Download - Aid management in fragile states
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Aid management in a fragile, low capacity context:
the case of CAR
Kersten JAUERUnited Nations Development Programme
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Contents
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A. What makes CAR a fragile state
B. How to adapt the aid management system (DAD) to fragility
C. Why fragile can be easy
D. How aid management drives policy (examples)
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A. What makes CAR a fragile state
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Situated in the heart of Africa
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CAR
Indicator Value
Size 1.1 x France
Population 4.2m
GDP per head $398
GDP (‘07) $1.7bn
Aid $317m
HDI 178 of 179
Life expect. 43 years
Literacy 47%
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Landlocked in the fragile centre
CAR
Rebellion or conflict
ChadSudan
Cameroon
DRCCongo
Darfur
GabonUganda
Nigeria
South Sudan
Bangui
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Political instability since Emperor Bokassa
Jean-Bédel BokassaHead of state 1966-1979
Crowned emperor in 1977
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No development in more than two decades
Slide 7
1990Source: HDR (2007)
1985 1995 2000 2005
Human Development Index (HDI) Growth, Base = 100 (1985)
Burkina Faso, Niger, Guinea-Bissau,Mali, Mozambique, Chad, Ethiopia
CAR
DRC
100
+15%
+30%
+45%
-15%
One of only two LDCs where HDI is lower, not higher, than in 1985
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Almost no IT capacity and knowledge
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Internet users per 100 inhabitants – almost nowhere lower than in CAR
United KingdomUnited States
ThailandPakistan
IndiaArmenia
Sri LankaZambia
NamibiaRwanda
AfghanistanYemen
SomaliaIraq
CAR
79.6
Source: ITU (2008)
74.0
18.010.5
7.0
5.76.4
5.65.3
3.11.81.61.1
1.00.4
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Foreign assistance fell significantly
Source: OECD (2007), Development Assistance Disbursements (constant USD), All donors
1985 1990 2000 2005
Aid to Sub-Saharan Africa rose 87% since 1985, but fell 49% for CAR
1995
100
-20%
CAR
Sub-Saharan Africa
+40%
+60%
-80%
ODA Growth, Base = 100 (1985)
-60%
-40%
+20%
+80%
+100%
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Hardly any international presenceLate 2006, only 4 int. NGOs, UN/EC there, but no World Bank, IMF, AfDB
Paoua
Bangui
Bambari
Birao
Ndélé
SibutBouar
Bossangoa
Bozoum
Kaga-Bandoro
EC France
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Government disconnected from aid effort
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Only 25% of development projects were documented in national accounts
500 100 150 200
160 developmentprojects enteredin DAD
40 documented in public expenditure report for 2007
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Donor RoundTable in BXL
Int. advocacycampaignstarted
PRSP published
Rapid progress since 2007
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2005 2006 2008
From close to zero to DAD + HIPC completion in little more than 2 years
< >
2007 2009
Democratic elections
World Bankclears arrears
• No Poverty Reduction Strategy (PRSP)
• No effective fundraising strategy
• No humanitarian clusters or dev. coordination groups
• No PIP, MTEF, etc.
• Knowledge about aid forms and modalities virtually inexistent in ministry of planning or finance
Paris Declaration signed and HIPC decision point reached
Hum. clustersstarted
Sector andregional dev.committeesstarted
DAD projectstarted
HIPC completionpoint reached
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Sharp increase in presence creates volatilityLate 2008, 30 international NGOs, UN, EC, World Bank, IMF, AfDB and more
Paoua
BANGUI
Bambari
Birao
Ndélé
SibutBouar
Sam Ouandja
Bossangoa
Bozoum Mbrés
Kaga-Bandoro
Kabo
Gordil
Obo
Bocaranga
JUPEDEC
EC France
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Annual aid gross disbursements by nature (origin of funds)
Sharp increase in aid creates volatility
2002 2003 2004 2005 2006 2007
$63m
$126m
$81m
$251m $242m
$117m
DevelopmentHumanitarian
Clearing of debt arrears
2008
$317m
33%
67%
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B. How to adapt the aid management system to fragility
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Achieve more by doing less
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Adapting aid management to fragility
Key steps(the case of CAR)
1
2
3
4
Have one tool only• Integrate humanitarian and development aid well (OCHA)
• No other PIP or project tracking database at national level (3W)
Improve contract and tool• Design tight technical specifications and create an online bug tracking application
• Reflect pooled fund contributions while avoiding double-counting
• Prepare for the future (1st and 2nd
level implementers, transaction details)
• Simplify Paris Declaration tracking (work with OECD sector codes)
Go international and learn from standards• Do not host locally, and build a website to centralize docs and reports
• Be compliant with DAC reporting directives (definitions, types, markers)
• Use OECD sector codes but remain compatible with PRSP sectors
Stay relevant• Make DAD key tool for PRSP, dev. coordination groups, dec. makers
• Make DAD unit a point of entry• Focus on accessible reporting
5 Design incentives!• No govt. signature under AWP without data in DAD
• No portfolio, UNDAF, CAS review not based on DAD data
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* Exceeding OECD DAC coverage
PRSP ‘09review
Implementing an aid management system
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Jun Jul Sep
Twelve months to design, install, enter data and report on aid for 3 years
Aug Mar
Core DAD pilotdeployed
Oct Nov Dec Jan Feb Apr May Jun Jul Aug
Contract with Synergysigned
Design of contract and detailed technical specifications
Data entry and training starts
Prelim. data for 2007 published
Prelim. data for2008 and 2007 final published*
Prelim. data for1st sem. 09 and
2008 final publ.*
AWP reviews
PRSP ‘08review
DAD donor profilepilot deployed
DAD finals deployed
Pub. expen-diture review
400
200
300
Pro
ject
s in
DA
D
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C. Why fragile can be easy
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The more fragile, the harder
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Fragile environments do have generic disadvantages
Disadvantages(the case of CAR)
1
2
3
4
Limited skills• Limited pool of potential collaborators (national and international)
• High training needs everywhere (starting from zero)
Higher turnover• Organisations arrive and leave more quickly
• Humanitarian projects are 12to 18 months maximum
• International staff stay 3 to 12 months
• National staff move frequently
Poor connectivity• VSAT connection typically 512kbps (shared with 30+ users)
• Working online with DAD directly difficult
Higher political risk• Change of leadership
• Change of staff / product preferences
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But also: the more fragile, the less complex
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Fragile environments can offer advantages to aid management
Advantages(the case of CAR)
1
2
3
4
Simpler aid modalities• Only grants, no loans
• Donors or PIUs implement projects (DEX not NEX)
• Aid only through official channels
Smaller group of actors• Fewer (resident) bi- / multilaterals
• Fewer int. and local NGOs
• Easier access to decision makers
Simpler public financial management (realistic approach)
• Internal revenue limited, aid represents very high share of budget
• Public investment plan is function of development projects (DAD)
• Mid-term expenditure plan is function of aid (DAD) plus int. rev.
Clean slate• Few or no legacy systems
• Chance to build back better
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Public financial management shortcut
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Internal revenue has little relevance for investment and budget planning
500 150 250 350
$105m
$317mForeign aid in 2008
Internal revenue
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Public financial management (PFM) shortcut
• Only $1.5m in public investments financed with internal resources
• 99.9% of public investment is financed through development aid, all of which documented in DAD
• DAD thus simplifies public investment and mid-term expenditure planning
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Govt. expenditure on int. rev. + bud. support
$45m, Debt (28%)
$17m, Interest (10%)$9m, Current costs
(6%)
$81m, Salaries (51%)
$6m, Transfers / subsidies(4%)
$1.5m, Investment (1%)
Budget support
DAD as a tool for PFM
* Intern. resources plus non-specific budget support, but excluding aid financed projects and programmes, Source: Budget execution report 2008
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D. How aid management can drive policy
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Track PRSP financing and alignment
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Monitor aid alignment to nationals goals and the poverty reduction strategy
Needs
Development
Humanitarian
(1) Peace and security
(2) Governance andrule of law
(4) Human capital
3) Econ. recovery and reconstruction
Budget supp. / debtwithout HIPC
$71m
$68m
$884m$265m (31%)
$206m (79%)
$55m (81%)
$262m
$82m (115%)
$59m
* Total value of specific projects / agreements signed Oct. 2007, plus commitments made in Mar. and Sep. 2007 for road construction Baoro - Garam Boulaye,including for multi-year projects and activities
Poverty reductionstrategy pillar
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Measure alignment of aid and poverty
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> 20.000> 40.000> 80.000> 120.000> 180.000> 320.000
Combine needs indicators and aid data to shape the policy debate
Number of poor
1
3
4
5
6
78 9
10
11
1213
1415
15
16
Prefecture Hum Dev Σ
1 Bam.-Bangoran 5,6 1,6 7,2
2 Bangui 5,8 53,5 59,2
3 Basse-Kotto 0,0 1,7 1,7
4 Haute-Kotto 5,4 1,0 6,4
5 Haut-Mbomou 0,1 1,0 1,1
6 Kémo 0,0 2,5 2,5
7 Lobaye 0,0 3,9 3,9
8 Mambéré Kadéï 0,0 1,5 1,5
9 Mbomou 0,0 1,1 1,1
10 Nana-Gribizi 12,7 2,1 14,8
11 Nana-Mambéré 3,5 4,8 8,3
12 Ombella-M‘Poko 3,1 2,8 5,8
13 Ouaka 0,1 1,9 2,0
14 Ouham 20,6 3,4 24,0
15 Ouham-Péndé 16,3 2,3 18,6
16 Sangha-Mbaéré 0,0 4,8 4,8
17 Vakaga 8,9 1,0 9,9
Non-specified 7,4 79,7 87,1
Humanitarian
Development
Expenditure 2008
2
$19m$24m
$15m
$7m $10m
$6m
$1m$1m$2m$3m$6m$8m
$60m$5m $4m
$2m$2m
Bangui
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Identify new challenges to development...
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Analysis of the impact of the global economic crisis on CAR...
01/07 01/08 07/08 12/0807/07
60,000
50,000
40,000
30,000
20,000
10,000
30,000
25,000
20,000
15,000
10,000
5,000
CaratsCubic metres
Wood (cut) Wood (sawn) Diamonds
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... and support development partners’ response
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Bangui
< $5m> $5m> $15m> $30m> $60m> $120m
Diamonds
Woods
... showed insufficient aid levels in affected diamond/wood prod. regions
* Projects signed in 2007/08
Commitments*
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Push for better project management
• DAD and simple research allows aid management unit to push implementers
• Weak project management capacity in government and multilateral aid agencies
• Often, large parts of the budget are only spent during the 4th quarter
• Severe deficiencies in procurement, recruitment and finance lead to delayed and sub-standard results
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Poor project management quality Budget delivery profiles compared
0 3 6 9 12
100%
75%
50%
25%
Month
Budg
et s
pentBad: 50% of
budget spent in last 2 months
Good: at least 50% of budget spent in first 6 months
5 months lost
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Signal danger ahead to decision makers
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2002 2003 2004 2005 2006 2007 2008 2009*
$63m
$126m
$81m
$251m $242m
$117m
$317m
Development aid stabilizes while humanitarian aid is likely to decline
DevelopmentHumanitarian
Clearing of debt arrears
* Based on data available as of July 2009
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For more information
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• http://dad.minplan-rca.org
Supported by the ARCAD project – Building capacity for the implementation of CAR’s poverty reduction strategyAid coordination | Public finances | Anti-corruption measures | Administrative reform | Business environment
• Désiré Yassigao | [email protected] coordinator | Ministry of Planning
• Kersten Jauer | [email protected] Information Manager | UNDP
• Tino Kreutzer | [email protected] Manager | UNDP