Aid Effectiveness Coordination Officers Workshop Glen Cove, New York unite and deliver effective support for countries Aid Effectiveness Coordination Officers Workshop Glen Cove, New York Abdul Hannan, Programme Advisor

Topics we’ll cover today 1. The international aid architecture 2. What is “aid effectiveness”? 3. Aid effectiveness and the UN

The UN is a small fish in a big funding pool

UN funding can only do so much Total funding for the UN’s development cooperation work is rising and reached $19 billion in 2007. Multilaterals only disburse 12 percent of total aid (official plus private; 30% of DAC ODA). The European Commission and the World Bank Group have grown to become the major multilateral players. The OECD countries provided USD 103.7 billion in ODA in 2007, a decrease of 8.4% in real terms over the previous year. The fall was expected: ODA had been exceptionally high in 2005 and 2006. Decrease of ODA in real terms by 8.4% (OECD 2007) Still, donors are not on track to meet their aid volume commitments, which the 2005 G8 summit in 2005 estimated would raise ODA to $130 billion by 2010. While there was an encouraging upsurge in bilateral aid to sub-Saharan Africa (an increase of 10% in 2007, excluding debt relief), donors still face a real challenge in doubling total aid to Africa by 2010.

Bilateral aid’s share of total aid has grown much more rapidly. · Multilateral aid agencies (around 230) outnumber donor and recipient countries combined. · Multilaterals only disburse 12 percent of total aid (official plus private), and about one quarter of total net country programmable aid. · Multilaterals disburse more towards Africa than do bilaterals.

Core funding for the UN development system has plateaued. UN funding has failed to keep pace with overall development assistance. It rose by only 4% in the past decade, while contributions to the EC rose 56%, the International Development Association rose by 43%, and regional banks’ funding climbed 33%. Most of the UN’s increase is from non-core, earmarked program or supplementary funding, which has encouraged supply-driven approaches to development assistance. UN System core funding for development fell 26% between 2001-2006. This undermines the principle of country ownership and the UN’s ability to formulate long-term strategies. Net ODA from OECD DAC countries to multilateral institutions at constant 2006 prices and exchange rates (millions USD)

… so the UN should focus on technical assistance and leverage its impartiality

The UN’s technical expertise is a strength only when deployed strategically and coherently. The UN system has unique advantages in helping countries develop. We are a strong and reliable partner with a unique depth of capacity and breadth of voice. The breadth and diversity of the UN system is also a weakness, because it’s often difficult for these very different organizations to plan and work together strategically. Some donors still see the UN’s field operations as too cumbersome and plagued by duplication in programming. Developing country governments, particularly small ones, often find dealing with the UN incurs excessive transaction costs. Cooperation is hindered by competition for funding, governance bodies that set divergent priorities, and different business practices. Even when mandates intersect, UN organizations tend to operate alone with little synergy and coordination between them. Meanwhile, the international aid architecture has changed dramatically. There are now many more donors, including middle income countries with different approaches. Funding patterns are changing significantly. A bigger share of aid is going directly to governments’ budgets, to vertical funds and to small NGOs. Donors have many more choices about where to put their money. Most money is now flowing bilaterally.

Any questions on how the UN fits into the international aid architecture?

1. The international aid architecture 2. What is “aid effectiveness”? 3. Aid effectiveness and the UN

The average number of donors per country is growing. The average number of donors per country is growing, while average project size appears to be shrinking, implying growing fragmentation of aid. Average of 12 donors per country in the 1960s Average of 33 donors per country in 2001-2005 Private and “emerging” donors More donors, smaller projects = growing fragmentation Difficult for local governments to drive the agenda 1960s 2001-2005

There are new modalities, mechanisms, Initiatives and partnerships with an emphasis on setting goals and results. unite and deliver effective support for countries Earmarking of ODA “Vertical” funds Budget support SWAps Highly-Indebted Poor Countries Poverty Reduction Growth Facility Poverty Reduction Strategy Credits • greater consensus on goals: a wide consensus on the need to focus efforts on reducing poverty • more emphasis on results: leading to the identification of clear and ambitious development targets (the Millennium Development Goals) which emphasise poverty reduction; • new mechanisms and initiatives to channel resources rapidly and effectively to countries in need: e.g. the HIPC initiative, the Poverty Reduction Growth Facility (IMF) and Poverty Reduction Strategy Credits (World Bank); • new approaches to improve aid effectiveness: the introduction of national poverty reduction strategies as a mechanism for explicitly linking policies, public expenditure allocations and poverty reduction goals; see www.worldbank.org/prsp and moves towards greater harmonisation and alignment see www.aidharmonisation.org • new aid instruments and approaches: disillusionment with impact using traditional aid instruments has led to increased emphasis on programme type support (budget support and sector programme support); • stronger partnerships: increased emphasis on strengthening the role of governments and developing true partnership approaches in which donor-government relationships are increasingly based on Government ownership and leadership, broad participation, partnership, mutual accountability and long-term commitment.

Aid effectiveness is gathering momentum. Millennium Development Goals Why use graphics from PowerPointing.com? Millennium Declaration Rome Forum (Harmonization) Doha Declaration Seoul 2000 2002 2003 2005 2008 2011 • 2000 Millennium Declaration (and the MDGs) The Declaration affirms the obligation of all members of the UN “to strive for the full protection and promotion in all countries of civil, political, economic, social and cultural rights for all”. Members declared that they would “spare no effort to free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty…” • 2002 Monterrey UN Conference on Financing for Development A partnership between developed and developing countries to achieve the MDGs in the context of open markets for economic growth, good governance, increasing aid flows, and improving the effectiveness of aid to achieve these objectives. • 2003 Rome High-Level Forum (OECD) In February 2003, leaders of the major multilateral development banks and international and bilateral organizations, and donor and recipient country representatives gathered in Rome for the High-Level Forum on Harmonization (HLF-Rome). This Forum spotlighted the issue of harmonization and alignment as a major development issue and gave international legitimacy to the good practice principles for harmonization and alignment • 2005 Paris High-Level Forum and Declaration (OECD) The Paris High Level Forum of 2005 was attended by development officials and ministers from 91 countries, 26 donor organizations and partner countries, representatives of civil society organizations and the private sector. The participants collectively resolved to reform the delivering and Accra Agenda Monterrey Consensus Paris Declaration

The Paris Declaration set five principles for more effective aid, with indicators and targets. • 2005 Paris High-Level Forum and Declaration (OECD) The Paris High Level Forum of 2005 was attended by development officials and ministers from 91 countries, 26 donor organizations and partner countries, representatives of civil society organizations and the private sector. The participants collectively resolved to reform the delivering and 5 principles for more effective aid Indicators and targets set for 2010 A “spirit” of doing things differently

Aid effectiveness principles mutual accountability ownership alignment managing for results harmonization ownership by countries - partner countries set their own strategies for poverty reduction, improve their institutions and tackle corruption; alignment with countries’ strategies, systems and procedures – donors align behind partner country objectives and use local systems; harmonisation of donors’ actions – donors coordinate, simplify procedures and share information to avoid duplication; managing for results – partner countries and donors shift focus to development results and results get measured; and mutual accountability – donors and partners are accountable for development results.

The Paris Declaration Pyramid

Paris Declaration Indicators

The 2006 Paris Declaration Monitoring Survey established baselines for 2005. 34 UN country teams participated.

The second survey in 2008 looked at 2007 data to assess progress The second survey in 2008 looked at 2007 data to assess progress. 56 country teams participated.

The final Monitoring Survey in 2011 will assess whether 2010 targets were met.

Any questions on what aid effectiveness means?

1. The international aid architecture 2. What is “aid effectiveness”? 3. Aid effectiveness and the UN

The UN system has unique advantages and challenges in delivering effective aid. The UN system has unique advantages in helping countries develop. We are a strong and reliable partner with a unique depth of capacity and breadth of voice. The breadth and diversity of the UN system is also a weakness, because it’s often difficult for these very different organizations to plan and work together strategically. Some donors still see the UN’s field operations as too cumbersome and plagued by duplication in programming. Developing country governments, particularly small ones, often find dealing with the UN incurs excessive transaction costs. Cooperation is hindered by competition for funding, governance bodies that set divergent priorities, and different business practices. Even when mandates intersect, UN organizations tend to operate alone with little synergy and coordination between them.

Impartiality makes the UN a trusted government partner that can help coordinate with donors. The UN often plays a lead role in donor cooperation fora in country For example, the UN is well-placed to provide governments with technical advice where a SWAP is being used.

Aid effectiveness builds on the existing reform agenda set by UN member states Member states have asked the UN system to be more coherent, coordinated and strategic TCPR 2007 Calls for “concrete, effective and timely action in implementing all agreed commitments on aid effectiveness, with clear monitoring and deadlines” ““welcomes efforts and initiatives to enhance the quality of aid and to increase its impact, including the implementation of the Paris Declaration on Aid Effectiveness”.

The UN system is making progress.

UN progress: Indicator 3 Proportion of aid flows to the government sector that is reported on partners’ national budgets. UNCTs on target in 2007: 5 (9%) Technical assistance provided by the UN is harder to put on budget than financial assistance

UN progress: Indicator 4 Proportion of donor capacity-development support provided through coordinated programmes consistent with partners’ national development strategies. UNCTs on target in 2007: 35 (63%) Difficult to achieve uniform interpretations for this indicator

UN progress: Indicator 5a proportion of aid flows that use public financial management systems in partner countries Proportion of aid flows that use public financial management systems in partner countries, which either (a) adhere to broadly accepted good practices or (b) have a reform programme in place to achieve these. UNCTs on target in 2007: 3 (5%) Key area for further UN reform

UN progress: Indicator 5b Proportion of aid flows that use partner country procurement systems with good practices or reforms in progress Indicator 5b: the proportion of aid flows that use partner country procurement systems, which either (a) adhere to broadly accepted good practices or (b) have a reform programme in place to achieve these. UNCTs on target in 2007: 1 (2%) Key area for further UN reform Economies of scale important too however

UN progress: Indicator 6 Reduction in the number of parallel project implementation units per country. Indicator 6: the reduction in the number of parallel project implementation units (PIUs) per country – that is, those PIUs that are created outside the existing structures of national implementation agencies. UNCTs on target in 2007: 11 (20%) Uncertainly around interpretations for this indicator Key area for reform

UN progress: Indicator 7 Proportion of aid disbursements released according to agreed schedules in annual or multi-year frameworks. Indicator 7: the proportion of aid disbursements released according to agreed schedules in annual or multi-year frameworks. UNCTs on target in 2007: 4 (7%) Uncertainly around interpretations for this

UN progress: Indicator 9 proportion of aid provided as programme-based approaches Indicator 9: the proportion of aid provided as programme-based approaches. UNCTs on target in 2007: 4 (7%) Key area for further UN reform

UN progress: Indicator 10a Proportion of field missions that are joint. Indicator 10a: the proportion of field missions that are joint UNCTs on target in 2007: 34 (61%) Good result, but unclear how much Is intra-UN collaboration and how much is UN-external donor cooperation

UN progress: Indicator 10b Proportion of country analytical work, including diagnostic reviews, that is joint. Indicator 10b: the proportion of country analytical work, including diagnostic reviews, that is joint. UNCTs on target in 2007: 29 (52%) Good result, but unclear how much is intra-UN collaboration and how much is UN-external donor cooperation

The UNDG’s priority is to help UNCTs engage in the changing aid environment and do well in the 2011 survey. UNDAF indicators reflecting aid effectiveness principles UNDG Guidance Note “UNCT Engagement in the Changing Aid Environment” UNDG Action Plan on Aid Effectiveness The UNDG’s priority is to help UNCTs engage effectively in the changing aid environment and do well in the 2011 survey. UNDG Guidance Note “UNCT Engagement in the Changing Aid Environment” UNDG Action Plan on Aid Effectiveness UNDAF indicators reflecting aid effectiveness principles

Any questions on the UN and Aid Effectiveness?

Thank You Abdul Hannan, Programme Advisor unite and deliver effective support for countries Aid Effectiveness Thank You Abdul Hannan, Programme Advisor