1. 1 FINNISH AID FINNISH AID in the PRS-context......Where are we? Timo Voipio/MFAF May 2003

2. 2 Finlands role?

3. 3 Goals / Commitments / Real situation - Summary: All ODA, incl. budget support, sector support and projects have to be based on the PRS-priorities. All ODA, incl. budget support, sector support and projects have to be based on the PRS-priorities. The % of BS/SS still low in Finlands ODA (~2%) The % of BS/SS still low in Finlands ODA (~2%) Most contracts in the form of projects, but increasingly aligned to PRS-priorities. Most contracts in the form of projects, but increasingly aligned to PRS-priorities. But: PRS & BS & SS are important elements in the context where Finland operates. But: PRS & BS & SS are important elements in the context where Finland operates. E.g. >50 % of Tanzanias total ODA is BS. E.g. >50 % of Tanzanias total ODA is BS. Hence We (at least) have to understand & discuss - preferably influence! Hence We (at least) have to understand & discuss - preferably influence!

4. 4 Government of Finlands Policies? MAIN GOALS OF DEVT COOP.? 1. Poverty reduction 2. Reduction of global threats to environment 3. Promotion of equality, democracy, human rights

5. 5 GoF 2001 Decision-in-Principle: To enhance poverty impact… bilateral cooperation will be concentrated on fewer partner countries (Moz,Vie,Tan,Eti,Nep // Ken?Zam?Nic?BuFa?Hon?) bilateral cooperation will be concentrated on fewer partner countries (Moz,Vie,Tan,Eti,Nep // Ken?Zam?Nic?BuFa?Hon?) …and focused on fewer and larger programmes or sectors (max. 3/country). …and focused on fewer and larger programmes or sectors (max. 3/country). Finland supports devt and implementation of PRSs and sector programmes Finland supports devt and implementation of PRSs and sector programmes

6. 6 GoF 2001 Decision-in-Principle: To enhance poverty impact (2)… New forms of cooperation require new forms of mngt, decision-making and admin. New forms of cooperation require new forms of mngt, decision-making and admin. MFAF will ensure that the level of devt expertise will be maintained and enhanced: (a) reform the MFAF career system (MFAF?) MFAF will ensure that the level of devt expertise will be maintained and enhanced: (a) reform the MFAF career system (MFAF?) (b) in-depth training for the entire staff (c) Recruit local experts and more advisers to embassies

7. 7 MFAFs Implementation Plan Millennium Decl. + MDGs Millennium Decl. + MDGs = aid steering & perf. assessment framework = aid steering & perf. assessment framework To ensure partner countries leadership and donor coordination To ensure partner countries leadership and donor coordination PRSP = main framework of Finlands action. PRSP = main framework of Finlands action. Finland will… Finland will… - participate in harmonisation of donor practices - participate in harmonisation of donor practices - advocate aid admin. that develops poor countries own admin.structures and procedures. - advocate aid admin. that develops poor countries own admin.structures and procedures. Need for bi/multi coherence Influence WB/UN! Need for bi/multi coherence Influence WB/UN!

8. 8 The most important objective of cooperation is poverty reduction MFAF-mandates for bilateral consultations have to be analysed from poverty perspective MFAF-mandates for bilateral consultations have to be analysed from poverty perspective Finland will support (and use), with other donors, country-specific poverty analyses Finland will support (and use), with other donors, country-specific poverty analyses Finland will specifically monitor income redistribution policies and will seek to reduce inequalities Finland will specifically monitor income redistribution policies and will seek to reduce inequalities Finland will support democracy by promoting participation of civil societies and parliaments. Finland will support democracy by promoting participation of civil societies and parliaments.

9. 9 Finlands experience this far (1) 1) PRS-process: monitoring & support: - Moz, Viet, Tan, Eti, Nep, Nic, Zam, Ken. 2) Budget support to PRS-priorities: - Greatest demand for this mode of assistance - Tanz (Bilat.MDF-97 PRBS-01 WB/PRSC-03), - Nic. (-02), Moz. (-03) - But Viet: NO! Preconditions for Finlands 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 budget b. link from PRSP (CPRGS) to budget c. implementation capacity c. implementation capacity Can we identify other ways to support the PRSP- process? Embassy: Need for quick funds from Embassy. Can we identify other ways to support the PRSP- process? Embassy: Need for quick funds from Embassy.

10. 10 Finlands experience this far…(2) Sector programme support Sector programme 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 Finlands role and niches. Money alone or also focused monitoring (TA)? Discussion about Finlands role and niches. 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?

11. 11 Need to engage in, to read and to promote public discussion about, e.g… National budgets and accounts monitoring. National budgets and accounts monitoring. PER – Public Expenditure Reviews PER – Public Expenditure Reviews CFAA – Country Financial Accountability Assessments (~ auditors assessment) CFAA – Country Financial Accountability Assessments (~ auditors assessment) Poverty, welfare & gender statistics development, monitoring and dissemination Poverty, welfare & gender statistics development, monitoring and dissemination Finlands State Audit Office – BS OK, but monitoring of results – Take part in Poverty Monitoring?Finlands State Audit Office – BS OK, but monitoring of results – Take part in Poverty Monitoring? Central/local govnt relationships: regional equalisation in taxation and budget allocation? Central/local govnt relationships: regional equalisation in taxation and budget allocation? Tax reform and capacity building Tax reform and capacity building

12. 12 But…Finlands capacity constraints 1) Staff – Too few embassy staff? Traditionally all Finnish projects were managed by competent Finnish consulting companiesTraditionally all Finnish projects were managed by competent Finnish consulting companies Now: Influencing takes place through donor-govnt dialogues – Who can represent Finland?Now: Influencing takes place through donor-govnt dialogues – Who can represent Finland? 5 new experts recruited into embassies in 2002 – more needed!5 new experts recruited into embassies in 2002 – more needed! Can we use monitoring consultancies & research…?Can we use monitoring consultancies & research…? 2) Money - 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

13. 13 Good discussion in Finland on, e.g… 1. State Audit Office of Finland (VTV) Monitor results (pov.red), not inputs! Monitor results (pov.red), not inputs! 2. Budget support condition: IMF on-track? - Finland: Yes? Sweden: Not automatically. 3. Budget/Sector prgs vs. Area devt prgs? - Budget s. – right principles (ownership, no parallel PMUs, capacity & systems devt for permanent institutions. But: for Central governments? or for Local governments? (Districts?) or for Local governments? (Districts?) (= equal size partners with Finland?) (= equal size partners with Finland?)

14. 14 Good discussion in Finland (2) 4. What role for Finnish devt NGOs? How to strengthen civil society partners capacity and voice in PRS-processes? 5. How to ensure markets for Finnish consultants (TK: If we are good, well be OK.) 6. But: How to share Finnish/Nordic values & experiences? (Harmonisation of donor- procedures but not ideologies – How to provide a menu of models for poor country partners to choose from?)

15. 15 A thorough poverty analysis as part of design of every project and programme Link between gender equality and poverty reduction must be integrated to this work. Link between gender equality and poverty reduction must be integrated to this work. + Rights of disabled people In recruitment/training of consultants attention will be paid to poverty/gender/disability skills In recruitment/training of consultants attention will be paid to poverty/gender/disability skills Within MFAF… Within MFAF… – Poverty Competence Project / unit-by-unit – Poverty Competence Project / unit-by-unit - Pages at global.finland.fi/koyhyys - Pages at global.finland.fi/koyhyys - Joint Donor Staff Training on PRS-appr. - Joint Donor Staff Training on PRS-appr. - This training- Key messages - This training- Key messages

16. 16 Causes and solutions to Poverty: 1. Multi-dimensional all MDGs all MDGs 2. Context-specific national PRS, no one-size-fits-all national PRS, no one-size-fits-all 3. Coherent e.g. aid + trade + migration + agric. e.g. aid + trade + migration + agric. 4. Democratic Country: ownership, participation, Country: ownership, participation, Donors: partnership, harmonisation Donors: partnership, harmonisation

17. MULTI-DIMENSIONAL POVERTY – ALL MDGs SECURITY vulnerability social protection/safety nets & springboards POLITICAL rights freedoms voice & influence SOCIO- CULTURAL s tatus respect, dignity ECONOMIC consumption income assets HUMAN health education hunger, thirst GENDER ENVIRONMENT