Project assistance completion report (PACR) : Central American shelter and urban development project (596-0143)

The report covers the period 1986- 6/30/92. Of the program's other two components, the Development Assistance (DA) loan, to finance infrastructure projects, was deauthorized on 6/5/90 due to implementation difficulties, while the HG loan is scheduled to continue until 1996. While the project did approach or exceed its numerical targets, the fact that its success was inherently linked to progress in the other two components limited its impact in terms of policy change and housing output. Only $2.4 million of the $4 million TA/training grant was actually obligated. The planned output of 177 months of TA was achieved, and the training of 1,063 professionals from national and regional agencies involved in shelter and urban development issues was satisfactory, though short of the target of 1,500. It was difficult to determine the extent to which the goal of institutionalizing improvements in participating national and regional agencies was achieved. Suspension of HG disbursements in 1990 due to concerns about the liquidity of the Central American Bank for Economic Integration (CABEI) and the deauthorization of the DA loan essentially negated the aim of expediting implementation, and also limited the project's ability to promote policy changes on the part of national governments and housing finance institutions. Nevertheless, the project was able to assist CABEI in implementing important policy and operational changes to improve its financial management, including approval by the CABEI Assembly of Governors to restructure along the lines of the recommendations contained in a 9/89 evaluation by Deloitte, Haskins, & Sells. Even though the project was not able to focus on implementation to the extent envisioned, the policy dialogue it promoted has led to support for decentralization in municipal development under subsequent projects as a means of expanding democratic governance in Central America; the policy dialogue process begun under this project needs to be continued on a long-term basis to assure the changes in attitudes which are necessary for policy and institutional changes. Approval to resume HG disbursements was received after the PACD. RHUDO/CA will adjust the median income for the two CABEI sub-programs, review other disbursement requests from CABEI, and de-obligate the remaining project grant funds. It is recommended that policy dialogue become an integral part of the HG component, and that the restructuring plan mentioned above be fully implemented.