The Social Program Development Policy Loan (SPDPL) Project is a stand-alone, single-tranche development policy loan (DPL) featuring Uruguay's social policy response to the economic crisis of 2001 and 2002, providing support to past and ongoing, structural and administrative reforms in the health, education, and social protection sectors, in addition to assisting the early activities of the new administration in various social policy areas. The SPDPL will also lay the foundation for a program of future Bank assistance, as outlined in the Country Assistance Strategy (CAS) for the period FYO5-FY 10, in support of the country's social policy programs, through multi-sector programmatic DPLs, as well as through investment and technical assistance operations. The proposed SPDPL will therefore support specific actions to increase the efficiency, coverage, and sustainability of Uruguay's health, education, and social protection sectors and programs. The policy measures supported under the SPDPL seek to achieve steeper reduction in poverty levels in the aftermath of the crisis, over and above that which would have resulted without the supported measures, and, improved equity and efficiency of social sector expenditures. Given the single-tranche status of the project, the associated risks are considered low to moderate. Risks of non-compliance with expected actions are considered minimal, however, there are important sustainability risks, as some of the SPDPL-supported actions represent the starting point of reforms that will require continuation over time to be effective. These sustainability risks can be classified as political, economic, and managerial. Risks however, will be mitigated by a continued and strong policy dialogue with the Government. Economic and financial risks relate to the possibility of potential fiscal restrictions that would limit implementation of proposed reforms, potential debt sustainability problems, and external shocks. These would be mitigated through the inclusion of program expenditures in the Government's five-year budget, and expectations that the Government will maintain a sustainable macroeconomic framework. Finally, managerial risks relate to the possible difficulties in managing new sectoral programs, and systems because of the potential shortage of skilled human resources. This risk will be minimized through training provision to Ministries and staff at the local levels, (in particular, to the Social Security Fund within the new Ministry of Social Development).