BO Social Safety Net SAC

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Bolivia has achieved remarkable progress in social indicators since the launch of it s far reaching economic and social reforms of the early 1990s. Those reforms, sustained and deepened in successive Governments up to the present, met with early success in stimulating growth, but the economy's performance stalled after 1998, due to several causes, and poverty increased over the last 5 years. This eroded popular support for the reforms, and recently led to a serious episode of civil unrest. The Social Safety Net Structural Adjustment Credit, a two-tranche credit intended to be completed by March 2004, is a part of IDA'S immediate response package to the current social and economic crisis in Bolivia. The credit supports the Government's near term program of fiscal adjustment and provision of vital social safety net services. The credit thus will help the Government to close a financing gap in 2003, expand the provision of social services during this period of fiscal adjustment, contain erosion in social outcomes for the poor ,to address the economic underpinnings of rising social tensions. Specifically, the program would: (i) protect the budgets of nine key programs (National Emergency Employment Program, Health Reform, Epidemiological Shield for Chagas, Malaria, and Tuberculosis, Universal Health Insurance for Mother and Child Care, Expanded Immunization Program, Education Reform and Education Quality), that are subject to high volatility in investment budgets and expenditure execution and are key to the containment of further erosion of social outcomes and achievement of counter-cyclical goals of the 2003 budget;(ii) sustain and, in some areas, strengthen key social sector reforms of this Government and it s predecessors; (iii)provide technical support over the bridging period (June2003 to March 2004) to protected social safety net programs. The time horizon is a bridging period of 9-10 months, during which stability, both social and fiscal, can be restored, and the foundations for medium term reform put in place.