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 poor51%

Poor49%

50 million

Poor population

Extreme poverty

50%

In food poverty + capacities poverty:25 million peopleor 5 million families

Evolution of Poverty in Mexico

0

10

20

30

40

50

60

70

1984 1992 1996 1998 2000 2002 2004 2005

Po

bla

ció

n

(mil

lon

es)

0

10

20

30

40

50

60

70

80

Po

rcentaje (%

)

Pobres Alimentarios Pobres Capacidades Pobres Patrimonio

% Pobres Alimentarios % Pobres Capacidades % Pobres Patrimonio

Año

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

11.3

24.8

9.9

33.9

18.9

48.1

39.2

15.7

5.8

22.8

36.4

0

10

20

30

40

50

60

Norte Centro C. Mexico Sur Rural Urbana Indigena Bajo NSE NSEMedio

NSE Alto Nacional

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

Urban9,599 (77%)

Rural2,749 (23%)

GeneralSubsidies8,945 (63%)

TargetedSubsidies3,404 (37%)

No support

59%Support

41%

Program Background

PRONASOLNational Solidarity Program

(1989-1994)

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

PROGRESAProgram for Education, Health

and Food (1997-2001)

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

OPORTUNIDADESProgram for Human Development

(2002-2007…

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

H ogares en pobreza de capacidades

H ogares de m ayores ing resos

0

5

10

15

20

25

15

6

23

13

Prevalencia de d iarreas y enferm edades respiratorias severas en niñosm enores de cinco años, según condición socioeconóm ica, 1999

PORC

ENTA

JE

Diarreas Enferm edades respira toriasseveras

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 215

0.2

0.4

0.6

0.8

1.0

1.2

Asistencia escolar por edad, condición socioeconómica ylugar de residencia, 2000

POR

CEN

TAJE

EDAD

Hogares con mayores ingresos

Hogares urbanos en pobreza de capacidades

Hogares rurales en pobreza de capacidades

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

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 alleviationShort term

Development of abilities and linkage with other development options

Long term

Strengthening of Oportunidades

2001Working 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)

2003Wealth component Jóvenes con Oportunidades

Differentiated support schemes

2004Inclusion 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

3,440,909

861,253

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 2001-2006

0

200

400

600

800

1,000

1,200

1,400

0

0.5

1

1.5

2

2.5

3

3.5

Presupuesto (USD) 464 624 795 905 1,017 1,281

Gasto operativo (%) 3.2 2.9 2.4 3 2.5 2.8

2001 2002 2003 2004 2005 2006

Nota: Estimated closing figures for 2006

Mil

lon

es

US

D

• 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

Po

rce

nta

je

882.5

1,284.4

1,663.31,908.1

2,243.5

2,595.1

-

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

2001 2002 2003 2004 2005 2006

mill

on

es U

SD

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 INTERVENCIONESMONTOS

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

SaludServicios básicos de salud preventivaTalleres de capacitación en salud y nutrición

Educación$11 - 69 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

Food Household Attendance to health care services

Health Person >15 yearAttendance 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 CitizensAdults 70 years or

olderAttendance 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 CORRESPONSABILITIESRESPONSIBLE

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

governmentBody Representation General 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 CertificationFormats

(400 thousand formats)

Certify corresponsabilities

Printing of certification

formats E2 y S2

(400 thousand formats)

State Coordination

Health and Education State

Sectors115

thousand

17 thousandl

Health units

Schools

1

2 3

4

56

7

&

State

State

Points of

delivery

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)

7

8 9

101112

Points of

delivery

• 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.

¡Muchas gracias!