Document of The World Bank Report No: ICR00001069documents.worldbank.org/curated/en/459161468246908156/pdf/ICR10690... · The World Bank Report No: ICR00001069 ... Emergency Demobilization

Document of The World Bank

Report No: ICR00001069

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-36410, TF-50023)

ON A

CREDIT

IN THE AMOUNT OF SDR48.1MILLION (US$60 MILLION EQUIVALENT)

TO THE

STATE OF ERITREA

FOR AN

EMERGENCY DEMOBILIZATION AND REINTEGRATION PROJECT

September 28, 2009

Human Development 1 Eastern Africa Country Cluster 2 Africa Region

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

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CURRENCY EQUIVALENTS

(Exchange Rate Effective June 2, 2009)

Currency Unit = Nakfa 1.00 Nakfa = US$ 0.06502 US$ 1.00 = Nakfa15.38

FISCAL YEAR

January 31 – December 31

ABBREVIATIONS AND ACRONYMS

BA Beneficiary Assessment BDS Business Development Services CBR Community Based Rehabilitation CFW Cash For Work DCA Development Credit Agreement DS Demobilized Soldiers DTF Demobilization Task Force EA Environment Assessment ECDF Eritrea Community Development Fund EDRP Emergency Demobilization and Reintegration Program EOP End of Project ERP Economic Reform Program GoE Government of Eritrea HAMSET HIV/AIDS, Malaria and TB Control Project IBRD The International Bank for Reconstruction and Development ICR Implementation Completion Report IDA International Development Agency IDPs Internally Displaced Persons IGA Income Generating Assistance ILI Intensive Learning Initiative IP Implementing Partners ISR Implementation Status Report ISS Interim Support Strategy KPI Key Performance Indicators M&E Monitoring and Evaluation MDTF Multi Donor-Trust Fund MIS Management Information System MOD Ministry of Defense MOLHW Ministry of Labor and Human Welfare MOU Memorandum of Understanding MTR Mid-Term Review

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NCDRP National Commission for the Demobilization and Reintegration Program OM Operational Manual PDO Project Development Objectives PPF Project Preparation Facility PRSP Poverty Reduction Strategy Program SMCP Savings and Micro-Credit Program SWC Soil and Water Conservation TSN Transitional Safety Net TSZ Temporary Security Zone UNMEE United Nationals Mission in Ethiopia and Eritrea WFP World Food Program

Vice President: Obiageli Katryn Ezekwesili

Country Director: Johannes Zutt

Sector Manager: Christopher J. Thomas

Project Team Leader: Suleiman Namara

ICR Team Leader: Ida Manjolo

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ERITREA Emergency Demobilization and Reintegration Project

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design ............................................... 12. Key Factors Affecting Implementation and Outcomes ............................................ 103. Assessment of Outcomes .......................................................................................... 134. Assessment of Risk to Development Outcome ......................................................... 175. Assessment of Bank and Borrower Performance ..................................................... 186. Lessons Learned ....................................................................................................... 207. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 22Annex 1. Project Costs and Financing .......................................................................... 23Annex 2. Outputs by Component ................................................................................. 24Annex 3. Economic and Financial Analysis ................................................................. 31Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 32Annex 5. Beneficiary Survey Results ........................................................................... 34Annex 6. Stakeholder Workshop Report and Results ................................................... 39Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 40Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 42Annex 9. List of Supporting Documents ...................................................................... 44

MAP

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A. Basic Information

Country: Eritrea Project Name: Emergency Demobilization & Reintegration

Project ID: P073604 L/C/TF Number(s): IDA-36410,TF-50023

ICR Date: 10/05/2009 ICR Type: Core ICR

Lending Instrument: ERL Borrower: GOVERNMENT OF ERITREA

Original Total Commitment:

USD 60.0M Disbursed Amount: USD 70.7M

Revised Amount: USD 59.9M

Environmental Category: B

Implementing Agencies: NCDRP

Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: Effectiveness: 08/08/2002

Appraisal: 05/21/2001 Restructuring(s): 12/23/2005

Approval: 05/16/2002 Mid-term Review: 03/31/2005 07/16/2005

Closing: 12/31/2005 12/31/2008 C. Ratings Summary C.1 Performance Rating by ICR

Outcomes: Moderately Satisfactory

Risk to Development Outcome: Substantial

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Moderately Satisfactory

Quality of Supervision: Moderately SatisfactoryImplementing Agency/Agencies:

Satisfactory

Overall Bank Performance:

Moderately SatisfactoryOverall Borrower Performance:

Moderately Satisfactory

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C.3 Quality at Entry and Implementation Performance IndicatorsImplementation

Performance Indicators

QAG Assessments (if any)

Rating

Potential Problem Project at any time (Yes/No):

Yes Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Moderately Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

General agriculture, fishing and forestry sector 2 5

General public administration sector 8 4

Micro- and SME finance 12 12

Other social services 73 73

Vocational training 5 6

Theme Code (as % of total Bank financing)

Conflict prevention and post-conflict reconstruction 25 30

Gender 13 15

HIV/AIDS 13 13

Improving labor markets 25 27

Vulnerability assessment and monitoring 24 15 E. Bank Staff

Positions At ICR At Approval

Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo

Country Director: Johannes C.M. Zutt Makhtar Diop

Sector Manager: Christopher J. Thomas Arvil Van Adams

Project Team Leader: Suleiman Namara Wim H. Alberts

ICR Team Leader: Ida Manjolo

ICR Primary Author: Ida Manjolo

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F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The objective of the Project was to consolidate macroeconomic stability in the Borrower#s territory and contribute to the economic recovery in the country through: (a) a first phase of demobilization of about 60,000 soldiers; (b) provision of reinsertion support to the Demobilized Soldiers; and (c) the support in phases of the social and economic reintegration of the Demobilized Soldiers over a period of 3 to 4 years; and (d) the mobilization and strengthening of the capacities of the Borrower#s ministries, departments, private sector firms, community organizations, and other local agencies and entities participating in the implementation of the Project in order to improve the efficiency and effectiveness of the delivery of services to Demobilized Soldiers. Revised Project Development Objectives (as approved by original approving authority) The PDO was not revised. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : 60,000 soldiers demobilized by August 2005. Value quantitative or Qualitative)

Not applicable 60,000 soldiers demobilized in phase 1.

Not applicable 60,000 soldiers demobilized in phase 1

Date achieved 12/20/2005 08/31/2005 12/23/2005 12/31/2005 Comments (incl. % achievement)

100% achievement. The Project demobilized the 60,000 soldiers under Phase 1.

Indicator 2 : Number of DSs that are economically active in the business (non-agriculture) sector in either self or employment or or market wage

Value quantitative or Qualitative)

Not available 65200 DS are economically active

Not applicable 54,392


At 52% there was under achievement. For purposes of effective measurement of the indicator, the Bank team and Government understood the indicator to mean self employed DSs

Indicator 3 : Number of demobilized soldiers that are economically active Value quantitative or Qualitative)

29,858 Not available Not applicable 89,053


85%. For purposes of effective measurement of the indicator, the Bank team and the Government understood the indicator to mean DSs who were in paid employment

Indicator 4 : Number of disabled DS employed

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Value quantitative or Qualitative)

Not available Not available Not applicable 4,216


87% (3,668) of the disabled DSs were employed; of whom 2,270 (61%) were in self employment, a demonstration of social and economic emowerment.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : 85% of demobolised soldiers knowledgable of medical and predischarge orientation topics

Value (quantitative or Qualitative)

Not available 85% Not applicable 78%


At 78% against the planned 85% there was an underachievement because the demobilization processes had stopped by MTR.

Indicator 2 : 100% of demobilized soldiers have received their civilian Identity cards Value (quantitative or Qualitative)

Not available 100% of DS Not applicable 100%


All the discharded DSs received ID card and there was no discrepancy, depicting the efficiency with the task was carried out.

Indicator 3 : Eligible DSs have received the minimum of transitional safety net payments and transport and clothing allowance as per schedule


Not available

100% have received minimum TSN payments 100% have received transport and clothing allowance

Not applicable 100%


Achievement was at 100% due to the transparency and efficiency in processing the reinsertions.

Indicator 4 : Number of Demobolised soldiers receiving loans Value (quantitative

Not Available 60,000 DS Not applicable 6,483

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or Qualitative) Date achieved 12/20/2005 12/31/2008 12/23/2005 12/31/2008

Comments (incl. % achievement)

9.9% of the DSs received loans. Most of the DSs were reported to be afraid of taking the loans in case they failed to repay should the business fail (Beneficary Assessment 2008). However, of those who took the loans the repayment rate was high at 90%.

Indicator 5 : SMCP - repayment rate for micro credits Value (quantitative or Qualitative)

Not available 98% Not applicable 89%


89% repayment rate was achieved ie nine percentage points below target due to the impact of the countries economic problems that had started to negatively affect the businesses.

Indicator 6 : Number of demobilized soldiers who received one or more economic reintergration assistance; training, small credit, agricultural/non agricultural activities


Not available 83,868 DS and Community members

Not applicable 82,846


The achievement represented 98% of the target, falling short by two percentage points.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual

Disbursements (USD millions)

1 12/02/2002 Satisfactory Satisfactory 1.00 2 05/30/2003 Satisfactory Satisfactory 22.30 3 12/01/2003 Unsatisfactory Unsatisfactory 22.76 4 06/29/2004 Unsatisfactory Unsatisfactory 23.51 5 12/29/2004 Unsatisfactory Unsatisfactory 25.67 6 05/10/2005 Unsatisfactory Unsatisfactory 27.58

7 12/21/2005 Moderately

Unsatisfactory Moderately Satisfactory 45.09


Unsatisfactory Satisfactory 46.50





11 11/08/2007 Moderately Satisfactory Satisfactory 62.80 12 06/20/2008 Moderately Satisfactory Satisfactory 67.62 13 12/31/2008 Moderately Satisfactory Satisfactory 70.71

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H. Restructuring (if any)

Restructuring Date(s)

Board Approved

PDO Change

ISR Ratings at Restructuring

Amount Disbursed at

Restructuring in USD millions

Reason for Restructuring & Key Changes Made

DO IP

12/23/2005 N MU MS 45.09

There was no formal restructuring. After MTR, demobilization of soldiers was stopped due to the border challenges between Eritrea and Ethiopia. The DCA was amended after MTR to; (i) to deepen reintegration activities (which were still within the confines of the PDO); (ii) re-allocate project proceeds in line with new realities; (iii) refine project indicators including defining PDO indicators.

I. Disbursement Profile

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1. Project Context, Development Objectives and Design 1.1 Context at Appraisal

1. The Project was initiated to assist the Government of Eritrea (GoE) to respond to the devastation caused by the 1998-2000 war waged between Eritrea and Ethiopia, which was triggered by a territorial dispute along the border dividing both countries. The conflict ended with a comprehensive Peace Accord adopted in December 2000. The war caused considerable loss of human life, widespread suffering and social dislocation, and large-scale destruction of the economic base. The Peace Agreement contained provision of a peacekeeping force which would be deployed along the border between the two countries until the border was to be demarcated by a neutral boundary commission. The UN Security Council authorized the establishment of the UN Mission in Ethiopia and Eritrea (UNMEE) in July 2000. A peacekeeping force constituted of up to 4,200 personnel was deployed along the 25-km wide Temporary Security Zone (TSZ) by March 2001. 2. The humanitarian impact of the two-year-long war had been severe. Towards the end of the conflict, more than a million people were internally displaced. In the conflict areas, which normally contributed about 70% of the country’s grain production – including Gash-bark and Debub Zones, 70% of the people had to relocate. In addition, the sub-region suffered a drought in 2000 and an estimated 75,000 Eritreans and Ethiopians of Eritrean origin were deported from Ethiopia to Eritrea. In 2001, about 1.76 million people living in the rural area were dependent on food assistance. The establishment of the TSZ allowed the return of Internally Displaced Persons (IDPs) to areas within the TSZ, where they could resume their normal economic activities. 3. The war had caused economic problems, including: physical destruction of productive sector, the displacement of people, increased military spending and the mobilization of 200,000 able bodied men and women, decline in private sector activities, and loss of port revenues. In 2000, the GDP had a negative growth of -10.9%. Inflation rate in 2000 reached 19.9%. While the budget deficit had increased from 5.6% of GDP in 1997 to 48.1% in 2000. Per capita income stood at only USD 200. 4. Following the Security Council authorization to establish UNMEE peace keeping force in July 2000, the Government announced its intention to launch a demobilization and reintegration program building its design on the Government’s previous program, international experiences and best practice. In November 2000, the Government requested the Bank to provide technical assistance in the preparation of a comprehensive demobilization and reintegration program in collaboration with other development partners. The Government’s Emergency Demobilization and Reintegration Program (EDRP) henceforth referred to as Program objectives were to: (i) demobilize 200,000 troops phased over the period of 18-24 months; (ii) support the social and economic reintegration of the demobilized soldiers into their respective communities in a period of 3-4 years, including strengthening of institutional capacities of relevant government and

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local implementing partners within a two-year time frame; and (iii) support macro-economic stability. 5. At the request of the GoE, the IDA established and administered a Multi Donor-Trust Fund (MDTF) with the objective of raising grant funds from the donor community to support activities in the second and third phases of the Program. Accordingly, the EDRP was funded by the IDA and the Multi Donor Trust Fund (MDTF). The external assistance was essential in making resources available to invest in the conversion process, which in turn would produce a peace dividend and indicate the Government’s commitment to implementation of the Peace Agreement. The estimated cost of the Government’s overall program was US$ 197,243,000 (see Table 1), and the financing plan in the amount of US$197 million (see Table 2). Under the MDTF US$ 38.9 million were mobilized at the inception of the Program, while the balances were never made available by the donors who pledged. In addition, the pledges from the World Food Program never materialized. According to the WFP policy, their pledge could not be made available in the form of money as per GoE’s request. The IDA made available a credit of US$60 million representing (30%) of the total Program cost, which was earmarked for funding the Program’s first phase. 6. There are inconsistencies in the wording of the Project Development Objectives (PDOs) between the Development Credit Agreement (DCA) and the Memorandum and Recommendation of the President (MOP). The PDO as outlined in the Technical Annex was for the entire Government Program. The differently worded PDOs have been included under Section 1.2. These discrepancies in the PDO wording between the DCA and the Technical Annex should have been explained when the DCA was amended after the MTR in 2005. In addition, the PDOs were high level as they included macroeconomic stability objectives for which attribution could not be clearly established. The Implementation Completion and Results Report (ICR) covers the IDA contribution (the Project) to the Program activities based on the DCA. However, the assessment does exclude the objective of macroeconomic stabilization. Consequently, the ICR uses the PDO as spelt out in the DCA. Tables 1 to 4 are presented in order to distinguish between the Program and the Project. In the subsequent sections, the ICR concentrates on the Project achievements.

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Table 1: Program Costs by Components (in US$ Million) Component Total Percent Demobilization

9,250,000

4.7

Reinsertion (cash) 105,000,000 53.2 Reinsertion (in kind) 15,000,000 7.6 Reintegration (NCDRP) 35,000,000 17.7 Reintegration (Sector Programs) 15,000,000 7.6 Special Target Groups 2,000,000 1.0 Institutional Strengthening 1,200,000 0.6 Executive Secretariat (capital) Executive (Recurrent)

1.400,000 4,000,000

0.7 2.0

Sub-total 187,850,000 95.0 Contingency 9,393,000 5.0 Total 197,243,000 100.0 Table 2: Program Financing Plan (in US$ Million) Source First Phase Overall IDA 60 60 MDTF 5 107 Sector Programs - 15 WFP 6 15 Total 71 197

Table 3: Program Targets and Achievements by source of funds Source of Funds

Target at Appraisal End of Project Demobilization

Reinsertion Reintegration1

Demobilization

Reinsertion Reintegration

IDA 60,000 60,000 0 60,000 60,000 104,400 DS and eligible community members

MDTF 140,000 140,000 65,200 44,400 44,400 0

1 Reintegration component targeted not only DS but also eligible community members. There was no baseline prepared for community members

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7. The following were the key Program performance indicators by phase: (a). Demobilization Phase

Number of demobilization Centers established and functioning in a timely manner

Timely provision of basic services in camps (i.e. food, water, and medical services)

Demobilization completed including provision of ID cards, medical screening and PDO within 10 days per person

85% of ex-soldiers knowledgeable of medical and PDO topics 200,000 soldiers demobilized by December 2003

(b). Reinsertion Phase Timely payment of reinsertion benefits per payment schedules Less than 4% errors (most cases of double or incorrect payment) made in

reinsertion payments (c). Reintegration Phase

Average reintegration subprojects processing by the National Commission for Demobilization, and Reintegration Program (NCDRP) from application to completion within or less than 6 weeks

50,000 demobilized soldiers or families members, and 50,000 community members receiving some form of economic reintegration assistance

75% of the demobilized soldiers (DSs) pursuing economic reintegration assistance engaged in one or more of training, small credit assistance, and agricultural activities within 3 months of demobilization.

90% of demobilized disabled soldiers receiving appropriate assistance after demobilization

75% of DS have returned to the community where they were located before war

75% of DSs engaged in productive economic activities within 1 year after demobilization

(d) Savings and Micro-Credit Number of active beneficiaries Repayment rate of micro-credits and portfolio yield calculated as income

divided by the average outstanding micro-credits

1.2 Original Project Development Objectives (PDO) and Key Indicators 8. The Technical Annex described the PDO of the Government Program as: “The overall development objectives of the Governments Demobilization and Reintegration Program are to: (i) demobilize and provide reinsertion support to about 200,000 soldiers in three phases; (ii) support the social and economic reintegration of demobilized soldiers, including strengthening of institutional capacities of relevant government and local implementing partners; and (iii) support macro-economic stability”. The DCA wording of the project PDO is : “The objective of the Project was to re-establish and consolidate macroeconomic stability in the Borrower’s territory and contribute to the economic recovery in the country through: (i) complete first phase of demobilization of about 60,000 soldiers; (ii) provision of reinsertion support aimed at Demobilized Soldiers; and

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(iii) provision of support for subsequent activities, namely the social and economic reintegration of the Demobilized Soldiers over a period of 3 to 4 years; and (iv) the mobilization and strengthening of the capacities of the Borrower’s ministries, departments, private sector firms, community organizations, and other local agencies and entities participating in the implementation of the Project in order to improve the efficiency and effectiveness of the delivery of services to Demobilized Soldiers”. 9. The MOP described the Program PDO as follows: “The overall development objectives of the Governments Demobilization and Reintegration Program are to: (i) demobilize and provide reinsertion support to about 200,000- in three phases; (ii) support the social and economic reintegration of demobilized soldiers including strengthening of institutional capacities of relevant government and local implementing partners; and support macro-economic stability.” The Credit was to finance the demobilization of 60,000 soldiers which constituted the first phase of the USD 197 million overall Program. The primary benefit of the Project (first phase of the Program) was the return of 60,000 demobilized soldiers to their communities to resume their economic life. The secondary benefit was the re-allocation of resources from defense expenditures towards social and economic investments. Key Performance Indicators (KPI) in Table 4 indicates the evolution of the indicators at the Project design and as revised at the Mid Term Review (MTR). This ICR has used PDO as articulated in the DCA as discussed in paragraph 6. The ICR has also used the indicators as revised at MTR as per Table 4 below.

Table 4. Project Key Performance Indicators (KPI) Original Indicator Revised Indicators and targets at

Mid-Term Review (MTR)

Project Development Outcome

PDO indicators were available only at component level.

1. 60,000 soldiers demobilized by August 2005 2. 65,200 of DSs that are economically active in the business sector -- either self employed or earning market wage (Non agricultural activities) 3. Number of DS that are economically active 4. Number of disabled DSs that are either economically active or receive social transfers

Component

Demobilization

1. 60,000 Soldiers demobilized by December 31, 2003

2. All DSs receive HIV/AIDS counseling

- Demobilization effectively completed within 10 days per case

- 100% of DSs have received their civilian ID Cards

- 85% DSs knowledgeable of

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3. Demobilization completed including provision of identification, medical screening and pre-discharge orientation within 10 days per person

medical and pre-discharge orientation topics

- 85% of DSs receive pre-discharge orientation

Reinsertion 4. Transition Safety Nets (TSN) payments made to all eligible DSs

- 100% of DSs have received the minimum of TSN payments and transport and clothing allowances as per schedule

- Less than 4% processing error (due to double or incorrect payments) made in reinsertion payments

Reintegration 5. Number of DSs who have received economic reintegration assistance within one and two years of demobilization

6. Number of disabled DSs who have received medical rehabilitation support within six months of discharge

- % of DSs who received one or more economic reintegration assistance: training, small credit, agriculture/non-agricultural activities

- % of DSs whose self sufficiency levels improves

- % of communities whose self sufficiency improves

- % of DSs who are engaged in social community activities by gender and social economic profile

- % of DSs who are engaged in income generating activities through self employment

Savings and Micro -Credit

7. Number of active beneficiaries

8. Repayment rate for Micro-credits and portfolio yield calculated as income divided by the average outstanding Micro-Credits

- Number of DSs receiving loans - Number of DSs receiving business

development services (BDS) - Repayment rates for micro-credits

and portfolio yield calculated as income divided by the average outstanding micro credit

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification Although the PDO remained the same (i.e. not revised), the indicators were revised at Midterm Review (MTR) in 2005 as per column 3 in Table 4 above.

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1.4 Main Beneficiaries 10. The Project primary target beneficiary group was a group of 60,000 Demobilized Soldiers (DS) who were provided support to rebuild their livelihoods and resume productive economic activities. The other beneficiaries included various government ministries, departments and other agencies that participated in implementing the project. These entities were to benefit through resource transfer and capacity building. The project’s reintegration component also targeted members of the wider community in the form of micro credit programs and cash for work and employment programs.

1.5 Original Components 11. The four Project components were: (i) Demobilization, (ii) Reinsertion; (iii) Social and Economic Reintegration, and (iv) Operating Costs/Technical Assistance. The Operating Cost/Technical Assistance component is not listed as the fourth component, in the DCA and MOP, however, in the table of financing by component it is listed and allocated US$2 million, hence the ICR has included it among the component and evaluated it on the basis of its contribution to the institutional development. Component 1: Demobilization (US$1 million) 12. The component was aimed to provide support to reduce the number of military personnel through funding: (i) the initial demobilization on pilot basis of about 5, 000 soldiers to test the applicability of the demobilization procedures and processes; (ii) the preparation by the Ministry of Defense (MOD) of a clear and transparent demobilization criteria; and through the Ministry’s Demobilization Task Force (DTF), preparation of a logistics plan to ensure the smooth processing of demobilization; (iii) preparation of an information package to provide relevant information to soldiers selected for demobilization; (iv) the establishment of an independent appeals mechanism within MOD to determine appeals relating to demobilization; (v) the development of a non-transferable identification card system capable of ensuring that only eligible DSs have access to demobilization benefits; (vi) the implementation of pre-discharge orientation and preparation information materials to prepare the DSs for return to civilian life; (vii) the implementation of medical screening and voluntary testing for HIV/AIDS; and (viii) the transportation of the DSs to designated regions (zobas) in which they would take residence for registration purposes. The component also supported the collection of social economic data on soldiers slated for demobilization for use during Project implementation. Component 2: Reinsertion (US$42 million) 13. The component was to support the Transitional Safety Net (TSN) allowance valued at US$600 per capita that was to enable the demobilized soldiers (DSs) to meet their personal or family’s basic material needs. The TSN, paid in three installments, was defined as the cash equivalent of a basket of goods and services, such as household expenditure, with clothing, cooking utensils, and children’s education. The TSN was to

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be provided over a period of twelve months. As part of the TSN, the World Food Program was to provide 12 months of supplementary food support to vulnerable DSs. The TSN had two subcomponents: the Basic Transition Support, and the Enhanced Support to vulnerable groups. Component 3: Social and Economic Reintegration (US$12 million) 14. This component was to support the social and economic reintegration of the DS through provision of social and economic opportunities. In addition, it also included targeted assistance to other war-affected citizens such as displaced persons and deportees. It was envisaged that the component’s activities would promote community cohesion and economic recovery. There were special considerations for the female soldiers, disabled DSs and those with HIV/AIDS. The specific activities to be financed under social reintegration were: (i) improved access to information and raising awareness; (ii) first-line counseling; (iii) outreach and community support training of first line counselors; and (iv) strengthening capacities of second-line counselors. Under economic reintegration the following activities would be financed: (i) provision of referral services for employment and training; (ii) provision of skills development and training opportunities; (iii) access to micro enterprise support schemes; (iv) support for small scale rural development activities; and (v) employment promotion and training in construction trades. Component 4: Operating Costs/Technical Assistance (US$2.00 million) 15. The aim of this component was to support program management in the implementation of the Project in order to improve the efficiency and effectiveness of the delivery of services to Demobilized Soldiers.

1.6 Revised Components

16. The EDRP originally financed through the IDA Credit and the MDTF support, comprised three major components namely: demobilization, reinsertion, and reintegration of demobilized soldiers. At the time of the Mid Term Review (MTR), significant progress had been made with the implementation of the demobilization and reinsertion components of the first and second phases of the Program, with financing from the IDA Credit and part of the donor contributions to the MDTF. The Program overall had demobilized a total of 104,400 soldiers, of which 60,000 were demobilized under IDA funding and 44,400 under the MDTF, against the original program target of 200,000. The MDTF had also provided the lower band of transitional safety net (TSN) payments, including clothing and transport allowances covering 100% of the demobilized soldiers; the TSN transfers were made in three installment payments. However, due to a period of uncertainty of the conflict—which led to the ‘no war no peace’ stance with Ethiopia, there was a stalemate in the demobilization process. However, all development partners, including those who did not directly contribute to the MDTF, agreed with the MTR’s recommendation for the Program to strengthen support for social and economic reintegration activities. Of the funds that were made available, (US$38.9 million), about US$19.4 was cancelled, although the GOE officially requested for the extension of the

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closing date of the MDTF in time (August 1, 2005). Of the funds that were made available, (US$38.9 million), about US$19.4 was cancelled, as Government was not able to request for the extension of the closing date of the MDTF in time. Under the Credit, cost savings were identified under Categories 1B, 1-C and Works which were reallocated to the social and economic reintegration component in line with the new realities. 17. In line with MTR recommendations, the Social and Economic Reintegration component was strengthened as per the amended DCA in order to reintegrate the DSs that were already demobilized and contribute towards the achievement of the project PDO. A results based action plan was developed and agreed upon putting more emphasis and prominence to reintegration activities and resources were re-allocated accordingly. Social reintegration continued to focus on: (i) supporting the most vulnerable DS; (ii) mobilizing and supporting communities and the families of the vulnerable DS; (iii) strengthening policy coherence and synergies between social integration initiatives. Economic reintegration continued to emphasize; (i) community based rural development programs- including cash for work activities; (ii) vocational training and; (iii) micro-credit and business development services. 18. The revisions made enabled the project to ensure that the target beneficiaries were adequately supported throughout the project’s envisaged implementation processes. The Project component technical changes were approved by the Regional Vice President in line with the IDA guidelines.

1.7 Other significant changes 19. As already indicated in 1.6, the DCA was amended after MTR. The amendments included: (i) refocusing and enhancing components’ activities in line with the evolving realities on the ground, (ii) enhancing the outcome indicators; and (iii) improving performance of implementing partners through adoption of the Results based Action framework. The DCA was amended four times on the following dates: February 24, 2005, extending the closing date; December 23, 2005 DCA amendment to reflect MTR recommendations; December 17, 2007, extension of closing date; and December 11, 2008 in order to reallocate resources among Categories of Expenditure.. 20. The initial financing plan for the Demobilization and Reintegration Program was US$197 million of which the IDA provided US$60 million for the EDR Project activities. By the close of the Project, the IDA funding was in the amount of US$70.71 million due to exchange rate gains against the SDR. The amount of US$10.71 million were used to meet the scaled up activities under the Social and Economic Reintegration component as the balance of the pledges under the MDTF were no longer available as discussed under Sections 1.6. A total of SDR 64,345.14 was not used by the Project closing date and was therefore cancelled.

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2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry 21. The Government was committed to the peace process denoted by; (i) signing the peace agreement; (ii) undertaking all the actions immediately prior to and subsequent to the credit Negotiations and meeting the conditions agreed with the IDA; and (iii) the establishment of the National Commission for the Demobilization and Reintegration Program (NCDRP) by Proclamation No. 113, 2001 of April 10, 2001. 22. Key recommendations from previous Bank operations were taken on board including the following: (i) the need for full transition from demobilization to reinsertion and reintegration in order to achieve the primary project objectives; (ii) the need to provide a short term safety net to demobilized soldiers in order to facilitate a sustainable reintegration; (iii) the need to use existing implementation structures; (iv) the creation of viable long-term employment being closely linked to a conducive macroeconomic environment and restoration of the private sector confidence; (v) the importance of inclusion of psychosocial support services, awareness raising and sensitization about HIV/AIDS; (vi) the need for collection of social economic data of each individual DS; and (vii) inclusiveness of reintegration subprojects at community level being seen as vital for engendering community cohesion. 23. The EDRP design was deemed sound as a result of the following factors: (i) the Government had some experience in demobilization in the mid-1990s, following the liberation war; (ii) international best practice was available as the Bank had implemented similar projects in other countries; and (iii) there was a pilot phase within the project which allowed for a random testing of the systems and procedures put in place prior to scaling up the demobilization process. In addition, the main components of the Project were considered well designed and reasonably aligned to the PDO. 24. The design identified critical risks and mapped out minimization measures. The main external risk was the resumption of hostilities, for which the Bank had included a remedy in the legal agreement. This risk was initially considered minimal, or at least reduced by virtue of the signed peace agreement by both Eritrea and Ethiopia, and the full deployment of the UN peacekeeping forces. At the Project level, risk mitigation measures were internalized into the project, these included: (i) recruitment of highly competent staff for the National Commission for the Demobilization and Reintegration Program (NCDRP) to strengthen the human resource capacity gap found in the country, (ii) capacity building inputs for other implementing partners; (iii) mainstreaming project implementation activities within the line ministries and other existing specialized agencies; and (iv) built-in safeguards for financial management, disbursement, and procurement in the project documents as a preventive measure against possible misappropriation or abuse of project funds for military spending, and to monitor directly uses of project resources. Additionally, regarding misappropriation or uses of funds for other purposes, Government expenditures were to be monitored by the IMF as part of the consultations with Eritrea and the IDA in the context of assistance. A Management

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Information System (MIS) was developed and put in use, that increased the monitoring capacity of the NCDRP, as attested to by the Institution and Technical Assessment of the NCDRP and Implementing Partners’ Report (December 2008). 25. The main weakness in the design of Project was that outcomes indicators were not initially articulated. This was corrected at MTR. In addition there were no baseline data as this was an emergency project and most of the outcomes were only captured during implementation through the beneficiary assessments and tracer studies.

2.2 Implementation

26. Favorable Factors. A two-phased MTR was conducted in 2005 and it was informed by the MTR Issues Paper and the Independent Evaluation Report (August 2005). The MTR recommendations led to DCA amendment in order to address the operational impediments that were constraining implementation of the social and economic reintegration component. The main issues identified included: (i) capacity constraints of relevant implementing partners, such as the case of the Ministry of Education; (ii) constraints in the preparation of smaller subprojects for training and attachment of DSs; and the related appraisals; and (iii) delays in processing subprojects led to slowing down disbursements which also meant that the benefits at the receiving end by DSs was at a slow pace. The key recommendations made at MTR and following the Independent Evaluation (2005) was for the adoption of the community-based approach to the process of reintegration, in order to engender community cohesion and broader community economic gains. Another recommendation adopted at the restructuring process was the results-based action framework to guide the implementation of agreed activities with Government. The framework introduced service delivery standards, a measure which all other implementing partners (IP) had adhered as a way to attain greater efficiency. Strengthening of public works in Agriculture, and other sector program activities such as fisheries, community based rehabilitation; in the rural development sub-component was another factor that contributed to increasing the project’s impact.

26. The Government’s decision in March of 2007 to appoint the Director in the Office of the President to be responsible for the day-to-day management of the Project was instrumental to improving the implementation rate of the Project. This action enhanced the NCDRP’s institutional backing and support. The change in institutional arrangement resulted in faster decision making processes, the implementing partners being fully mobilized, and demonstrating renewed commitment for the project to achieve the development objectives. 27 Unfavorable Factors. The main unfavorable implementation issues included: (i) the ‘no war, no peace’ situation prevailing for most of the project’s implementation, affecting the efficiency with which the project was implemented. (ii) The gradual pull out of the Development Partners from the Multi-Donor Trust Fund. Following the stalemate in the implementation of the border demarcation, it had become clear that it was unlikely that demobilization could have a positive impact as envisaged during the program design. The development partners began to gradually disengage. The MDTF development

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partners were not an exception. In the course of implementation, other donors rolled back on their pledged funding for the MDTF, as the demobilization program was discontinued. This led, at MTR, to scaling down of EDRP activities of demobilization and reinsertion hence only 104,400 against the planned 200,000 DSs were achieved; and refocusing the remaining Project resources to conclude the reinsertion of the already demobilized soldiers and enhancing reintegration support activities. The Bank’s position to refocus was plausible as it took care of the raised expectations of the already demobilized soldiers by reallocating resources to reintegration activities. (iii) The drought in the 2005, during the growing season and the economic difficulties in the country have affected the positive impacts of the reintegration interventions insofar as the benefits that DSs and community members accrued from the project through the micro–credit activities have been largely eroded by the adverse effects of the crisis (source: Beneficiary Assessment December 2008).

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 28. The project’s key performance Indicators (KPIs) were refined after MTR to include PDO outcome indicators. This was important for the measurement of the program outcomes and determining whether or not the Project development objectives have been achieved. During implementation, the NCDRP commissioned two beneficiary assessments, one in 2005, and in 2008; and an institutional assessment in 2008. These studies captured some of the Project development impacts, and informed decisions at the MTR and the ICR. 29. The overall performance of the M&E during supervision was rated moderately satisfactory, particularly in monitoring the processes and outputs as summarized by the KPI Table 4 of this document. The project’s MIS was instrumental for monitoring of the DS activities at all levels, and played a valuable role in making socioeconomic data available for management decisions. However, there were some weaknesses noted in terms of the timely relaying of M&E data from decentralized project offices to the center, and from sub-project implementing agencies to the NCDRP. This affected timely reporting of the project activities. 2.4 Safeguard and Fiduciary Compliance

30. Safeguards. Overall, the project had no reported safeguards policy issues; hence it was rated satisfactory throughout the implementation stages. The project was rated as category B at the design stage mainly due to its planned support to the DSs reintegration activities that included income generating activities and the public works. The EDRP built on the Environmental Assessment (EA) that was completed in October 2001 for the Bank supported Emergency Reconstruction Program, while the EDRP’s own EA was completed six months after Project effectiveness. During the implementation there were no environmental and social issues identified, as most of the mitigation measures had been mainstreamed into the subproject cycle process.

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31. Fiduciary. At the design stage, measures were adopted to mitigate the risk that funds would be fungible and abused as discussed in Section 2.1. Therefore qualified financial management staff were recruited and hired. Audit reports were received with unqualified opinions throughout project implementation. At design, the overall Procurement risk rating assessment was fair due to the previous experience of implementing other Bank operations in the country and the effective collaborative linkages established between the NCDRP, ECDF, ERP and HAMSET. During implementation, Procurement was generally satisfactory, except in a case where IDA could not grant a “No Objection” for pesticide inputs--as these were not in line with Africa Region Pesticide Stockpile initiative. The Africa Region Pesticide Stockpile initiative provides standard guidelines on the type of pesticides allowed for acquisition and to be warehoused in bulk for future use. The Project had requested for a “No-objection” to procure pesticide in bulk for the planned agricultural activities in support of the farmer DSs and other community members. The negative effect of this was that the project was not able to provide the required input to the beneficiaries, thus negatively affecting the farm outputs. Annual post procurement reviews were carried out and recommended actions followed.

2.5 Post-completion Operation/Next Phase 32. The NCDRP was a well functioning organization. At the time of the ICR Mission in January 2009, its mandate was about to expire. Relevant staff, systems and equipment of the NCDRP had been reduced, and were earmarked to be absorbed in other government institutions, such as the Department of Social Welfare in the Ministry of Labor and Human Welfare and Ministry of Agriculture. The Government’s capacity has been enhanced through the implementation of this project because it specifically had an objective to build capacity of the implementing entities.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation 33. Relevance of the objectives is considered substantial. The objectives of the Project were still relevant to the country’s development priorities as espoused in the Government’s Draft Interim Poverty Reduction Strategy Paper (draft I-PRSP) of April 2004 particularly in the section: Pillar II: Creating Income Generating Opportunities for the poor. The IDA’s Interim Strategy Note for the State of Eritrea (Report No. 42930-ER) of May 15, 2008 which brought to the fore the following institutional development priorities: (i) support to Human Development; and (ii) support basic infrastructure was in line with the recommendations contained in the Draft I-PRSP. Through demobilization, the purpose of the project was to alleviate manpower constraints faced by government and private sector and in that way contribute to a resumption of critical economic activity.

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3.2 Achievement of Project Development Objectives 34. The overall rating for the development outcomes is Moderately Satisfactory. The ICR used the MOP PDO. The MOP described the program PDO and clearly articulated the project objectives as follows: The overall development objectives of the Governments Demobilization and Reintegration Program are to: (i) demobilize and provide reinsertion support to about 200,000- in three phases; (ii) support the social and economic reintegration of demobilized soldiers including strengthening of institutional capacities of relevant government and local implementing partners; and support macro-economic stability. The credit was to finance the demobilization of 60,000 soldiers which constituted the first phase of the USD 197 million overall Program. The primary benefit of the project (first phase of the program) was the return of 60,000 demobilized soldiers to their communities to resume their economic life. The secondary benefit was the re-allocation of resources from defense expenditures towards social and economic investments. The amended DCA indicators were also used. PDO 1: Demobilize 60,000 Soldiers by August 2005. Rating: Satisfactory. 35. The IDA supported Project effectively to demobilize the targeted 60,000 soldiers. The MIS data indicates that the complete demobilization cycle with the issuance of individual Identity Cards, and orientation provided at the pre-discharge medical and HIV/AIDS procedures took an average of five days to complete a case out of the planned ten days. There are no indications that any of those specific individuals that have been demobilized under the Project have been remobilized. PDO 2: Provision of Reinsertion Support to the Demobilized Soldiers. Rating: Satisfactory. 36. The rating is satisfactory because the Reinsertion TSN payments were seen to be successfully managed; with 100% of the DSs receiving their due payments within the scheduled timeframe (source: Independent Evaluation 2005). The TSN payments were to be paid within the Band of US$300 – US$600 over a period of three months. The DSs were paid at the lower band, ie US$300. A survey on the utilization of the reinsertion cash payments indicated that 69% was used for sustaining households basic needs, 9% for helping family and 6% on children’s education, paying house rent 3%, dwelling improvements 2%, and 1% for each category: savings in bank accounts, given to spouse/partner, given to parents, meet costs for getting married, 2% for other uses, and 0% was squandered. Five percent was used for investment, pointing to the fact that the social and economic reintegration objective was important to spur the DSs economic investments. Thus the DSs were not left to destitution, the reinsertion payments were efficiently executed, as demonstrated by the percentage of error at 0.004% against the target of <4% according to the MIS data. The TSN payments clearly played an important role in the DSs’ resettlement process. The reinsertion payments accorded the DSs ability to choose where to settle either in their original home location or elsewhere. According to

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the Beneficiary Survey (2008), 45% of sample DSs were staying in their places of origin where they were taking active part in community development activities, including taking up leadership positions. This demonstrates acceptance of the DSs and cohesion within the community. PDO 3: Social and Economic Reintegration. Rating: Moderately Satisfactory. 37. At the close of the project, 85% of the DSs were employed; 52% of those employed were self-employed. 87% (3,668) of the disabled DSs were employed while 2,270 62% of the disabled DSs were self employed (Beneficiary Assessment (BA) of December 2008 and MIS data). The Project created 320,000 social and economic reintegration opportunities of which 36% were taken up by the DSs, and the rest by community members. These opportunities were reintegration projects that DSs could choose to access, funded by the EDRP through implementing partners. The opportunities included, training, micro credits employment programs and cash for work activities. The opportunities were also available to communities at large. The BA found that the DSs were at par with the counterpart community members in terms of economic status, while the female DSs and disabled DSs were economically better-off than the average person in the community. In part it is due to the DSs’ access to training facilities which enabled them to be absorbed by the job market and/or to establish themselves as self-employed, others were enabled to access credits and became self employed. The status of the DSs who settled in rural areas also changed in the positive direction as they had access to productive land and were economically active. Close to 80% of the DSs indicated that their self sufficiency had improved compared to 66% of the community members in the same target areas who had also accessed the opportunities under the EDRP. Yet against the backdrop of success, the BA found that about a third of the sample of DSs in the survey indicated that their income levels were insufficient for achieving their desired quality life as they were not able to meet their nutritional needs. Sixty four percent of the DSs were involved in social community activities demonstrating that the transition and the reintegration had been effective. PDO 4: Mobilization and strengthening of the capacities of the Borrower’s implementing agencies. Rating: Moderately satisfactory: 38. This is more of an intermediate outcome. The Institutional Assessment (December 2008) indicated that the capacities of implementing agencies were improved. The performance based agreements with implementing partners were fully executed as planned, while timely submission of reports was achieved in 93% of cases. Alignment of the NCDRP activities with sector policies through mainstreaming of project implementation into sector Ministries’ work plans, and adherence to the business standards agreed upon with the performance based action framework, brought about efficiency. This notwithstanding, adherence also came about due to the Proclamation No. 113/2001, April 10 2001 establishing the NCDRP, which stated that public sector organizations were required to cooperate in the implementation of the EDRP. These

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achievements notwithstanding, there were some weaknesses. Quarterly reports submitted to the Bank more often than not required improvements in data quality and content. IDA reviews indicated that the reports did not regularly capture outcomes of implementing agencies achievements. In addition, the NCDRP did not adequately provide feedback to the agencies based on their submitted reports. On balance, the objective of strengthening the Borrower’s agencies capacities was achieved.

3.3 Efficiency 39. Not applicable for emergency operations.

3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory. 40. The overall outcome rating is moderately satisfactory. The project had substantial relevance and impact and satisfactory efficacy. On the whole, the design of the PDOs was relevant and responded sufficiently well to the emergency situation at hand as discussed in Section 3.1. The project target of demobilizing 60,000 DS was achieved, the reinsertion component was implemented with the required efficiency and the reintegration component surpassed its overall targets. However, project implementation took three more years to be completed after its initial closing date, a long delay for an emergency project. There were shortcomings in the design of the M&E which were effectively corrected after MTR.

3.5 Overarching Themes, Other Outcomes and Impacts (a). Poverty Impacts, Gender Aspects, and Social Development 41. The following are the impacts on:

(a). Poverty: Provision of a range of support activities aimed at economic

empowerment benefited an estimated 320,000 DSs and other community members mainly through the provision of employment opportunities, public works and general access to micro credits for income generating. The public works sub-projects enhanced and increased the stock of public goods and community assets. The project also contributed to agricultural and environmental enhancement in the communities through conservation subprojects.

The project injected significant amounts of targeted cash into the urban and rural economies at a critical time through the project activities it financed, especially the TSN payments.

Through the TSN the project provided support food security not only for the DSs, but also to those that sold their wares/products to the DSs.

(b). The figures on access to employment by the DSs indicate that of male DSs, 91% were employed and that of all female DSs 74% were in employment (source: BA December 2008) which in overall is a significant achievement.

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(c). Social Development: The project contributed to enhance cohesion between the DSs and the community at large; this was due to the way the Reintegration component was revised to include the community based approach. Other noteworthy social achievements of the project are related to promotion of inclusiveness of the vulnerable DSs, i.e. HIV/AIDS infected, the disabled, the elderly and female household heads, as beneficiaries of the Project and their reintegration within their respective communities. For example, the project equipped the national orthopedic workshop and provided orthopedic support to 3,150 of disabled DS and community beneficiaries. The psycho-social counseling engendered smooth reintegration of the vulnerable DSs.

(b) Institutional Change/Strengthening 42. The implementation of the Project was mainstreamed into existing government structures and other private/public entities. There was specific focus on capacity building and enhancement, which will remain after the project’s life. The skills, proposals and appraisal templates as provided in the OM will be of benefit to similar future programs and projects, and will live beyond the life of the NCDRP. (c) Other Unintended Outcomes and Impacts (positive or negative) - None

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops (Optional for Core ICR, required for ILI, details in annexes

43. Refer to summary of the Beneficiary Assessment at Annex 5. Also Refer to the Government’s ICR at Annex 7 as it has drawn much from the findings of the Beneficiary Assessment.

4. Assessment of Risk to Development Outcome Rating: Substantial. 44. The risk to the development outcomes is considered substantial mainly because of the factor outside project control. While at community and individual levels the outcomes could be sustained all factors being equal, at national level it is more of a challenge. At community level, the involvement of local institutions (village committees) in the management of the assets created is a positive factor due to the ownership and social capital that evolved. At individual level, due to the current global economic challenges, and specific economic problems in Eritrea, it is possible that some of the project gains can be eroded. This condition is applicable for both the DSs and the community at large. 45. Capacity built at the national in the implementing partners and the NCDRP, is likely to be sustained even in the absence of the project. However, at this level, the

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challenge is in ensuring sustained financial flows to the implementing partners to in-turn sustain the gains that have been realized through the Project activities and outcomes. 46. The other challenge posing a risk to the development outcomes is the continued “no peace no war” situation between Ethiopia and Eritrea. Since the cessation of hostilities in 2000, implementation of the agreements is still at an impasse. It is clear that should conflict break out the positive impacts of the EDRP will dissipate through likely remobilization and reduction in expenditures for social services.

5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Banks performance is rated satisfactory. 47. The project was consistent and in line with the elements of the Interim Support Strategy (ISS) and the State of Eritrea’s prospects for the war to peace transition. This reflects a relatively high degree of efficiency in designing a project of this magnitude. The preparatory team studied the operating environment, articulated the possible risks and proposed mitigation measures; the design period can be considered relatively short. On the request of Government, the team mobilized other donors and UN agencies to participate in the Government program. (b) Quality of Supervision Rating: Moderately Satisfactory

48. Adequate staff time and resources were spent on supervision. The Bank clearly guided the implementation and ensured that the DCA was complied with. This is confirmed through the supervision mission documentation (i.e. Aide Memoires and Back-to-Office Reports). In addition to regular task team supervision missions in country, the Project benefited from day-to-day support from team members based in the Bank’s country office in Asmara. Moreover, the Project team included staff and expert consultants with the full range of specialties related to this Project, including financial management, procurement, community development and safeguards specialists. Donor and NGO coordination was emphasized and in some instances supervision and implementation missions were jointly organized. The Bank team prepared an Issues Paper and the encouraged the NCDRP to commission the Independent Evaluation. These two documents informed the MTR effectively and the subsequent restructuring. The Bank team quickly responded to the emerging issues including those that required the DCA amendments, budget re-allocations within components. Overall, amidst the difficult political economy environment, the team provided quality supervision which paid off by turning around a problem project in the last three years leading to the PDO being rated Moderately Satisfactory. The above notwithstanding, the Bank team lost a chance at MTR to reformulated the PDOs to remove the inconsistencies as they appear in the DCA, the MOP and the Technical Assistance.

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(c) Justification of Rating for Overall Bank Performance

49. Rating: Overall Bank performance is rated moderately satisfactory in view of intensive and quick preparation, appropriate guidance during project implementation. The above notwithstanding, the Bank team lost a chance at MTR to reformulated the PDOs to remove the inconsistencies as they appear in the DCA, the MOP and the Technical Assistance

Borrower Performance 50. The State of Eritrea prepared the project concept document, requested for the Bank support, prepared the pre-appraisal/appraisal jointly with the Bank team, negotiated and fulfilled effectiveness conditions.

(a) Government Performance Rating: Moderately Satisfactory.

51. There was high level political support for the project. This was evidenced through briefs to the Minister of National Development (who was then responsible for AID Coordination in Eritrea); by the preparation and supervision missions; meetings held with various ministers and director generals and zoba and sub-zoba political leaderships. The existence of the NCDRP duly staffed with eminent Eritreans that have given policy guidance, and the appraisal processes supported by zonal and district staff; the involvement of NGOs and the private sector in the implementation process; and the provision of all counterpart funds (amidst resource scarcity) though sometimes late; all attest to good performance of the borrower. However, the policy shift arising out of the ‘no war no peace’ situation that resulted in the halting of the Demobilization process, slowed down the zeal of a number of stakeholders even within Government resulting in prolonged implementation period (from 2002-2008 instead of 2002-2005). Subsequently, support from implementing line ministries especially for the reintegration component dwindled. It was not until the Government appointed the Director in the Office of the President as the Chairman of the Commission and renewed support by Ministries was reinvigorated. Government performance is rated moderately satisfactory.

(b) Implementing Agency or Agencies Performance Rating: Satisfactory.

52. The implementation agency’s performance is rated satisfactory. The agency prepared all the project preparatory documents, facilitated IDA missions and prepared background papers for discussions. Procedurally, the NCDRP implemented the project to the satisfaction of all stakeholders. The project outputs targets were surpassed in many instances and the IDA resources were all disbursed, there were no qualified audit reports during implementation. This notwithstanding, the NCDRP never officially emitted a criticism of the implementing agencies whenever the implementing agencies were not performing according to agreed standard as in the case of the SMCP. As many of the

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implementation partners (IPs) were government ministries and departments, they were initially slow in implementation, the NCDRP avoided creating tensions; hence it took the change in leadership of the NCDRP in February 2007 in order to improve the situation.

53. The NCDRP complied with the IDA, GoE, Zoba and community guidelines and technically guided the implementation of the project by providing on the spot answers to implementation questions. The agency commissioned a number of studies including MTR and end of project studies undertaken by both international and local consultants. It also adhered to both environmental and social safeguard policy requirements and implemented the project according to the DCA requirements. While the agency had an M&E system, it hardly reached the zoba’s and sub-zoba, and could not always produce good quality consolidated quarterly and annual reports.

(c) Justification of Rating for Overall Borrower Performance

54. Rating: Overall Borrower’s performance is moderately satisfactory based on the fact that the policy shifts arising out of the ‘no war no peace’ situation that resulted in the halting of the Demobilization process, negatively affected the project implementation. It also caused a shift among the donors, which rolled back their initial pledged support and slowed down the initial zeal of a number of stakeholders even within Government resulting in prolonged implementation period (from 2002-2008 instead of 2002-2005).

6. Lessons Learned 55. The main lessons learned with this Project, can be summarized as follows:

(a). Political Economy challenges reduced the effectiveness of the Project. The shift in political situation in the country referred to as “no war, no peace” prevailing for most of the Project implementation did not allow the GoE to demobilize all the 200,000 soldiers as envisaged, leading to the adjustments in the Project which were made during the MTR in 2005 to partially reflect the new situation. Subsequently, it could no longer be argued that the project assisted the GoE in the reduction of people under arms. It should be noted that much of the military is dominated by participation in the agriculture sector of the economy.

(b). Unrealized funding pledges can affect project implementation and results. The funding of the Program partially dependant through a Multi-Donor Trust Funds (MDTF) created a situation in which the implementation of some of the planned activities had to be cancelled due to the lack of funds. The uncertainties over the resolution of the border disputes between Eritrea and Ethiopia, which casted doubts about the continuity of the demobilization process, largely contributed to this problem. (c). Project management effectiveness is enhanced by support arising from highest level of government. A strong sense of ownership and support received from the highest levels in Government – especially in early and late

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stages of the project – contributed significantly to consistent and effective management of the Project by the NCDRP, despite difficult overall economic and political circumstances. The high level support enabled the NCDRP to mobilize other actors in the country behind common policy goals. The NCDRP was well organized, well staffed and thus able to initiate and pursue new activities once agreed upon. The GoE had managed an EDRP before in the 1990s, without much external support, this added to the strength and confidence of the Commission.

(d). Timely reinsertion payments effectively delivered immediate benefits to the demobilized soldiers. The reinsertion support in terms of cash transitional safety nets (TSN) was implemented in full and on time, and played an important role in the DS’ resettlement process. About 85 percent of the DSs benefitted from the TSN cash transfer and other services to sustain their immediate livelihoods or to support family members. This key component of the Project was from the outset foreseen to absorb more than half of the total Project costs.

(e). The social reintegration process holds the key for the overall DS reintegration process. In the initial phases of reintegration process the social acceptance of those returning from the war into the communities played a major role, even before any further reintegration support had been provided. Social reintegration was positive and showed to be essential for the success of the overall socio-economic reintegration. By the end of the project one quarter of the DSs have played a leadership role in the community where they lived.

(f). Targeting reintegration support to the DS in combination with support to the wider community – with a gradual shift towards the latter – lead to effective achievement of results. The double-tiered targeting approach of the project with regard to reintegration support was effective in reaching the DSs, while not upsetting the other war-affected groups. Following the Mid-Term Review (MTR) the targeting shifted increasingly from the individual to the communities. Utilization of existing structures for reintegration support also resulted in a broader range of project beneficiaries. The effective combination of individual and community targeting might well be somewhat specific for Eritrea, since in the initial post-war period a high level of solidarity existed and the GoE kept possible discontent in later stages under control.

(g.) Importance of using the institutional structures in place. One of the strongest pillars in the design of the EDRP was the use of existing institutions in government, public and private sectors for implementation of program activities. This led to the development of capacities in the participating institutions; it allowed for creating strong linkages to existing policies. This notwithstanding, it was not always easy for the NCDRP to enforce requirements/quality standards for sub-projects reports since they did not want to stir up tensions with other ministries.

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7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies No formal comments were received from the Borrower. However, the ICR that was sent to GoE was returned with track changes from the NCDRP. The track changes have been summarized in Annex 8.

(b) Co financiers: No comments (c) Other partners and stakeholders: No comments)

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Annex 1. Project Costs and Financing

Table 5. Project Cost by Component (in US$ million equivalent)

Components Appraisal Estimate)

Actual/Latest Estimate

Percentage of Appraisal

Demobilization 1.00

3.39

339

Reinsertion 42.00

20.28

48.9

Reintegration 12.00

44.52

371

Operating Costs/Technical Assistance

2.00 2.52 126

Total Baseline Cost 0.00 0.00

Physical Contingencies

0.00 0.00

0.00

Price Contingencies

3.00 0.00

0.00

Total Project Costs 0.00 0.00 Front-end fee PPF 0.00 0.00 0.00 Front-end fee IBRD 0.00 0.00 0.00

Total Financing Required 60.00 70.71 0.00

Table 6. Financing (in US$ million equivalent)

Source of Funds Type of Co-financing

Appraisal Estimate

Actual/Latest Estimate

Percentage of Appraisal

Borrower 0.00 0.00 .00 International Development Association (IDA)

60.00 70.71 117.85

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Annex 2. PDO Outcome Indicators and Outputs by Component Table 7: PDO Outcome Indicators

Outcome/Intermediate Indicators

Baseline Target Final

Source of Data

1. Number of demobilized soldiers by August 2005

Not available

60,000 for

phase 1

60,000 MIS database

2. Number of DSs that are economically active in the business sector -- either self employed or earning market wage (Non agricultural activities)

65,200 54,392 (52%)

MIS/ 2008 BA

3. Number of DSs that are economically active

29,858 Not set 89,053 (85%)

MIS/ 2008 BA

4. Number of disabled DS employed Not available

Not set 3,668 (87%)

MIS

56. It was noted from the Project files that the Bank team worked with the Government tried to have a clear common understanding of the indicators. Such that for the purposes of effective measurement, of indicators numbers 2, 3 and 4 above. Indicator number 2 was taken to mean number of DSs who are self employed; indicator number 3 was taken to mean those who were employed, and employment included all forms of employment; ; while indicator number three was understood to mean self employment. 57. Component 1: Demobilization Table 8: Key Performance Indicators

Component 1: Demobilization Baseline Target Source of Data Average number of days to complete demobilization process per person

Less than 10 days

5 days

NCDRP working documents

% of DS who received their civilian identification cards

Zero 100% 100% MIS database

% of DS knowledgeable of medical and pre-discharge orientation topics

Zero 85% 78% NCDRP Rapid Assessment survey 2006

% DS receiving pre-discharge orientation

Zero 85% 90% NCDRP working documents 2001

Rating: Satisfactory: While the Program target was to demobilize 200,000 soldiers, only 104, 000 were actually demobilized, however, for the IDA funded Project, the target was fully achieved. The project successfully and effectively demobilized 60,000 soldiers by December, 2004 as part of Phase 1 and 2 of demobilization. Demobilization was

25

preceded by a pilot intervention whereby 5,000 soldiers were demobilized. The pilot was part of the MDTF supported activities under demobilization policy. The purpose of the pilot was to test the systems put in place for the demobilization procedures and process. The component’s indicator targets were fully achieved as per the Table 1.1 above. The processes included: (a). Defining demobilization criteria, a logistical plan for transporting the DSs to the discharge centers; (b). Disclosing information to the selected soldiers for demobilization to avoid raising widespread expectations; setting up an appeals mechanism for use by the selected soldiers; (c). Collection of social economic data while still at their respective the duty stations in the army. This served as baseline information. It was used for triangulation to avoid errors in implementing the demobilization process; (d). Conducting the discharge process which included: transporting soldiers to the discharge centre, verification of ID’s, discharge formality which entailed handing in the military ID and obtaining a civilian ID, at which point the person became a DS, a beneficiary of the EDRP, receiving pre-discharge orientation on topic which included: a range of project benefits, implementation arrangements, orientation on health issues including HIV/AIDS, civil rights and duties; medical screening; and transportation to the community of settlement.

58. Component 2: Reinsertion

Table 9: Component Key Performance Indicators

Component 2: Reinsertion Baseline EOP Target

Final achievement

Source of Data

% of eligible DS who received the minimum of TSN payments, transport and clothing allowances

0 100% 100% MIS database

% of error made in reinsertion payments (double or incorrect payments)

0 Less than 4%

0.04% MIS database

Rating: Satisfactory. The component surpassed the target for the error margin performing at 0.004% within a target of 4%. This indicates that the process of reinsertion was carried out judiciously. Procedures were in place, there was transparency during the execution of activities and the implementing staff was diligent. This activity had two subcomponents- (i) Basic Transition Support which was payment of US$600 equivalence per person, and (ii) Enhanced support to Vulnerable Groups. Eligible DS received the minimum of transitional safety net payments and transport and clothing allowance as per schedule.

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59. Component 3: Reintegration – (Social and Economic Reintegration) Table 10: Performance Indicators for Economic and Social Integration

Reintegration (Social and Economic Reintegration)

Baseline Target Final Result

Source of Data

Total Number of social and economic reintegration opportunities available through the NCDRP

0 83,000 353,649 NCDRP and IP reports

Number of social and economic reintegration opportunities utilized by DS

0 - 127,438 NCDRP and IP reports

Rating: Satisfactory. The component performance surpassed the initial Project targets. The component provided social and economic reintegration opportunities to DSs and non-DSs alike. Of the total number of opportunities that were available, 36% were taken up by DSs. The communities where DS settled accrued substantial benefits from the Project even though they were not included according to the initial design of the Project. Restructuring of project component that took place at MTR, in which the community based approach to reintegration process was introduced. This approach accorded the receiving communities and its members as beneficiaries of the Project and at the end proved to be the right approach to the reintegration process. According to references from Aide Memoires, this was one of the components that had a slow uptake initially.

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60. Subcomponent 3(a): Social Reintegration

Table 11: Key Performance Indicators (expressed in Percents)

Social reintegration

Baseline EOP Target

Final Results

Source of Data

Percent of DS who are engaged in social community activities, by gender

Total Male

Female

0

0

64.0% 61.1% 69.7%

2008 BA

Percent of DS who are engaged in social community activities, by age

Age:

18-24 25-34 35-44 45-54 55-64 65+

0

33.3%

100%

61.4% 62.2% 74.4% 52.8% 33.3%

2008 BA

Orthopedic workshop equipped (materials and supplies available

on demand)

Established but not

equipped

Fully equipped

Fully equipped

IP reports

Number of DS and community members receiving orthopedic

services

10,000 3,150 IP reports

Number of community based workers trained

0 3,039 • 1537

new CBR workers trained • 1,502 existing

CBR workers received refresher training

3,391 • 1489

new CBR workers trained • 1902

existing CBR

workers received refresher training

MIS data

base/ IP reports

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Rating: Satisfactory. The Subcomponent has met the set targets. The underperformance by the project on community members and DSs receiving orthopedic services, 3,150 against the original target of 10,000 will be reached beyond the project life since this is a service accessed on a needs basis. Large numbers of community based rehabilitation workers will remain a vital resource in the community supporting the disabled DSs and other community members with tools to cope with life and raise their self-confidence.

61. Sub Component 3 (b) Economic Reintegration Table 12: Key performance Indicators

Economic reintegration

Baseline Progress at December

2008

Target Final Result Source of data

Remarks

Number of DS and community members participating in cash for work program

0 176,566(of which 52,970 are

DS)

113,875 190,993 MIS data base/ IP reports

* includes all opportunities for the three phases of the cash for work sub projects

Number of DS receiving grants for income generating activities

0 1174 1174 MIS data base/ IP reports

2 HIV/AIDS sub-projects

provide grants to DS

Number of DS trained in business skills Of which % are female

0 973

65%

973

65%

MIS data base/ IP reports

Measure calculated as total # of DS opportunities in Business

Cluster less # of micro-credit opportunities. NB: double-

counting error in June 2008 measure was corrected in Dec 2008 measure

Number of communities whose self-sufficiency levels improved (as a result of cash for work program)

66.0% 66.0% 2008 BA

Number of DS whose self-sufficiency levels improved (as a result of cash for work program)

71.9% 71.9% 2008 BA

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Rating: Satisfactory. All the set output indicators for the component have been achieved demonstrating the efficiency with which the project has been executed. To be noted that MIS provided a strong support for the implementation of the project. The component excelled on support for female soldiers accessing 65% of the training in business skills. A total of 44 subprojects were implemented through which the communities and the DS both accessed the job opportunities, earning a wage that enabled them to acquire basic needs for their homes, particularly improved food security. Close to 30% of the worker were DSs. The benefits of the cash for work program were not limited to participant households or DSs that earned wages, as a subproject it supported soil and water conservation to the benefit of the wider community. 62. Sub-component 3(c): Savings and Micro Credit Table 13: Key Performance Indicators

Component 4: Savings

and Micro Credit

Baseline EOP Target Final Result Source of Data

No. of DS receiving loans* 0 Not set 6,483 SMCP No. of DS receiving business development services

0 612 SMCP

Repayment rate for micro-credit*

0 98% (industry standards)

89% SMCP

Repayment rate from DS 90% SMCP Portfolio yield (calculated as income divided by the average outstanding micro credit)

15% SMCP

*In these indicators the words ‘loans’ and ‘micro-credits’ were used interchangeably. Rating: Moderately Satisfactory. The component has met the set targets. DSs accessed business development skills and accessed credits. Their repayment rate was quiet high at 90% failing by eight percentage points to reach the industry standard at 98%. The BA (December 2008), found out that the credit interest at 16% had dissuaded some cautious and risk averse DSs from accessing the available credit.

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63. Component 4: Institutional Strengthening. Table 14: Key Performance Indicators

Institutional Strengthening

Baseline EOP Target

Final Results

Data Source Remarks

Performance based agreements with Implementing Partners executed as planned

0

100% 100% MOUs and performance agreements

signed by IPs

All performance

based agreements executed as

planned Completed reports submitted on time

0 100 93% IP reports * delays reported for

four sub projects out of a total of

44 sub projects

Rating: Moderately Satisfactory. The component met the target in one of the two indicators; fell short of seven percentage points on the second indicator.

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Annex 3. Economic and Financial Analysis (Including assumptions in the analysis) Not applicable for emergency projects.

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

Table 15: Task Team Members

Names Title Unit Responsibility/

Specialty Lending

Markus Kostner Lead Sp Conflict and Development

Africa Region

Brighton Musungwa Senior Financial management Specialist

AFTQK

Per Wam Senior Social Scientist Post Conflict

Unit

Piet Goovaerts Consultant Implementation Sean Bradley Consultant MTDF MTDF

Stelios Comninos Consultant UNDP Vocational Training

Morten Ussing Reintegration Specialist UNHCR Reintegration

Anne Hertzberg Consultant NORAD Medical Rehabilitation

Wim Alberts Senior Social Protection Specialist

AFTH4 Task Team Leader

Supervision/ICR

Wim H. Alberts Senior Social Protection Specialist

AFTH1

Henry Amena Amuguni Financial Management Specialist

AFTFM

Marylou R. Bradley Senior Operations Officer AFTH3 Efrem Fitwi Procurement Analyst AFTPC Serigne Omar Fye Consultant (Safeguards) AFTH1 Maina Gathu Consultant AFCE2 Sarah G. Michael Social Development Spec. AFTCS Brighton Musungwa Senior Finance Officer CTRLP

Suleiman Namara Senior Social Protection Specialist

AFTH1

Francesco Sarno Consultant CITPO

Pamela O. Sofola Resource Management Analyst

AFTRM

Helen Giorghis Taddese Program Assistant AFTH1 Saba Solomon Tekle Executive Assistant AFMER Per Wam Senior Social Scientist SDV Moses Sabuni Wasike Senior Financial OPCFM

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Management Specialist

Samuel Iyasu Zerom Resource Management Analyst

AFTRM

Ida Manjolo Social Protection Specialist AFTH1

Cornelis Kingma Social Development Specialist,

AFTCS

Table 16: Staff Time and Cost

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands

(including travel and consultant costs)

Lending FY01 29 140.94 FY02 34 194.86 FY03 8 26.68 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00 FY08 0.00

Total: 71 362.48

Supervision/ICR FY01 0.00 FY02 0.00 FY03 12 68.05 FY04 14 73.47 FY05 27 130.43 FY06 41 175.30 FY07 32 82.77 FY08 30 88.76 FY09 7 0.00

Total: 163 618.78

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Annex 5. Beneficiary Survey Results 64. The Beneficiary Assessment Report was prepared by;

(i) The IDL Group; (ii) Nordic-Irish Development Limited; and (iii) F.A.B.I. Consulting and Trading PLC; Eritrea

Background to Assessment 65. Following the signing of the Peace Accord in Algiers, on December 12th 2000, the Government of Eritrea requested the international donor community to launch a multi-donor assessment mission in order to prepare a comprehensive demobilization and reintegration program. The mission was supported by the World Bank, UNDP, USAID, the Embassies of Denmark, the Netherlands, Norway, and funds from the Consultant Trust Funds from Belgium and Switzerland. The mission worked with the State of Eritrea to prepare the Eritrea Emergency Demobilization and Reintegration Program (EDRP). The overall development objectives of the Program were to:

(a). Demobilize and provide reinsertion support to up to 200,000 soldiers, in three phases, over a period of 18-24 months; (b). Support the social and economic reintegration of demobilized soldiers into communities including strengthening of institutional capacities of relevant government and local implementing partners; and (c). Support the macro-economic stability.

66. The Program comprised of three main components: (i) demobilization; (ii) reinsertion support in the form of a transitional safety net; and (iii) social and economic reintegration. In November 2004, as part of the midterm review process, an Independent Evaluation was commissioned after the Government and Development Partners agreed on its merit. This evaluation noted that despite the considerable and high standard of preparatory activities and capacity building supported by the Technical Assistance Program, two years after the start of Phase I demobilization, reintegration service delivery to DS had not begun, and the reintegration budget remained largely unspent. In light of this situation and continued tension along the border region with Ethiopia the Mid Term Review recommended a change of focus within the EDRP from demobilization to social and economic reintegration. 67. In order to provide a clear outline of how reintegration support would be provided in line with both national priorities and the social and economic reintegration pillars identified for the program, a results based action framework was developed. This identified a series of cross cutting objectives as well as subdividing reintegration activities into three cluster areas:

a. Rural reintegration cluster, which included a cash for work scheme, an income generating assistance scheme, and agricultural support scheme;

35

b. Vulnerable groups reintegration cluster, which included a community based rehabilitation program, a medical assistance scheme and an HIV/AIDS scheme; and c. A business (non-agricultural) reintegration cluster, which included a training program scheme.

68. Key Result Areas and Performance Indicators for prioritized sub-projects were identified for each cluster. The framework was based on realistic schedules and budget projections within the deadline of the extended program completion date and reallocated global budgets. The Development Credit Agreement was also amended to reflect the new realities and Key Performance Indicators were refined. Implementing partners were then invited to apply to conduct projects aimed at meeting these objectives, while remaining in line with national priorities. The revised approach shifted reintegration processes from the individual to the community. This shift was seen as essential to re-establish and strengthen community based structures that would ensure effective DS reintegration, and the sustainability of the communities into which they returned. 69. To date, 44 reintegration sub-projects have been developed, the majority of which have been fully completed by implementing partners. Through these reintegration sub-projects, over 251,989 demobilized soldiers and other community members, have been assisted, and benefited from a range of reintegration opportunities. Assessment Objectives 70. The current Beneficiary Assessment was commissioned by the NCDRP to identify the impact of the program’s activities on these beneficiaries, to assess the social and economic status of the demobilized soldier population vis-à-vis community members of a similar demographic strata and to determine the extent to which relevant project Key performance indicators as outlined in the Development Credit Agreement have been met. In addition, the study sought to gain a comprehensive picture of the current status of DS and the communities in which they live across Eritrea. In addition, gathering information on the impact that different programs and projects supported through the DRP have had on recipient DS and communities as well as their indirect impacts on those that have not been targeted by project. Moreover, the Assessment enhanced the understanding of the processes through which project components have been implemented, including the methodology behind processes of targeting and implementation. Assessment Findings 71. Economic Reintegration The assessment found that DS are no longer economically more vulnerable than others in the community and that the NCDRP has certainly contributed to this situation. Furthermore, specifically targeted groups such as female and disabled DS were found to be economically better off than the average Eritrean of the same class and category. The NCDRP has therefore met its economic reintegration objective. Economic participation rates are high with employment levels of DS measured at 85% (91.2% of males and 74.4% of females), which is10% higher than

36

that of the other members of the communities within which they live. In addition, this level of employment is five percent higher than that measured in the 2005 assessment. Employment levels of female DS, targeted as a vulnerable group by the Program, were measured at 73.4% that is higher than that for other women. Likewise, employment of disabled DS was extraordinarily high being just a couple of percentage points lower than the one for able-bodied DS. Furthermore, employment was also measured as being relatively stable with three quarters of employed DS remaining in the same job since their demobilization.

72. Amongst male DS, types of employment were divided evenly across those who were employees, self-employed in non-agriculture sectors, with level of self-employment in agriculture being relatively slightly lower. As for the female DS, most of which worked either as employees or were self-employed in non-agriculture sectors. Across all DS, those in younger age cohorts were more likely to be in formal employment as employees or self-employed in non-agriculture sectors as opposed to older DS who were most likely to be working in the agricultural sector.

73. A little over four in five male and nine in ten female DS worked only in one job and claimed that this provided a sufficient income to live on or was the best they could achieve. However, a little under one third of all DS claimed that their income levels were insufficient to provide a quality of life that they would like. More perturbing revelation is that a little over half of DS claimed that their nutritional levels deteriorated over the past two years and one in five claimed they rarely have sufficient food for a balanced diet. These DS were drawn across all age cohorts and were not gender differentiated, although older male DS were more likely to fall in these categories. These figures however were not DS specific with 65% of non-DS households identifying deteriorations in nutritional levels over the same period of time. It is thus important that those members of the community both DS and non-DS that are sliding towards malnutrition due to conditions of food insecurity are supported.

74. Social Reintegration. With regards to social reintegration, the assessment found that all of the NCDRP supported interventions assisted DS in achieving this goal. DS increasingly belong to more social groups and socialize more than three years ago, with one in four playing some kind of active leadership role. In addition, the overwhelming majority trusts in the rest of the community and in turn are trusted by their fellow citizens; DS are encouraged and committed to working with others for societal benefits; and feel a sense of togetherness and closeness within their communities which is reciprocated by members of the communities. Three quarter of DS also feel happy and in control of their own development, which they link closely to community development. Almost all feel valued by their communities for the contributions they make towards community development, which is reflected in community’s expressed feelings about them. These positive trends are slightly higher amongst the younger DS of both genders and consistent across the urban rural divide and the entire country.

37

75. Some social challenges remain salient as far as women and disabled DS are concerned, but this is not attributed to the fact that they are DS, but to societal perceptions and cultural prejudices, which are accorded to other similar members in society. Nevertheless, the assessment found that female and disabled DS were, when viewed relative to individuals of similar characteristics in the community, socially well integrated, a factor many attributed to improved economic opportunities and predicated on personal material realization. The NCDRP has therefore met its targeted social reintegration objective. Program Effectiveness, Efficiency and Relevance 76. The program was effective in meeting beneficiary needs by offering a package of essential services to support DS and thus prevent this social group from becoming a vulnerable category within society. Overall, the program was also relevant and efficient in meeting DS beneficiary basic needs. It is also worth noting that in addition to the benefits accrued to the receiving communities those where the DS reside, there were other direct beneficiaries within the program’s implementation structures namely: the Community Based Rehabilitation Workers who received skills training, credit and loan officers who found employment and NCDRP staff who were able to build their own capacities as well as those with whom they worked. Furthermore, community structures such as Village Committees also enhanced their social capital and development skills honed by the process and remain valuable entities with potentials to drive further development agenda in the beneficiary communities. With regard to efficiency, the deployment of implementing partners and community structures working together, strengthened by a well-thought working procedures, has enabled the program to reach a wider circle of beneficiaries. Concluding Comments 77. The NCDRP’s success with the DS social and economic re-integration can be attributed to the following factors: (a) it had at the outset a clear vision and mission statement; (b) a solid institutional structure set up; (c) a competent and committed staff; (d) an effective program implementation structure; (e) regular and systematic monitoring and evaluation of each of the components; and (f) a rich data-base supplemented by regular commissioning of relevant studies.

78. In addition, the success of the Program lies in the fact that the NCDRP fitted well into the priorities of sector ministries and zobas while engaging jointly in their efforts. NCDRP was able to raise additional resources whenever these were made available to them, enabled them to accelerate socio-economic reintegration of the DS and to reach wider circle of beneficiaries through community empowerment. By building upon the existing structures and a network of implementing partners, no parallel Project structures were created, hence costs were reduced and the sustainability of interventions was clearly increased.

38

79. In conclusion, it is important to highlight that the success of the Program was predicated on the use of a Community Based approach to Program implementation whose various interventions and support schemes were mutually supportive providing synergies to a series of benefits that reinforced one another. These benefits have not only facilitated the reintegration of DS into their communities and allowed most to be self-reliant but have also acted as both a social safety net (e.g. through the program activities: CFW, CBR, medical support, HIV/AIDS support) enabled to detect those falling into poverty and a social cargo net (e.g. through training, IGA) on which individuals can prevent entry to negative mobility spiral or begin to climb out of poverty and/or build sustainable futures.

80. It can thus be concluded that the complex operation supported by the NCDRP have been able to provide essential support to DS and prevent them from becoming a vulnerable category within society. Vulnerable groups however still exist in these communities and thus it is recommended that the experience gained from the implementation of EDRP may serve as a concrete reference on how to develop a holistic package of assistance with opportunities to other vulnerable groups within Eritrean society in the future.

39

Annex 6. Stakeholder Workshop Report and Results (if any) Not applicable

40

Annex 7. Summary of Borrower's ICR SUMMARY 81. Following the signing of the Peace Accord in Algiers, on December 12, 2000, the Government of Eritrea (GOE) requested the international donor community to launch a multi-donor assessment mission in the second half of January 2001 in order to prepare a comprehensive Emergency Demobilization and Reintegration Program (EDRP). The World Bank (WB), UNDP, USAID, the Embassies of Denmark, the Netherlands, Norway and Consultant Trust Funds from Belgium and Switzerland supported this mission. The Mission worked with the State of Eritrea to prepare the Eritrean Emergency Demobilization and Reintegration Program and the National Commission for Demobilization and Reintegration (NCDRP) was established by proclamation No. 113 of April 10, 2001, mandated to coordinate the program. 82. The Program development objectives were to (i) Demobilize and provide reinsertion support to up to 200,000 soldiers in three phases, over a period of 18-24 months; (ii) Support social and economic reintegration of demobilized soldiers into communities including strengthening of institutional capabilities of relevant government and local implementing partners; and (iii)Contribute to Marco-economic stability. The project had three main components: (i) Demobilization, (ii) Reinsertion and (iii) Reintegration. The total number of DSs covered through the program was 104,400 out of the planned 200,000. Of the 104,000, there were 5,000 who were demobilized during the pilot, while 60,000 were demobilized through the Project supported by the IDA. All DSs including the disabled DSs were reinserted and fully reintegrated into their respective communities by December 2008 when the project closed. 83. The implementation arrangements, particularly for the reintegration were mainstreamed into the existing structures in the GoE sector ministries and departments, the private sector and Non-governmental organizations in order to build capacity and enhance the implementing partners (IPs) operational skills. The IPs included the Ministry of Health, Ministry of Agriculture, Ministry of Labor and Human Welfare, Ministry of Fisheries, Ministry of Tourism, the National Union of Eritrean Women (NUEW), the Seghen Construction Company and the Eritrean Communications and Development Institute. By the end of the project, the IPs had significantly improved in their capacity and skills through the performance based action framework that was adopted during the Project implementation phase. 84. The project implemented a total of 44 reintegration subprojects creating 353,649 reintegration opportunities in the communities of which, 127,438 were taken up by the DSs. Some DSs obtained loans for income generating activities; while 973 accessed training which later enabled them to be employed in the relevant fields. Through the vulnerable cluster activities, disabled DSs and other HIV/AIDS affected persons received specialized support that helped them to gain confidence. Apart from the psychosocial support, the project rehabilitated the orthopedic centre which was accessed by 3,150 persons by the close of the project, (these included the DSs and the community members at large). Apart from these benefits accruing to

41

individuals, the project through the Soil and Water Conservation has positively contributed to arresting further environmental degradation. 85. The GoE ICR is positive on all counts of the assessment of the design and implementation of the Project, including the Program. The ratings assigned by the GoE ICR are highly satisfactory for demobilization, reinsertion reintegration and the PDO is also upgraded to highly satisfactory based on the findings of the BA.

86. Lessons Learnt. The following are listed as some of the Borrower’s lessons learnt: (a). Strong Government commitment in mobilizing key national actors behind common policy goals was a necessary pre-condition to the success of the EDRP. (b). Conducting socio-economic profile of the DSs in the early planning stages is important to design sub-projects and services that are responsive to the specific needs and characteristics of those being demobilized. (c). Improved selection criteria and appropriate training provided--based on needs and capacity of DSs, enabled the attainment of cost effective interventions. (d). Joint supervision and progress monitoring by all stakeholders was very important in implementing subprojects resulting in the subprojects’ sustainability. (e). The set of subprojects, comprised of community based rehabilitation, Soil and Water Conservation and Income Generating Activities were complementary to national and sector development plans, strategies and activities as these were mainstreamed. (f). Targeting of women soldiers was consistent with Government policies, and took into account the diversity among women, with respect to their vulnerabilities, age and capacities.

87 Sustainability. The following are the aspects of sustainability for the project

(a). Most EDRP subprojects were implemented by line ministries, and these were integrated into existing sector programs without creating parallel structures. (b). The inclusive criteria for access to the DRP reintegration programs, i.e. the inclusion of IDPs, returnees, deportees and other war affected persons at the community level, promoted community cohesion as an integral part of the broader post-war economic recovery process. (c). Capacity was enhanced in IPs and the transfer of professional manpower and expertise following the closure of the NCDRP will also contribute to the sustainability of the social and economic reintegration program. Investment in capacity building promoted added value and sustainability beyond the scope of the program.

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Annex 8. Comments of Co-financiers and Other Partners/Stakeholders

Table 17 Comments on issues raised by the Borrower ICR Paragraph Number

(a) ICR Text- with the bolded showing areas where GOE had comments or alternative text

(b) Preferred text by GoE (c) ICR Remarks

2 In 2001 about 1.8 million people living in the rural area were dependent on food assistance

In 2001 about 1.76 million people living in the rural area will require varying levels of food aid.

Adopted since it is a matter of rounding off the decimal point

3. The war had caused economic problems, including: physical destruction of productive sector, the displacement of people, increased military spending and the mobilization of 200,000 able bodied men and women, decline in private sector activities, and loss of port revenues.

The war had caused economic problems, including: the displacement of people, increased military spending and the mobilization of 200,000 able bodied men and women, decline in private sector activities, and loss of port revenues.

ICR text retained as it was in the Technical Annex

16. Of the funds that were made available, (US$38.9 million), about US$19.4 was cancelled, as Government was not able to request for the extension of the closing date of the MDTF in time.

Of the funds that were made available, (US$38.9 million), about US$19.4 was cancelled, although the GOE officially requested for the extension of the closing date of the MDTF in time (August 1, 2005).

The time was still short to allow for the extension of the child trust fund agreement that was required by the European Commission.

24. (iv) Built-in safeguards for financial management, disbursement, and procurement in the project documents as a preventive measure against possible misappropriation or abuse of project funds for military spending, and to monitor directly uses of project resources. Additionally, regarding misappropriation or

(iv) As resources are fungible, there is the risk that project resources are used indirectly for military spending or that savings from demobilization are not translated into a reduction of military expenditures. However, safeguards with regards to financial management, procurement and

No further comment, however, ICR text retained

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uses of funds for other purposes, Government expenditures were to be monitored by the IMF as part of the consultations with Eritrea and the IDA in the context of assistance.

disbursement are outlined in the project documentation to monitor direct uses of project resources. Government expenditures will furthermore be monitored by the IMF as part of its regular consultations with Eritrea and the IDA in the context of its assistance.

28. In addition, the NCDRP did not adequately provide feedback to the agencies based on their submitted reports.

Suggested deletion of the statement

No further comment, however, ICR text retained

51. However, the policy shift arising out of the ‘no war no peace’ situation that resulted in the halting of the Demobilization process, slowed down the zeal of a number of stakeholders even within Government resulting in prolonged implementation period (from 2002-2008 instead of 2002-2005). Subsequently, support from implementing line ministries especially for the reintegration component dwindled. It was not until the Government appointed the Director in the Office of the President as the Chairman of the Commission and renewed support by Ministries was reinvigorated.

Earlier during the Mid Term review it was observed that NCDRP projects were not given priority by the IPs and reintegration sub-projects were rather seen as sideline activities. This problem was further magnified by the fact that IP staff members were over-burdened with a number of other pressing commitments from their organizations. Later on IPs came on board of facilitating NCDRP sub-projects, because the approach of reintegration was shifted to community based rural development projects. Subsequently new IP’s were involved and those who were active IPs also enhanced their participation.

No comment

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Annex 9. List of Supporting Documents

1. EDRP Technical Annex Report No. T7478-ER of April 22, 2002 2. Development Credit Agreement 3641 ER of May 25, 2002 3. IDA’s supervision missions Aide Memoirs 4. ISRs and Issues MTR Paper 5. IDA Interim Strategy Note for the State of Eritrea, March 10, 2005 6. World Bank: Eritrea Country Assistance Evaluation, Report No. 28778, April 22,

2004 7. Eritrea at a Glance, September 2008. 8. Interim Poverty Reduction Strategy Paper – Government of Eritrea

April 2004 9. EDRP Government ICR December 2008. 10. NCDRP Quarterly Reports 11. Independent Evaluation, Eritrea Emergency Demobilization and

Reintegration Project August 2005 12. Beneficiary Assessment Report December 31, 2008. 13. Institutional and Technical Assessment of the NCDRP and the

Implementing Partners Report, December 22, 2008.

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MAP