The World Bank approved on June 7th a US$17.0 million Health Services and Social Assistance Project for Moldova under IDA credit terms.[1] The project will assist the Government in reducing premature mortality and disability, and in improving the targeting of social transfers and services to the poor.

Moldova has made notable progress in reforming its health sector, including the introduction of mandatory health insurance and the consolidation of the health infrastructure, while extending the primary care network and decentralizing its management to local governments. However, important challenges remain and the authorities need to further the reform process if the country's health and social assistance systems are to offer effective and sustainable care, particularly to the country's poor.

Health sector reforms undertaken in recent years by the Government risk of being undermined as the population continues to face low average life expectancy, high mortality rates, and the re-emergence of tuberculosis and other illnesses. Access to quality health care services remains skewed in favor of the largely better-off urban population. The country still lacks universal health insurance coverage, and informal payments to obtain medical treatment are commonplace. In addition, poor conditions in many hospitals and policlinics, and the widespread lack of nurses and doctors lead to inadequate health care.

In the area of social protection, the Government has established a National Social Insurance House (NSIH) to improve the administration of pension and social insurance, and to eliminate arrears in the payment of pensions. However, Moldova currently has 15 social assistance benefits with a range of eligibility criteria and processing procedures, which are not applied using poverty-related instruments. This fragmentation of social assistance transfers limits their ability to reach the poor and much of social assistance ends up benefiting the middle and upper-income groups.

"The project builds on the ongoing reform process outlined in the Government's Medium Term Expenditure Framework and will be implemented in close coordination with other donors. It aims at addressing the most prevalent health concerns, including reducing the high rates of premature mortality, modernizing the hospital sector, and improved targeting of social services for Moldova's poorest people, " said Rekha Menon, World Bank Task Team Leader for the Project.

The project has three main components. The first component, Health System Modernization, builds on on-going reforms in the health sector that form part of the National Health Strategy 2007-2017. The second component, Social Assistance and Welfare, supports Government plans to improve the effectiveness of cash benefits and social welfare services in combating poverty. The third component, Institutional Support, relates to the provision of institutional support for the implementation of the reform strategies.

The project is an integral part of a larger and longer-term program of the Government to improve the efficiency and effectiveness of social spending in Moldova. It is jointly supported by other donors, including the European Union, the Swedish International Development Cooperation Agency (SIDA), the United Kingdom's Department for International Development (DfID), the Council of Europe Development Bank, and relevant UN agencies. The project will be executed over a four-year period, from September 2007 to February 2011, and will be implemented by the Ministries of Health, and of Social Protection, Family and Child.

Since Moldova joined the World Bank in 1992, commitments to the country total approximately US$672.4 million for 41 operations. -World Bank