on self-helpconstruction; this in turn entails training, technical assistance andeffective community organization. Under these circumstances, the mostsensible approach should be to concentrate on developing a new formulafor slum upgrading and site servicing suited to the needs of thepoorest communities, rather than trying to meet ambitious quantitativetargets. The Government should also phase out the use of interestsubsidies (See Chapter 6).

3.08 In the field of education, the Government's povertyalleviation effort is focused on a program to universalize primaryeducation. In comparison, adult education receives relatively littleemphasis. This approach is basically sound because formal primaryeducation is a much more cost-effective vehicle for disseminatingliteracy and numeracy, and for imparting basic communication andproduction skills. The Government's basic strategy is to concentrateon improving access to primary education in rural areas by adopting amodel of multi-grade instruction and flexible promotion. Nonetheless,to make this program truly responsive to the needs of the poor,greater attention should be given to improving coverage in poor urbanneighborhoods where large numbers of school-age children do not haveaccess to formal primary education (See Chapter 7).

3.09 One common characteristic among the programs mentioned aboveis the enhanced role given to community participation. As indicatedin subsequent chapters, successful implementation of the "Hogares deBienestar Infantil" program depends crucially on the participation ofthe entire community while the proposed shelter upgrading program isexpected to rely heav'ly on self-help construction. Moreover, inbulding new primary schools, some poor communities are expected toorganize themselves to contribute labor in lieu of financial costsharing. In line with the new initiatives to decentralize basicsocial services to the municipalities, the present Government promotes'self-help' and "self determination" and attaches increasingimportance to the role that poor communities can play in definingtheir problems, making their needs known to local authorities, andcollaborating with public agencies in the design and management ofbasic needs services.

Chart 1: Now Initiatives in Poverty Alleviation--A Summary of Secommendations Pas. 1 of 3

Programs Obiectives/Ben*fits Status Ausesment Is.ues Recommendations

*Hogar.s de - Supplemental feeding Under Should receive high Limited coverage of - Establish specialized HBI forBSinestar of children 0-6 implementa- priority children between 8 infantsInfantils (HBI) years old tion and 24 months - Distribute Bi-nestarina to

- Day care and households with infants notprotection of covered by HBIchildren

- Training of Concentration in - Should d velop modalitiesvolunteer mothers in urban areas suited for rural areasnutrition and health

- Substantial Constraints in - Seek alternative creditimprove_met in capacity of ICT to arrangoemntshousing provide hoe

improvement loans

Lack of co mmu nity - Spend more time educatingsupport and communities at outetinvolvemet for - Progressive transfer of

C14 program responsibilities tocommunities withprovisions for trainingby ICBF

- Targetting communitie withproven record of com unityorganization

Unreliable supply of - Regularize production ofBionestarino Bionestarinu at 3 existing

planteLack of surveillance - Develop SISVAN to monitorsystm for nutr'tion nutrition status of

general population- Develop evalustion *ystem

specifically for HBI; mightconsider adapting the *LSMS'Living Standards Survey tocomplement and broadenexisting rudimentary informationsystem

- Equip community mothers withscales and pedometers

Chart 1: Now Initiatives in Poverty Alleviation--A Summary of Recommendations

Pane 2 of 3

Programs Objectives/Benefits Status Assessment Issues Recommendations

'Basic Health - Expansion in Under - Implementation - Chronic under- - Reallocation of recurrentfor All' coverage of primary prepara- should be funding of funds within the health system

health delivery tion postponed pending recurrent in favor of primary healthsystem by buiiding financial reforms expenditures in care deliverynew health in the Health primary healthposts/centers snd Ministry delivery systemtraining additional - Expanding coverage undermininghealth promoters of primary health effectiveness of

sBystem not servicesmeaningful without

improving existingcapacityutilization

- Expansior in - Expanding coverage - Institutional - Reform of ISS to be undertakencoverage of Social of ISS not weakness and poor over the longer haulSecurity Institute nchievable in near financial(ISS) term management at ISS

'Human - Upgrading of houses Under - Implementable on - Unrealistic - Should reduce size of programSettlements' in poor prepara- more modest scale targets and to manageable scale and focus

neighborhoods tion - Active community financing plan on integrated approach to- Servicing of sitex participation shelter upgrading (e.g. 'Agua- Rehabilitation of crucial Blanca' model)

run-down inner cityaras

- Role of Government - Role of Government shouldnot clearly consist of legal anddefined regulatory function, provision

of servicod sites and promotionof self-help construction andcommunity activities

- Use of Interest - Phacs out of intOrest subsidiessubsidies by ICT

Chart 1: Now Initiatives in Poverty Alleviation--A Summary of RecommendationsPage 3 of 3

Programs Obi ctives/Benefits Status Assessmnt Issu-s Recommendations

'Educaci6n - Universal primary Advanced On balance, well - Lack of access to primary - Establish schools in

8fSica para education stage of conceived program and education in urban areas poor urban

Todos3 - Improvements in preparation ieplem_ntable communitiesinternal efficiency - Integrate informal

, unity schoolsInto formaleducation system bydistributing text

books and offeringperiodic trainingof teachers

- Ned to enhance Incentives - Expand schoolfor school attendance feeding program for

7-14 age group

oo

CN DANE's - Definition of Poverty Ongoing DANE0s NBI measure - NBI measure lacks Income, - Incorporate house-

statistical work - Drawing of Poverty has serious expenditure and nutrition hold Income,

to support Lines shortcomings indicstors, among others expenditure,

Poverty - NBI measure biased towards employmnt, health

Alleviation housing-related physical and nutrition data

Programs Indicators to complement NBIindicators

- Targetting of - NBI measure not well- - Use of permanent

Beneficiaries suited for targetting of surveys to generatebeneficiaries or reliable andmonitoring of program relevant data in aresults form that permits a

wide range ofapplications andanalysis at adlaggregnted level

- Might consideradapting LSMSO

Living StandardsSurvey to Integrateexisting informationsystem

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Chapter 4

A New Approach to Nutrition Intervention

A. Community-based Day-Care Centers

4.01 Among the Government's new poverty alleviation initiatives isan innovative program that combines the functions of supplementalfeeding, day-care for poor children and community education anddevelopment. This program, called Oprograma de hogares de bienestarfamiliar" (HBI) was launched by the Colombian Institute of FamilyWellbeing (ICBF) in February 11P7 and now caters to nearly 400,000a-ross the country. ICBF's gc s to extend its coverage to 1.5million children by 1992. HBi ks to establish community-based day-care centers in poor neighborhooas in cities and rural towns wherechildren between the age of 0 and 7 can be supervised and given mealsand Bienestarina (nutritional supplement).

4.02 Unlike the traditional day-care centers,l these facilities arerun by volunteer mothers in their own homes or in a community-ownedbuildings, so that poor families can have easy access. The targetingof beneficiaries is geographical, as well as by age-group. Each day-care center is expected to accommodate a maximum of 15 children, butin some communities where the demand e-ceeds supply. e.g., those inCiudad Bolivar in Bogota, the volunteer mothers are presently obligedto take care of larger numbers. These women who run the centers arecalled "community mothers" and are chosen from within the community byother parents. They must first undergo training in subjects relatedto childcare and basic needs, e.g., family and community relations,recreation, nutrition, hygiene and preventive health. IC3F helps the"community mothers" obtain loans to upgrade their homes--at theminimum, to put in a concrete or wooden floor, a kitchen and a toilet;this agency also provides "community mothers" with the necessaryfurniture and equipment and compensates the "community mothers"through a system of "becas". More importantly, HBI helps meet 80Z ofeach participating child's daily nutritional requirements bydistributing Bienestarina (nutritional supplement) and helping procurefoodstuffs at below-market prices by contracting with a network ofcommunity stores.

4.03 Parents of children participating in the program are expectedto come in once in fifteen days to help the "community mothers" withthe cooking and child care. HBI was functioning well in all the

1/ ICBF also manages a more traditional program of day-care andsupplemental feeding for children under six years of age called CAIP.Children are fed and supervised in well-equipped day-care centers bytrained personnel. While ICBF continues to administer this program, itno longer ranks among the Institute's high priority activities because(a) it is costly and therefore it is not possible to extend coverage;(b) it is not targeted on the poorest children; and (c) is generallynot locationally accessible to poor communities.

Figure 4: COVERAGE OF HOGARES DE BIENESTAR INFANTIL PROGRAM(As of January 20,1988)

28,000 -

26,000-

24,000 -

22,000 -

20,000-

18.000 -

16,000-

14,000-

E12,000-

z~~~~~~~~~~~~~~~~~~~~10,000-

8,000 -

6,000 -

4,000-

2,000

0-* . c417t

Indhho Colonftim de Bimneuta Fandw. cdkX4l718k

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communities visited by the Bank mission. 'Community mothers' appearedto be well-trained and highly-motivated, and the demand for theprogram was strong.

4.04 HBI is an effective vehicle for addressing local communities'key poverty problems. In addition to the care and feeding ofchildren, it has great potential for preschool education and basicneeds training of 'community mothers" and other parents. The programbrings about substantial housing improvements for "community mothers"and their families. HBI also affords community mothers an opportunityto receive remuneration ("becas") from ICBF and the parents of thechildren they supervise2 while freeing up other mothers to seekemployment outside of their home. This child care aspect isparticularly important because the poorest and most vulnerable groupsin Colombia are households headed by women, usually single motherswith young children.

4.05 The program has given rise to income-generating activities inmany poor communities. For example, the establishment of 130 day carecenters in the district of La Candelaria (Cartagena) has createdemployment for 30 persons engaged in the production of bread, chairsand mattresses for the program. In the barrio Potosi in CiudadBolivar, the increasing demand for construction materials used in theupgrading of the homes of "community mothers" has led to theestablishment of several businesses manufacturing concrete blocks.Tne employment and incomes impact of nPI in poor co='unities isexpected to grow in importance, given Lne projected expansion in thecoverage of this program.

B. Financing of Nutrition Programs

4.06 ICBF is a Government agency with responsibilities for allmatters related to nutrition and family welfare in the country. Whileit is affiliated with the Ministry of Health, ICBF has its own sourceof funding and operates with a fair degree of independence. Theagency is entitled by law to 2Z of revenues from the national payrolltax and 12Z of salt sales tax revenues. In 1987, its total currentrevenues were estimated at Col$23,325,000,000.3 A key question hereis if ICBF could finance its planned expansion in the coverage of HBIfrom 120,000 beneficiaries in 1987 to 400,00L in 1988 and 1,000,000 in1990 in addition to a slightly more modest increase in the covera e ofschool feeding programs from one million to two million children.

2/ ICBW pays "communfty mothers" an average of Col$650 per child per monthand the participating parents contribute Col$200 per month per child.

3/ A DNP estimate. While ICBF is authorized to collect 22 of the payrolltax directly from enterprises in public and private sectors, it doesnot collect its full entitlement.

4/ School feeding programs are discussed under education initiatives inChapter 7.

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4.07 Table IV-1 shows ICBF's projected revenues and expendituresfor the 1988-1990 period in 1987 prices. The revenues are Bankprojections (assuming annual real growth of 62 over the DNP 1987estimates) while expenditure figures are from DNP sources adjusted forthe increases in the coverage of a school feeding program currentlyunder consideration by ICBF. Table IV-2 containing projected costsand beneficiaries of various ICBF programs is based on information in'Plan de Economia Social, 1987-1990' with adjustments made for apossible expansion in a school feeding program.5

Table IV-1: ICBF--Projected Revenues and Expenditures1988-1990

(Millions of 1987 Pesos)

1988 1989 1990

RevenuesTax Revenues 22715 24075 25520Other Current Revenues 1985 2075 2170Capital Revenues - _ __

Total 24700 26iav 27690

ExpendituresCurLent Expenditures 16700 28650 30365Capital Expenditures 8000 12500 14150

Total 24700 41150 55S'.5

Additional Revenue Requirement -- 15000 20500

Sources DNP (Unidad de Inversiones Publicas) and Bank missionestimates.

4.08 The unit cost of HBI is estimated between Col$26,000-27,000per year. With its coverage projected to expand from 400,000 in 1988to 1,030,000 in 1990, costs for HBI will increase from Col$10,290million to Col$26,500 million during this period. Its share in totalICBF program costs is expected to rise from 45Z in 1987 to 75Z in 1988and to approximately 85Z in 1990. Meanwhile, the coverage of school

5/ In addition to the nutrition-oriented interventions listed in Table IV-2, ICBF undertakes other programs including those for the preventionand treatment of drug addiction, promotion of recreational activities,and use of free time, care of the aged, and care of the physically andmentally handicapped.

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Table IV-2: Assumptions Regarding Program Costs andNumber of Beneficiaries

1988 1989 1990

HBI Cost($ColMil) 10290 17840 26500Number ('000) 400 700 1000

Educacion Familiarpara Desarrollo Cost($ColMil) 350 485 695Infantil Number ('000) 240 430 625

Atencion Nutric. Cost($ColMil) 100 100 100Haterno Infantil Number ('030) 710 710 710

Vigilancia del Cost($ColMil) 1060 1540 1880Desarrollo Fisico Number ('000) 1150 1420 2040y Atencion Nutric.Escolar

Other Programs Cost($ColMil) 1810 1575 1440

Source: Plan de Economia Social 1987-1990. DNP, and Bank missionestimates.

feeding programs is assumed to double in three years, pushing up costsfor this category from Col$1060 million in 1988 to Col$1880 million in1990. Its share in total ICBF program costs is nonetheless relativelysmall and is projected to decline from 8Z to 6Z over the three yearper:.od.

4.09 With the current sources of funding, these projections showthat ICBF would be able to finance all its programs through 1988.However, starting in 1989, the expansion in HBI coverage would resultin significant deficits (Col$15,000 million in 1989 and Col$20,500 in1990). Faced with this shortage of funds, ICBF submitted to Congressa bill to authorize an increase in its share of the payroll tax from2Z to 3Z.

C. Recommendations on Program Design

4.10 While HBI is an excellent program, there are some aspects thatcause concern. The following are some recommendations in areas of theprogram in which improvements could be made.

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Coverage of Children Between 6 and 24 Months

4.11 The program coverage for the 6 to 24 month age category isextremely low. In the first evaluation of HBI undertaken by ICBF inNovember 1987, only 6Z of the beneficiary children were under twoyears of age. This may be attributed to a general reluctance on thepart of the community and parents to separate infants from theirmothers during the first and second years. On the other hand,malnutrition is generally most severe during this early period oflife, and something needs to be done quickly.

4.12 One approach would be to establish a special HBI programtargetted exclusively on children under two years of age withguidelines for training, supervision and nutrition standardsspecifically tailored to this age group. Alternatively, infants mightremain with their mothers at home and ICBF could make arrangementswith community organizations and businesses for special home deliveryof food and Bienestarina with provisions for periodic supervision. Athird option would be to continue with the present HBI system but toissue more rigorous guidelines for the care and nutrition of infants.We believe that ICBF should be flexible on this matter and decide onthe arrangement that might best suit the local circumstances, inconsultation with community leaders.

Nutrition Interventions in Rural Areas

4.13 While HBI is being tried out in rural parts of the country ona limited scale, the program is essentially tailored to urban areasand "cabeceras' with a critical mass of populati(n. ICBF will need todesign modalities specific to rural areas where the needs aredifferent: protein deficiency among children is a critical problem inrural areas but there is little demand for day care. Since ICBF doesnot have adequate presence in soLle rural communities, the bestapproach will be to work through other institutions or programs thatare most active in a specific locality, e.g., multisectoral ruraldevelopment programs such as DRI and PNR, or public agencies that areactive in rural areas such as Caja Agraria, concerned with foodissues. With greater decentralization of administrative and politicalfunctions to local jurisdictions, local governments might also play alarger role in planning and administering nutrition programs. Thereare a number of possible alternatives. For example, the existingschool restaurant programs, which now cover the 7 to 15 age group (seeChapter 7) could be extended to pre-school age children, withBienestarina supplied by ICBF, physical facilities and supervisionprovided by local governments and local communities participating inthe procurement of food and management of the restaurants.Alternatively, communities might establish supplementary feedingcenters staffed by volunteers where infants and preschool-age childrencould be given Bienestarina. If the primary health delivery system isfunctioning adequately in a particular locality, Bienestarina might bedistributed through the health centers. The targeting ofbeneficiaries should be geographical and by age groups, as in the caseof HBI.

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Hogares de Bienestar Infantil, Cali

KN , '#S~~~~~~~~~~~~~~~

_* \ o

-kf\')'~~~~~~~~~~~~~~~~~~~~

l~ ~ ~ ~~~~~~~~~~~~~~~~~i

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Hogares de Bienestar Infantil, Cali

_!~~~ -

i~~ / I \

_-Que_~~~~~~~~~~~~~~~~~~~~~~~~

X 's\~~~~~~~

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Treatment of Serious Malnutrition Cases

4.14 HBI is a preventive program with no mechanism for screeningout the seriously malnourished children who require special treatment.It is crucial that the primary health care delivery system be mademore effective because the principal responsibility for screeningserious malnutrition cases belongs to the paramedics in health postsand health centers. While there is agreement on the need to integrateHBI and primary health services, this has not been put into practicebecause in large areas of the country the primary health deliverysystem is not functioning effectively. In fact, the lack oflogistical support from the public health system is preventing ICBFfrom incorporating into HBI those services that need to be integratedwith nutritional interventions, e.g., immunization, psycho-affectivedevelopment, pre-natal care, family planning, promotion cfbreastfeeding. This issue will be discussed further in Chapter 5below.

Role of Land Credit Institute (ICT)

4.15 In order to upgrade the homes of "community mothers," HBIrelies heavily on loans from the Land Credit Institute (ICT), afinancia1Jt t-^o_bled publ4c h^usir.g agerc .e,ux4h 4S r.ow- undergoingserious restructuring (See Annex 1). Other credit arrangements willneed to be made quickly. Already, ICT's inability to respond to loanapplications is becoming a major constraint. Financial institutions(e.g., Central Mortgage Bank) are prevented from giving mortgage loansin cases where no clear title exists; unfortunately, most residents ofpoor communities, including "community mothers," do not have titles totheir properties. The Government might consider channeling funds fromfinancial institutions to "community mothers' through non-governmentalorganizations if there are any active in a particular community, orthrough municipal governments which could on-lend to communities. TheGovernment must also simplify and speed up the process for land tenurelegalization. (See also paras. 6.10-6.12 for a discussion on the rolethat Government needs to play in the low income shelter sector.)

Fostering Community SupDort

4.16 ICBF hopes to reach 1.5 million children by 1992, a veryambitious target, and is expanding the HBI coverage at a furious paceto meet this goal. It is crucial that, in expanding coverage, ICBFshould not overlook the community development aspect of the program--the all important, and generally time-consuming process of educatingcommunities on the goals of HBI and obtaining the support and activecollaboration of the entire community and particularly of allparticipating families in its management.

4.17 At present, while the demand for HBI is strong, the necessarycommunity support for the program is not always forthcoming.Community mothers in barrio Jerusalem (Ciudad Bolivar) reported to the

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Bank mission that none of them have had any help from participatingmothers during the previous month. Some parents would move theirchildren from one day care center to another without notice and otherswoull leave their children at the centers for days. A few parents hadobjected to the meals provided by community mothers, alleging thattheir children are turning green or yellow from eating too manyvegetables. All these incidents point to the urgent need tostrengthen the community support for HBI.

4.18 The design of HBI is premised upon community participation.The entire community is expected to take part in the establishment andadministration of day-c=.re centers from the selection of communitymothers and organization of community grocers to contracting of civilworks for house upgrading. Training and technical assistance isprovided primarily through community-based permanent study groups withwhich technical advisors from ICBF and other Government agencies meetperiodically to review their experiences with HBI, and to study theprogram literature and other educational materials.

4.19 Despite all this emphasis on community participation, ICBF, inits 1987 evaluation of the program, reported that it directlyadminister 97Z of the day care centers under HBI and otherorganizations administer the remaining 3?. As the coverage increases,the primary responsibility for administering HBI must shift to thelocal communities. No Government agency can single-handedly manage100,000 day care centers -wich the goal of reaching 1.5 millionchildren entails. Moreover, it is crucial for the survival of thisinnovative program that the administration of HBI become firmlyestablished at the community level; once the program takes root inpoor communities, it will be more difficult for future administrationsto arbitrarily discontinue it, as another important nutrition program,PAN, was discontinued in the early 1980s after a change of Government.

D. Policies on Bienestarina

4.20 An integral component of the Government's intervention innutrition is a product called Bienestarina, a nutritional supplementmade of wheat, rice or maize flour (60Z), soybean flour (30Z), low-fatpowdered milk (8X) and minerals and vitamins (2?). The product istargetted at the high risk population (infants, pre-school and school-age children, pregnant and lactating women and the elderly) and enjoyswidespread acceptance in poor communities.

4.21 There has been a good deal of controversy surrounding theproduction and use of Bienestarina in Colombia. Concerns areexpressed over the balance of payments impact of producingBienestarina in the country because most all of the ingredients needto be imported. Some claim that the product is too costly, and othersquestion the value of Bienestarina as a nutritional supplement. TheBank mission's assessment is that this is a good product forsupplementary feeding, easy to prepare, palatable, and costssubstantially less than milk, its closest substitute. As indicated in

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Table IV-3, Bienestarina compares favorably with milk in terms ofcaloric and nutrient values. Moreover, contrary to a widely-heldbelief that its production cost is prohibitive, Bienestarina costsonly ColS180 per kilogram as compared with Col$800 per kilogram formilk (both wholesale prices), an approximate ratio of one to four infavor of Bienestarina.

Table IV-3s A Comparison of Bienestarina with Milkin Terms of Nutrients and Calories

(Per 100 g. of Product)

Nutrient/ Bienestarina MilkCalorie (powdered)

26Z

Calorie 319.0 Cal. 490.0 Cal.

Protein 26.0 g. 26.4 g.

Pat 1.4 g. 26.0 g.

Sugar/Car-bohydrates 52.2 g. 37.7 g.

Iron 14.1 mg. 0.7 mg.

Calcium 512.0 mg. 921.0 mg.

Vitamin A 2000.0 IU 598.0 IU

Vitamin C 27.0 mg 2.0 mg.

Thiamin 1.9 mg. 0.3 mg.

Niacin 9.7 mg. 0.7 mg.

Riboflavin 0.5 mg. 1.3 mg.

Source: ICBF and Bank mission estimates.

SecurinR Adequate Supply

4.22 While Bienestarina has gained widespread acceptance acrossthe country, the most common complaint about this product among thepoor is that they do not get enough of it, and that the supply iserratic. Hence, it is essential to regularize production in the threeplants in order to secure a constant supply of Bienestarina insufficient amounts. In 1987, approximately 17,000 tons ofBienestarina were produced by ICBF in its two factories, one inCartago, Valle, and the other in Paipa, Boyaca. With a third plant in

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Baranquilla coming on stream in May-June 1988, Bienestarina productionfor this year is estimated at 19,550 tons. This output is expected toexpand steadily, as capacity utilization at the Baranquilla plantincreases, to itstimated 27,500 tons per annum.6 On the demand side,based on the I',BF guideline for Bienestarina intake of 30g. per childper day and the projected increase in program coverage from 400,000children in 1988 to 1,000,000 children in 1990 (an optimisticassumption), the requirement for this food supplement under HBI willrise from 2,532 tons to 6,330 tons during the three year period.Adding amounts needed for school feeding and other programs undertakenby ICBF, the total Bienestarina requirement will increase from 16,000tons in 1988 to approximately 28,500 tons in 1990. Hence, by 1990,the demand is projected to exceed production by some 1,000 tons.However, ICBF should have no difficulties managing a deficit of thismagnitude: there will be scope for increasing capacity utilization,particularly

Table IV-4: Bienestarina Requirements through 1990

Coverage BienestarinaNo. of Children Requirement

Programs (thousands) (tone)

1988 1989 1990 1988 1989 1990

HBI 400 700 1000 2532 4431 6330

School FeedingPrograms 1150 1541 2041 4119 5519 7309

Other ICBFPrograms* 1718 2343 2988 94!0 12068 14790

TOTAL 3268 4584 6029 16081 22018 28429

*Includes the maternal and child care program, program for theelderly, and program for the mentally and physically handicapped.

Source: ICBF and Bank mission estimates.

in Baranquilla and Paipa. Beyond 1990, rather than make newinvestments in additional production capacity at its own factories,

6/ Paipa and Baranquilla plants are expected to operate at 65Z of capacitywhile the capacity utilization rate at the Cartago factory is assumedto remain at around 852.

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ICBF might consider new modalities for expanding Bienestarina output,such as contracting production out to the private sector. At thatpoint, ICBF might also arrange to have Bienestarina marketed throughcommercial channels.

Distribution and Storage

4.23 In the past, ICBF had sustained substantial losses due toinefficient distribution and storage of Bienestarina. However, in1987 many of the bottlenecks in transportation (i.e., moving rawmaterials to the plants and Bienestarina to distribution centers) wereremoved when ICBF introduced a system called Fiduciaria' throughwhich a number of outside enterprises bid competitively for theopportunity to supply inputs or to transport inputs and finishedproducts. However, ICBF is still experiencing difficulties withstorage at regional and departmental levels. Currently, the agency isundertaking a study of storage requirements country-wide.Furthermore, a brochure containing guidelines on storage ("Manual deAlmacenamientow) was recently issued by ICBF. With respect topackaging, Bienestarina has traditionally been distrt.uted in 25 kgbags but ICBF is n-iw starting to ship the product in more manageable 1kg packages in ordLr to reduce the risk of contamination and loss.

E. Information System

Absence of Surveillance

4.24 Despite considerable effort by Colombian Governments past andpresent to improve the nutritional status of the population, it is,unfcrtunately, not possible to evaluate the impact of these nutritioninterventions because the country does not yet have an adequatesurveillance system. Thie is a serious shortcoming, since aneffective surveillance system is crucial for monitoring improvementsin social indicators and identifying problem areas, for more accuratetargetting of beneficiaries under health and nutrition programs on thebasis of anthropometric data, as well as for providing input in thedesign of new interventions or making adjustments in program design asrequired during implemeultation.

Work in Progress

4.25 The Government is now in the process of estaalishing aninformation system called SISVAN ('Sistema de VigilanciaEpidemiologica, Alimentaria y Nutricional') for the whole country.This system originated as a research project of the University ofValle and is currently being implemented in seven departments, viz.,Cauca, Valle, Antioquia, Narino, Meta, Atlantico and Quindio. TheGovernment plans to extend SISVAN progressively across the country tocover all children under 5 years of age under the care of the national

-42-

health system. It utilizes information from various sources includingsurveys and other regular channels of data collection (e.g.information obtained from health clinics). Data are analyzed underthree headings, viz., nutritional status, health status, and foodavailability. A major obstacle to extending the coverage of SISVAN isthat the national health system through which information must bechanneled, effectively serves less than 5OS of the population.Moreover, as mentioned repeatedly in this report, the health systemreaches only a small proportion of the very poor, the group that needsto be monitored closely because they are at greater health andnutritional risk than the rest of the population.

4.26 ICBF is also beginning to develop its own information systemdesigned to evaluate the management of HBI. This system essentiallyconsists of a follow up of the nutritional and health status ofchildren enrolled in HBI. Data on the children must be collected andrecorded on a standard form by visiting paramedics from the closesthealth centers.

Recommendations on EstablishinR a Surveillance System

4.27 Both these systems are still rudimentary and much needs to bedone to establish a reliable information system on which to base asurveillance system. Firstly, steps must be taken to validateinformation on vital statistics. Given the high level of under-reporting (28Z), vital statistics are not sufficiently reliable forevaluating the global impact of health and nutrition programs.Secondly, the results of the most recent national nutrition survey(1986) should be compared with the findings of the previous survey(1977-1980) in order to establish a trend and a baseline for designingfuture interventions. Thirdly, work on SISVAN should continue eventhough progress might be very slow in the next few years due toconstraints posed by the limited coverage of the national healthsystem. Fourthly, the information system for measuring the impact ofHBI must be developed as quickly as possible, and these data should befed back into SISVAN. But, once again, the lack of integrationbetween HBI and the national health system (and specifically, theprimary health delivery system) is expected to seriously retard datacollection. In the short-term, ICBF should be able to do a reasonablygood job of data collection by equipping each day-care center withscales and pedometers and training 'community mouhers" to weigh andmeasure children under their care. Lastly, additional surveys need tobe conduhcted periodically in very poor and high risk areas not coveredby regular channels of data collection (e.g., areas not served byeither the health system or HBI). The introduction of the LivingStandards Survey by DANE recommended in Chapter 2 would effectivelyaddress the information collection needs nationwide. Use of such asystem is crucial for monitoring the nutritional and health status ofthe poorest segments of the population and for targettingbeneficiaries for public programs.

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Chapter 5

Strenhthenina the Primary Health Care Delivery SlStem

5.01 A key ingredient in any successful nutritional interventionis the integration with health services. An administrator of anutrition program targetted on pre-school children, pregnant women orlactating mothers would require support from the national healthsystem to provide vaccinations, treat diarrhoea and other commonchildhood diseases and to offer family planning, pre-natal care andmaternal and child health care. However, in Colombia, thisintegration has yet to develop. Firstly, the coverage of the nationalhealth system is limited to about 502 of the population. Secondly,the services do not exist or are seriously inadequate in manylocalities where the national health system network has ostensiblybeen established.1

Coverage and Access

5.02 A critical problem facing the Colombirn health sector is howto expand coverage while attempting to achieve more efficientutilization of existing facilities and infrastructure. Studies inColombia have sho-*a that the frequency of medical consultations isdetermined largely by physical access to medical facilities andhousehold incomes.

5.0? A national health survey covering the 1977-1980 period foundthat 142 of the population lived at least three hours from the nearesthealth center. and 29Z three hours away from the nearest hospital.The frequency of medical consultations decreased in inverse relationsto the distance from the nearest health post, declining from anaverage of 4.8 consultations for patients living less than one hourfrom a health post to 3.2 consultations for those living more thanthree hours away. Similarly, the percentage of population that hadnever consulted a doctor was more than twice as high in remotelocations. The proportion of pregnant women who had consulted aphysician or had received medical attention during delivery was alsoinversely related to the distance from health posts (see Table V-1).

5.04 For the poorest segments of the population, the difficultyof access is compounded by their inability to pay for drugs andlaboratory tests after consultations. The survey reported that for

|1 There are exceptions. The national health system functions extremelywell in coffee growing regions (especially in the departments ofAntioquia, Risaralda, Valle, Caldas, Quidio). This is due in largepart to the substantial financial and logistical support in the healthsector provided by the National Coffee Growers Federation in areas ofcoffee production. For a discussion on the Federation's unique healthprogram, please see 'Revision del Programa de Salud para Caficultoresde la Federacion Nacional de Cafeteros de Colombia, 1977-19850, August1987.

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economic reasons, nearly 70Z of households earning less than oneminimum salary did not bother to seek medical attention when a familymember became ill.

Table V-1: Patient Consultations by Distanceto the Closest Health Post

Distance to the Closest Health Post

< 1 Hour 2-3 Hours > 3 Hours

Average Number ofConsultations per 4.8 4.1 3.2Patient

Percentage of Popula-tion that had Never 20.7 29.4 51.2Consulted a Doctor

Average Number ofConsultations per 4.2 3.4 2.6Pregnancy

Percentage of Deli-veries Attended 52.4 43.8 17.5by a Doctor

Source: National Health Survey 1977-1980, 1984

5.05 Hospital utilization rates differ substantially by regionsand income groups (see Table V-2). The Atlantic and Pacific coastsshowed the lowest hospitalization rates among the five regions during1977-1980, and utilization in urbanized areas was twice as high asrural areas. The average hospitalization rate for low income familieswas only about two-thirds of that for the high income group. Poorhouseholds have the greatest difficulties gaining admission tohospitals and affording the time for hospitalization. Admissionrefusals in public sector hospitals are reported to be as high as 582for out-patient care and 80? for hospitalization.

Problems with Primary Health Delivery System

5.06 On paper, the poor families' entry point into the nationalhealth system is at the lowest level of its integrated servicepyram4d, or at the primary health care level. This consists of (a)health posts staffed by auxiliary nurses and health promoters whoprovide basic preventive, curative and emergency care on an outpatient

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basis, and refer cases of increasing complexity to a health center, ora local hospital; and (b) health centers which have, in addition toauxiliary nurses and health promoters, the services of a full-timephysician and offer faciliti-" for minor surgery and delivery. Inreality, the primary health care system is understaffed andunderfinanced, thereby falling short of coverage targets and requiredstandards of service. Additional problems include inadequate trainingand supervision and lack of logistical support. It is important to

Table V-2: Ho.pitalization Rates by Region. IncoaeLevels and Degrees of Urbanization

1977-1980

veer Thousand Population)

Total Country 51.1

Regions

Atlantica 40.2Oriental 44.8Bogota 65.0CeAtral 6 .2Pacifica 52.3

Rural 33.4Urban 64.2

Income Levels

Low 43.7Middle 56.1High 60.6

Source: National Health Survey 1977-1980

note that while total financial resources available to the healthsector varied little in real terms from 1980 to 1985, allocationsto the social eecuri;y system increased at 1.52 per annum while theresources for the Ministry of Health decreased yearly by 2.52.Furthermore, in 1985, the average expenditure per patient under thesocial security system was eight times higher than for the populatLon(including the poorest households) covered by the Ministry of Health.It is estimated that within the Ministry-administered national healthservice, primary health care receives less than 10X of total funding.

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Government Proposals on Health and Bank Recommendations

5.07 The main thrust of the Government's poverty allevictionproposals is to achieve universal primary health care in the healthsector and to extend the coverage of social security from about 15Z to802 of the population to cater to the poorest groups. However, muchwork needs to be done by line agencies before the proposals can betranslated into implementable action programs. For this reason, noattempt is made in this report to evaluate these proposals in terms ofeither implementation capacity or financing requirements. But somegenoral comments are in order. First, given the poor utilization ofexisting primary health care capacity, there is little point in tryingto expand coverage by building additional health posts or trainingmore health promoters. Second, the proposal on social security istotally unrealistic because it would require far-reaching reforms ofthe social security system which, given the many administrative andfinancial problems, is not attainable in the foreseeable future.Colombia's social security system is one of the most fragmented andstratified in Latin America, has one of the lowest percentages ofpopulation coverage by social insurance, and is one of the mostexpensive and heavily subsidized by the Government.2

5.08 What the Government needs to do is to make the existinghealth system work effic'iently by shifting resources from tnehospital-based tertiary care to the comunity-based primary healthcare. We should emphasize that the focus should be on rationalizingwhat hts become a complex and unmanageable system of earmarkedrevenues rather than on increasing total Lesources available to thehealth sector. Health sector finance is one of the key topics of thehealth sector study currently undertaken by the Ministry of Health.The Government should make a concerted effort to complete this studypromptly and to undertake an administrative and financial reform ofthe health sector. There appears to be very little that theGovernment can do in the health sector in the short-term.

5.09 In the meantime, the Government might take a hard look atan innovative and successful experiment in Cali with investment fundswhose interest earnings can be utilized to finance recurrent costs ofbasic health services at the local level. The funds are set up andmanaged by public or private institutions, depending on which entitiesare most active in a given community, and to date, the organizationsinvolved in this experiment have included ICBF, the departmentalhealth services (SSS), and Fundacion Carvajal. The decentralizedcharacter of these funds, the potential for community involvement andthe flexibility offered by such a system would appear to make it anattractive vehicle for financing primary health care at the locallevel, particularly in poor communities where access is mostdifficult.

2/ See the World Bank, Colombia: 'Social Security Review' (Report No.6540-Co). September 23, 1987.

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Chapter 6

Meetint the Shelter Needs of the Poor

Background

6.01 Over the past thirty years, Colombia has changed from arural to predominantly urban society. Between 1964 and 1980, theurban population increased by 3.7Z per annum and today accounts for67Z of total population. By comparison, the housing stock increasedby only 3.2Z per annum during the period, and the bulk of the newhousing units went to the high- and middle-income groups. Becausehousing units produced in the formal sector were not affordable tohouseholds earning less than three minimum salaries, the poor soughttheir shelter in the informal and unregulated subdivisions. Illegalsquatter and "pirataw settlements1 proliferated on the periphery oflarge and medium-size cities to which migrant workers had gravitatedin search of jobs.

6.02 As shown in Table VI-1 below, between 1972 and 1981, 43Z ofhousing construction in the Bogota metropolitan area and 402 inmetropolitan Medellin was unregulated. In the eleven intermediatecities, clandestine developments were even more widespread:unregulated construction averaged over 702 of total housing in thesecities, ranging from over 802 in Villavicencia to slightly under 402in Tulua. The map on page 49, based on the 1985 Census of Populationand Housing, shows the national distribution of families living ininadequate housing by departments for that year. A large majority ofhouses in the unregulated sector, built on the self-help basis withoutadequate technical know-how, were in violation of municipal planningand construction ordinances. Furthermore, these illegal developments

1/ The unregulated housing sector consists of two main types ofdevelopments, the *pirata' subdivisions and the areas of "invasion" orsquatter settlements, frequently euphemistically referred to aswasentamientos.0 In the case of *pirata" subdivisions, an unlicenseddeveloper purchases a piece of land from the owner and subdivides andsells the land as a number of very small housing lots without havingobtained legal title or provided adequate infrastructure and services.Purchasers build their homes on this lot principally with the help offamily labor and self-financing. On the other hand, squattersettlements are created when a group of people simply invade and buildon vacant land belonging to the state or a private owner. Reportedly,"pirataw developments are restricted to the periphery of large cities,while invasions occur all over the country, and more frequently aroundsmaller cities.

-48-

had poor access to public utilities including transportation. Slumsand squatter settlements establish themselves on unserviced sites andwhile many become regularized over time, communities cannot get basicservices--piped water, sanitation, electricity--until a majority ofresidents obtain legal title to their properties. The maps on pages51 - 53 indicate the level of public services in the country bydepartments in 1985.

Table VI-1: Relative Shares of Legal and Illegal Housing(1972 - 1981)

City Increases Building Relative Sharesin Permits ----------------

Housing Issued Legal IllegalStock (Z) (Z)

('0008) ('000s) 3-2/1 4-1-31 2 3 4

Large Cities

Bogota 215.2 123.7 57.5 42.5Medellir 53.9 32.4 60.1 39.9Cali 41.6 36.1 86.8 13.2Barranqailla 34.4 30.2 87.8 12.2

Sub-total 345.0 222.4 64.5 35.5

Secondary Cities

Cartagcna 19.4 4.2 21.6 78.4Cucuta 18.7 3.4 18.2 81.8Pasto 12.9 2.9 22.5 77.5Neiva 8.8 3.2 36.4 63.6Ibague 10.8 6.0 55.6 44.4Monteria 7.5 2.0 26.7 73.3Villavicencio 8.2 1.5 18.3 81.7Buga 2.5 0.9 36.0 64.0Tulua 3.8 2.4 63.2 36.8Barrancabermeja 8.0 2.0 25.0 75.0Soledad 8.3 2.5 30.1 69.9

Sub-total 108.9 31.0 28.5 71.5

TOTAL 453.9 253.4 55.8 44.2

Source: National Center for Construction Studies (CENAC)

II~~~~~~~~M

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Cli~ ~ ~~Il ~ t

-50-

Government's Policy on Low Income Housing

6.03 In approaching low income housing, the present Governmenthas shifted the focus of housing policy from reliance on the publicsector construction of new units, a policy which had failed to addressthe housing needs of the poorest groups in past years (Annex I), toimproving the quality of the existing housing stock in the unregulatedsector through comprehensive upgrading. To this end, and premised onthe philosophy that access to adequate housing and related servicesconstitutes a basic right, the low-income 'human settlements' plan for1987-1990 under the 'War on Poverty' calls for 1.4 million solutionsat a total investment cost of Col$817,600 million (US$3,200 millionequivalent). The plan comprises three-subprograw,s, viz.: (i)upgrading of slum and squatter communities at the periphery of cities;(ii) construction of new serviced sites; and (iii) rehabilitation ofdepressed inner-city areas which already have a servicesinfrastructure. Funding amounting to Col$600,000 million wasidentified at the outset when the plan was first proposed, leaving afinancing gap of Col$200,000 million. The Government hopes to obtaina substantial part of the required financing from the financialsector, primarily from the housing and loan associations (CAVs) aswell as from commercial banks and insurance companies. Moreover,under the ongoing decentralization process, there has been an increasein the transfer of the national sales tax (IVA) revenue from thecenter to smaller local jurisdictions. Local governments are countingon IVA funds to finance the provision of housing-related services aswell as to give them additional borrowing capacity. The LandCredit Institute (ICT) has been assigned a central role in theimplementation of the plan as a provider <' subsidized housing or homeimprovement credit and a conduit of substantial forced investmentsfrom the financial sector.

Table VI-2a Low Income Shelter Plan1987-1990

Category No. of Unit InvestmentUnits Cost Cost

(Col$) (Col Mil.)

Upgrading 915,000 500,000 457,500Serviced Sites 358,000 1,250,000 298,350Inner City Reha- 89,000 750,000 66,750bilitation

TOTAL 1,362,000 --- 817,600

Source: National Planning Department

Main Issues

6.04 Four main issues emerge from our analysis of theGovernment's approach to low-income shelter policy under the "War onPoverty." First, serious questions must be raised on the scale andthe implementability of the component as currently defined, and

-51- IUtD 20733R

COLOMBIA Caribbean Sea

LEVEL OF PUBLIC SERVICES SUCNA

1?r HOUSEHOLDS WITH SEWERS W'ER

ArL4W 7 CUADOR - i

BRAZIL

t~~~~~~~~~~~~~~ob 4 \;c i @ PERU

<t; ~~~~~~~~~~~~~~~~~~eao Pacd_ k

PANM )

VENEZUELA

Ocean . i | 2; XXotAcA,X-3 ¢/*.8 A4 .)1- CASANAR*

,r,e,A -,r i R _ _ ~ ~ ~~~~_ ;

\ . w l _ F . . 's ' g ~~~~~~V#CIHALOA - ---

o r P -J} S~~~EtA | 9 -

, - -- SHtlNA O V~--+ GUAIIA 4N. -.- ' 0

GUAVtARE

CAQ#jETA - VAUPtS

Li o * o BRAZIL

PERCENTAGE OF W 1 { LES

HOUSEHOLDS WITH SEWERS* 9 0 o 50 to0 150

80% - 100% (Highest value: Bogota - 95.6%) '\ AAMAZONAS 0 o 200

60% - <80% ; 0 KILOMETERS

40% - <60% /20% - <40% -0% - <20% (Lowest vatue: Choc6 - 10.9%) -_ ,s' ,

All Intendencias overoged to one value: 16.7% * / 0 , -All Comisarias averaged to one value 23.5% PERU

0 Nattoil Capital J m --

Department. Intendencia, and Comisaria Boundaries f J __,',',_-- - wInternational Boundaries a

1985 Census 740

JUNE 1988

-52- NM_20_31 It

Cr O L O M4B I A, Caribbean Sao

COLOMBIA WRO

LEVEL OF PUBLIC SERVICES _KA U

-12' HOUSEHOLDS WITH ELECTRICITY PA COLOMBIA

Ocean~ ~ ~ .aa (->,

AS ) CUAR ^ 11 / \ (J S ~~~~~~~~~~~~~~~~~RAZIt

i ~~~~~~~~~~~~~~~~~~~~~~CP

CAQtJEAANAUCA

Pacific _., ' '~ "S~

Oceon t8 | ~~~~~~~CASANAIV ,

k _[ < ~~~~~~CA QUE rA VA~ ,UP SS

Q 4 t.t' m A BRAZIL

PERCENTAGE OF C _ _LE _

HOUSEHOLDS WITH ELECTRICITY*IES100 15,0

80% - 100% (Highest value: Bogot6 - 98.4%) AMAZONAS 6 100 20060% <80% 1 KILOMETERS

r 40%- <60% II) 120% - <40% (Lowest voluet Choc6 - 30 9%)t OSJ - 20% /

All Intendentios averaged to one volue: 49.3% c | . ,. a a

All Comnisarios averaged to one volue: 44 7% P E RU* National Capitol a r i. .

- Department, Intendencia, and Comisoria Boundaries I '--- Intenationl Boundaries .- N 4°

' 198Coensus 74,

JUNE 198ti

-53- IBRD 20732R7ir 7,4

COLOMBIA 7) Car,bbean Sao

LEVEL OF PUBLIC SERVICES ARA NCAA

HOUSEHOI DS WITH PIPED WATER

6 A _ t § G~~~~~~~~~~~~~~~~~~~~~EUADOR A

t 4 ' , BRAZILBRAZIL

PERCENTAGE~~~~~~~~~~~~~~~~~~PR OF,

HOUSEHOLDS WITH PIPED WATER* 9 McwocoiboPgSD,lo,o'1(1

: ^: 1 40% - <c'l0% _~~~~~~~~~~~~~~~~~~~~~~ac(

700

VENEZUELA

Pacific 47

Ocean OAjCUNW4M45'~ ~ CASANARE/

-~~~ ~ ~ GUASNIA

S ~~~~GUAVIARE

CAQUETA VAUP#S 7& -1BRAZIL

PERCENTAGE OFMLEHOUSEHOLDS WITH PIPED WATER* 0 5 JE 0 5

80% - 100% (Highest value; Bogot6 95.4%) AMAZONAS .0 ;60% - <:80% /KILOMETERS

[J40% - <60%EJ 120% - <40% (Lowest volue: Choc6 - 20.2%)

0EJ %-<20% -

All Intendencios averaged to one valve: 41.9%

All Comisorios overoged to one value: 44. 1% PER U

* National Capitol /- Deportment, Intendencio, ond Comisaria Boundaries I

4,-.- Internationol Boundories ' 40

' 1°85 Census 740

JUNE 19*E

-54-

?able VI-3: Anticipated Financing Sources for theLov Income 'Human Settlements' 1987-1990

Sources Amounts(in 1987 Col$ Million)

Municipal Contribution Underthe Water and SanitationAdjustment Plan 230,000

Local Electricity Companies 50,000Municipal Contribution UnderLaw 61 of 1936 (5Z of Budget) 40,000

Housing and Loan Associations(CAVs) * 80,000

Bonds (Constant Value) 10,.,Land Credit Institute (ICT) ** 80,000National VocationalTraining Institute (SENA) 10,000

Central Mortgage Bank (BCH)and Financial Fund forUrban Development (FFDU) *** 75,000

National Savings Fund (FNA) *** 25,000

600,000

* Includes direct financing to beneficiary families** Includes direct financing to beneficiary families. Also takes intoaccount budgetary allocations of about Col$15,000 million and anexternal credit of US$75 million.*** Includes existing low-income credit lines, FFDU financing for thewater and sanitation sector adjustment plan and forced investmentsfrom the UPAC system.**** Corresponds to the portion of FNA's resources oriented to lower-income families.

Source: National Planning Department

especially on the choice of ICT as the main vehicle for overseeing itsimplementation. Second, there is a need to define the role of theGovernment in meeting the shelter needs of the poorest groups. Third,in formulating the details of this policy it is important to ask howthe 'human settlements' component can be made to meet the needs of thepoorest households, specifically those earning less than two minimumsalaries. Fourth, one should take a hard look at the Government'spolicy on interest rate subsidies under the low income shelter policy,and especially the 'human settlements' component.

-55-

Size and Feasibility of Implementation

6.05 The enormous scale of the "human settlements' component canbe best appreciated when its targets are set against the sum total ofinvestment programs that had been formulated independently by majorinstitutions involved in housing during the 1987-1990 period. Whenindividual programs of the main actors in Colombia's housing sector--ICT, the Central Mortgage Bank (BCH), the National Savings Fund (FNA)and CAVs--are aggregated, they add up to 500,000 solutions for alltypes of housing (as compared with the Government target of 1.4million for just low income shelter). The four institutions' combinedplanned investments for the 1987-1990 period amount to Col$418,800million (as compared with Col$818,000 million for the "humansettlements"). Assuming that the individual programs for 1987-1990were based on each agency's assessment of its own implementationcapacity and its ability to raise financial resources, thequantitative targets of the 'human settlements" component are totallyunrealistic.

6.06 What is more, the successful implementation of the "humansettlements" component will depend on effective coordination between alarge number of organizations at the national, municipal and communitylevels. Specifically, it will require local ccrmunities toeffectively organize themselves and initiate projects. These houseupgrading projects will be complex, involving legalization of landtenure, planning and financing of infrastrulctural investment andorganization and operation of community-based services. Since shelterupgrading has never been tried in Colowabia cn a such large scale,Government agencies and communitSes will need to proceed slowly,making adju;tments in project designs to suit local conditions as theygo along. The National Vocational Training Institute (SENA) will needto play a key role through training programs focused on increasingcommunity capability for self-help housing improvements and on micro-industry development designed to generate incomes in poor communitiesto finance these projects. For the illegal settlements, an aggressiveprogram is needed to regularize land tenure, and this can be achievedonly by streamlining/strengthening existing regulations andprocedures. At the level of local governments, tho public enterpriseswill be required to provide basic services. To fund housing-relatedservices, local governments will be asked to contribute 5Z of theirannual budget; local jurisdictions and departments will also beexpected to levy betterment (valorization) taxes. National agenciessuch as ICT, BCH and the Financial Fund for Urban Development (FFDU)will also be called upon to participate in co-financing with localgovernments.

6.07 This level of coordination has never materialized inColombia outside of emergency situations such as earthquakes, andcax.nct be expected to emerge overnight. Moreover, while much of the

-56-

major upgrading effoLt is to be initiated by local communities andlocal governments, outside of larger cities, few jurisdictions haveadequate technical and administrative experience needed to plan andput together upgrading projects. Financial capacity is also limitedlocally with most jurisdictions already heavily dependent on nationalgovernment transfers. Additional transfers of IVA funds (see para.6.03) are not expected to provide sufficient assistance to largertowns and cities where the shelter problems are most severe.

6.08 In particular, the proposed scale of human settlements willpresent a major challenge to ICT, a financially-troubled publichousing agency currently undergoing major financial restructuring.ICT has had limited experience with housing improvement projects:during 1982-1986, it was able to achieve only 14,500 solutions in slumupgrading and 8,500 cases of title legalization. Furthermore, duringthe same four year period, ICT completed less than 15,000 new sitesand services units, including 2,000 units under the Popayan earthquakereconstruction project.

6.09 To date, ICT has completed a nationwide inventory ofcommunities with substandard housing and services which will form thebasis for site selection and prioritization. The United NationsDevelopment Programme is providing technical assistance for coding andtabulating key indicators such as physical characteristics of thesites, environmental hazards, housing conditions, infrastructural andcommunity service deficiencies, degrees of urbanization, and economicdevelopment potential in some 1,200 low income communities.Nonetheless, shere remains a need for massive training within ICT.Recruitment of new staff and job training will be a aonumental task.An estimated 3,600 technical staff would be required to plan, programand help supervise implementation in the 1,200 initially targettedsites. Work on these sites cannot start simultaneously since aconsiderable amount of community organization is needed beforephysical investments can be initiated.

Role of Guvernment in Low Income Shelter Provision

6.10 The role of the Gcovernment in meeting the shelter needs oflow income households should consist of (a) the legal and regulatoryfunctions, (b) provision of serviced sites and (c) promotion of self-help activities in poor communities. Firstly, the Government mustguide orderly urban development by setting and enforcing realisticminimum standards for private developers and simplifying the processfor obtaining legal title. This will reduce the incidence ofunauthorized subdivisions and invasions, and, in particular, preventunregulated developments from taking place in ecologically precariouslocations that are difficult and costly to service. The draft UrbanLand Reform Law submitted to the Congress in November 1987 seeks toreduce the legal and procedural constraints to expanding the supply ofland for low-income residential subdivisions and to the formation ofhousing cooperatives while attempting to eliminate the worst aspectsof disorderly clandestine developments

-57-

Squatter Settlement, Popayan

,~~~ _ _

',..~ ~~ ~ _ ,.

'4 ~ ' .

-i

l .

Squatter Settlement, Buenaventura

A. _

-59-

6.11 Secondly, the Government must provide the poor communitieswith basic infrastructure and public utilities. A particular emphasisneeds to be given to the provision of sanitation. While many poorcommunities are coping with the lack of access to piped water byobtaining their supply from 'water trucks," the absence of sewers andgarbage disposal is causing serious health problems and is likely toundermine the impact of Government interventions in nutrition andhealth. Over the past year, an important decision has been made todecentralize the responsibility for providing housing-relatedinfrastructure and public utilities services to local governments.Extension of credit for housing-related infrastructural investments,now provided by ICT, should be consolidated into the operations ofFFDU, the urban development arm of the BCH.

6.12 Thirdly, the Government can better serve the poor segmentsof the urban population by adopting more innovative approaches totechnical assistance and credit financing for slum upgrading. Thescale of equity investment mobilized to date in the unregulatedhousing sector constitutes a potential collateral base for increasedhousing credit for low income households. Over the past few years,BCH, in collaboration with a number of Government agencies and non-governmental organizations, has been involved in an interestingexperiment in community building and housing improvements in Cali-which will be described in the following section. While theseprojects have not been implemented on a large enough scale to testtheir rsplicability, they merit a closer examination for theirpotential for targeting much poorer households than is normallypossible under traditional low-income housing programs and for thepossibilities that such an approach will hold out for communitydevelopment and participation.

Agua Blanca--a New Approach to Slum Upgrading 2

6.13 In 1982, the Office for Special Programs of BCH came up with ascheme called 'Celula de Desarrollo Urbano en AsentamientosPopulares,' an integrated approach to home improvemert and communitydevelopment in poor neighborhoods. The sites chosen for its first twopilot projects were the communities of el Poblado and el Vallado inthe district of Agua Blanca in Cali. In 1980, the municipality ofCali granted legal title to lots in these two 'barrios' withoutproviding basic services and infrastructure. In 1982, BCH embarked onan integrated pilot program that included provision of basicinfrastructural and social services, production and distribution ofbu-lding materials, development of other income generating activities,provision of horme improvement loans and technicai assistance to

2/ Unregulated housing subdivisions had emerged in Cali in the 1950s andby the 1960s had occupied over 30Z of the city's land area.Aguablanca, consisting largely of communities that were originallyestablished through invasions, had the highest concentration of illegalhousing.

-I~~-

o B~~~~~~~~~~~~C

0~ ~~

-61-

promote self-help construction. An important feature was the emphasisgiven to the process of education and community levelopment in orderthat the beneficiaries could participate fully in the project.

6.14 Given the multisectoral nature of the undertaking, BCHsigned an agreement with nine other institutions that includedGovernment agencies and non-governmental organizations--Municipalityof Cali, ICT, Fundacion Carvajal, the National Center for ConstructionStudies (CENAC), the University of Valle, SENA, Corporacion para laRecreacion Popular de Cali and Instituto Colombiano de Normas Tecnicas(ICONTEC)--each of which contributed to the project in its own area ofexpertise or specialization.

6.15 BCH has provided some 500 loans in el Poblado and 2,500loans in el Vallado that led to rehabilitation of some 5,500residential units including servicing of lots. However, the mostsignificant contribution of the pilot projects has been the markedimprovement in the standard of living of the residents in these twocommunities, creation of jobs, transfer of skills, and in particular,the establishment of community materials banks* that substantiallyreduced construction costs and brought housing improvements within thereach of the poorer households. With experience gained in Aguablanca,BCH also initiated similar projects in Manizales and Pereira.

Use of Interest Subsidies

6.16 For many years, subsidized financing through ICT has beenthe major policy instrument for reducing housing costs for low-incomefamilies. However, in practice these subsidies have predominantlybenefitted the middle class, and the urban poor continued to live inslums without any access to formal financing. At the same time, ICT'sheavy reliance on 'forced investments, from the financial system andits poor cost recovery performance have obscured the true magnitude ofsubsidies to the Ovivienda popular" program (see Annex I) andsegmented ICT's operations from the rest of the housing financialsector.

6.17 Given the seriousness of ICT's financial and managementproblems, it is not clear if this agency can continue to play anactive role as a provider of housing finance. Nonetheless, whateverthe outcome of ICT's restructuring, the Government should avoid theuse of interest subsidies and seek more transparent and efficient waysto reduce housing costs for low income groups. These might includeproviding cash grants to qualifying families, and/or matching grantsto municipalities for investments in basic infrastructure and servicesin poor neighborhoods.

Priorities for Government in Low Income Shelter

6.18 To sum up, the Government should (i) significantly reducethe size of the 'human settlements' (lasentamientos humanos")component by cutting back on the targeted number of 'solutions' to a

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realistic level; (ii) take an integrated approach to shelter upgrading

within the context of community building and community participationwhich, while it is complex and time consuming, ultimately offers

better opportunities for designing projects that address the needs of

the poor; (iii) phase out interest subsidies in order to reduce the

strain on the financial system; (iv) offer more transparent forms of

subsidies such as matching grants to local governments for the

provision of basic services (local government in turn might, if it

chooses, provide c,.sh grants to qualifying families to help lower the

cost of housing); and (v) strengthen and streamline the regulations

and procedures for legalization of tenure, which is a pre-requisitefor families obtaining formal housing improvement credit.

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Chapter 7

Basic Education for All

A. Background

Prevalence of Illiteracy and Low Educational Attainment

7.01 Studies on Colombia have demonstrated a close correlationbetween poverty and illiteracy, and between poverty and loweducational attainment.1 Reflecting huge increases in primary schoolenrollment over the past two decades, the rate of illiteracy among theColombian population aged 10 years and older dropped dramatically from26.6Z in 1964 to 12.2Z in 1985. Nonetheless, there are still some 2.6million people in the country who are functionally illiterate (SeeTable VII-1). What is more, over one-half of those who cannot readand write are found in the economically active population (in the 18to 44 age group).

Table VII-1: Changes in Illiteracy Rate among Population10 Years and Older(In Thousands)

Census Population Illiterates IlliteracyTen Years Among Those Rate Zand Older Ten Years

and Older

1964 11,598 3,086 26.61973 14,513 2,568 17.71985 21,151 2,580 12.2

Source: Ministry of Education, 'Situacion del Analfabetismoen Colombia y Sugerencias para la Accion", August 1987.

7.02 Even among those that are classified as literate, a largenumber have had very little schooling. It is estimated that in theColombian population 12 years and older, some eight millior. have notcompleted primary education; of this group of early school leavers,24Z belong to the 12-17 age group, and more than 50Z are under 34years old.

1/ Examples include studies by Kugler 1974, Fields 1977 and Mohan 1986.Also see Chapter 1 on the characteristics of the poor in Colombia.

-64- IBRD 207391

-- - ~~~~~74 _

CO LOMB IA Caribban Sa

HOUSEHOLDS WITH CHILDREN C O A

NOT ATTENDING SCHOOL J CO-OMBIA

9, v- V E ~~ArLN E ZU ELf

2 tNffA s_-*4' G#^rZGUrAVIAl

BRAZIL

PERCENTAGE OF HOUSEHOLDS OF WHICH MiIPES

CHILDREN DO NOT ATTEND SCHOOL* ,, o 5 0 10

_ 16% - 20% (Highest volue~ Choco - 16.9%) *~bAPAZONAS!o o 2012% - <16% K | lLOMETeRS

;38%-<12% t

4% - <8% z

[ ]0% -<4% (LowestvoIue~ 8090t6 -2.6%) ' -/<@ -1 w r_All Intendencias overoged to one volue: 13.5% - - eao.a, -

All Cornisorios averoged to one voIue~ 10.6% PERU'-3,

* Nationol Capitol / )E N EZU LDepartment, Intenoencio, anc1 Comisiorio Boundories I - '

o -'- Interruotionol Boundaries -~> -

1.°85 Census 740 -t_

JUNE 1911

-65- __ ISRD 20730

C COLOMBIA -65- U Coribbeon S.o

PREVALENCE OF ILLITERACY ST.URIN

PAAACOLOMI

/ 2 -I- BRAZIL

.tSAI/ a11 eI,e PERU -

\ *~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~M,c,b Pe#| '5 Q ': ZUE v auriocuiv ~SAN>N^ oyA;CA \

IIROLrAA

PAN k~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~CHILE

VENXIZUELA

Pacific , >jo~~~ ' >~

Ocean _, _$B OYAC#XJ CASANARE

P K k.- o ---f VICHADA

?VAJlE JEWLtla_

00-S ;-J/ META j rm)

fh .. 4<:A GUAINIA 4

CAUCAL.%. .N/J,%,< GUAVIARE K

CAjOUETA VAUPtS -

& 4 BRAZIL0 R .0

PERCENTAGE OF ' MILESILLITERATE POPULATION* zx.. ° 50 100 150

28% - 35% (Highest value: Choc6 - 30.9%) AMAZONAS ! 10 0 200

21% -<28% J KILOMETERS

- 14% < 21% _

7% - <14% 0% - <7% (Lowest value: Bogot6 - 3.7%) \, ,W ' |

All Intendencias averaged to one volue, 13.5% IAll Cornisarias averaged to one volue: 19.7% P E RU j j

0 National Capital / |---- Department, intendencia, ond Con isorio Boundaries ,.- -- Intemational Boundaries

1I985 Census 740 4 X

J'JNE 1988

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Table VII-2s Illiterate Population 12 Years and Olderby Age Group

Age Group Number '000 As 2 of TotalIlliterates

12 - 17 253.8 11.218 - 24 255.8 11.325 - 34 342.1 15.235 - 44 370.7 16.444 - 59 534.7 23.760 and Older 502.6 22.2

Total 2,259.7 100.0

Source: Ministry of Education, Op Cit, 1987

7.03 A critical facter in school enrollment is access. Thesituation varies greatly from department to department, depending onthe degree of urbanization and levels of economic development. Whilecoverage of primary education is relatively high in urban areas, atabout 902 of the age group, less than 702 of school age children inrural areas are served by the formal primary school system. The mapon page 64 shows a geographical distribution of households which hadschool-age children not attending school, and the Lnap on page 65shows the illiteracy rate in different parts of the country. Fig. 11indicates the variations in primary school enrollment by departments.

7.04 Furthermore, as mentioned in para. 7.02, student retentionrates are poor in primary education. Once enrolled, only about 602 ofstudents in urban areas complete primary education due to highrepetition and dropout rates. In rural areas, the situation is morecritical with only 202 of students finishing primary school. As aresult, the years of schooling for primary school children average 3.5years in urban areas and 1.5 years in rural areas. The problem ofearly school leaving in rural areas is also aggravated by the factthat only 60? of rural schools offer a full five-grade primary schoolcycle. The high dropout and repeater rates are attributed in part tothe poor quality of primary education across the country, constrainedby outdated curriculum and lack of teaching aids. Moreover, though a1983 law stipulates that 12 of the education budget must be allocatedto the acquisition of textbooks, in practice, the cost of purchasingtextbooks is borne by the students' families and local communities.As a result, children from low income families frequently need to makedo without textbooks.

Government's Response

7.05 To break the vicious circle of poverty and low educationalattainment, the present Government has initiated a program called'educacion basica para todos which seeks to bring basic education

FIgure 5: PRIMARY SCHOOL ENROLLMENT RATE BY DEPARTMENTS

100 -

90

80

70

-� 60

S 50 -JE.5U'a

�- 40

80

20

%� �

�4171Ub�Sauras: ON 8o�, 1967

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(formal and non-formal) within the reach of the poorest families. Themain component of Government poverty alleviation interventions ineducation is 'universalization de la educacion basica' which seeks toextend the coverage of formal primary education in rural areas andimprove its quality and efficiency nationwide. The Ministry ofEducation is now working on a seven-year (1988-1994) program toachieve universal education at total cost of Col$34,500 mill:an (1987prices). The second component leducacion basica continuada" isincluded in the current four-year development plan ("Plan de EconomiaSocial') but has not yet been developed into concrete action programs.Designed to serve the needs of adults and children who are eitherilliterate or have had only rudimentary schooling, the component willinclude expansion of ongoing literacy campaigns as well as educationin basic needs (shelter, health, sanitation and nutrition) and inbasic communication and productive skills organized within the localcommunities and imparted through the mass media.

Table VII-3: Share of 'Educacion Basica Para Todos'in Total Education Sector Investment

(Millions of 1987 Pesos)

Programs 1987 1988 1989 1990

Universal Primary 4,225 3,930 4,500 4,940Education

(Z of Total) (39.7) (37.3) (30.9) (35.2)

Continuing BasicEducation 510 700 725 725

tS of Total) (4.8) (6.6) (4.9) (5.2)

Total EducationInvestment 10,632 10,536 14,746 14,C41

Source: DNP, 1988

B. Universal Primary Education

Disseminatici of the *Escuela Nueva' Model

7.06 The Government's basic strategy for improving access toprimary education in rural areas is to adapt and disseminate theOescuela nueva' program which has been utilized with success in some8,000 rural schools. This program, based on the principle of multi-grade teaching and flexible promotion, has allowed small rural schoolsto offer the full primary education cycle which they would not havebeen able to do under a traditional system for lack of resources andsufficient size enrolLment. Available studies also suggest that theprogram has helped to increase the relevance of primary education evenin poor rural communities, thereby reducing dropout and repeater ratessubstantially.

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7.07 The Government contends that in urban areas the access toprimary education is sufficiently good hence the priority should be onaddressing qualitative issu s, viz., low student achievement and highdropout and repeater rates. To remedy these deficiencies, theGovernment has already implemented a policy of flexible gradepromotion combined with systematic evaluation of achievementthroughout the year (instead of the previous practice of basingpromotion on a single exam given once a ye-ar'. It also intends tointroduce an expanded program of teacher training and a new system ofdistributing textbooks free of charge.

Assessment

7.08 TIn Government's strategy to address the issues ofilliteracy and low educational attainment among the poor throughuniversalization of primary education is sound and appropriate. InColombia's context, the goals appear achievable within a reasonablyshort time, though the program may realistically require longer thansix years. The estimated investment costs totalling some US$138million are not prohibitive. Furthermore, incremental recurrent costsgenerated by the program (salaries for additional teachers, in-servicetraining and textbook replacement), estimated at US$18 million shouldnot be difficult to absorb if the Government is prepared to redirectbudgetary resources away from higher education.

Improving Access in Urban Areas

7.09 An expansion in the coverage of the "escuela nueva' programshould help meet the needs of poor rural communities. Moreover,improvements in the curricula and quality of instruction woulddefinitely help make primary education more relevant for children inpoor communities country-wide where there is sufficient access.Nonetheless, data from the 1985 census show that 6.8Z of urbanhouseholds in Colombia have school-age children not attending school.While the problem is not adequately documented, the Bank's PovertyMission in March 1988 noted that this lack of schooling is causingserious concern in poor urban communities. It is caused, for the mostpart, by the difficulty of access, compcunded by the families'economic circumstances. Demand for primary education is high in poorcommunities in urban areas. However, the nearest public schools areeither too crowded to accommodate all the children, or too far awayfor poor households to afford the cost of the daily commute. In manyparts of the country, poor communities pool their funds to hiretea:hers and establish their own schools, or escuelas de banco." TheBank Mission observed many such schools in Cartagena and Cali.However, the results are generally unsatisfactory because classesgenerally take place in one of the parents' homes, lacking desks orblackboards. The instructors are not certified and do not haveteaching materials. Moreover, since these scaools are not officiallyaccredited, those students completing an equivalent of primaryeducation in lescuelas de banco' have no chance of advancing to theformal secondary school system.

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7.10 The Government could approach this issue in one of two ways.First, the Ministry of Education could try to standardize thecurricula and the quality of instruction in 'escuelas de banco" bydistributing free textbooks and offering periodic training forinstructors who teach in these classrooms. Students from theseschools might be integrated into the formal system upon passing aspecified examination, and over time, the Ministry might accreditthose schools that meet the minimum necessary standards.Alternatively, the Ministry might authorize the establishment offormal primary schools in poor urban neighborhoods that now lack easyaccess. As a first step, the Government is planning to undertake astudy in seven largest cities to compile information on 'escuelas det.'.co. Furthermore, under the Bank-financed Second Primary SchoolSdE ,r Project, the Government proposes to finance the provision ofte.tbooks, furniture and teacher training for these non-formal schoolsin poor urban communities.

School Feeding Program

7.11 Enrolling children in school entails significant sacrificesfor poor households. Even if tuition and textbooks were free,2

primary education requires out-of-pocket expenditures on food, clothesand transport. Where children work to augment the family income,education has an opportunity cost in terms of earnings foregone. Aneffective way to enhance the incentives tor school attendance by poorchildren and simultaneously help improve their nutritional and healthstatus is to expand the existing school lunch program administered byICBF.

2/ Since 1983, the Ministry of Education has had a policy of distributingfree textbooks which was not implemented vigorously. However provisionof free textbooks is a prominent feature of the 'Educacion Basica ParaTodos' program.

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Table VII-4s School Feeding Programs

Programs Number of Beneficiaries7 to 14 age group(In Thousands)

1987 1988 1989 1990--actual-- ----planned----

Lunch Program 109 109 500 1,000

Reinforced Refreshment 235 235 235 235(Bienestarina withLight Snack)

Refreshment 806 806 806 806(Only Bienestarina)

TOTAL 1,150 1,150 1,541 2,041

Source: ICBF

7.12 Out of 5.2 million children in the 7 to 14 age groupenrolled in school, only 3? (109,000) are covered by ICBF's schoollunch program. :n addition, some 7? (235,000) are served "reinforcedrefreshments' (Bienestr.riia and snack) and 23Z (807,000) given onlyBienestarina. The Government is now considering expanding the school

lunch program to cover 1 million children. The best approach is togradually introduce school restaurants across the country withmunicipalities providing the buildings, furniture and personnel; ICBFsupplying Bienestarina and staples, such as powdered milk, pasta,flour, potatos, sugar and vegetable oil; and the local communitiescontributing meat, eggs, vegetables and fruit. This extended lunchprogram, expected to cover nearly 20? of school children in the 7-14

age group by 1990, should be targeted at the poorest communities andpreferably implemented in close coordination with other nutritionprograms to permit monitoring of nutritional impact.

C. Continuing Basic Education

7.13 The Government's continuing basic education initiative is

targetted at adults and young people (12 and older) who either did notreceive any formal education or had failed to finish primary school.It is essentially an extensior of ongoing adult education programssuch as literacy training and non-formal primary and post-primary

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education. Currently, there are some 200,000 persons enrolled invarious formal adult education programs, both in communities andthrough the mass media, and an additional 100,000 persons participatein non-formal basic education courses organized by the NationalVocational Training Institute (SENA) and various non-governmentalorganizations. In the past, programs of adult education have tendedto be fragmented with little coordination among executing agencies andnot much effort has been made to evaluate their impact. TheGovernment should therefore take a good look at the ongoing programs,monitor their impact, evaluate costs and constraints, identify areasfor expansion and find ways of strengthening the linkages betweenformal primary education and basic adult education. Furthermore, careshould be taken to fully integrate the continuing basic educationprogram with the community development and organization components ofother 'War on Poverty' interventions.

7.14 Nonetheless, the Government does not accord adult educationhigh priority, allocating only 3Z to 42 of total educationexpenditures to the scontinuing basic education" component as comparedwith 332 to 372 for universal primary education. We strongly supportthis general approach. In the longer run, it would be much more cost-effective to concentrate on the formal primary education system as theprincipal vehicle for disseminating literacy, and for imparting basicconmunication and production skills to the poorer segments of thepopulation.

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ANNEX I

Social Programs of Past Administrations

National Food and Nutrition Plan (PAN) - Integrated Rural Dev-lopmentProgram (DRI)

1. The Government in 1975 introduced an innovative multi-sectoral strategy for combatting malnutrition consisting of anutrition plan (PAN) and an integrated rural development program(DRI). The objectives were to raise the incomes and nutritionalstatus of low income groups in the country, defined very broadly bythe policy makers as *the poorest 50? of the population'. The DRIcomponent was essentially production-oriented although substantialamounts were spent on investments in social services to improvewelfare in rural communities. Furthermore, DRI was not strictlypoverty-oriented in so far as it was targeted at those 'minifundista'farmers having the potential to develop into 'agriculturalentrepreneurs'. It sought to increase production and incomes of some240,000 beneficiaries in eight departments through the provision ofagricultural support services (credit, inputs such as fertilizers andpesticides, extension, marketing) and investments in relatedinfrastructure.

2. The PAN component was directed more narrowly at the "poorest302' of the rural and urban population including landless farm handsand small farmers whose circumstances could not qualify them astargets for DRI-related credits and investments. Its approach was tointegrate into a single package, where feasible, community healthservices, provision of potable water and latrines, nutritioneducation, promotion of family gardens ('Pancoger') and distributionof subsidized processed food. Two special features were the use ofthe community health post as a delivery mechanism for nutritionservices and the use of coupons to supply subsidized processed food topregnant and nursing women, infants and malnourished pre-schoolchildren through commercial channels. As part of PAN, the Governmentbegan in 1976 to install a national system of primary health services.The food coupon system entitlement and distribution were to operatethrough the health post in low-income communities targeted forinclusion in the nutrition program. Community health workers('promotoras') were to certify women and children for coupons to beissued at health posts where weight-height measurement were to betaken regularly for all infants and malnourished pre-school children.

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3. The impact of the PAN-DRI program was significantparticularly on the production side. Over the 1975-1979 period,activities in DRI areas resulted in some 100,000 tons of foodproduction and sizeable productivity improvements in a variety ofcrops ranging from a 5OZ increase for wheat to a 30Cr increase forcassava. Furthermore, the use of food coupons led to a three-foldincrease in the production of five basic processed food items.2

Outside of food production and supply, the most noteable achievementof the program was the impetus it provided to the development of anascent primary health care system through the construction andupgrading of community health posts and training of health promoters.While the effectiveness of primary health care came to be seriouslyhampered by the chronic shortage of recurrent funding, some 420,000beneficiaries targeted by newly trained promotoras received foodcoupons through the health system. Another noteable accomplishment ofPAN was the successful campaign it ran to promote breast feeding.However, these positive results notwithstanding, it has provenimpossible to quantify the impact of PAN-DRI on the nutritional statusof the target population. This is attributable tc -he absence of anadequate information management and evaluation system. The Governmentdid not show much commitment to monitoring and evaluation under theprogram nor did it pay much attention to the development of a systemof nutrition surveillance.

4. In retrospect, if an effective surveillance system had beenput in place to quantify the nutritional impact of PAN, thepolicymakers could have decided whether or not to continue with theprogram strictly on its technical merits. However, this did nothappen. The political support for PAN (and particularly for itssubsidized sub-components) began to wane in the early eighties asColombia's economic environment deteriorated, and the program came toan abrupt end in 1983 when the Betancur administration came intopower. The new Government took the view that the nation'smalnutrition problems could be more effectively addressed by expandingfood production through rural development programs and rapidly phasedout the food coupon and Pancoger components.

5. The DRI component subsequently developed into an independentand separate rural development program which today serves smallfarmers in some 360 municipalities across the country. While it isthe single most important program in agricultural development

1/ These assessments are based on Tomas Uribe: Colombian Food Coupons:What they used to be," Report of the World Food Programme--Governmentof the TNetherlands Seminar on Food Aid, The Hague, 1983 and the WroldBank: 'Colombia--Integrated Nutrition Improvement Project (Loan1487-CO) Project Completion Report,* August 1S86.

2/ These items included soya flour, corn flour, texturized vegetableprotein, vegetable mixes, and noodles.

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(essentially, it is a multi-sectoral rural development programinvolving credit, inputs, extension and marketing components as wellas provision of social infrastructure), its focus today, as in theearlier years, is not on the poorest of the rural poor. Thebeneficiaries of DE continue to be selected from among the relativelybetter off smallhol. rs.

Naticnal Rehabilitation Plan (PNR)

6. Launched in the last year of the Betancur administrationwith the aim of bringing about economic progress and security to theunderdeveloped and remote parts of the country dominated by guerillagroups, PNR has been carried over into the present administration. Infact, this program is an integral part of this Government's povertyalleviation strategy, and a major vehicle for addressing ruralpoverty. It seeks to improve incomes and welfare of poor and largelylandless tenant farmers through the creation of economic and socialinfrastructure (e.g., roads, small-scale irrigation, sanitation,educational and health facilities); provision of credit andagricultural support services; and redistribution and titling of land.PNR now covers approximately 250 municipalities in 13 departments andtwo intendencias. It is extremely well funded; during 1987-1990, itis expected to account for 17? of total investments in agriculture (orCol$ 46,630 million in 1987 prices).

Low Income Housing ("Vivienda Popular")

7. The development plan of the Betancur administrationidentified construction as the lead sector for reactivating thenation's sagging economy, and in keeping with its overall strategy ofachieving growth with equity, gave high priority to expanding housingsector activity, and more importantly, to reorienting housingproduction toward lower income groups. The plan called forconstruction of 400,000 new urban housing units during 1983-1986--anunprecedented level of output almost double that of the previous fouryear period. Of this total, almost two-thirds were to be low-cost"viviendas populares' affordable for households earning about twominimum salaries.3 The plan also promoted self-help construction asa way of reducing production cost by maximizing the labor inputs ofthe low-income beneficiary families.

8. A Government housing agency, Land Credit Institute (ICT),was given principal responsibility for producing low income housingunits, though other institutions in the housing sector, namely,

3/ These houses were the so-called wlow income solutions' that cost up to1300 UPACs (See footnote 4 below). Other categories consisted of "lowerincome solutions" costing between 1300-2800 UPACs (252 of total plannedhousing output); "middle income solutions* costing between 2800-5000UPACs (9Z of output) and "high income solutions" costing over 5000UPACs (3? of output).

Central Mortagage Bank (BCH), National Savings Fund (FNA), Housing andLoan Associations (CAVs) and 'Cajas' were also expected to participatein financing low cost housing. A financial strategy to support thelow-income orientation of the housing plan required that the CAVsdirect 252 of their resources to lower cost housing with loans of lessthan 2500 UPACs,4 and lend 3Z of their assets to ICT at below-marketinterest rates--a significant allocation given that CAV deposits hadgrown to 10 of GDP. Direct budgetary support was limited to about 8Zof overall investments by ICT.

9. The Government also adopted credit policies designed to makehousing more affordable to low income groups. Firstly, the downpayment on a house--often amounting to 30I of total purchase price--was thought to represent a serious obstacle to access. To addressthis issue, the Betancur administration eliminated the down paymentrequirement on houses costing less than 1300 UPACs. Secondly, highinterest rates were perceived as limiting the effective demand forfinancing of housing from lower income groups. The Government soughtto subsidize low income groups with a system of interest rates thatdiffered by types of housing as well as by agencies. This arrangementled to segmentation in the provision of formal sector low-incomehousing between Government and the private sector by creating twoproduct lines that are equal in type and cost but charging verydifferent prices to beneficiaries. In fact, four distinct low incomehousing markets emerged during this period, consisting of (a) thepublic sector (ICT) with a subsidized 202 interest financing; (b) theformal private sector with commercial financing at 31Z interest; (c)informal self-help construction which catered to a significantlypoorer population than the ICT's client group but received relativelylittle formal sector financing during 1983-1986; and (d) the apirata"development, which like other informal sector operations, constituteda large pool o,r family savings in the form of housing investment.

10. From a production standpoint, plan targets were fullyachieved. Of the total output of about 400,000 new units producedduring the 1983-1986 period, about 63Z or 250,000 had a unit cost ofless than 1,300 UPACs and well over half of these were produced byICT. At the same time, a critically important lesson derived from the'vivienda popular" experience is that it is very difficult to meet theshelter needs of the poorest segments of the urban population throughpublic housing programs in the formal sector. ICT's design standardswere too high to qualify their constructiorn as 'low income.' Thevividenda popular" units were sold typically to households earningmore than two minimum salaries, a 8l1wer middle income' groupbelonging to the second and third quintiles of income distribution.On the other hand, the poorest 25Z of Colombia's households earn lessthan one minimum salary. Many, moreover, do not have fixed monthlyincomes that would allow them to maintain regular mortgage payments.

4/ UPAC is an abbreviation for *Unidad de Poder Adquisitivo Constante", ora unit of constant purchasing power. The term also refers to a systemof indexed savings used in housing finance by CAVs.

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11. Not only was this program inefficiently targeted, the creditpolicies adopted to support 'vivienda popular, caused widespreadnegative rspercussions in tiLe financial sector. Differential interestsubsidies, applied rather ran^domly, helped to reinforce marketsegmentation without helping the truly needy. Similarly, the policyof exempting down payment on a house exposed lenders to the risk ofdefault by borrowers without significantly improving thebeneficiaries' access to housing.5 The CAVs and BCH have bothexperienced repayment problems on 202 to 302 of their 'viviendapopular* loans. Above all, the impact of a heavy dependence onborrowing, subsidized interest rates and poor cost recovery has beenmost devastating on the finances of ICT. Arrears affect 502 of ICT'sloan portfolio and more than one--half of its annual budget must now beallocated to debt servicing cost. Its financial position has beenweakened to such an extent that even under the most optimisticassumptions portfolio revenues will not be able to meet debt serviceobligations on existing indebtedness for many years to come. Thepolicy of 'no down payment' has since been rescinded, but the damagethat has been done to ICT finances is serious. A major financialrestructuring of this agency--including substantial injections ofadditional Government capital--will be necessary before ICT is able toundertake low-income housing programs in the future.

National Child Survival and Development Plan ('Supervivir')

12. The National Child Survival and Development Plan, morecommonly known as 'Supervivir", is a vertical health awarenesscampaign designed to reduce morbidity and mortality in children underfive years from common childhood diseases and complications. It wasstarted jointly by the Ministries of Health and Education as a pilotprogram in four departments in August 1984 but has now been extendedto cover the entire country. The Plan in essence consists of thetraining of volunteers drawn from among students (eighth to tenthgrade) and community leaders (e.g., smadres comunitarias'6 ) and fromthe Red Cross, the National Police, the Scouts, and the CatholicChurch to serve as health monitors ('vigias de saluds), who in turnvisit families in poor communities to offer instruction designed topromote health awareness and prevention of common diseases. Thisinstruction centers on seven topics, namely, perinatal mortality,acute diarrLoeic diseases, acute respiratory infections, immune-preventive diseases, malnutrition, psycho-affective development andaccidents.

I/ A 1982 study by the National Center for Construction Studies (CENAC)demonstrated that families which could afford monthly payments on a'viviendas popular' unit would have little problem mobilizing asubstantial down payment.

6/ Volunteer mothers who participate in the 'hogares de bienestarinfantill program under the supervision of ICBF. (See Chapter 4).

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13. The Supervivir Plan has been highly successful in mobilizinglocal resources and organizing community-level training in the basicsof nutrition and disease prevention. It is estimated that some 1.5million families are covered by Supervivir. Unfortunately, however,the expansion of this Plan has not been accompanied by commensurategrowth in the primary health infrastructure. The very success of thehealth awareness campaign has led to a growing demand for healthservices in poor communities, which cannot be met by the country'sinadequately financed and poorly staffed primary health care system.(See discussions on problems facing Colombia's primary health care inChapter 5.)

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ANNEX IIThe Evolution of the'War on Poverty'

(PLPGE)

Its Origin

1. The 'War on Poverty, (PLPGE) was an outcomae of PresidentBarco's 1986 electoral platform that gave top priority to theeradication of poverty within the context of sound macroeconomic andexternal debt management. This Government has explicitly made povertyalleviation the main theme of its four-year developLent plan,emphasizing the importance of the social development as an integralcomponent of Colombia's sustained longer-term economic growth.

2. The PLPGE defines as 'the absolute poor' some 402 of thecountry's population whose household incomes do not allow them toenjoy life's basic necessities. The President's Office was chargedwith the task of formulating the plan. The basic policy framework wasapproved by the National Planning Council (CONPES) in December 1986.Six months later, the presidential advisors came up with arecommendation for a multi-sectoral plan that included the followingcomponents:

(a) Primary Health for All ('Salud Basica para Todos");(b) Improvement of Family Welfare ("Hejoramiento del Hogar");(c) Basic Education for All (^Educacion Basica Para Todos");(d) Low Income Housing ('Asentamientos Humanos");(e) Provision of Basic Goods ('Suministro de Bienes Basicos");(f) Small-farmer Development ('Desarrollo Integral Campesino');

and(g) Employment Generation ('Generacion de Empleo').

In its original proposal,1 PLPGE was no more than a verygeneral statement of policies and a listing of a large number ofprograms and sub-programs without any ranking of priorities amongthem. There was no clear strategy for translating its policyframework into a concrete program of action. The targetting of thebeneficiaries (i.e., 40Z of the population) was too broad and general,and the proposal did not define any logical relationship between theindividual p.ogram components and the target groups that they wereintended to serve.

1/ Presidencia de la Republica: Plan de la Lucha contra la PobrezaAbsoluta v Para la Generacion de Empleo--Informe al Senor Presidente dela Republica, Diciembre de 1986-Junio de 1987, Bogota.

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Evolution of Prouram Content

3. Subsequently. the National Planning Department and lineministries and agencies took over the responsibility for detailed workon program formulation. Despite the multi-sectoral nature of theoriginal proposal, PLPGE components are now beginning to take on thecharacateristics of independent and separate sectoral programs to beprepared and implemented as part of each ministry/agency's regulardevelopment programs. Comments on the content and the status ofpreparation of PLPGE components follow.

4. Health. In Colombia, healtb services are provided by thenational public health system, the Social Security Institute and othersocial security agencies and the private sector. Given that thefinancially troubled social security system serves only a small groupof middle-class salaried workers in the formal sector, and the privatesector is designed for the relatively wealthy, public healthrepresents the only system of health care available to low incomegroups. Furthermore, some 25Z to 302 of Colombians (including most ofthe poor) have no access to health services whatsoever. The objectiveof the 'salud basica para todos" component is to extend health care tothe poorest segment of the population. It proposes to universalizeprimary health services by (a) strengthening and expanding the scopeof the public health system and (b) extending the coverage of socialsecurity from the present 16? to some 802 of the population. The plancomponent also guarantees free primary health care for the poorest andmost vulnerable groups that cannot obtain health insurance. Thiscomponent is long on policy and short on specific action. It has notprogressed much beyond the discussion stage largely because, while thegoals are desirable, the enormous institutional and financialmanagement problems 'n the health sector impede action. Many in theGovernment agree that its objectives are not within reach in the nearfuture.

S. Nutrition and Family Welfare. The i.sjoramiento del hogar'component seeks to meet the basic needs of the most vulnerable groupsthrough activities designed to improve the nutritional status ofchildren, to take care of the aged, to treat drug addiction and toorganize recreational activities for youngsters. It is worth pointingout that all these comprise ongoing programs of the ColombianInst'tute of Family Wellbeing (ICBF), an agency affiliated with theMinistry of Health that has primary responsibility for nutrition andfamily welfare programs in the country. The main focus, however, willbe on expanding the coverage of 'Hogares de Bienestar Infantil', anongoing program of day-care centers based in poor communities forsupplementary feeding of children in the 0 to 6 years age group. Thisprogram now covers nearly 400,000 children, primarily in urbancenters.

6. Education. Presently, in Colombia, some 302 of school-agechildren in rural and 102 in urban areas do not have access to primary

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iducation. Studies have demonstrated close correlation betweenpoverty and illiteracy, and between poverty and lack of schooling.Mireover, repeater and drop-out ratios are shown to be particularlyhigh among children from poor families. To remedy this situation, theccaponent leducacion basica para todosl seeks to bring basiceducational opportunities within the reach of the poorest familiesthroegh universal formal education by extending its coverage in ruralareas, and improving its quality and efficiency nation- wide. Thepreparation of this component is at a fairly advanced stage, and thenew policy of automatic promotion (to reduce repeater rates) isalready in place. The Goverrment's main focus will be on increasingcoverage in rural areas through adaptation and dissemination of the'Escuela Nueva" model.2

7. Shelter. Within the context of guiding urban growth andensuring efficient and intensive use of urban space, thewasentamientos humanos' component proposes to improve the housingconditions of the urban poor primarily through the (a) upgrading ofsubstandard housing and provision of basic services (water,sanitation, etc.), and to a lesser extent through the (b) constructionof new low-income housing in urban areas with adequate infrastructureand (c) renovation of urban areas that are already built up but under-utilized. It also involves credit schemes, legalization of titles forproperty in areas of invasion and in 'piratal developments, andorganization and training of local self-help groups to undertake muchof the upgrading and construction. Progress on this component hasaeen slow, probably due to the absence of a Oparent ministryg toundertake detailed planning and programming, and the lack of agreementon which Goverment institution should have the primary reponsibilityfor overseeing the -mplementation of this component. The PLPGEproposal of the President's Office assigned primary responsibility tothe financially troubled ICT which must first undergo majorrestructuring before it can undertake new operations.

8. Increased ARricultural Production and Food Security. ThePLPGE approaches the issue of food security for low income groups fromboth the supply and demand context. Firstly, on the supply side, thecomponents Osuministro de bienes basicos' and 'desarrollo integralcampesino' seek to ensure low income households' access to essentialfoodstuffs by expanding agricultural production, promoting rural agro-processing and microenterprises. On the demand side, both componentsaim at lowering the price of foodstuffs and other essential consumergoods by rationalizing marketing arrangements (e.g., reducingmonopolistic and oligopolistic practices in order to lower middlemenprofits). The Idesarrollo integral campesino' component whichinvolves agricultural extension, rural credit and small irrigationschemes is being prepared by the Ministry of Agriculture and inprinciple will be located in impoverished rural areas not includedunder PNP. projects. The 'suministro de bienes basicos' component isno more than a listing of very general proposals and the Governmenthas made little progress beyond establishing an inter-agency committeeon food security.

21 The 'escuela nueva' program is based on the principle of multi-gradeinstruction and has been introduced to some 8,000 schools in ruralareas with great success.

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9. Employment Generation. This component seeks to increasethe productivity and income of unskilled and semi-skilled workers inthe urban informal and traditional agriculture sector through jobcreation, skill training, and extending the coverage of unemploymentinsurance to independent workers in the informal sector. It alsoproposes introduction of a unified regulatory framework to protect thewelfare of workers both in the inoderr and informal sectors. Thiscomponent appeared in the original PLPGE document but very little workhas been done to operationalize the proposals that are sti'l veryvague and unfocused. No cohesive strategy has yet emerged to addressthe basic employment and labor issues underlying poverty.

10. Community Participation. One unifying theme that emergesclearly in the document of the President's Office is communityparticipation. In line with the initiatives currently underway ondecentralization, PLPGE emphasizes the role that communities need toplay in defining their problems, maring their needs known to localauthorities, and collaborating with public agencies to design and tomanage basic needs services. This is an important consideration,particularly because there exists in poor neighborhoods across thecountry a strong tradition of self-help and organized communityaction. However, with the sole exception of 'mejoramiento del hogar",a mechanism for tapping community resources has not been clearlyspelled out in program design. It is critical that in the process offormulating individual components, Government agencies do not losesight of the contributions that community groups can make at each stepof the way from planning to implementation.

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References

Luis Ignacio Aguilar y Juan Jose Perfetti: 'Distribucion delIngreso y sus Determinantes en el Sector Rural Colombiano', pp 123-155.Coyuntura Economica, Abril 1987.

Oscar Altimir: "The Extent of Poverty in Latin America*(World Bank Staff Working Papers No. 522), 1982.

Ulpiano Ayala: 'Hogares, Participacion Laboral e Ingresos',El Problema Laboral Colombiano, Informes de la Mision Chenery (ed. JoseAntonio Ocampo y Manuel Ramirez), 1987.

R. Albert Berry and Ronald Soligo (ed.) Economic Policy and IncomeDistribution in Colombia, Westview, 1980.

Mauricio Carrizosa: 'Evolucion y Determinantes de la Pobrezaen Colombia, El Problema Laboral Colombiano, Informes de la Mision Chenery(editores, Jose Antonio Ocampo y Manuel Ramirez), Bogota. 1987.

Alan Carroll: 'Pirata Subdivisions and the Market forResidential Lots in Bogota" (World Bank Staff Working Paper No. 435), 1980.

Corporacion Centro Regional de Poblacion et als Encuesta dePrevalencia Demografia y Salud, 1986.

Lauchlin Currie: Evaluacion de la Asesoria Economica a los Paisesen Desarrollo--el Caso Colombiano, 1984.

DANE: Censo Nacional de Poblacion v de Vivienda, 1985.

DANE: Boletin de Estadistica 411 (Especial: Magnitud de laPobreza en Colombia), Junio 1987.

DANE: Boletin de Estadistica 414 (Especial: Las Mujeres Jefesde Hogar en Colombia), Septiembre 1987.

DANE-DNP-PAN-DRI: Encuesta Nacional de Alimentacion.Nutricion Y Vivienda, 1981.

FEDESARROLLO: Debates de Coyuntura Economica--Plan de Luchacontra la Pobreza, Marzo de 1987.

Gary S. Fields: 'How Segmented is the Bogota Labor Market?'(World Bank Staff Working Paper No. 434), 1980.

Andrew Marshall lamert 'Bogota's Unregulated Subdivisions'(World Bank Staff Working Papers No.734), 1985.

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Hike Hopkinss Alternatives to Unemployment andUnderemployment: the Case of Colombia, Westview, 1985.

Hugo Lopez, et als uSector Informal: Entronque Economico yDesconexion Juridico-Politica con la Sociedad Moderna', El Problema LaboralColombiano, Informes de la Mision Chenery (ed. Jose Antonio Ocampo y ManuelRamirez), 1987.

Rakesh Mohan: 'The People of Bogota--Who They Are, What TheyEarn, Where They Live" (World Bank Staff Working Papers, No.390), 1980.

Rakesh Mohan: 'Measuring Urban Malnutrition and Poverty: ACase Study of Bogota and Cali, Colombia' (World Bank Staff Working Papers,No.447), 1981.

Rakesh Mohan: 'The Determinants of Labour Earnings inDeveloping Metropoli: Estimates from Bogota and Cali, Colombia* (World BankStaff Working Papers No.498), 1981.

Rakesh Mohan: 'The Poor of Bogota' (World Bank Staff WorkingPaper No. 635), 1984.

Rakesh Mohan: "An Anatomy of the Distribution of Urban Income-A Tale of Two Cities in Colombia' (World Bank Staff Work. Paper No. 650)1984.

Rakesh Mohan: Work. WaRes, and Welfare in a DevelopingMetrovolis--Consequences of Growth in Bogota, Colombia, A World BankResearch Publication, 1986.

National Planning Department: (Documento DNP) 'PoliticasGenerales De Lucha Contra La Pobreza Y Para La Generacion De Empleo",Revista de Planeacion Y Desarrollo, Sep-Dec.1986.

Alvaro Reyes Posada: 'Evolucion de la Distribucion delIngreso en Colombia", El Problema Laboral Colombiano. Informes de la MisionChenerv (ed. Jose Antonio Ocampo y Manuel Ramirez), 1987.

Alvaro Reyes Posada: 'Ingresos Laborales Y Empleo', El ProblemaLaboral Colombiano. Informes de la Mision Chener, (ed. Jose Antonio Ocampoy Manuel Ramirez), 1987.

Ernesto Rojas Morales: Plan de Lucha Contra la PobrezaAbsoluta v Para la Generacion de Empleo. Infornie al Senior Presidente de laRepublica, Diciembre de 1986 - Junio de 1987.

Ernesto Rojas Morales, et al: Pobreza Absoluta--CincoProgrmas Bandera, Editora Guadalupe Ltda, 1987.

Marcelo Selowskys Who Benefits From Government Expenditure? A CaseStudy of Colombia, A World Bank Research Publication, Oxford UniversityPress, 1979.

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Amartya Sen: "Levels of Pove-ty--Policy and Change (WorldBank Staff Working Papers No. 401), 1980.

Tomas Uribes 'Colombian Food Coupons: What they Used To Be'Report of the World Food Programme--Government of the Netherlands Seminaron Food Aid, The Hague 1983.

Tomas Uribe Mosquera: 'Revaluacion de la InsequridadAlimentaria en Colombia', pp. 157-193, Covuntura Economica, Abril 1987.

Miguel Urrutia: Winners and Losers in Colombia's EconomicGrowth in the 1970s, A World Bank Publication, 1985.

Eduardo Wiesner Duran, et al: Finanzas Intergubernamentales enColombia (Informe de la Mision de Finanzas Intergubernamentales), 1981.

The World Bank: 'Bank Operations in Colombia--An Evaluation"(Report No. Z-18), May 25, 1972.

The World Bank: 'Colombia Health Sector Review' (Report No.4141-Co), December 15, 1982.

The World Bank: 'Colombia: Economic Development and Policy underChanging Conditions" (A World Bank Study), 1984.

The World Bank: 'Colombia: Social Security Reviews' (Report No.6540-Co), September 23, 1987.

The World Bank: 'Country Economic Memorandum' (Report No.6624-Co), October 15, 1987.

7Z' 75' 74- 7i 70' U

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