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Initiatives for Afghanistan
Country-Level Harmonization
 

The draft National Development Framework (NDF) was developed and presented in April 2002 by the Afghan Interim Administration (AIA). It provides the basis for the Government’s reconstruction planning , and prioritizes programs for support. The NDF is based on three pillars, under which there are twelve national programs. These programs are being prepared through a consultative process led by key ministries and involving relevant agencies and development partners.

  • Pillar One - Humanitarian Assistance and Human and Social Capital with national programs on (1) Refugee Return, (2) Education, (3) Health and Nutrition, (4) Livelihoods and Social Protection, and (5) Cultural Heritage, Media and Sports.
  • Pillar Two - Physical Reconstruction and Natural Resources with national programs on (1) Transport, (2) Urban Management, (3) Energy, Mining and Telecoms, and (4) Natural Resource Management.
  • Pillar Three - Private Sector Development with national programs on (1) Trade and Private Investment, (2) Public Administration, and (3) Security and Rule of Law.

In addition, the following three cross-cutting themes are to be addressed within each program

  • Governance, Financial Management and Administrative Reform
  • Human Rights, Security and Rule of Law
  • Gender

The National Development Budget (NDB) is the central instrument of policy and resource allocation. The NDB builds on the NDF to outline a series of detailed programs, that form the core of the reconstruction effort. An integrated NDB for Afghanistan’s Solar Year (SY) 1382 (the fiscal year from March 21, 2003 to March 20, 2004) was presented at the first annual meeting of the Afghanistan Development Forum (a national Consultative Group meeting) which was held in Kabul for two days beginning on March 13, 2003.

AIA has established Consultative Groups (CGs) within which the NDB is planned, financed and implemented. There is a CG for each of the twelve national programs. Each group is chaired by a lead Ministry and includes donors, NGOs and a program focal point (secretary). The CG structure aims to encourage a fully transparent and accountable process to guide the collaborative reconstruction efforts.

The Afghanistan High Level Strategic Forum was hosted by the government in Brussels on March 17, 2003. Representatives of over 40 countries and 12 international organizations met to endorse a roadmap the government outlined for reforms in the financial, administrative, judicial, socio-economic and security sectors.

The government’s efforts to take full leadership of the reconstruction process and aid coordination have increasingly paid of, as shown by the following:

  • There is only one, government-led aid coordination process.
  • Consultative Groups are bringing government line ministries and donors together for substantive interactions on policies, programs, and implementation.
  • The national budget process has become the focal point for decision-making on government policy and for allocation of domestic and external resources.
  • Donors and other assistance partners (for the most part) have bought into these processes.

The Afghan Interim Administration (and then the Government of Afghanistan (GoA)) took steps to create and /or strengthen government systems. The Assistance Coordination Authority (now the Development Budget and External Relations Unit in MoF) provided a focal point for managing aid. The GoA set some hard conditions for the acceptance of aid, which forced donors to harmonize their activities to some extent. GoA also has a clearly expressed preference for budget support, with trust funds the preferred second choice where aid cannot be routed through the budget.

The Afghanistan Reconstruction Trust Fund (ARTF) was set up in May 2002 to provide support to the country for three main areas of expenditure: recurrent costs (e.g. salaries for teachers, health workers and police); priority investments (including capacity building. feasibility studies and technical assistance) and financing the return of expatriate Afghans. ARTF provides a coordinated financing mechanism to enable the AIA to fund budget and priority sector and investment projects and programs.

The Fund is jointly managed by the Asian Development Bank (AsDB), Islamic Development Bank (IsDB), UNDP and the WB (administrator of the ARTF). Channeling support through this multi-donor Trust Fund as key instrument of support to reconstruction has helped the government avoid addressing the distinct funding specifications of 24 donors and improve aid efficiency and effectiveness. These donors include Bahrain, Canada, Denmark, EC, Finland, Germany, India, Ireland, Italy, Japan, Kuwait, Luxembourg, The Netherlands, Norway, Portugal, Saudi Arabia, South Korea, Sweden, Switzerland, Turkey, United Kingdom and United States.

Despite early success in establishing clear policies and systems for donors to align to, the GoA’s control over aid inflows remains limited by the security situation and the combination of humanitarian, military and development assistance it receives. Approximately 75% of foreign aid to Afghanistan is channelled outside the government’s budget (e.g. in the area of security), presenting a constraint to the country’s long-term planning.

The United Kingdom hosted the London Conference on Afghanistan on January 31 – February 1, 2006 which was co-chaired by Afghanistan and the UN. Aid effectiveness was a key topic at this conference. On the first day, GoA launched its Afghanistan Compact, the successor to the Bonn Agreement (2001) which ended in September 2005 with the completion of the Parliamentary and Provincial elections. The Compact provides the framework for international community engagement in the country for the next five years. GoA also presented its Interim Afghanistan National Development Strategy (IANDS) to the international community. The strategy sets out the Government’s priorities for accelerating development, increasing security, tackling the drug trade, and strengthening governance. Participants showed strong support for increased use of government systems, like the budget, to channel their assistance to Afghanistan’s priorities.

At this conference, USA, Russia and Germany announced their intention to cancel debt owed by Afghanistan through the Paris Club.

In March 2006, Afghanistan officially endorsed the Paris Declaration on Aid Effectiveness. The principles of this declaration are already reflected in the Afghanistan Compact which was agreed between the Government and the international community at the London Conference, and was endorsed by the United Nations Security Council in February 2006.

Common guidelines, including environmental and social safeguards’ framework, for the investment and program component of the ARTF have been agreed to and are being used.

ARTF is financing a feasibility studies' fund to help AIA produce a pipeline of bankable projects in the near future.

Joint sector missions have increased sector knowledge, and considerable work has been done on public administration and other institutional issues. DFID, BMZ, EC and WB conduct joint appraisal and joint funding of activities. Specifically, support to ARTF for recurrent and development budget (approx. 15% of bilateral funds and 50% of DFID allocation).

Donors and NGO members of the twelve CGs are assisting the Government in defining benchmarks and will, in future, focus on monitoring performance against the benchmarks in close collaboration with Government partners.

GoA and the international community are establishing a Joint Coordination and Monitoring Board for the implementation of the Compact.

Afghanistan will participate in the first round of survey work (beginning in May 2006) in order to establish a comprehensive baseline and methodology for tracking implementation progress on the Paris Declaration (and its indicators) through 2010. GoA will seize this opportunity to monitor additional country-specific indicators of aid effectiveness as identified and agreed in the Afghanistan Compact.

In 2005, the World Bank, collaborating on specific issues with AsDB (procurement), DFID (state-owned enterprises), EC (highways), and IMF (revenues), completed a report which was a product of the Public Finance Management (PFM) Review.

In 2004, CIDA, DFID, USAID, UNDP, UNICEF, WB and others jointly produced a report on Subnational Administration in Afghanistan: A Guide to Government.

WB and partner institutions will prepare a Gender Assessment which will explore linkages among health, education, poverty and gender discrimination.

Afghanistan and its civil society organizations were represented at the AsDB and the Government of Japan sponsored East and South Asia, and the Pacific Regional Workshop on Harmonization and Alignment for Development Effectiveness and Managing for Results which was hosted by the Government of Thailand in Bangkok on October 19-20, 2004. The workshop prepared participants for the Second High-Level Forum (HLF-2) on Harmonization and Alignment in Paris, Feb. 28-March 2, 2005.

  Area:
 
1
Development Policy Support

The GoA set some hard conditions for the acceptance of aid, which forced donors to harmonize their activities to some extent. For example, the Government limited the number of sectors any donor could work in, and required minimum contributions before donors could expand to new sectors ($30m required for the first three sectors before a donor could enter a fourth). GoA also has a clearly expressed preference for budget support, with trust funds the preferred second choice where aid cannot be routed through the budget. As a result, GoA has refused aid proposals, for example where overhead costs are excessive, or where proposals involve the use of expensive technical assistance.

However, GoA allows enough flexibility in the rules and systems so that donors can return with new proposals if their initial plans are not accepted. The GoA also knows that capacity varies across ministries/sectors, and therefore varies modalities as appropriate – for example, the health sector has good capacity, so more donors are using GoA channels in this sector than in others.

The World Bank is supporting the Government’s efforts to build an accountable but effective state via grants for the first Programmatic Support for Institution Building (PSIB I) in July 2004 and PSIB II approved in December 2005.

Common guidelines, including environmental and social safeguards’ framework, for the investment and program component of the ARTF have been agreed to and are being used.

Joint sector missions have increased sector knowledge, and considerable work has been done on public administration and other institutional issues.

BMZ, DFID, EC and World Bank conduct joint appraisal and joint funding of activities. Specifically, support to ARTF for recurrent and development budget (approx. 15% of bilateral funds and 50% of DFID allocation).

Donors:
Name: Contact:
AsDB  
Canada  
Denmark  
EC  
Finland  
Germany  
IMF  
India  
Ireland  
IsDB  
Italy  
Japan  
Korea  
Kuwait  
Luxembourg  
Netherlands  
Norway  
OECD  
Portugal  
Saudi Arabia  
Sweden  
Switzerland  
Turkey  
UK  
UNDP  
UNEP  
UNICEF  
United States  
WB  
 Next Steps:
 Resources:
 
Initiatives for Bolivia
Country-Level Harmonization
 

Bolivia has a fragile economic, political and social position as a result of the recent regional recession and an escalating trend of social unrest in the country – with serious conflicts in April 2000, September/October 2000, January 2002 and February 2003. These conflicts culminated in the forced resignation of the President in October 2003 and the assumption (in accordance with constitutional processes) on October 17, 2003 of Vice President Mesa as the current President. Over sixty percent of the population lives in poverty and thirty-seven percent lives in extreme poverty. The country ranks in position 114 in the Human Development Index and there are severe income inequalities. Poverty is pervasive among indigenous people who account for 54 percent of the population.

The Bolivian Poverty Reduction Strategy, Estrategia Boliviana de Reduccion de la Pobreza (EBRP) was approved by the Cabinet in February 2001 and submitted to the Boards of the World Bank and IMF in June 2001. The EBRP reflects a broad consultative process conducted through the National Dialogue 2000. It has four pillars: (i) expanding employment and income opportunities, (ii) developing capabilities, (iii) increasing safety and protection for the poor, (iv) promoting social integration. In addition, there are cross-cutting issues such as gender, environment and the rights of indigenous people.

The present Government’s plans have been formulated to cover two periods. The first period will end with the planned completion of a Constitutional Assembly (estimated at 14 to 18 months after President Mesa took office). The second period will begin after the first one and last until August 6, 2007 (the end of the constitutional term of the President). During the first phase, GoB is attempting to (i) restore macro-economic stability, (ii) reorient some public expenditure toward high-visibility programs that respond to underlying factors that led to social conflict (especially in sensitive geographic areas), and (iii) relaunch the institutional reform program and anti-corruption efforts.

The EBRP is currently being revised based on a (further developed) participatory process - the National Dialogue 2004 which was formally launched in February 2004. It is being overseen by a Board of 22 members (from local gov’t associations, indigenous organizations recognized by the law, other CSOs and government officials). The Dialogue is to include municipal, departmental and national dialogues taking place from April to July 2004.

Bolivia has obtained a reduction in debt repayment obligations of $1.2 billion under the Heavily Indebted Poor Countries (HIPC) initiative. The debt relief substitutes expenditure for repayment of debt for expenditure on poverty-oriented programs.

The new Government has indicated its intention to play a strong role in coordinating development assistance. On March 26, 2004 all development assistance agencies were invited by the GoB to a workshop in which agreement on a common agenda was a key topic.

The development partners (especially the bilaterals) are interested in strengthening partnerships. Previous partnership accomplishments have been stalled as a result of the political turmoil. Most partners are seeking a common approach to budget assistance that will support the reform agenda of the GoB.

IADB in cooperation with DFID and other bilaterals in Bolivia are providing technical support to Viceministerio De Inversion Publica y Financiamiento Externo (VIPFE) in designing the Bolivian Harmonization and Coordination Action Plan.

Currently several development partners (France, Germany, (GTZ & KfW), Inter-American Development Bank, the Netherlands, Sweden, USAID and the World Bank) are drafting a common framework for multi-donor budget support (MDBS). This draft Memorandum of Understanding (MOU) is in support of the revised EBRP through the GoB’s budget.

There are 5 formal working groups operating the new coordination framework between GoB and International Cooperation. The Groups are led by GoB and development assistance agencies (i.e. Dialogo Nacional, Asamblea Constituyente, Fiscal, Productividad y Competitividad, and Armonizacion).

A recent procurement decree that amends the law to favor local procurement by splitting large contracts into smaller contracts is under review.

The recent CG meeting chaired by the Government was held in Paris (Oct. 3, 2003). A follow-up mini-CG is planned for La Paz.

The IADB and WB share information and audit tools on financial management.

A Country Financial Accountability Assessment (CFAA), prepared jointly with IADB, is in progress. Denmark, England and the Netherlands are also contributing inputs to this analytical work.

A joint PER (WB/IADB/Germany/Denmark) is being prepared and its second draft was discussed in end-March Four reform issues will be analyzed, i.e. municipal finance (GTZ), pension system (IADB), multi-annual budgeting (WB) and public institutional reform (Denmark).

OECD/DAC Working Party has developed indicators (in a survey instrument) to monitor progress on harmonization and alignment. These indicators were field-tested in 14 countries (including Bolivia). A draft report has been prepared.

The Government was represented at the IADB-sponsored Latin America and Caribbean Regional Workshop on Harmonization and Alignment for Development Effectiveness and Managing for Results which was hosted by the Government of Honduras in Tegucigalpa on November 8-10, 2004. The workshop prepared participants for the Second High-Level Forum (HLF-2) on Harmonization and Alignment in Paris, Feb. 28-March 2, 2005.

  Area:
 
2
Development Policy Support

Harmonization was on the Agenda of the Consultative Group (CG) meeting held in Paris (October 2003). A key area for harmonization (identified by the Government) is alignment of donor assistance in support of PRSP implementation.

IADB in cooperation with DFID and other bilaterals in Bolivia are providing technical support to Viceministerio De Inversion Publica y Financiamiento Externo (VIPFE) in designing the Bolivian Harmonization and Coordination Action Plan.

Most bilaterals have provided budget support to GoB, without a common framework but with conditionality attached in a loose agreement. Now, the bilaterals want a common approach that supports a reform agenda. Currently several development partners (France, Germany, (GTZ & KfW), IADB, the Netherlands, Sweden, USAID and the World Bank) are drafting a common framework for multi-donor budget support (MDBS). This draft Memorandum of Understanding (MOU) is in support of the revised EBRP through the GoB’s budget. It includes the need to (i) make the revised EBRP the central document around which to align general (not sectoral) support; (ii) tie triggers to progress in financial management; and (iii) have joint missions.

In the water and sanitation sector, the EC has planned sector budget aid in 2004 to support an official sector reform program.

The World Bank is supporting the GoB through a Poverty Reduction Support Credit (PRSC) which includes progress indicators in education. KfW and the WB are developing a policy matrix for the Social Sector Programmatic Credit (SSPC).

All bilaterals in Bolivia are working toward a SWAp in education. The recent Program Structural Adjustment Credit (PSAC) is a type of SWAp focusing on decentralization.

The Directorio Unico de Fondoc (DUF) was created in 2000 and works like basket funding.in that the same rules for M&E, financial reporting and auditing have been agreed between GoB and development agencies. Some development partners (e.g. the Netherlands) channel funds in this manner. The Minister of Popular Participation is championing the reform of the DUF.

Donors:
Name: Contact:
Denmark  
EC  
Finland  
France  
Germany  
IADB  
IMF  
Netherlands  
Norway  
OECD  
Sweden  
UK  
UNDP  
United States  
WB  
 Next Steps:
 Description:   Time Frame:   Progress Indicator:   Status:   Contact:   Government contact:   Donors: 
Government and donors to prepare a timebound action plan.  September 2003  Proposed Action Plan developed.  Planned  WB: John Newman jnewman@worldbank.org  Luis Arnal  - Government
- EC
- IADB
- UK
- UNDP
- WB 
Harmonize development, financing, and monitoring of Government-led programs. Continue pooled funding for Citizen's Rights Project. Joint development to lead to pooled funding and joint accountability in the second phase of decentralization project.  Information not yet available.    Information not yet available.  WB: John Newman jnewman@worldbank.org  Luis Arnal  - Government
- IADB
- UK
- WB 
 Resources:
 
Initiatives for Burkina Faso
EFA-FTI pilot
 

The Education for All – Fast Track Initiative (EFA-FTI) was launched in April 2002 as a global partnership between donor and developing countries to ensure accelerated progress towards the Millennium Development Goal (MDG) of universal primary education by 2015. It was endorsed two months later by the G-8. The objectives and strategies are described in the EFA-FTI Framework document, adopted by the donor partners in March 2004.

In June 2002, eighteen countries were invited to prepare proposals for FTI financing. Five other countries (Bangladesh, Democratic Republic of Congo, India, Nigeria and Pakistan) were invited to participate in an “Analytical Fast Track” (EFA-AFT). Operational guidelines for AFT and for access to resources were under the FTI Analytical and Capacity Building Trust Fund.

EFA-FTI has evolved from a vertical program and global fund – where participation was on an invitation basis only - to a country-based and country-led process of program development and resource mobilization, with the global partnership providing tools and resources to support, fill gaps and leverage longer term financing. To this end, the FTI partnership has:

  • Opened up participation to all IDA-eligible countries responding to the EFA-FTI criteria of a Poverty Reduction Strategy (PRS) and an education sector plan prioritizing Universal Primary School Completion (UPC) and endorsed by the local donor group (EFA-FTI Partnership Meeting in Oslo, November 2003);
  • Clarified expectations of the local endorsement process whereby the endorsement process is conducted by the local donor group. The endorsement brings a collective responsibility to mobilize financing, and a collective responsibility that whether donors channel their funds through project or budget support, it should be within country priorities as established in their sector plans and accounted for in national budgets;
  • Launched and operationalized the Catalytic Fund (CF) in November-December 2003 to provide transitional grant financing over a limited period of time (a maximum of two to three years) to countries to (1) help finance endorsed sector plans that mobilize insufficient resources due to an inadequate number of donors and (2) scale up implementation and establish a track record that may leverage more sustainable support through regular bilateral and multilateral channels. Current donors supporting the Catalytic Fund include: Belgium, Italy, The Netherlands, Norway, Spain, Sweden and the United Kingdom. Pledges to the CF reached about $300 million for 2004-2007. Six countries (The Gambia, Guyana, Mauritania, Nicaragua, Niger and Yemen) have received CF grants for 2004. Ghana and these six countries will receive CF financing in 2005.
  • Launched the Education Program Development Fund (EPDF) in November 2004. The EPDF, a multi-donor trust fund, was put in place to enable more low-income countries to access the FTI and accelerate progress towards universal primary education. As of January 2005, the EPDF has two donors (the United Kingdom and Norway) that have pledged a total $6 million for 2005. Pledges are expected from other donors in the near future. Norway is also contributing $10 million for 2005 into a trust fund for only African countries through the Norwegian Education Trust Fund (NETF). Ultimately, there is a plan to merge these two funds.

The Analytical Fast Track no longer exists and the five countries initially invited to participate are now EFA-FTI potential countries. In mid-April 2005, thirteen countries have received endorsement through the EFA-FTI review process. Burkina Faso, Guinea, Guyana, Honduras, Mauritania, Nicaragua and Niger were the first seven countries to be endorsed in 2002. The Gambia, Mozambique, Vietnam and Republic of Yemen were accepted in 2003 while Ghana and Ethiopia joined EFA-FTI in 2004.

There are three EFA-FTI Working Groups as follows: (i) The Harmonization Working Group became operational in March 2004 and has grown from 10 members to more than 20 members. The membership includes the following bilateral or multilateral agencies – Belgium, Canada, EC, France, Germany, Japan, the Netherlands, Norway, Sweden, UNESCO, the World Bank – and the FTI Secretariat. The Harmonization Working Group has developed and tested a tool – the Donor Indicative Framework (DIF) – that enables countries and donors to assess their progress on harmonization.

(ii) The Finance Working Group, led by DFID, monitors donor support. It has undertaken four studies whose draft reports were presented at the FTI Partnership meeting in Brasilia, November 10-12, 2004.

(iii) The Communications Working Group is headed by UNICEF and is charged with defining a communications strategy, including key messages customized to various audiences (e.g. donor agencies, partner governments, NGOs). A communication strategy was discussed with the FTI Partnership at the annual meeting in November.

The FTI Secretariat is based at the World Bank (WB) in Washington, DC and is comprised of staff from donor partner agencies and from the WB. It is managed by the WB under the direction of the FTI Steering Committee (present five members are the current co-chairs - Sweden, UK; UNESCO, WB; and the most recent out-going co-chair – USA).

Canada is the EFA-FTI lead donor for Burkina Faso.

The country has successfully mobilized the financing required through direct donor support.

In July 2005, Burkina Faso's Threshold Country Plan was the first one to be approved by the Millennium Challenge Corporation (MCC) for its innovative program to increase primary education completion rates for girls. As a result, this program will receive $12.9 million and together with EFA-FTI, Burkina Faso now has a better chance of accelerated progress towards the Millennium Development Goal (MDG) of universal primary education by 2015

  Area:
 
3
Financial Management & Accountability

Given its transitional role, the CF is expected to remain small relative to support provided by the development partner community directly to the countries as a whole. However, the CF provides important backing to the FTI commitment that realistic financing needs in all qualifying countries will be met.

In January 2005, the Netherlands signed an Agreement to contribute directly to the CF. Previously, their contribution was channeled through the Bank/Netherlands Partnership Program (BNPP). The Netherlands is the largest contributor to the CF.

All low-income countries can receive support from the EPDF, as per the regional proposals that were approved by the EPDF strategy committee (so far, three regional proposals have been approved - South Asia, East Asia and MNA). The World Bank’s regional managers received an overall allocation from the EPDF that they can distribute among the countries of their region, according to the activities mentioned in their proposals which will be posted on EFA-FTI website. Africa region receives support from the NETF (Norwegian Education Trust Fund) which is the equivalent of the EPDF in Africa.

The four draft reports of the Finance Working Group were on (a) testing a methodology to account for budget support in ODA for education in three pilot countries - Nicaragua, Niger and Uganda; (b) examining how external finance mechanisms (including budget support) affect educational outcomes; (c) reviewing methodologies for assessing the global financing gap for MDG #2 (universal primary education); and (d) reviewing the cost effectiveness of alternative service delivery mechanisms, including case studies for Ghana, Honduras and Mali.

Donors:
Name: Contact:
AfDB  
AsDB  
Australia  
Austria  
Belgium  
Canada  
Denmark  
EC  
Finland  
France  
Germany  
Greece  
IADB  
Ireland  
Italy  
Japan  
Netherlands  
New Zealand  
Norway  
Portugal  
Spain  
Sweden  
Switzerland  
UK  
UNAIDS  
UNDP  
UNICEF  
United States  
WB  
 Next Steps:
 Description:   Time Frame:   Progress Indicator:   Status:   Contact:   Government contact:   Donors: 
Agree on date for initiating disbursements.  Information not yet available.  Date determined.  Information not yet available.  World Bank: fti@worldbank.org  Information not yet available.  - Government
- WB 
Finalize implementation and financing plans.  Information not yet available.  Implementation and financing plans completed.  Information not yet available.  WB: fti@worldbank.org  Information not yet available.  - Government 
 Resources:
 
4
Donor Cooperation

EFA-FTI is built on mutual accountability. Donors provide coordinated and increased financial and technical support in a transparent and predictable manner. Conversely, partner countries have agreed to put primary education at the forefront of their domestic efforts and develop sound national education plans.

EFA-FTI brings together over thirty bilateral donors, development banks, and international agencies. It is the first global initiative to operationalize the Monterey Consensus, and it offers a platform to enable donors to provide increased, better coordinated, and more effective support to countries. Bilateral Donors include: Australia, Austria, Belgium, Canada, Denmark, European Commission, Finland, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Russia, Spain, Sweden, Switzerland, United Kingdom, United States of America. Multilateral Donors are: AfDB, AsDB, IADB, UNAIDS, UNICEF, UNDP, UNESCO, World Bank.

The work of the Communications Working Group is intended to facilitate communications within agencies and with countries. A communication strategy was discussed with the Partnership at the annual meeting in November, and a kit for countries and local donors is being prepared.

UNESCO and USAID jointly organized a seminar on EFA in Wash. DC on February 28, 2005. At this seminar, the World Bank led the session titled “Supporting EFA in Fast Track Countries”.

Donors:
Name: Contact:
AfDB  
AsDB  
Australia  
Austria  
Belgium  
Canada  
Denmark  
EC  
Finland  
France  
Germany  
Greece  
IADB  
Ireland  
Italy  
Japan  
Netherlands  
New Zealand  
Norway  
Portugal  
Spain  
Sweden  
Switzerland  
UK  
UNAIDS  
UNDP  
UNICEF  
United States  
WB  
 Next Steps:
 Description:   Time Frame:   Progress Indicator:   Status:   Contact:   Government contact:   Donors: 
In an MOU, formally set out accountability for the commitment made by the Government of Burkina Faso and donors.    MOU finalized    WB: fti@worldbank.org  Information not yet available.  - Canada
- EC
- France
- Germany
- UK
- WB 
            - Government 
 Resources:
 
Initiatives for Cambodia
Country-Level Harmonization
 

Rapid growth in overseas development assistance (ODA) supported the reconstruction efforts of the Royal Government of Cambodia (RGC) until 1996. Civil unrest in 1997–98 lowered the volume of aid and disrupted budget support operations. Since 1999, net ODA has gradually increased. The increasing bilateral share of gross ODA was 63 percent in 2002. Loans, as a percentage of ODA, have increased from 17 percent in 1999 to 26 percent in 2001. Budget support has not returned to its levels prior to 1997. On average, the disbursement/commitment ratio is around 75 percent. The top 10 donors are AsDB, Australia, EC, France, Germany, IDA, IMF, Japan, Sweden and, US.

Cambodia is a post-conflict country and as such, both human and physical capital have been depleted, resulting in severe capacity constraints and poor social indicators. Poverty is a major concern with about 40% of population below the poverty line (living on $1 per day) and nearly 78% of the population at $2 per day. The country has the highest prevalence of HIV in Asia.

In 2002, the National Assembly adopted the Second Socio-Economic Development Plan (SEDP-II). The National Poverty Reduction Strategy (NPRS) – RGC’s full PRSP - prepared with stakeholder participation was finalized in February 2003. The SEDP-II and the PRSP provide the framework for an action plan to reduce poverty. RGC’s first NPRS Annual Progress Report (APR) was approved by the Council of Ministers on August 6, 2004. It documents the progress in implementation of the PRSP (during calendar years 2002 – 2003). The report’s coverage is limited to only the key priority areas (e.g. rural and agriculture development, education, health, and road infrastructure). It also attempts to reconcile the MDGs and the NPRS for 2005.

Following Cambodia’s general election in July 2003, the inconclusive result led to months of negotiations between the three political parties (CPP, FUNCINPEC and SRP) until a new government was established in July 2004. It presented the Rectangular Strategy – its economic policy agenda at the first Cabinet meeting. This Strategy is an integrated structure of interlocking rectangles consisting of Good Governance (core of the Rectangular Strategy), Environment and Growth. RGC is implementing critical measures including the Public Finance Management reform program, public procurement reform, and the proposed introduction and enforcement of an anti-corruption law.

Alignment of donor support with NPRS priorities is an important step toward increased harmonization. Partnerships across sectors and programs are at different stages of development, ranging from donors fully committed to joint planning, programming and budgeting (e.g. exemplary donor alignment in the education sector) to areas where partnerships have not yet developed (e.g., fiduciary framework).

There are 18 bilateral donors, 16 UN agencies, the World Bank (WB), the IMF, the Asian Development Bank (AsDB) and the EC providing assistance to Cambodia. The Council for the Development of Cambodia (CDC) was established to coordinate all external investment (ODA and FDI). In general, each donor operates individually, but in 2003, AsDB, IMF and the World Bank (with significant contributions from DFID, ILO, SIDA, UNDP and WHO) finalized a joint Integrated Fiduciary Assessment and Public Expenditure Review (IFAPER). Some improvements in donor coordination have been achieved since the Government has taken the lead with measures, such as the introduction of an Inter-Ministerial Steering Committee to Strengthen Development Partnerships, the establishment of a focal point within the Government for partnerships, and the strengthening and expansion of the ODA management information system.

Seven working groups were formed, namely :

  • Forestry/Natural Resources,
  • Demobilization (which stopped meeting once the program was operationalized),
  • Public Administration,
  • Fiscal Reform,
  • Social Sectors (containing a number of sectoral sub-groups),
  • Governance, and
  • Government-Donor Partnership Working Group (PWG)

The first five working groups listed above were established in 1999 at the first donor meeting following the 1998 elections. Later the Governance Working Group was formed. A Government-Donor Partnership Working Group (PWG) was established in December 2002 under the CG mechanism to address systemic issues of partnership, coordination and harmonization. The Group commissioned three significant reports on improving aid coordination:

  • The capacity building practices of Cambodia’s development partners (financed by UNDP; completed). This study is being discussed by the Council for Administrative Reform (CAR) to arrive at recommendations and develop an implementation plan.
  • The practices and lessons learned in the management of development cooperation (financed by Japan; completed). This study examined four cases of good practices that included: (a) Sector-focused aid coordination - (i) Education -- Sector Wide Approach (SWAp) and (ii) Health -- Sector Wide Management (SWiM) and Tuberculosis Sub-Sector (TB), and (b) Cross-cutting-issue focused aid coordination - (iii) Local Governance -- SEILA and (iv) Public Finance – Technical Cooperation Assistance Program (TCAP).
  • The preparation of national operational guidelines for development cooperation (financed by UNDP; first draft scheduled for completion by end 2004).

The Government is taking the lead in the PWG dealing with substantive issues on governance, natural resources and environment. The PWG is chaired by the Government (Council for the Development of Cambodia (CDC)/ Cambodian Rehabilitation and Development Board (CRDB)) with Japan and UNDP as co-vice chairs. Other members of the PWG are AsDB, Canada, Denmark, EC, France, Germany, Sweden, UK and the WB. At the request of the government and the donor community, the WB has agreed to be the lead donor for the harmonization process in Cambodia.

In October 2003, the Prime Minister approved a proposal to restructure the working groups under the CG mechanism which includes 17 Technical Working Groups (TWGs) and a Government-Donor Coordination Committee (GDCC). The GDCC ensures coordination among the 17 technical groups. All TWGs are co-chaired jointly by government and donors. The WB volunteered to co-chair the private sector development group as well as the legal and judicial reform group. These groups presented their action plans and benchmarks at the 2004 CG meeting.

In response to the Government's concerns about its high transaction costs associated with multiple missions, requirements, and procedures of the donors, some recent harmonization initiatives have taken place. In particular, increased collaboration between staff from the in-country offices of the World Bank and AsDB has resulted in agreement on standard bidding documents for national competitive bidding. Major donors produced joint operational procedures, and a joint financial management manual designed to train local government staff managing development assistance. AsDB, DFID, UN and the World Bank have collaborated extensively in the preparation of new assistance strategies. The UN system in Cambodia has agreed to use the NPRS as the basis for its country-level planning rather than produce its own UN Common Country Assessment (CCA).

In November 2003, the EC implemented sector budget aid to support the Pro-poor Basic Education Reform.

All donors have agreed to support the government’s decision to merge into one government-led and government-owned exercise the MDG/ SEDP-II/ NPRS in the planning process for 2006-2010. A Poverty Working Group (the seventeenth TWG) was formed to coordinate the inputs into this exercise. The resulting document is the National Strategic Development Plan (NSDP) for 2006-2010 which is under preparation (in draft form).

SEILA, an aid mobilization and coordination framework for support to the government's decentralization and deconcentration reforms, aims at promoting local governance and achieving poverty reduction through decentralized local planning processes. SEILA is increasingly being used by many development partners, to deliver aid. For example, WFP, UNICEF and GTZ use this aid coordination mechanism. Donors (DFID, IFAD, SIDA, UNDP and WB) are already using multi-donor aid instruments in the local governance sector (SEILA).

SWAps are operational in the education and health sectors and in the decentralization program (SEILA ).

Implementation of the key recommendations of the IFAPER is supported by a new multidonor partnership for technical assistance – based on SWAp – with focus on capacity development.

Work is underway to develop a SWAp for Land Management and Administration as well as one for Private Sector Development.

RGC welcomes development partner’s support to prepare SWAps in other key sectors, e.g. agriculture, rural development, decentralization, and infrastructure.

Following a harmonization workshop (jointly sponsored by the Government and the WB) in January 2004, the government began preparing a National Action Plan on Harmonization in collaboration with donors. At a follow-up workshop in Siem Reap in mid-June (June 16 –17, 2004), government and donors (e.g. AusAID, JICA and WB) worked towards a joint draft Harmonization Action Plan, 2004-2008 and the building blocks for a harmonization/alignment Partnership Agreement. In August, a revised draft was reviewed and discussed at the inter-ministerial workshop in Sihanoukville. The aim of the fourth workshop (one and a half days) on October 26-27 was to (i) finalize the RGC’s draft Harmonization Action Plan for Harmonization and Alignment 2004-2008 (“the Action Plan”) and (ii) develop a partnership framework for harmonization and alignment between RGC and development partners in Cambodia.

The Action Plan has been approved by the Government. It is likely to be implemented at the sectoral level in the TWGs. A formal progress review on its implementation was tentatively scheduled for mid-2005.

Through a consensus process, the workshop participants prepared the key elements of a draft Cambodia Declaration which expresses the willingness of the participants to implement the Rome Declaration commitments within the Cambodia context. On December 2, 2004, this Declaration was signed in Cambodia by RGC and 12 donors (AsDB, Australia, Canada, Danida, DFID, EC, France, Germany, Japan, SIDA, UN and WB).

A Pre-CG Meeting was held on September 10, 2004. The seventh CG meeting for Cambodia was held on December 6-7, 2004 in Phnom Penh. The RGC circulated the Action Plan and Cambodia Declaration at this meeting. The next CG is scheduled for March 2-3, 2006. The WB is preparing a new Poverty Assessment for this meeting.

The Global Donor Platform for Rural Development (GDPRD) is working to harmonize donor activities in rural development. It has selected Cambodia (also Burkina Faso, Nicaragua, and Tanzania) for a preliminary fact finding study on donor collaboration. The draft Assessment Study on Harmonization and Alignment (H&A) in Rural Development (March 2005) with reports for each pilot country, was presented for discussion at the World Bank on March 30, 2005. The next step is to involve the partner/client institutions to assess their views on cooperation and to prepare a joint road map for improved H&A in Rural Development. RGC has requested (and gained approval from) GDPRD to facilitate the development of its Program-Based Approach (PBA) in the natural resources and land sector.

Future areas of work are likely to be in financial management and accountability (with common reporting requirements), monitoring and evaluation of donor-funded activities, and social and environmental safeguards.

A workshop on Dissemination of the Cambodia Fiduciary Review and Official Adoption of the new Standard Operating Procedures was held in Phnom Penh on September 13, 2005.

Cambodia was one of the thirteen partner countries attending the meeting of the Task Team on Harmonization and Alignment (TTHA) in Paris (2/23/04 – 2/25/04). The country was also represented at the TTHA in Paris in July 2004. RGC and its civil society organizations were represented at the Regional Workshop on Harmonization and Alignment for Development Effectiveness and Managing for Results, sponsored by AsDB and Japan, and hosted by the Gov’t of Thailand in Bangkok on October 19-20, 2004. The workshop prepared participants for the Second High Level Forum (HLF-2) on Harmonization and Alignment in Paris, Feb. 28-March 2, 2005.

In April 2004, a workshop on Participatory Poverty Assessment was a joint Government-Donor-NGO partnership between the Ministry of Planning, AsDB, DFID, WB and the Cambodia Development Research Institute (CDRI).

OECD/DAC Working Party has developed indicators (in a survey instrument) to monitor progress on harmonization and alignment. These indicators were field-tested in 14 countries (including Cambodia). A draft report has been prepared.

  Area:
 
5
Non-Financial Reporting and Monitoring

RGC’s first APR was approved by the Council of Ministers on August 6, 2004. It documents the progress in implementation of the PRSP (during calendar years 2002 – 2003) which has been constrained by a combination of policy slippages and exogenous shocks. Little or no progress has been made on administrative reform, improvement of the private sector environment, trade reform (including approval of legislation needed to join WTO), legal and judicial reforms, anti-corruption program, governance, and civil service reforms. However, given the government’s commitment to improve policies and advance reforms, the strategy continues to provide a credible framework for external aid. The report’s coverage is limited to only the key priority areas (e.g. rural and agriculture development, education, health, and road infrastructure). It also attempts to reconcile the MDGs and the NPRS for 2005.

OECD/DAC Working Party has developed indicators (in a survey instrument) to monitor progress on harmonization and alignment. Field-testing has been completed in all fourteen countries (including Cambodia). A draft report has been prepared.

NIS (with assistance from the WB) conducted the Cambodian Socio-Economic Survey (CSES) 2003-2004, the first comprehensive survey, which provides information on multiple dimensions of poverty. The CSES was financed by UNDP and SIDA.

A database of indicators (CAM-info) is being compiled at the National Institute of Statistics (NIS) and the line ministries (supported by UNICEF and GTZ) to monitor outcomes of NPRS, MDG and other policy framework.

A formal progress review on the implementation of the Harmonization Action Plan was tentatively scheduled for mid-2005.

Donors:
Name: Contact:
AsDB  
Australia  
Canada  
Denmark  
EC  
FAO  
Finland  
France  
Germany  
IFAD  
IMF  
Japan  
OECD  
Sweden  
UK  
UN  
UNDP  
UNICEF  
United States  
WB  
WFP  
WHO  
 Next Steps:
 Description:   Time Frame:   Progress Indicator:   Status:   Contact:   Government contact:   Donors: 
Complete field-testing in the 14 countries.  June 15, 2004  Survey completed.  Field-testing completed in all 14 countries (incl. Cambodia).  OECD/DAC:    - OECD 
Prepare the survey report.  September 2004.  Final report available.  First draft prepared.  OECD/DAC:    - OECD 
Conduct CSES 2003-2004.    CSES completed.  Completed.  WB:  NIS :  - Government
- Sweden
- UNDP
- WB 
Compile CAM-info.  2004.  CAM-info compiled.  In progress.    NIS:  - Government
- Germany
- UNICEF 
Donors provide periodic (probably quarterly) progress reports on on-going H&A efforts to RGC.  From Jan. 2005  Periodic progress reports provided by donors to RGC.         
 Resources:
 
This website provides practical information for development practitioners interested in the harmonization of operational policies, procedures, and practices. Although accessible to the general public, it is collectively owned by its members who regulate its content and accessibility