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• Direct election of half the national deputies in uninominal districts and of all the mayors and municipal council members
• Inclusion of any citizen over 18 years of age in the electoral registry
• Creation of the Constitutional Tribunal, which is in charge of solving competency conflicts among public powers
• Creation of the Judicature Council, which is the administrative and disciplinary arm of the judiciary system
• Creation of the Office of the People’s Defender, which is responsible for the advocacy, promotion, and dissemination of information with respect to human rights.
MINISTRIES LAW. This law, enacted in 1993, defines the composition and functions of the central government’s ministries, creating the Ministries of Human Development for the social sector, the Ministry of Economic Development for the production and service sector, and the Ministry of Sustainable Development for national planning and environmental protection. It aims to restructure the organization of the government in accordance with a development philosophy that identifies the complementarity of social and economic development. It requires a comprehensive approach to planning investments and setting priorities to enable the sustainable management and use of available natural resources.
ADMINISTRATIVE DECENTRALIZATION. The Law of Administrative Decentralization enacted in 1995 aims to strengthen administrative departments by decentralizing decisionmaking related to resource allocation for investments in the education, health, and infrastructure sectors. The responsibilities transferred to the departmental prefectures are planning, administration, control, and supervision of human resources in education, health, and social assistance, as well as investment in secondary roads, rural electrification, irrigation, and support to production, tourism, and environment conservation. Resource allocations for the departmental prefectures are made mainly from 25 percent of the effective collection of a special tax on hydrocarburants from the Departmental Compensatory Fund and from the nation’s general treasury for expenditures in health, education, and personal welfare services.
POPULAR PARTICIPATION. The main objective of the Popular Participation Law, enacted in 1994, is to bring the state closer to the people by enabling citizens’ participation in decisionmaking.
The law recognizes autonomous municipal governments in urban and rural areas that are responsible for local development and social infrastructure. Their resource base consists of a transfer of 20 percent of the internal tax collected by the national government. These resources are distributed among municipalities in proportion to the size of their populations; municipalities also have the right to retain the income from local taxes. The law recognizes the organizations and associations of indigenous peoples, peasant communities, and neighbor associations as representatives of the civil society before the state. The law creates mechanisms for their participation in the identification of needs and setting priorities for investments, as well as in the planning, execution, and administration of municipal services. Vigilance committees are recognized in each municipality; they represent their grassroots organizations and supervise and control the performance of municipal administrations to balance urban demands with rural demands and to ensure the appropriate use of municipal resources.
Economic Reforms The economic reforms enacted under this sweeping national reorganization included laws that privatized government-owned companies, safeguarded consumers, and changed the social security and pension laws for the elderly and disabled.
The Social Investment Fund in the Context of National Development 153 Capitalization of State Companies—The Capitalization Law, enacted in 1994, seeks to establish a legal framework for transferring ownership and the administration of strategic state enterprises to the private sector, so that the government can allocate its resources to the more important areas of human development.
SIRESE Law—This law creates state agencies responsible for regulating economic activity and for safeguarding the rights of the state, the private sector, and consumers.
Pensions Law—This law changes the social security benefit packages for the elderly and for people with disabilities and reforms the system of death pensions. It expands the long-term social security coverage benefits to the informal sector and to independent workers.
INRA Law—This law seeks the equal distribution of land resources and the legal recognition of indigenous territories. It creates an equitable tax base that depends on the investment in and the productivity of farming activities.
Human Capital Reforms The changes in the legal framework supporting the Bolivian social system included the criminalization of domestic violence, the expansion of the public health services, and reforms in the criminal justice system.
Education Reform—The Educational Reform Law of 1994 requires that education be efficient, equitable, permanently accessible for all the people in Bolivia, free in every public facility, and mandatory at the primary level. It requires that the educational system adapt to Bolivia’s multicultural and multilingual reality and that priority be accorded to primary education. It facilitates access to education for all Bolivians by offering a flexible, systemic, bilingual, and regionalized curriculum. It fosters the direct participation of parents, teachers, and the community in general in education planning, organization, control, and evaluation to ensure that it responds to their needs and interests. It unifies urban and rural education under one administration and offers a curriculum that includes both formal education and alternatives for those who cannot pursue their education in the formal area.
Actions in Public Health—These actions expand the supply of medical service to a wider population, with free health service available to pregnant women, children under the age of five, and the elderly.
Solidarity Bond—Under this scheme, half the capitalized share of public sector companies will be distributed as life and annual bonds for people over 65 years of age.
Judiciary System Reform—These reforms are intended to reduce delays in the justice system by making it more human and efficient in the control of corruption.
Law Against Domestic Violence—Domestic violence is punishable by law, especially in the case of acts of aggression against women and children.
The Central Level of Government Law 1493 of Ministries of the Executive Branch requires that “the business of public administration be performed through the State Ministries.” This law also determines the number, composition, attributions, and competencies of the new ministries. State ministries are composed of the minister, the national secretaries, and the undersecretaries. The national secretaries are responsible for social and production areas that include the health, education, sports, culture, energy, mining, tourism, and transportation sectors. The Ministers of the Presidency, Finance, Economic Development, Human Development, and Sustainable Development are part of the National Development Council (CODENA), created in 1995. CODENA’s functions are (a) to ensure convergence in the guidelines and policies for the country’s development; (b) ensure cohesiveness in the national, regional, and local policies in the social, economic, and environmental areas; and (c) balance and match public investment priorities with external financing.
154 Original Workshop Papers Neoliberal models of economic growth create inequities in the distribution of income and power. The reforms in Bolivia described previously should modify the economic, social, and political stratification. They are complementary to the neoliberal model implemented since 1985, yet their orientation aims to mitigate the imbalances of the past in the social area gradually and bring about a change in the relationship between the state and civil society.
From Poverty Relief to Human Development The human development approach for the formulation of social policy has been adopted in
Bolivia. Its objectives are the following:
• To provide opportunities for poverty alleviation, satisfy basic needs, and develop human capital to contribute to economic growth
• To increase community participation in the identification of needs, and to improve the quality of services by community control and supervision of resources
• To foster responsibility within communities in the search for solutions to their problems and in the fulfilling of their duties and obligations.
Institutional Mandate of Social Funds The Supreme Decree 24010 of 1995 transfers the supervision of the SIF, the Peasant Development Fund (FDC), the National Fund for Regional Development (FNDR), and the National Fund for Social Housing (FONVIS) to the Ministry of the Presidency, through the National Secretary of Governmental Coordination. The intention of this decree is to give executive capacity back to the development funds, which is somewhat reduced when the funds are transferred to sectoral ministries for supervision. It redefines roles and interventions so that the SIF and FNDR finance water and basic sanitation projects. FNDR, however, must focus on the needs of towns with more than 10,000 people, while the SIF must focus on towns with fewer than 5,000 people. In this way, the funds become the investment instruments for the central government.
Social Investment Fund, Phase II Replenishment of funding by the World Bank for the second stage of the SIF came when the effects of the fundamental changes in the economic and legal framework were starting to show.
Reforms related to institutional, economic, and human capital further strengthened the foundations needed for the sustainable and equitable growth of Bolivia.
CHARACTERISTICS. SIF interventions are characterized by explicit criteria that guide their selection and development. These interventions are required to be transparent, sustainable, participatory in their planning, gender sensitive, and technically sound. They must focus on regions prioritized by the Secretary of Rural Development, the National Secretary of Health, and the Education Reform. The prioritization of rural areas limits SIF interventions to localities with fewer than 5,000 inhabitants. Resources from the SIF budget are distributed among municipalities based on the level of poverty, as defined by the poverty maps, as well as on the basis of their total population.
AREAS OF INVESTMENT. The SIF invests in education, health, basic sanitation, and institutional support. In the education sector, the SIF invests in formal education programs and finances equipment and the construction of school facilities. Through its support for informal education, it finances training of women to increase their productivity and efficiency.
The Social Investment Fund in the Context of National Development 155 In the health sector, the SIF supports the construction of health centers, finances the purchase of equipment and supplies, and invests in institutional development and community training.
The three programs in the basic sanitation sector supported by the SIF are potable water, night soil disposal, and solid waste management, which seek to reduce mortality and disease rates.
The SIF’s institutional support program helps public and private nonprofit development institutions become responsible for incipient projects in areas where government institutions are weak or absent. The SIF is implementing a program of municipal strengthening, directed toward creating local capacities to plan sustainable social investments.
SIF II OUTCOMES. Two hundred and eleven municipalities, or 68 percent of the total number
of municipalities in Bolivia, have benefited from investments made by the SIF. The most important achievements have been the following:
• Incorporation of the objectives of human development in a legal framework for the intervention strategy
• Adoption of participatory planning as the main instrument for identification of priorities
• Creation of a close working relationship with municipal governments in the cofinancing of investments.
SIF Investments between 1994 and 1996
General accomplishments attributable to the SIF are as follows:
• The SIF’s experience has been useful in strengthening social policies, especially in the education and health sectors.
• In following the SIF’s criteria of supporting projects that respond to priorities identified by municipal development plans, the work of nongovernmental organizations (NGOs) and the private sector have been integrated with local municipal priorities.
• SIF technicians have become agents that facilitate transformation at the local level.
• The SIF is an active member of the Plan of Strategic Actions for Human Development (PAE) and of the National Development Council (CODENA), thus contributing to national development planning.
Sector Objectives Proposed by the SIF
Mission and Vision of the SIF In this new context, the SIF becomes an instrument of the national government to implement
social policies oriented to the development of social capital in Bolivia. It strengthens local capacities in three ways:
• By facilitating participation in the debate and decisions related to development
• By promoting equal access to the benefits of development
• By contributing to the development of a responsible exercise of rights of both individuals and the society.
The internal measures adopted by the SIF to facilitate institutional development are described in the following paragraphs.
Decentralization The SIF has deepened the process of decentralization, forming interdisciplinary departmental teams that execute most of the identification of and preparation for investment projects. The central office sets norms and standards for procedures and maintains quality control.
External Strengthening The SIF has assisted municipalities to develop their management capacity so that they can fulfill more efficiently the functions assigned to them by the Popular Participation Law. This program includes delivery of equipment, technical assistance, service operation, and maintenance manuals, as well as coordination with professionals of different disciplines who provide services in support of municipal management. Another program will transfer the SIF’s functions to municipalities over time, so that they may be able to assume all processes related to the project cycle.
Implementation of the Management Information System The delegation of functions to departmental offices grants departments new responsibilities and creates new needs for them, one of them the improvement of the data management system.
To facilitate this, the SIF is implementing a management information system, which involves the modernization of software and hardware, networking among all the departmental and central offices through access to the Internet, construction of related systems, and the provision of a permanent technical support system.
Personnel Training Training activities are aimed at improving the skills and abilities of executive and technical personnel, with special emphasis on social management skills, because the new institutional framework assigns new roles and functions to staff.
Looking to the Future The sustainability of projects has been an area of concern both inside and outside the SIF. The sustainability of social investments is directly related to income level. If wages are inadequate to cover a family’s basic needs, people will be less likely to contribute to the fees and maintenance costs of services. This realization has pushed the SIF to propose to enter the area of income generation and employment through a new program that improves the production and productivity capabilities of communities that have benefited from investments made by the SIF.
The Social Investment Fund in the Context of National Development 157 The income-generation program assumes the framework of the national sector policy as its
reference point, which has the following goals: