Foreign Assistance Policy Framework 2010 The future of aid effectiveness in Pakistan 

Pakistan Development Forum 2010 

Minister of State for Economic AffairsMonday November 15 2010Monday, November 15, 2010

The Context of Aid Effectiveness in Pakistan

1. The responsibility for Pakistan’s development lies with1. The responsibility for Pakistan s development lies with the people and Government of Pakistan. 

2. Pakistan’s friends and partners have a valid and important stake in Pakistan’s development. 

3. Aid effectiveness is about enhancing the prospects for development in Pakistan. 

4. Starting point? Paris Declaration for Aid Effectiveness. 2

The Paris Declaration

The Paris Declaration measures progress on aid ff l d b deffectiveness against twelve indicators, based 

on five pillars  

It also defines the roles and responsibilities of the government and donors partnerf g p

Paris Declaration 2005

GOVERNMENT OBLIGATIONS`

Monitor progressJointly ImproveEnhanceUndertakeTake lead in Monitor progress in Achieving Aid Effectiveness Commitments

Jointly Improve Management of Resources and Decision-Making through Results-O i t d

Enhance Complementarities between Donors and Government to E t bli h M

Undertake necessary reforms to improve government

t (

Take lead in coordinating aid & translating strategies into operational

Oriented Reporting and Assessment Frameworks

Establish a More Efficient Division of Labour

systems (e.g. public financial management & procurement)

programmes

Government of Pakistan is fully determined and committed toGovernment of Pakistan is fully determined and committed to ensure transparency and accountability in use of foreign

assistance across the board

Paris Declaration 2005

DONORS OBLIGATIONS

Provide timely, ManagingDonors’ actionsDonors base theirRespect partner o de t e y,transparent and comprehensive information on aid flows so as to enable partner

Managing resources and improving decision-making for results

Donors actions are more harmonized, transparent and collectively effective

Donors base their overall support on partner countries’ national development strategies,

Respect partner country leadership and help strengthen their capacity to exercise it

authorities to present comprehensive budget reports to their legislatures and citizens

institutions and procedures

and citizens.

D it t t i i hi t N ti lDonors commitment to give maximum ownership to National Government with focus on delivery of results

The Paris Declaration

So, how are we doing?

Ownership: Grant Disbursementsp

47%47%53%53%

GoPGoP Outside GoPOutside GoP

FY 2005/06 2009/10 US$ 4 2B

Source: Development Assistance Database

FY 2005/06 ‐2009/10 US$ 4.2Bn

Alignment: Aid Predictability 

12 000

14,000 

g y

8 000

10,000 

12,000 

on

4,000 

6,000 

8,000 

US$

 millio

Committed 

Disbursed

‐

2,000 

,

Years

Disbursed

Years

05‐06 2005‐0606‐07 07‐08 08‐09 09‐10 2005‐062005‐06

2005‐06

Source: Development Assistance Database

Harmonization: Harmonization: Aid ProliferationFY 2009-10

Funding SourceDisbursed (US $ Million)

No. of Sectors

No. of Projects

Canada 67  12 73

Germany 99  13 45

USA 1 272 20 115USA 1,272  20 115

Switzerland 3  5 10

Netherlands 38  7 30

Source: Development Assistance Database

UK 234  13 46

Australia 36  7 17

Proliferation Index, Large number of sectors a donor is active inLarge number of projects with small financial size

Harmonization: Harmonization: Aid Fragmentation FY 2009-10

SectorDisbursed (US $ 

Million)No of Donors

No of ProjectsMillion) Donors Projects

Environment and Natural Resources 16 11 43

Health and Nutrition 371 21 117

A i l d Li k 70 14 55Agriculture and Livestock 70 14 55

Governance 92 11 58

Education 864 21 93

Energy Generation 402 12 41

Social Welfare 226 14 20

Rural Development 345 11 26

A sector is highly fragmentedwhich has large number of donors with a large number of projects of 

Source: Development Assistance Database

g y f g g g p jcomparably small financial size

Mutual Accountability: Donor complianceMutual Accountability:  Donor compliance

• Since we started the DAD, it has been difficult to get donors to inp t datainput data.

• One measure of compliance is donors’ responsiveness to GOP’s p pinvitation to comment on the draft Foreign Assistance Policy Framework (FAPF).  

• Responses to the first draft of the Foreign Assistance Policy Framework: 

• 81% (52/64 ) government divisions & ministries)

• 40% (28/69) development partners or donors)40% (28/69) development partners or donors)

So, How are We Doing?So, How are We Doing? 

• Its clear… 1. Donors are not providing aid to government, or into government 

systems. 2. International aid is highly unpredictable. 3. There is a severe aid fragmentation in a number of sectors, i.e. many3. There is a severe aid fragmentation in a number of sectors, i.e. many 

donors are working on many sectors. 4. There is very heavy proliferation, i.e. many donors are working on many 

projects of very small amount.5 Donors do not contribute to the DAD regularly5. Donors do not contribute to the DAD regularly. 

• Its also clear… 1. Government of Pakistan needs to show leadership and articulate its1. Government of Pakistan needs to show leadership and articulate its 

priorities better. 2. The systems required to engender donor confidence are not 

adequate, and require reform. 

What is the GoP Doing?What is the GoP Doing? • The New Development Strategy will lay out the medium term 

vision, goals and objectives and results framework for Pakistan’s development.

• New intensive rounds of discussions with donors to set clear priorities.

• There are a number of reforms in PFM designed to enable adoptionThere are a number of reforms in PFM designed to enable adoption of Pakistani system, such as PIFRA and the AGP reforms.

• New models that innovatively address poverty like the BISP and theNew models that innovatively address poverty, like the BISP and the Citizens Damage Compensation Scheme are also being rolled out. 

• Finally and most pertinently there is the Foreign Assistance Policy• Finally, and most pertinently, there is the Foreign Assistance Policy Framework 2010. 

What is The Foreign Assistance Policy Framework?What is The Foreign Assistance Policy Framework? 

• Government‐led policy response to the core challenges of p y p gimproving the effectiveness of aid

• Aligned with the Paris Declaration and informed by the Accra Agenda for Action

• Annual Action plans will be used to manage implementation with individual commitments from government and development partners

Fi t t ill b d h d f th F th Hi h• First progress report will be ready ahead of the Fourth High Level Forum on Aid Effectiveness in Korea, November 2011

Why The Foreign Assistance Policy Framework? 

• Aid effectiveness reform must keep focused on the big prize –delivering better results for the people of Pakistan. 

• Previous reform efforts, like the One UN programme have had d i t ti b t tigood intentions—but poor execution. 

• The adoption of FAPF needs to be a fundamentallyThe adoption of FAPF needs to be a fundamentally transformative event in aid effectiveness in Pakistan. 

• It is based on two key motivations:

• Pakistan’s abiding commitment to the Paris Declaration

h h h ll• The need to ensure success through mutually reinforcing commitment to the policy. 

Once The FAPF is Operational…Once The FAPF is Operational…

• Want to invest in visible projects according to your p j g ypreferences? – Invest in our projects. They are listed in the annual PSDP. 

• Want a more effective Pakistani state? – Invest in general or sectoral budget support.Invest in general or sectoral budget support. 

• Want to support non‐state actors? – Excellent. Help strengthen civil society in Pakistan. But it must be 

through agreements with the GoP and in sectors agreed on by the Pakistani parliament. 

What’s Next?What s Next? 

• Pakistan’s friends and partners must respondPakistan s friends and partners must respond to the FAPF, and give us feedback. 

• We commit to work with you to arrive at an bl f kagreeable framework. 

• You must commit to working within the framework, once it has been agreed. , g

THANK YOUTHANK YOU