Do_ment of TheWorld Bank FOR OFCAL USE ONLY z~~/\I Z6~~7 2 -/ -,7FQ ReportNo. P-6001-JO MEMORADlUM ANDRECOMMDATIONR OF THE PRESIDENTOF THE INTERNATIONAL BANK FOR RECONSTRUCTION ANDDEEOPMENT TO THE EXzCUTIVE DIRECTORS ON A PROPOSED LOA IN AN AMOUT EQuIVALE TO US$20 MIION TO THE lASHENTE KINGDOM OF JORDAN FOR A ALTH MANAGEMENT PROJnC FEBRIUARY 23, 1993 .ICAIFfCHBE COPY Repol't No. :P- 6001l. JO Type: ( rPH.1 Tit.1l: HEALTH 1IANAGEN:ENTPYtOJECT At,thor: PP()UN, DENI ^ Ex t : 3 20 , kri-mr: 1 ept.. ENTPH Tbs document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not othenwse be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Do_ment of
The World Bank
FOR OFCAL USE ONLY
z~~/\I Z6~~72 -/ -,7FQReport No. P-6001-JO
MEMORADlUM AND RECOMMDATIONR
OF THE
PRESIDENT OF THE
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEEOPMENT
TO THE
EXzCUTIVE DIRECTORS
ON A
PROPOSED LOA
IN AN AMOUT EQuIVALE TO US$20 MIION
TO
THE lASHENTE KINGDOM OF JORDAN
FOR A
ALTH MANAGEMENT PROJnC
FEBRIUARY 23, 1993
.ICAIFfCHBE COPY
Repol't No. :P- 6001l. JO Type: ( rPH.1
Tit.1l: HEALTH 1IANAGEN:ENT PYtOJECTAt,thor: PP()UN, DENI ^Ex t : 3 20 , kri-mr: 1 e pt.. ENT P H
Tbs document has a restricted distribution and may be used by recipients only In the performance oftheir official duties. Its contents may not othenwse be disclosed without World Bank authorization.
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CURRENCY EOUIVALENTS(As of January 1993)
Currency Unit = Jordanian Dinar (JD)US$1.00 = JDO.6882JD1.00 US$1.453
WEIGHTS and MEASURES
Metric System
FISCAL YEAR
January 1 - December 31
ABBREVIATIONS AND ACRONYMS
FY Fiscal YearGDP Gross Domestic ProductICB International Competitive BiddingJD Jordanian DinarLCB Limited Competitive BiddingLIB Limited International BiddingMCH Maternal and Child HealthMOH Ministry of HealthNBF Non-Bank-FinancingPIU Project Implementation UnitPHC Primary Health Care Center
FOR OMCIAL USE ONLY
HASHEMITE KINGDOM OF JONDAN
HEALTH MANAGEMENT PROJECT
Loan and Project Summary
Borrower: Hashemite Kingdom of Jordan
Beneficiary: Ministry of Health (MOH)
Amount: US$20.0 Million Equivalent
Terms: Twenty years, including a five year graceperiod, at the IBRD standard variable interestrate.
Financing PlanLocal Foreign Total
------ US$ Million-------Government of Jordan 7.6%o-financiers 2.4IBRD 1.8 18.2 20.0
Total Financing Requirements 11.8 18.2 30.0
Economic Rate of Return: Not Applicable
Staff Appraisal ReDort: Report No. 11418-JO
Map: IBRD No. 24383
Tbis document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its conents may nototherwise be disclosed without World Bank authorization.
This document has a restricted distribution and may be used by recipients .nly in the performanceof their official duties. Its contents may not otherwise be disclosed without 'Vorld Bank authorization.
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MEMORANDUM AND RECOMMENDATION OF THE PRESIDENTOF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
TO THE EXECUTIVE DIRECTORSON A PROPOSED LOAN
TO THE HASHEMITE KINGDOM OF JORDANFOR A HEALTH MANAGEMENT PROJECT
1. I submit for your approval the following memorandum and recommendation ona proposed loan to the Hashemite Kingdom of Jordan for the equivalent of US$20.0 millionto finance a Health Management Project. The loan would be at the Bank's standard variableinterest rate, with a maturity of twenty years, including a five year grace period.
2. Macroeconomic and Sector Backoround. Jordan has a small population, alimited resource base and an economy that is highly dependent on the prosperity of the oil-richcountries of the region, notably through remittances from Jordanians working in oil-producingcountries, grants from these countries' goverments, and intra-regional exports. The slow-down in economic activity in the region in the mid-1 980s led to a decline in Jordar's GDP andper capita income along with large budgetary and balance of payment deficits during the latteryears of the decade. In 1989, the Government responded by implementing a structuraladjustment program supported by the Bank and the IMF. The program was being successfullyimplemented when the Gulf crisis intervened, severely exacerbating Jordan's economicdifficultles through a combination of lost grants, remittances, export and transit tradeeamings, and an influx of about 300,000 returnees from neighboring countries. Following thecrisis, the Govemment has resumed the adjustment process with the support of theintemational community. During 1992, economic performance substantially exceededexppctations. Reflecting a boom in housing construction (based on inflows of returneesavings) and a strong recovery in agriculture and manufacturing, GDP is estimated to havegrown by over 11 % and the budgetary deficit fell sharply. Over the medium term, theGovemment plans to maintain its stabilization and adjustment efforts as a basis forrestructuring the economy in order to secure sustainable long-run growth. Inter alia theseefforts include reduction of the budgetary deficit from a projected 8% of GDP in 1993 to 5%by 1998. Achieving this target will depend critically on containing the budgetary burden ofpublicly provided services, including services (such as health and education) designed tomaintain and enhance Jordan's strong human resource base. This in turn implies substantialimprovements in the efficiency of service providers such as the Ministry of Health (MOH),which is the main institutional source of primary and hospital care in Jordan, especially forpoor and vulnerable groups.
3. Jordan spends a large proportion of its GOP and government budget on healthcare (over 8% in both cases). As a result, health conditions have improved substantially overthe years and health indicators compare favorably with those for other countries in the region.Life expectancy at birth has risen from 49 to 67 years since 1965, and infant mortality hasfallen from 1 14 to 51 per 1,000 live births. Further improvements are now potentially at risk,however, owing to the combination of constraints on increased expenditures and populationpressures. Although the population growth rate has fallen substantially in recent years,reflecting a nearly 30% decline in fertility rates and a nearly 50% increase in contraception
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practices since 1977, the natural rate of increase remains a high 3.2%.
4. Continued improvements in the health status of the population are also put atrisk by qualitative shortfalls in MOH services. In the primary care sector, while access is good(with about one primary health care (PHC) center per 6,000 population), the quality ofservices is low, largely owing to inadequately trained professional and support staff, and unitcosts are high, reflecting underutilization (patients prefer treatment at hospital out-patientdepartments, whose staff are perceived to be superior). Primary care centers are especiallyweak in the area of family planning (they account for 12% of contraceptive distribution whilethey cater to over 45% of women), again reflecting poorly trained staff. The MOH hospitalnetwork suffers from inadequate facilities and maintenance, and weakness in key servicessuch as emergencies. MOH tees contribute little to cost recovery, are inequitable as betweendifferent client groups, encourage patients to bypass primary care facilities, and are poorlycollected. Finalhy, MOH is inefficiently organized and lacks the management systems andexpertise tc operate its services effectively, while its capacity to develop medium termstrategies is hampered by inadequate information systems and planning capacity.
5. Project obiectives. The project is designed to enhance the health status of thepopulation through (a) qualitative improvements in MOH primary and hospital services, and(b) reform of MOH organization, management, finances and planning capacity.
6. Proiect descriotion. The project has the following five components: (a) serviceupgrading (US$5.4 million base cost), for training PHC doctors, nurses and midwives withspecial emphasis on Maternal and Child Health (MCH)/family planning, educating thepopulation about the appropriateness of using PHCs as first points of contact for healthissues, strengthening hospital management systems and training managerial staff, andestablishing a decentralized hospital management system at a pilot site; (b) facilitiesimprovement (US$15.7 million base cost), for selectively renovating and equipping MOHfacilities at one hospital, master-planning a second and upgrading emergency services at fiveothers, and improving MOH maintenance and storage services and facilities; (c) Organizationand management (US$2.2 million base cost), for reorganization of the central and regionaladministration of MOH, decentralization of management of day-to-day service delivery, a studyof MOH staffing, training of managerial and administrative staff, and developing managementinformation systems at central, regional and facility levels; (d) financing and cost recovery(US$1.2 million base cost), for a study of early cost recovery measures (with safeguards forthe poor), helping MOH to develop a more rational fee structure over the medium term, andimproving operations of the MOH health insurance fund (in the immediate short term, theGovernment has agreed to a series of preliminary fee adjustments that will raise MOH costrecovery by 10% and establish a gradient between primary care and hospital outpatientcharges to increase utilization of PHCs as first point of contact); (e) long-term planning(US$0.8 million base cost), for studies of the health status and epidemiological trends in thepopulation, and of the feasibility of a national health insurance scheme.
7. Project Cost and Financina. The total cost of the project is estimated atUS$30.0 million equivalent. The World Bank loan will finance US$20.0 million. TheGovernment of Jordan will finance US$7.6 million, and the remaining US$2.4 million will besupplied by co-financiers, for foreign technical assistance. Retroactive financing of up toUS$0.5 million will be included for costs incurred prior to loan signing but after September 30,
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1992, on equipment and specialist services necessary for timely project start-up. ScheduleA provides a project cost breakdown and financing plan. Schedule B shows amounts andmethods of procurement and disbursement. A timetable of key project processing eventsappears in schedule C. The status of Bank Group operations in Jordan is given in scheduleD.
8. Project imDlementation. The project will be implemented by the Ministry ofHealth. A Project Implementation Unit will coordinate all project activities and report directlyto the Secretary General of the MOH.
9. Proiect sustainabilitv. The project aims at improving productivity in the MOH.Primary care upgrading will not generate additional recurrent costs. Hospital rehabilitationworks will not create additional hospital beds, and costs resulting from operating newmaintenance centers will be more than compensated by fewer breakdowns and lessequipment outage. Cost recovery measures will increase non-budgetary financing for MOHrecurrent costs, and shift demand from costlier hospital care to less expensive PHC services,thus saving recurrent costs.
10. Lessons from Drevious Droiects. Previous Bank lending experience in the sectormainly comprises a FY86 Primary Health Care project, now near completion, which hasexpanded access to preventive and primary care services. Though reasonably successful, thisproject has not significantly improved primary care delivery, mostly because its trainingcomponent was not strong enough and the implementation unit in charge of its coordinationwas not integrated in MOH's activities. Both lessons have been incorporated in the presentproject.
11. Rationale for Bank involvement. The Bank's assistance strategy includessupporting Jordan's efforts to maintain and develop social services, especially for poor andvulnerable population groups. MOH is the main provider of health care for such groups.Upgrading care while containing costs will involve major efficiency enhancement in serviceprovision. The Government has already initiated a reform process to introduce suchenhancements.
12. Aareed actions. Prior to negotiations, the Jordan Cabinet approved a by-lawgiving force to the reorganization of the MOH. During negotiations, assurances were receivedabout the timing of MOH reorganization, timely completion of studies of MOH staffing andcost recovery measures, implementation of the two long term studies financed under theproject, and commitment by the Government either to secure project cofinancing or secureother resources in a timely fashion to cover any project cofinancing not pledged bycofinanciers as of August 31, 1993. A condition of effectiveness will be that the ProjectImplementation Unit be established with terms of reference, organization and staffingacceptable to the Bank.
13. Environmental aspects. The project has been placed in environmental CategoryC: "no appreciable environmental impact". Provision has been made in the project design forthe proper disposal of sanitary, medical and laboratory waste, and for the most economicaluse of water resources.
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14. Proiect Obiective Categories. The project will improve health conditions inJordan through MOH service upgrading, while containing budgetary costs. It will easostrengthen MOH's sector management and planning capacity.
15. Prolect Benefits. Training PHC doctors and nurses and midwives will raise thequality of primary care in general, and of mother and child health/family planning services inparticular, helping to further reduce maternal and infant mortality and morbidity, and toincrease rates of contraception use. Upgrading maternity and surgical services in the largesthospital in the Northem Region will eliminate present unsanitary conditions, and help reducerates of infection, morbidity and mortality. Training emergency service staff and improvingtheir equipment will improve the treatment and reduce the adverse after-effects ofemergencies. Improved maintenance services will reduce equipment breakdowns and yiek,net savings in costs. Enhanced MOH management (including devolution of decision-makingto the regional and facility levels) will improve the quality and responsiveness to client needsof day-to-day grassroots service delivery. The sector financing component will help lay thebasis for containing public expenditure while improving equity. The project will also help MOHdevelop an efficient administrative structure and prepare a long term strategy for the sector.Finally, the project will enhance the welfare of thie poor, who are disproportionately high usersof MOH services.
16. Risks. The main risk relates to the ability of MOH to carry out its administrativereform and decentralization program in an effective and timeiy manner. In addition, improvedmanagement and grassroots service delivery will depend critically on upgrading the humanresources irvolved; and it may prove difficult to realize necessary improvements in costrecovery during a period of austerity. These risks will be mitigated by (i) the careful designof the content and timetable for MOH reorganization, Cabinet approval of the reorganizationprogram, and advance sensitization of staff to it; (ii) the project's substantial program ofmanagament and staff training at all levels and (iii) the inclusion of safeguards for the poor inthe project study of cost recovery options.
17. Recommendation. I am satisfied that the proposed loan would comply with theArticles of Agreement of the Bank and recommend that the Executive. Directors approve it.
Lewis T. PrestonPresident
AttachmentsWashington, D.C.February 22, 1993
Schedule, APage I of l
NASNUNITE KINGDOM QF JORDAN
BEAL N MNOGMEN PROJECT
Estimated Cogts and Financing Plan9* *
Estimated Proiect Costs: 1
Local Foreign Total
---- US$ Million ----
Services upgrading 3.6 1.8 5.4
Facilities improvement 5.5 10.2 15.7
MOH reorganization 0.3 1.9 2.2
Financing & Cost Recovery 0.2 1.1 1.2
Long Term Studies 0.4 0.5 0.8
Total Bass Costs: 10.0 15.4 25.4
Physical Contingencies: 1.0 1.5 2.5
Price Contingencies: 0.8 1.3 2.1
Total Project Costs 11.8 18.2 30.0
Financing Plan
Local Foreign Total
---- US$ Million ----
Government of Jordan2 7.6 0.0 7.6
Cofinanciers 2.4 0.0 2.4
IBRD 1.8 18.2 2a.0
Total Pinanaing Requiremeats 11.8 18.2 30.0
Detailed numbers may not add to totals because of rounding
2 Includes taxes and duties estimated at US$1.2 million
Schedule BPage l of 2
SEEMZTU KIGDOX OF JORDAN
HEALTH MANAGE3SENT PROJECT
Procurement Methodogogy and DisburseWntsa
(uS$ millions)
Cteory of Expendiue 1cbb LCBf Other N.B.F. TOTAL
Civ works
Consuucion ad rebabilitation 7.1 3.6 10.7
(6.8) (1.2) (e.0)
Built-in Equiment 1.8 1.8
(1.7) (1.7)
Professional Services 1.1 1.1
(1.1) (1.1)
Sub-Total' 9.0 3.6 1.1 13.7
(8.5) (1.2) (1.1) (10.8)
Medical and Offce Equipmentt 6.9 0.9 0.8 8.6
(6.4) (0.7) (0.8) (7.8)
TehnicalsIstanc 4.0 4.0
(1.5) (,1.5)L.ocal aitnkg 3.6 3.6
(0"0) W_
Total Fmancing Requiremes 15.9 4.5 5.9 3.6 30.0
Total Bank Fiancing (14.9) (1.9) (3.3) (0.0) (20.0)
NOTE: Numbers may not add up due to roundinga/ Figures in parentheses are the respective amounts financed by the
Bank Loanbf ICB: International competitive biddingC/ LCB: Local competitive biddingd/ N.B.P.: non-Bank financed (government financing of local cost items)e/ Includes procurement through ICB (US$9. 0M) and through LCB (US$3. SM)
for rehabilitation of Princess Basma Hospital, and small items ofworks (Rehabilitation of emergency departments and hospitalworkshops).
f/ Includes procurement through ICB (US$6.9M), LCB (US$0.8M) for smallamounts of equipment, LIS and direct contracting (US$0.8M) forspecialized medical equipment, computer software and proprietaryitems.
g/ Includes procurement of services of consultants according to Bankguidelines.
Schedule BPa-cr- 2 Qf21-
HASHEM NGDOM OF JQRDA
HEAL1TH MANAGEME PRJECT
Procmen Methodology and Disbursements
Category Amount L % of expendius to be finaced
Civil works 10.7 100% of foreign expenditures (1.i.f); and 52% ofthe cost of goods procured localy. -
Medical and Office equipment. 7.8 100% of foreign expenditures (c.i.f)
Local training 0.0 0% of local training costs
Technical assistance 1.5 100% of foreign expendiures
Estimad Disbursements from the Loan (US$ Million).FY94 FY95 FY96 FY97 FY98 FY99 FY2000
Peer Reviewers: Anthony MeashamSalim HabayebMichael Porter
Division Chief: Douglas H. Keare
Director: Ram K. Chopra
Regional Vice President: Caio Koch-Weser
STATUS OF BANI GROUP OPMtATIONS XI JO3BDM 8sc1, D
.,_....____.....__.... 87ATMGMT"-'BAw --- __ ......................... __._.A. 8TAEET OF BANK LO1ANS AND IDA CREDTS8
(As of December 31, Ui#2)
Amount in VS$ millionFiscal _____._.+
Loan No. Year Borower Purpose k IDA Uisbursed
1S Credits and 19 loans hmre been fully disbursed 313.75 86.13Of which 8ECU4. SM1s and Progrm Loans a) ISO.0 0.0
Ln. 2334 84 Jordan Amman Transport 25.00 4.12Ln. 2378 84 Jordan Education VI 40.00 4.57LA. 2463 as Jordan ullti-Mode Trnsport 1S 30.00 1.06LU. 2531 86 Jordan Realth 13.sO 5. 77LA. 2587 86 Jordan Utrban Dev. II 21.56 4.84Lu. 2633 86 Jordan Manpower Development 10.20 2.67Ln. 2694 86 Jordan Water Supply & 8ev. 50.00 7.06Ln. 2710 86 Jordan Power VI 27.50 1.19Lu. 2841 88 Jordan Nat, 3 Urban Dev. 26.40 18.45Ln. 2890 88 Jordan Education VII 40.00 7.99Ln. 2902 88 Jordan Phosphate Mining 31.00 1.52hn. 3106 89 Jordan Mum Ras. Dev. 73.00 80.17Ln. 3172 90 Jordan Integrated Phosphate 25.00 22.99Ln. 3306 91 Jordan Emergency Recovery 10.00 0.19lu. 3355 91 Jordan Dead Sea Ind. btp. 15.00 6.So
Total 901.73 86.13 139.49of which has been repaid 2S1.49 11.44
Total now held by Bank and IDA 650.24 74.69
Amount sold 11.53of -Ohich "epaid 11.53
B. SATEMENT OF SFC INVESTME2NTS
(As of December 31, 1992)Amount in USS million
Date Borrower Type of Business Lan i Equity Total____ ______---- _- ---------------- _.. , ...... _____
1974 Jordan Ceramic Ind. Co. 8tructural Clay Products 1.60 0.23 1.S31975/78/81/82 Jordan Fertilizer Ind.Co. Phosphatic fertilizer 79.48 8.75 68.231979/85 Jordan Lime and Solicate Building materials 2.50 1.35 3.881982 Jordan Leasing Co. Ltd. Leasing 0.00 0.29 0.291987/91 Al-nikma Pbarmaceuticals Manufacturing of DrWgs & Med. 2.19 2.02 4.211979 J8C Securities Mkt. Vin. 0.00 0.67 0.67
Total Commitments 85.77 13.31 99.08Less: Total Coummitments Repaid, Sold or Cancelled 84.84 11.28 96.13
