2007

1. Sharing knowledge and lessons learned 2007

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

3. National Background Total population Poor population • 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) Poor 49% 50 million Non poor 51% In food poverty + capacities poverty: 25 million people or 5 million families Extreme poverty 50%

4. Evolution of Poverty in Mexico

5. Map of Poverty in Mexico

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

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

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

9. Mexico has a long experience in these type of programs: Programs targeted to the poor • 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)

10. Rural 2,749 (23%) Targeted Subsidies 3,404 (37%) General Subsidies 8,945 (63%) Urban 9,599 (77%) Inefficient Generalised Subsidies Budget for Food Programs, 1994 No support 59% Support 41% (data in millions of pesos) • 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)

11. Program Background 12 a ñ o s 6 a ñ o s

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

13. Vicious circle of Poverty 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 • Families in extreme poverty experience: • Greater school desertion • More illnesses and malnutrition

14. Oportunidades: what is it and what does it achieve? 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. Hunger alleviation Short term Development of abilities and linkage with other development options Long term

15. Strengthening of Oportunidades Greater coverage and benefits, & improvement of its components:

16. Oportunidades in numbers, 2006 Household beneficiaries by location size 3,440,909 rural 697,838 urban 861,253 semi 69% 14% 17%

17. Relevant coverage issues to 2006 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.

19. Total budget and running costs (CNO + Salud) Estimated Actual Expenditure 2006 * Cifras de 2006

20. Budget and running costs 2001-2006 • 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. Millones USD Porcentaje mill Nota: Estimated closing figures for 2006

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

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

23. 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

24. The average monthly transfer of the Program is equivalent to approximately 20% of beneficiary household income. Human Development: Interventions with synergies MONTOS COMPONENTES INTERVENCIONES Cantidades en USD

25. Corresponsability Scheme CORRESPONSABILITIES RESPONSIBLE Support

26. 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

27. Coordination Bodies National Council National Technical Committee State Technical Committee Municipal participation

28. 6 5 4 3 7 1 2 Certification of Corresponsabilities State Coordination Schools Health and Education State Sectors 115 thousand & Printing of certification formats E2 y S2 (400 thousand formats) Health units 17 thousandl Certify corresponsabilities Filling of Certification Formats (400 thousand formats)

29. 9 7 8 Permanent process of support delivery State Coordination Central office Dispersion of resources and electronic transfer of payments Filling of formats (400 thousand formats) Estimation of money transfers for 10.3 million people in 5 mill beneficiary households (=25 mill people) Paying institutions Holder receives cash transfer and detailed receipt Points of delivery 12 11 10 State (32) Points of delivery State (7,500 MAPs)

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

31. 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.

32. ¡Muchas gracias!