Transcript PRSP Monitoring and Synthesis Project

Putting the new aid agenda to work
Asia Programme Managers Meeting
Delhi, May 22nd 2002
Quick Recap (1)

Asia poverty reduction strategy processes are
different –
not necessarily a PRS
 maybe state rather than federal level
 different views on role of state
 large/entrenched private sector
 welfarist vs. dev. concepts of poverty
 capacity is available
 civil society generally more organised

2
Recap (2)

3
A new opportunity to influence pro-poor change?

Not if political commitment remains weak – process
conditionality unlikely to be any different, project/sector
support still important

An entry point for DFID to support more strategic
thinking, pro-poor dialogue & changes in donor
behaviour

Pro-poor political change is complex & does not come
from ‘outside’
Recap (3)

Challenges/dilemmas


4
What makes for a quality prs process? What’s the
bottom line? Is there a shared Asian perspective?
Is a ‘sound’ prs one backed by an MTEF? Should
DFID support national/subnational govts without such
a strategy? What about China? India? MICs?

Need to establish some ground rules for working with
more effectively with IFIs, RDBs (& Japan)

Need an HQ policy that is evidenced-based, able to
address the VFM question
PRSPs & Aid instruments

5
Support country leadership/ownership by working to
strengthen Govt. systems and processes:

A move away from parallel/off-budget projects

Shift towards joint funding of:

Sector programmes

General budget

Jointly agreed indicators, common performance
assessment & monitoring systems (building on
national systems)

Harmonised rules/procedures for disbursement,
accountability & risk assessment
Implications
6

Types of project/sector support - on-budget, linked with
PRS framework, performance-monitoring

Balance between conditionality, earmarking, accountability
requirements

Capacity support/non-financial assistance

Working with other donors and with non-government
entities
Issues in selecting aid instruments
7

Presence of a national commitment to poverty reduction
(presence of a prs/MTEF?)

Quality of PEM & PFM, integrity of accounting & audit
arrangements, off-budget exps., quality of indicators for
performance monitoring/ expenditure tracking?

Reform record on macro & structural

Risk vs. reward
IFI Instruments




8
PRGF – ‘Key Features’ : supporting PRS policy fw.
Performance criteria/benchmarks streamlined & linked to
PRS policy commitments. Importance of PSIA.
PRSC – programmatic adj. credit, ex post performance
assessment, annual tranches within medium term
framework set by PRS. Due diligence tests – CFAA, CPA,
SSR, PSIA.
Issues – Ambitious reform agenda, need to build on
sectoral processes, ‘champions’ within Govt, annual
tranching (reporting) vs.medium term perspective.
Dangers – ‘donors ganging up’, eggs in one basket
Budget Support – Risks/Safeguards


9
Risk of not achieving stated objectives because of:

only rhetorical commitment to poverty reduction

other reform measures not taken or macro deteriorates

corruption
Ways of assessing/mitigating risk

Presence of PRS backed by signs of pro-poor allocations/spend

CFAA, PER, CPA & other diagnostic tools

Safeguards - capacity support to budgeting & auditing, independent
financial tracking, financial accountability conditions, expenditure/
sector earmarking

Media/NGO scrutiny
Case study - Tanzania


10
Shift to budget support based on:

Macro stability largely achieved

PRSP in place

Increasing poverty focus of Govt. spending

Commitment to improving Govt. systems
Features of budget support:

Common mech. (9 other donors), common performance
assessment linked to PRSP

Safeguards: CFAA complete, TA support to Govt. systems &
poverty monitoring
Tanzania


Risks

PRSP implementation off track

PFM/PSR reforms ineffective

Joint donor support collapses
Complementary measures

11
‘Strategic’ project support for pro-poor growth; public
accountability from below (CSOs)

Continued SWAP engagement in PRS priority sectors

Influencing through analytical support, aid coordination.