2007 Sharing knowledge and lessons learned

National Background Program Background Oportunidades: Present Status Design & Operation: Key Factors Challenges faced for the consolidation of the Program Contents

Mexico is a country of sharp constrasts, rich in resources but with a large segment of the population living in poverty Has one of the highest inequality indexes in Latin America (GINI Index: 49.5% in 2006) Population:103 million (2005) GDP:$ 831,272 million USD (2006) GDP per cápita:$ 8,050 USD (2006) National Background Total population Non poor 51% Poor 49% 50 million Poor population Extreme poverty 50% In food poverty + capacities poverty: 25 million people or 5 million families

Evolution of Poverty in Mexico

Map of Poverty in Mexico

Rural and Urban Poverty Poverty is concentrated in rural areas 8.2 mill households 65% 35% 15.1 mill households URBAN RURAL DISTRIBUTION OF TOTAL HOUSEHOLDS IN THE COUNTRY HOUSEHOLDS IN EXTREME POVERTY (FOOD + CAPACITIES) 3.5 mill households URBAN RURAL 41% 2.4 mill households 59%

National Background Program Background Oportunidades: Present Status Design & Operation: Key Factors Challenges faced for the consolidation of the Program Contents

Program Background High prevalence of cronic malnutrition in under 5s in 1988 in spite of high expenditure in food distribution and subsidies: Rivera y Col., 1994 Región Lugar de residencia NSE %

Programs targeted to the poor Mexico has a long experience in these type of programs: Social supply of milk (1944) Education Promotion, Support to Rural Education, Administrative Support to the Education Sector –CONAFE– (1971) School shelters INI (Indigenous National Institute) (1972) DIF – School Breakfast Program (1975) General Coordination for the National Plan on Depressed Regions and Marginalised Groups –COPLAMAR– (1977 a 1983) Rural Supply Program (1980) Generalised subsidies to tortilla (1986 to 1998) and bread (1983 to 1998) Targeted subsidies to tortilla (1990 to 2004) Program for Greater Coverage (1996)

Inefficient Generalised Subsidies Emphasis on generalised subsidies: 63% of budget (1994) Biased coverage of food programs: 77% in urban areas & 23% in rural (1994) 59% of poor rural families without support y 28% with less than 8 USD per month (1996) (data in millions of pesos) Budget for Food Programs, 1994 Urban 9,599 (77%) Rural 2,749 (23%) General Subsidies 8,945 (63%) Targeted Subsidies 3,404 (37%) No support 59% Support 41%

Program Background PRONASOL National Solidarity Program ( ) Aimed at modifying the relationship between civil society and Govt. with an emphasis on regional development and priorising interventions on marginal areas Focused on communities Identification of beneficiaries by the community Set benefits for the community Flexible budget Local operation PROGRESA Program for Education, Health and Food ( ) Created as an alternative to PRONASOL. Its aim: promote human capital accumulation of the poor  generation of basic skills  conditional transfers Focused on households in extreme poverty, only rural Central Identification of beneficiaries x System of regional points Pre-set benefits defined centrally Pre-set budget Central Coordination OPORTUNIDADES Program for Human Development ( … Strengthening of PROGRESA w/new interventions: greater access to development opportunities + promotion of citizen participation and transparency Focused on households in extreme poverty, all contexts Central identification of beneficiaries x Sole Point System Pre-set benefits defined centrally + new initiatives and services (eg. JOP’s, AM) Pre-set budget Centralized coordination + Model de Attention & Service + Points of Service Attention to CPC + Corresponsability 12 a ñ o s 6 a ñ o s

National Background Program Background Oportunidades: Present Status Design & Operation: Key Factors Challenges faced for the consolidation of the Program Contents

Vicious circle of Poverty Families in extreme poverty experience: Greater school desertion More illnesses and malnutrition This leads, among other things, to the transmission of poverty from one generation to another, as people have no human and social capital that enables the opening of exits from poverty, including more productive and better paid jobs

The main social program of the Mexican Government created in 1997 (known as Progresa) General aim: To support families living in extreme poverty so as to strengthen the abilities and skills of their members and widen their alternatives to reach greater levels of welfare, through the improvement of their education, health and food options. In addition to contribute to the linkage of new services and development programs that foster the improvement of their socio-economic conditions and their quality of life Cash transfers linked to integrated actions within five components. Oportunidades: what is it and what does it achieve? Hunger alleviation Short term Development of abilities and linkage with other development options Long term

Strengthening of Oportunidades 2001 Working in semi-urban areas Scholarships for High School Education Recertification and density of households 2002 Working in urban areas Access to saving mechanismo thorugh bank accounts Community Promotion Committees (Committee members) 2003 Wealth component Jóvenes con Oportunidades Differentiated support schemes 2004 Inclusion of cities > 1mill inhabitants & metropolitan area General coverage and administration target 2005 NEW healthcare package: Lifeline Strategy New care strategy for malnutrition Redesign of “talks”: Workshops for health selfcare 2006 Component for senior citizens 2007 Quality + Evaluation + Focus + Supervision + Energetic Greater coverage and benefits, & improvement of its components:

Oportunidades in numbers, 2006 Households 5 mill People 25 mill (25%) Children under nutrition control 2 mill Scholars 5,298,756 Primary level 2,867,760 Secondary 1,734,643 High school level 696,353 Savings Accounts JOP’s 218,532 Senior citizens 820,000 Locations 93,164 Rural 90,162 (96.8%) Semi urban 2,500 (2.7%) Urban 502 (0.5%) Municipalities 2,435 (100%) States 32 (100%) Household beneficiaries by location size 697,838 3,440, ,253 rural semi urban 69% 17% 14%

Coverage in 80% (66,311) of locations with high or very high levels of poverty. 20% not covered is because of a lack of education and health services to certify corresponsability, so they are covered by the Food Support Program (a pre-Oportunidades program) Coverage in 97.8% of total rural locations of high and very high poverty levels with between 100 to 2,500 inhabitants. Coverage of 99.8% of total semiurban locations with high and very hight poverty levels and 97.8% of total urban locations. 76.9% of total locations where 40% or more are of indigenous origin are catered for. One in four households covered live in locations where 40% or more are of indigenous origin. Relevant coverage issues to 2006

Total budget and running costs Presupuesto 2007 (USD) 3.2 billones* % PIB (2006) 0.4% % Gasto Neto Total (2007) 1.5% Gasto operativo total* Desglose: Gasto corriente y de capital del Programa 9.05% 2.77% Costo de distribución de transferencias a Instituciones liquidadoras 2.01% Gasto operativo del sector salud 4.28% * Cifras de 2006 Estimated Actual Expenditure 2006 (CNO + Salud)

Budget and running costs Nota: Estimated closing figures for 2006 Millones USD The budget allocated to the National Coordination (NC) grew 2.3 time during the period. Every year reached the expected household coverage target. The NC allocates and distributes food & education support to the households, the running costs has reported and average of 3% during the period. mill Porcentaje

From 2001 to 2006: growth of 1,713 million USD = 194% Evolution of resources transferred

National Background Program Background Oportunidades: Present Status Design & Operation: Key Factors Challenges faced for the consolidation of the Program Contents

Design & Operation: Key Factors Targeting of resources Cash transfers as incentive to human development Integrated approach and interagency coordination at the three government levels Efficacy and efficiency in service and operation Control and permanent improvement under the Follow-up and Monitoring System and Impact Evaluation Transparency and accountability

COMPONENTES INTERVENCIONES MONTOS Alimentación$16 p/fam Apoyo en efectivo para mejorar el ingreso y la alimentación Complemento nutricional a niños menores de 5 años y mujeres embarazadas y en lactancia Salud Servicios básicos de salud preventiva Talleres de capacitación en salud y nutrición Educación $ p/becario Becas escolares crecientes desde 3º de primaria hasta 3º de Educación Media Superior (12º grado) Adultos mayores $ 23 p/adulto Apoyo en efectivo a adultos de 70 años o más integrantes de familias beneficiarias Jóvenes con Oportunidades $ 300 Entrega de una cuenta de ahorros para los becarios que concluyan el nivel medio superior Human Development: Interventions with synergies Cantidades en USD The average monthly transfer of the Program is equivalent to approximately 20% of beneficiary household income.

Corresponsability Scheme FoodHousehold Attendance to health care services HealthPerson >15 year Attendance to health self-care workshops Education All scholars (8 to 21 years old) Regular school attendance of children/youth Youth high school scholars Attendance to health self-care workshops for young people Senior Citizens Adults 70 years or older Attendance to twice a year health check- ups (Proof of life) Jóvenes con Oportunidades Youth scholars from Year 9 Finish high school before being 22 of age and formalize their savings accounts Support CORRESPONSABILITIES RESPONSIBLE

Policy decisions: Council of Ministers and Technical Committee of Deputy Ministers) Specialized body with technical autonomy: National Coordination of the Oportunidades Program Institutionalization of the program: General Law on Social Development and Administrative Ruling Presidential Decree Interagency coordination body at the three governmental levels Operational rules of the program Inter Agency Coordination

Coordination Bodies Levels of government BodyRepresentationGeneral Faculties Federal Ministers of : Treasury Social Development Health Education Social Security Institute Normativity Financing Evaluation Equity Ministry representatives of: Treasury Social Development Health Education Social Security Institute State State representatives: Social Development / Coplade Social Development Ministry Health Education Social Security Institute Comptrollership Operation Service coordination Follow-up Municipality Municipal representative: Linkage Operation support National Council National Technical Committee State Technical Committee Municipal participation

Certification of Corresponsabilities Filling of Certification Formats (400 thousand formats) Certify corresponsabilities Printing of certification formats E2 y S2 (400 thousand formats) State Coordination Health and Education State Sectors 115 thousand 17 thousandl Health units Schools &

State Points of deliver y Holder receives cash transfer and detailed receipt Central office Estimation of money transfers for 10.3 million people in 5 mill beneficiary households (=25 mill people) Paying institutions Dispersion of resources and electronic transfer of payments Permanent process of support delivery Filling of formats (400 thousand formats) State Coordination (32) (7,500 MAPs) Points of deliver y

National Background Program Background Oportunidades: Present Status Design & Operation: Key Factors Challenges faced for the consolidation of the Program Contents

Challenges for the consolidation of Oportunidades Improve the quality of services provided by the Program to the beneficiary population (internal audit, continue with evaluation). Generate an energetic subsidy component for beneficiary households. Catering for vulnerable groups (disabled, young households with small children, among others) Revision of transfer structure and amounts for greater impact, with emphasis on the education component. Multimodal intervention to take into account the regional differences in the country. Redefinition of duration of support (EDA), considering household vulnerability situation. Strengthen the link and coordination with the health and education sectors to improve coverage and quality of services requesting full corresponsability in order to achieve the gradual reduction of the existing gap as regards access. Linkage with other efforts that are being implemented at federal, state or municipal level, so as to promote focusing their development action to the population that has achieved a growth in human capital and now requires an exit from poverty.

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