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FINNISH AIDFINNISH AID in the PRS-context...

...Where are we?...Where are we?Timo Voipio/MFAF

May 2003

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Finland’s role?Finland’s role?

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Goals / Commitments / Real situationGoals / Commitments / Real situation- Summary:- Summary:

• All ODAAll ODA, incl. budget support, sector support , incl. budget support, sector support and and projectsprojects have to be based on the PRS-priorities. have to be based on the PRS-priorities.• The % of BS/SS still The % of BS/SS still lowlow in Finland’s ODA (~2%) in Finland’s ODA (~2%)• Most contracts in the form of projects, but Most contracts in the form of projects, but increasingly aligned to PRS-priorities.increasingly aligned to PRS-priorities.• But: PRS & BS & SS are important elements in But: PRS & BS & SS are important elements in the context where Finland operates. the context where Finland operates. • E.g. >50 % of Tanzania’s total ODA is BS.E.g. >50 % of Tanzania’s total ODA is BS.• Hence Hence We (at least) have to understand & We (at least) have to understand & discuss - preferably influence!discuss - preferably influence!

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Government of Finland’s Policies?Government of Finland’s Policies?

MAIN GOALS OF DEV’T COOP.?MAIN GOALS OF DEV’T COOP.?

1.1.Poverty reductionPoverty reduction

2.2.Reduction of global threats to Reduction of global threats to environmentenvironment

3.3.Promotion of equality, Promotion of equality, democracy, human rightsdemocracy, human rights

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GoF 2001 GoF 2001 ’Decision-in-Principle’’Decision-in-Principle’: : To enhance poverty impact… To enhance poverty impact…

• bilateral cooperation will be bilateral cooperation will be concentratedconcentrated on fewer partner countries on fewer partner countries (Moz,Vie,Tan,Eti,Nep // Ken?Zam?Nic?BuFa?Hon?)(Moz,Vie,Tan,Eti,Nep // Ken?Zam?Nic?BuFa?Hon?)

• … …and and focusedfocused on fewer and larger on fewer and larger programmes or sectors (max. 3/country).programmes or sectors (max. 3/country).

•Finland supports dev’t and implementation Finland supports dev’t and implementation of PRSs and sector programmesof PRSs and sector programmes

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GoF 2001 GoF 2001 ’Decision-in-Principle’’Decision-in-Principle’: : To enhance poverty impact (2)…To enhance poverty impact (2)…

•New forms of cooperation require new New forms of cooperation require new forms of mngt, decision-making and admin.forms of mngt, decision-making and admin.

•MFAF will MFAF will ensureensure that the level of dev’t that the level of dev’t expertise will be maintained and enhanced: expertise will be maintained and enhanced: (a) reform the MFAF career system (a) reform the MFAF career system (MFAF?)(MFAF?)

(b) in-depth training for the entire staff (b) in-depth training for the entire staff

(c) Recruit local experts and more advisers (c) Recruit local experts and more advisers to embassiesto embassies

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MFAF’s ’Implementation Plan’MFAF’s ’Implementation Plan’• Millennium Decl. + Millennium Decl. + MDGsMDGs = aid steering & perf. assessment framework= aid steering & perf. assessment framework• To ensure partner countries’ leadership and donor To ensure partner countries’ leadership and donor coordinationcoordination PRSPPRSP = = main framework of Finland’s actionmain framework of Finland’s action..• Finland will…Finland will… - participate in harmonisation of donor practices- participate in harmonisation of donor practices - advocate aid admin. that develops poor - advocate aid admin. that develops poor countries’ own admin.structures and procedures.countries’ own admin.structures and procedures.• Need for bi/multi coherence Need for bi/multi coherence Influence WB/UN! Influence WB/UN!

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’’The most important objective of The most important objective of cooperation is poverty reduction’cooperation is poverty reduction’

• MFAF-mMFAF-mandatesandates for bilateral consultations have for bilateral consultations have to be analysed from poverty perspectiveto be analysed from poverty perspective

• Finland will support (and use), with other donors, Finland will support (and use), with other donors, country-specific country-specific poverty analysespoverty analyses

• Finland will specifically monitor income Finland will specifically monitor income redistribution policies and will seek redistribution policies and will seek to reduce to reduce inequalitiesinequalities

•Finland will support democracy by promoting Finland will support democracy by promoting participationparticipation of civil societies and parliaments. of civil societies and parliaments.

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Finland’s experience this far (1)Finland’s experience this far (1)1) PRS-process: 1) PRS-process: monitoring & supportmonitoring & support::- Moz, Viet, Tan, Eti, Nep, Nic, Zam, Ken .- Moz, Viet, Tan, Eti, Nep, Nic, Zam, Ken .

2) 2) Budget supportBudget support to PRS-priorities: to PRS-priorities: - Greatest demand for this mode of assistanceGreatest demand for this mode of assistance-Tanz (Bilat.MDF-97Tanz (Bilat.MDF-97PRBS-01PRBS-01WB/PRSC-03), WB/PRSC-03), - Nic. (-02), Moz. (-03)Nic. (-02), Moz. (-03)- But Viet: NO! Preconditions for Finland’s BS not met:But Viet: NO! Preconditions for Finland’s BS not met: a. budget transparency (state secret still in 1999-2000)a. budget transparency (state secret still in 1999-2000) b. link from PRSP (CPRGS) to budgetb. link from PRSP (CPRGS) to budget c. implementation capacityc. implementation capacity Can we identify other ways to support the PRSP-Can we identify other ways to support the PRSP-process? Embassy: Need for quick funds from Embassy.process? Embassy: Need for quick funds from Embassy.

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Finland’s experience this far…(2)Finland’s experience this far…(2)

• Sector programmeSector programme support support - FIN: engaged in preparations: many countries- FIN: engaged in preparations: many countries

- all funding still through ’baskets’ or as projects - all funding still through ’baskets’ or as projects • Discussion about Finland’s role and ’niches’. Discussion about Finland’s role and ’niches’. Money alone or also focused monitoring (TA)?Money alone or also focused monitoring (TA)? - e.g. teacher training? - e.g. teacher training? - e.g. integrated special needs education?- e.g. integrated special needs education? - e.g. forest inventories & NFPs?- e.g. forest inventories & NFPs? - e.g. reproductive health?- e.g. reproductive health?

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Need to engage in, to read and to Need to engage in, to read and to promote public discussion about, e.g…promote public discussion about, e.g…• National budgets and accounts monitoring. National budgets and accounts monitoring. • PER – Public Expenditure ReviewsPER – Public Expenditure Reviews• CFAA – Country Financial Accountability CFAA – Country Financial Accountability Assessments (~ auditors’ assessment)Assessments (~ auditors’ assessment)•Poverty, welfare & gender statistics development, Poverty, welfare & gender statistics development, monitoring and dissemination monitoring and dissemination

• Finland’s State Audit Office – BS OK, but monitoring of Finland’s State Audit Office – BS OK, but monitoring of resultsresults – Take part in – Take part in Poverty MonitoringPoverty Monitoring??

• Central/local gov’nt relationships: regional Central/local gov’nt relationships: regional equalisation in taxation and budget allocation?equalisation in taxation and budget allocation?• Tax reform and capacity buildingTax reform and capacity building

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But…Finland’s capacity constraintsBut…Finland’s capacity constraints

1) 1) StaffStaff – Too few embassy staff? – Too few embassy staff?• Traditionally all Finnish projects were managed by Traditionally all Finnish projects were managed by

competent Finnish consulting companiescompetent Finnish consulting companies• Now: Influencing takes place through donor-govn’t Now: Influencing takes place through donor-govn’t

dialogues – Who can represent Finland? dialogues – Who can represent Finland? • 5 new experts recruited into embassies in 2002 – more 5 new experts recruited into embassies in 2002 – more

needed! needed! • Can we use monitoring consultancies & research…?Can we use monitoring consultancies & research…?

2) 2) MoneyMoney - Finland/SPA: 29 meuro (2003-5) - Finland/SPA: 29 meuro (2003-5)• = 8 x Finland in 2000-2002, but only 1/5 x Ireland= 8 x Finland in 2000-2002, but only 1/5 x Ireland

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Good discussion in Finland on, e.g…Good discussion in Finland on, e.g…

1.1. State Audit Office of Finland (VTV) State Audit Office of Finland (VTV) Monitor Monitor results (pov.redresults (pov.red), not inputs!), not inputs!

2.2.Budget support condition: IMF ”on-track”?Budget support condition: IMF ”on-track”?- Finland: Yes? Sweden: Not automatically. - Finland: Yes? Sweden: Not automatically.

3.3. Budget/Sector prgs vs. Area dev’t prgs? Budget/Sector prgs vs. Area dev’t prgs? - Budget s. – right principles (ownership, no - Budget s. – right principles (ownership, no

parallel PMUs, capacity & systems dev’t for parallel PMUs, capacity & systems dev’t for permanent institutions. But: permanent institutions. But: for Central governments? for Central governments?

or for Local governments? (Districts?) or for Local governments? (Districts?) (= equal size partners with Finland?)(= equal size partners with Finland?)

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Good discussion in Finland (2)Good discussion in Finland (2)

4.4. What role for Finnish dev’t NGOs? How to What role for Finnish dev’t NGOs? How to strengthen civil society partners’ capacity and strengthen civil society partners’ capacity and voice in PRS-processes? voice in PRS-processes? 5.5.How to ensure markets for Finnish How to ensure markets for Finnish consultants (TK: If we are good, we’ll be OK.)consultants (TK: If we are good, we’ll be OK.)6.6. But: How to share Finnish/Nordic values & But: How to share Finnish/Nordic values & experiences? (Harmonisation of donor-experiences? (Harmonisation of donor-procedures but not ideologies – How to procedures but not ideologies – How to provide a menu of models for poor country provide a menu of models for poor country partners to choose from?)partners to choose from?)

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’’A thorough poverty analysis as part of A thorough poverty analysis as part of design of every project and programme’design of every project and programme’

• Link between gender equality and poverty Link between gender equality and poverty reduction must be integrated to this work.reduction must be integrated to this work.

+ Rights of disabled people+ Rights of disabled people• In recruitment/training of consultants attention In recruitment/training of consultants attention will be paid to poverty/gender/disability skillswill be paid to poverty/gender/disability skills• Within MFAF… Within MFAF… – – Poverty Competence Project / unit-by-unitPoverty Competence Project / unit-by-unit - Pages at - Pages at global.finland.fi/koyhyysglobal.finland.fi/koyhyys - Joint Donor Staff Training on PRS-appr.- Joint Donor Staff Training on PRS-appr. - This training- This training - - Key messages Key messages

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Causes and solutions to Poverty:Causes and solutions to Poverty:

1.1. Multi-dimensionalMulti-dimensional all all MDGsMDGs

2.2. Context-specificContext-specific national PRS, no ”one-size-fits-all”national PRS, no ”one-size-fits-all”

3.3. Coherent Coherent e.g. aid + trade + migration + agric.e.g. aid + trade + migration + agric.

4.4. DemocraticDemocratic Country: ownership, participation, Country: ownership, participation, Donors: partnership, harmonisationDonors: partnership, harmonisation

MULTI-DIMENSIONAL POVERTY – ALL MDGs

SECURITYvulnerability

social protection/safety nets & springboards

POLITICALrights

freedoms voice &

influence

SOCIO-CULTURAL

statusrespect, dignity

ECONOMICconsumptionincome

assets

HUMAN

healtheducation

hunger, thirst

GENDER

ENVIRONMENT