ANNUAL REPORT 2002 27820 JAPAN POLICY AND HUMAN RESOURCES DEVELOPMENT FUND THE WORLD BANK RESOURCE MOBILIZATION AND COFINANCING The Faces of the PHRD: Partners in Development “It is difficult to imagine how the first IDA investment in the health sector in Tajikistan could have been carried out efficiently, according to schedule, and meeting institu- tional standards, without the support of the PHRD grant which was made available to the team. The grant enabled consultants to be engaged to assist and advise the national staff, to build up capacity in the newly created Project Unit, and to ensure that the proposed project could be appraised and then imple- Tajikistan Health Team: Michael Mills, Program Team Leader, Human mented according to plan.” Development Sector and Dr. Makhbuba Sheralieva, Health Project Manager, Ministry of Health, Dushanbe, Tajikistan — Michael Mills Program Team Leader “We prepared this grant during the project identification process and worked with locals to define exactly what PHRD should finance and how it should be implemented. This grant was extremely successful and created a lot of ownership which can help during the project.” — Sari Söderström Task Team Leader Task Team Leader, Sari Söderström with task team members, members of the borrower’s Project Management Office, and the mayor of Qingshui County in Gansu Province, China ANNUAL REPORT 2002 JAPAN POLICY AND HUMAN RESOURCES DEVELOPMENT FUND THE WORLD BANK RESOURCE MOBILIZATION AND COFINANCING Vice President’s letter “Institutions don’t appear overnight or are fully grown; they need catalysts to build momentum and scale up.” — World Development Report, 2003 tively and transparently applied. It must be driven by demand, by the desire to achieve measurable results and by a shared commitment to equity and alleviating poverty. These are a few of the necessary prerequisites for effective development and are the principles that guide the Policy and Human Resources Development Fund (PHRD), one of the largest grant facilities in the World Bank designed to alleviate poverty by develop- ing capacity. In fiscal year 2002, the PHRD Fund continued its work in building capacity and increasing project prepared- The overwhelming consensus in the development ness in client countries. Some of the highlights of community is that capacity development and owner- FY02 are outlined below: ship of programs is a necessary precondition for sus- tainability, reducing poverty, and promoting growth. ■ The Technical Assistance program continued to This point was clearly made during the recent United be the largest grant program supported by PHRD. Nations Conference on Financing for Development in In FY02, 97 Technical Assistance grants were Monterey, Mexico, maintaining that the Millennium approved, amounting to $61.6 million. Development Goals could not be realized without soci- eties being able to direct their own development ■ The PHRD Fund supported an increasing number process. Until government institutions, civil society of new and innovative programs in FY02, each organizations, and individuals have both the skills and designed to address a specific emerging develop- the opportunity to direct their own development, ment challenge. This support demonstrates both poverty will continue. the flexibility of the PHRD Fund and its commit- ment to effectively respond to the ever changing Developing this capacity is not a one-way, supply- needs of the developing world. driven process. It is a symbiotic exchange of knowl- edge, skills and opportunities. It is listening, ■ Overall, contribution levels increased from FY01 responding, adapting and enabling. It is the creation of levels, enabling the PHRD Fund to increase its an environment in which these assets can be effec- support in a diversity of areas. ii ANNUAL REPORT 2002 ■ With the support of PHRD, WBI provided training improvement of the PHRD Fund and we believe the to more than 48,000 participants, and the Joint steps taken during FY02 to improve PHRD processes Japan/World Bank Scholarship Program provided and procedures have been responsive to our clients. 130 scholarships. Additional measures are being taken as part of an FY03 performance improvement initiative to streamline pro- FY02 was also a year of listening, learning and cedures, increase communication and collaboration improving for PHRD. RMC worked to address the with our partners, and become a more effective devel- concerns raised about the processes and procedures opment fund. in relation to PHRD grants. The new procedures implemented during FY02 and currently under imple- Finally, one of the strengths of the PHRD Fund is its mentation in FY03 will streamline the PHRD grant ability to create strong partnerships in development— processes and improve the overall effectiveness of the partnership between the Government of Japan and the Fund. These improvement measures have already had World Bank, partnerships between the World Bank an impact on PHRD performance, as demonstrated by and its clients, and partnerships within client coun- a 42 percent increase in Technical Assistance grant tries. These partnerships within and outside the Bank submissions in FY03 Round 1, as compared to Round were further strengthened this year to the benefit of all. 1 of this fiscal year. We look forward to a continuing partnership with the Government of Japan, our numerous partners and our As part of the writing of the FY02 Annual Report, we clients to broaden our impact in the years to come. engaged a number of Bank Task Team Leaders, man- agers, and grant recipients. Excerpts of these interviews are included as part of this report. Many of the issues raised are important in the future development and Table of Contents Chapter 1: The Objectives of the PHRD Fund 1 Chapter 2: A Catalyst for Development 3 Chapter 3: PHRD Challenges and Performance Improvement Measures 10 The PHRD Portfolio — Fiscal Year 2002 Performance Chapter 4: Enhancing Project Design and Improving Performance - 15 PHRD Technical Assistance for Project Preparation and Implementation Chapter 5: The PHRD Human Development Programs – 22 The World Bank Institute and the Joint Japan/World Bank Graduate Scholarship Program Chapter 6: Responding to Crises and Emerging Development Challenges 28 Critical Ecosystems Partnership Fund, infoDev, Development Gateway, Cities Alliance, Japan Climate Change Initiative, Japan Post Conflict Fund Chapter 7: Japan – World Bank Partnership Program 35 Chapter 8: PHRD Special Programs 36 Japan Staff and Consultant Trust Fund, African Capacity Building Foundation, Russia Financial Institutions Development, MIGA Chapter 9: Financial Performance of the PHRD Fund by Program: FY02 40 Annexes Annex 1: List of Approved Technical Assistance Grants in FY02 44 Annex 2: Administration of Japan PHRD Grants Program 48 Annex 3: PHRD FY03 Annual Policy Document 50 For more information on the Japan PHRD Program, and to view abstracts of the current grants portfolio, please visit the World Bank’s website at www.worldbank.org/rms/tf Acronyms and Abbreviations ABCF African Capacity Building Foundation CDD Community-Driven Development CDF Comprehensive Development Framework CEPF Critical Ecosystems Partnership Fund CGAP Consultative Group to Assist the Poorest FASID Foundation for Advanced Studies on International Development GDN Global Development Network HIPC Heavily Indebted Poor Countries IDA International Development Agency ICTs Information and Communications Technologies infoDev Information Development Program JJ/WBGSP Joint Japan/World Bank Graduate Scholarship Program JPCF Japan Post-Conflict Fund JSCTF Japan Staff and Consultant Trust Fund JSDF Japan Social Development Fund LAB Learning Across Borders – Capacity Building for Asian NGOs LICUS Low Income Countries Under Stress MIGA Multilateral Investment Guarantee Agency NGO Non-governmental Organization OED Operations Evaluation Department OVP Operational Vice Presidency PHRD Japan Policy and Human Resources Development Fund PPIAF Public-Private Infrastructure Advisory Facility RMC Resource Mobilization and Cofinancing Vice Presidency TA Technical Assistance TTL Task Team Leader WBI World Bank Institute CHAPTER 1 The Objectives of the PHRD Fund “A key element of development effectiveness is the enhanced capacity of developing countries to formulate, execute and evaluate their own development strategies…the donor community needs to move away from providing technical cooperation and toward enhancing local capacity, replacing knowledge transfer with knowledge acquisition, generation, and application. ” — James D. Wolfensohn The PHRD Fund was created in 1990 through a joint As Box 1 demonstrates, the PHRD Fund supports a agreement between the World Bank and the variety of programs, some working in only one develop- Government of Japan out of a commitment to alleviate ment area (the Japan Post Conflict Fund), others poverty, build the necessary foundations for sustainable having impact across multiple areas (Technical development, and create a close development partner- Assistance grants). When taken together, these pro- ship. At its inception, the PHRD Fund, and its prede- grams work in concert to build the foundations for a cessor the Japan Grant Facility founded in 1988, well-developed national capacity and create a basis on recognized that without sufficient skills, knowledge, which effective development can take place. This com- and know-how, underdeveloped countries would prehensive approach to development is one of the most continue to struggle in their development process. In important and successful features of the PHRD Fund order to be successful, PHRD approaches the capacity and demonstrates the Government of Japan’s commit- building process holistically, focusing not just on insti- ment to equity, inclusion, and the transfer of skills, tutional development, but on the individuals, organi- knowledge and experience to all levels of a developing zations, and policies that are the building blocks of society. The number and diversity of programs sup- strong institutions. ported by PHRD is a testament to this commitment. To best respond to these distinct segments of a devel- “The overall impact of the PHRD Fund is greater oping society, PHRD defined four areas that would than the sum of the impact of its separate grant serve as a guide for the activities supported by the programs. In several countries visited by the Fund: development of institutions, civil society, and PHRD Monitoring Unit evaluation team, scholars human resources; improved program design and imple- from the Joint Japan/World Bank Graduate mentation; increased transparency and effectiveness of Scholarship program oversee investments prepared policy frameworks; and rapid response to crises and with PHRD grants by local specialists, trained in emerging development needs. These four “pillars of the World Bank Institute training programs, development,” each designed to improve development together with consultants financed from the effectiveness and sustainability, and, in the long term, grants. The scholarships, training and technical contribute to poverty alleviation, have shaped PHRD assistance activities of the Fund have a cumulative programs for the last 15 years. (Box 1, PHRD Fund effect in these countries.” Program Hierarchy). —PHRD Evaluation Report 2 ANNUAL REPORT 2002 Box 1: PHRD Fund Program Hierarchy Development Goal: Poverty Reduction PHRD Development Objective: Improved development effectiveness and sustainability, and partnership development. Programmatic Programmatic Programmatic Programmatic Area 1: Area 2: Area 3: Area 4: Improve design Strengthen capacity Increase transparency Rapidly respond to and implementation of institutions, civil and effectiveness emerging development of development society organizations, of development needs or crises. projects and programs and human resources. policy frameworks. Selective PHRD Supported Programs: Project Project Joint Japan WBI Poverty Climate Post Preparation Implemen- World Bank Training & Reduction Change Conflict grants tation Graduate Knowledge Strategy Initiatives Fund grants Scholarship Development (PRSP) Program Program World Bank- Miyazawa Africa Comprehensive Japan Initiative/ Capacity Development Partnership Financial Building Sector Framework (CDF) Program Initiative Advisory Services 1. A number of special programs responding to emerging development issues received support through transfers from PHRD in FY02. These programs which also contribute to the objectives of the Fund include: the Development Gateway, the Consultative Group to Assist the Poorest (CGAP), Cities Alliance, the Public-Private Infrastructure Advisory Facility (PPIAF), and the Critical Ecosystems Partnership Fund. CHAPTER 2 The PHRD Fund - A Catalyst for Development “Institutions don’t appear overnight or are fully grown; they need catalysts to build momentum and scale up.” — World Development Report, 2003 Strengthening Bank-Country Figure 1: Total Contributions fo the PHRD Partnerships and Empowering Fund, FY98-02, in millions of US dollars Recipients The use of grants financed from trust funds in the $142.5 $131.6 $129.7 development process is not new. The PHRD Fund has been supporting grants since 1988 and other grant facil- $87.5 ities have been operating for years. Today, grants are being increasingly viewed as effective instruments that $56.5 can achieve small to medium scale results quickly while building the foundations for the successful implementa- tion of larger development initiatives. Because of their FY98 FY99 FY00 FY01 FY02 focus on achieving results on a smaller scale, grants can better deliver tangible outcomes in the short-term while broadening the scope of future development oper- Figure 2: Percentage of PHRD Funds for the ations. As grants can be prepared relatively quickly, Technical Assistance Program, FY98-02 they can be more immediately responsive and encour- 78% age innovation. And because they are more focused, they are more conducive to creating development part- 62% 56% nerships. Grants act as catalysts, working to achieve 42% short-term results on a small to medium scale so that 31% larger scale projects can be effectively implemented and longer-term results realized. The World Bank and the Government of Japan recog- FY98 FY99 FY00 FY01 FY02 nized early the catalytic role of grants in the develop- ment process. In the last five years, the PHRD Fund has contributed more than $575.7 million to develop- fronted many obstacles, and faced challenges. Through ment (Figure 1). These contributions represent a sig- this process, the PHRD Fund has remained committed nificant amount of funding provided by a single donor to its original objectives while being flexible in its to a trust fund administered by the Bank. During this approach. PHRD has provided funding to potential time, the PHRD Fund has had many successes, con- Bank borrowers to acquire the necessary technical 4 ANNUAL REPORT 2002 assistance to prepare Bank operations, complimenting While Technical Assistance grants have supported a the Bank’s work; effectively responded to development diversity of sectors (figure 4), the Fund has placed a crises and emerging development challenges; and has special focus on the Human Development Sector (edu- encouraged partnerships between and among formal cation, health, and social protection), and water and and non-formal development institutions and organiza- sanitation and basic infrastructure. This focus responds tions to provide an effective and coordinated response. to a shift in Bank programmatic areas, a changing The partnership between the Government of Japan and development landscape and to the recognition that the Bank has significantly strengthened and enabled investments in social development make significant the PHRD Fund to be a true catalyst for development. contributions to poverty alleviation. These are the achievements of the PHRD Fund and are what differentiates it from other trust funds in the Bank. In addition to the focus on development, the PHRD Fund is one of the few trust funds in the Bank that places a special emphasis on participation, ownership Achievements of the and Community Driven Development (CDD). The PHRD Fund PHRD Fund also encourages grant recipients to be I. Preparing Large Scale Development Projects Figure 4: TA Cumulative Allocations by Over the last 15 years, the majority of PHRD funds – 70 Sector, FY98-02 percent amounting to $1.6 billion – have been spent Private Sector helping World Bank client countries prepare and imple- Development Public Sector Management ment large-scale development projects financed by the 10% 16% Bank. Since its inception, 1,150 PHRD Technical Human Assistance grants have helped more than 140 countries Develop- Finance ment 5% in the preparation of 1,060 World Bank supported proj- Multi- ects, amounting to $95 billion in Bank lending. This is 26% 4% Sector by far the most significant support for project prepara- tion provided by any grant facility operating in the 11% Agri- culture Bank. The total approved Bank-financed projects for 2002 which were prepared with PHRD grants is 110 5% 18% 5% Energy (Figure 3). Infrastructure Environment Figure 3: Number of Sucessfully Negotiated Bank Projects Prepared with PHRD TA Figure 5: Share of Recipient Execution of Grants, FY 98-02 Technical Assistance Grants, FY98-02 151 82% 75% 133 99 107 110 54% 49% 45% FY98 FY99 FY00 FY01 FY02 FY98 FY99 FY00 FY01 FY02 jphrd fund 5 Figure 6: Inputs Procured with PHRD II. Supporting Emerging Technical Assistance Funds, FY87-99 Development Challenges percent of total expenditures with Innovative Safeguard Policies Programs Project Design 3% & Feasibility Sector Policies and Strategies The PHRD Fund has been a leader in funding new and 16% innovative programs designed to respond to emerging development challenges. PHRD’s flexibility enables it HR & to support initiatives that employ new and innovative 9% Capacity approaches to emerging development problems, learn- 53% Building ing from past development practices and experiences and applying new approaches to the specific challenges 19% facing developing countries today. Last year, the PHRD Institutional Fund provided significant support to the following Development innovative programs: The Climate Change Initiative under the PHRD responsible for grant execution, building the capacity Fund provides grants to recipient countries’ govern- of local resources and institutions not just through the ment entities to support the inclusion of climate- provision of technical assistance inputs, but through change concerns in the country’s development transferring the authority and responsibility for the planning process and prepare and implement Bank- project preparation process to recipient country insti- financed projects which support reduction in emission tutions and individuals (figure 5). of green-house gases and promote energy efficiency or adaptation to the adverse impact of climate change, in The PHRD Fund is the only trust fund in the Bank that concert with economic growth and eradication of provides comprehensive project preparation support in poverty. PHRD contribution in FY02: $5 million. which untied funds allow recipients to design a com- prehensive package of technical inputs and then select The Critical Ecosystems Partnership Fund competitively the highest quality expertise available to (CEPF) is a joint initiative between Conservation provide that assistance. Other programs and agencies International (CI), an international environmental provide grant money for capacity building and techni- NGO, the Global Environment Facility (GEF), and cal assistance activities, but these funds are often con- the World Bank. The CEPF will contribute to the con- tingent upon a number of requirements that are tied to servation of 21 critical ecosystems around the world — particular donor objectives and constraints. PHRD is the most biologically rich and currently under great much more flexible than these trust funds, creating threat — mainly through small grants to local commu- more opportunity to apply funds where they are most nity groups, civil society organizations, NGOs and pri- needed in order to be effective. vate companies. PHRD contributions to date: $5 million. In addition to providing untied grants for the prepara- Cities Alliance was created to foster new tools, practi- tion of World Bank-assisted investments, PHRD has cal approaches and knowledge-sharing to promote strengthened recipients’ policies, institutions, and local economic development and to address urban capacity, resulting in investments that have high poverty. The program is working to create a global development effectiveness and quality and that con- alliance of cities and their development partners to tribute to poverty alleviation and sustainable develop- improve the living conditions of the urban poor ment (figure 6). through the development of City Development 6 ANNUAL REPORT 2002 Strategies and city-wide and nation-wide slum upgrad- Government has contributed $92.5 million to post- ing projects. PHRD contributions to date: $2 million. conflict reconstruction assistance through the Japan Post Conflict Fund (JPCF). The JPCF has helped break Development Gateway promotes the use of informa- the cycle of conflict in war-torn countries through tion and communication technology for poverty reduc- grants designed to provide social services to people in tion and sustainable development in order to help need, reconstruct roads and critical infrastructure, pro- countries overcome the digital divide through practical mote economic rehabilitation, and create institutional and dynamic programs. The flagship program is the capacity in countries struggling with development “Development Gateway,” a comprehensive on-line issues arising from civil war and conflict. portal which offers users access to development infor- mation, resources, and tools, providing a space to con- The Miyazawa Initiative was established to address tribute knowledge and share experiences. The Gateway country specific problems related to the Asia financial helps users navigate the growing amount of informa- crisis including financial and corporate sector reform. tion available online, and empowers virtual communi- Nearly $28 million was approved under PHRD for ties of learning to address key development issues. grants in China, Korea, Indonesia, Philippines, PHRD contributions to date: $5 million. Thailand and Vietnam in support of the Miyazawa Initiative. Through the implementation of various The Information for Development Program PHRD grants, these five countries, most dramatically (infoDev) is a multi-donor grant facility that supports affected by the Asia financial crises, restructured their innovative projects demonstrating the development corporations, tightened banking regulations, and opportunities offered by information and communica- improved bankruptcy procedures and accounting stan- tion technologies. With PHRD funding, infoDev is dards. The special allocation, in the framework of the launching a new flagship initiative – the ‘Incubator Miyazawa Initiative, provided $18 million for financial Initiative’ – aimed at fostering entrepreneurship and restructuring, training, and regulatory reform. Another private sector development in developing countries. This initiative will be dedicated, over an initial three- year period, to the establishment of a network of incu- Box 2: Impact of Japan Post-Conflict bators to facilitate the emergence and development of Fund Programs small and medium size information technology enter- prises in developing countries. PHRD contributions to Bosnia–Herzegovina - shelters for 6,500 displaced date: $6.5 million. persons constructed; roads, bridges, tunnels, water supplies, and power systems rehabilitated. Tajikistan - schools rehabilitated. III. Responding to Crises Rwanda - roads, bridges, schools, and irrigation and At its inception, the PHRD Fund was designed to be a power systems rehabilitated. flexible funding instrument that could effectively and Cambodia - schools, clinics, roads, and culverts rapidly respond to civil strife crises and emerging devel- repaired in the extremely poor northwest region opment issues and challenges. Once the decision is devastated by conflict. made to provide crisis support, funds can be allocated fairly quickly to provide support when it is most needed. Timor Leste – A transfer of $14.1 million from PHRD to the Bank’s Trust Fund for Timor Leste was Restoring stability, rebuilding physical assets and pro- made in FY00, followed by a transfer of $9.8 million viding basic social development quickly and effectively in FY01 to help fund community-based reconstruc- are the keys to enabling countries out of conflict. tion activities. FY02 contributions total $2 million. Since the first contribution in 1996, the Japanese jphrd fund 7 $10 million was allocated for similar purposes under “Since August 1998, you have supported 27 stu- the separate Financial Sector Program for the same dents from Ethiopia, Kenya, Malawi, Sierra Leone, countries and China. Sudan, Tanzania and Uganda. Most of these stu- dents have graduated and returned to their coun- tries and places of work. There is great promise IV. Enabling Skill that they will henceforth contribute more effec- Development, Knowledge tively towards the development of their countries. Sharing and Educational Already, within a relatively short time, some of Opportunities them have been promoted in their jobs while others have moved to more productive ones… On In the last five years, PHRD has contributed $54.9 mil- behalf of Makerere University, I would like to put lion to support training and educational programs it on record that we have greatly benefited from through the World Bank Institute and the Graduate this assistance.” Scholarship Program. An additional $8 million has — Dr. J. Ddumba-Ssentamu been contributed to other training and HR develop- Director, Economic Policy Management ment programs through special grants. Programme, Institute of Economics, Makerere University, Uganda An estimated 143,000 public and private sector offi- cials from 150 countries have acquired knowledge about development policies, approaches, and practices WBI training programs are designed to fill specific in World Bank Institute (WBI) training programs knowledge gaps in developing countries that are central (Figure 7). The PHRD Fund is the largest donor con- to poverty reduction and sustainable development. tributor to WBI programs, comprising an average of 19 Training programs address development in every sector, percent of total donor contributions for the last five from education to banking and finance and, more years. PHRD contributions to WBI finance capacity recently, include non-sector specific topics in commu- building activities and other related special capacity nity development, inclusion and empowerment. One of building activities, including the Study of Japan’s the reasons for WBI’s success, and the impact of PHRD Development Management Experience. PHRD’s fund- funds to WBI, is that they target every layer of a devel- ing of WBI Training Grants totals to nearly $33 million oping society: government, policy makers, institutions, since 1991. NGOs, civil society leaders and individuals. Their training approach is a demand-driven and comprehen- sive one, building skills and experience at all levels of a society to ensure the development process is as inclusive Figure 7: Number of Participants Trained as possible. The results of WBI programs for FY02 are Through WBI Client Training Programs, detailed in Chapter 5 of this report. FY99-02 48,089 48,118 The Joint Japan/World Bank Graduate Scholarship Program (JJ/WBGSP) is one of only two graduate and post-graduate level scholarship programs in the Bank. 27,642 The Program awards scholarships to individuals from 18,229 World Bank member countries to help create an inter- national community of highly trained professionals working in the field of economic and social develop- ment. The World Bank and the Government of Japan FY99 FY00 FY01 FY02 require the scholars to return to their home countries 8 ANNUAL REPORT 2002 on completion of their study programs and apply their Reduction Strategy Papers and Comprehensive enhanced knowledge and skills to contribute to the Development Frameworks. development process in their respective regions and communities. The educational process supported by Poverty Reduction Strategy Papers (PRSP) describe a this program is not simply focusing on educational country’s macroeconomic, structural and social policies attainment, but on the application of that education to and programs to promote growth and reduce poverty, as countries’ development process. well as associated external financing needs. PRSPs are prepared by governments through a participatory Since the program’s creation in 1988, the Government process involving civil society and development part- of Japan has contributed about $111 million to the ners, including the World Bank and the International scholarship program. These funds have covered Monetary Fund (IMF). The PHRD Fund has contributed tuition, subsistence and travel costs for scholars, and $10 million to the PRS TF. the costs of program management. The Regular Program has awarded 1,842 scholarships, selected from The Comprehensive Development Framework (CDF) nearly 39,000 applicants. In addition, 649 scholarships is an approach by which countries can achieve more have been awarded in the various JJ/WBGSP effective poverty reduction. The CDF establishes Partnership Programs for a total of 2,491 awards. mechanisms to bring people together and build con- sensus, forge stronger partnerships that allow for strategic selectivity, reduce wasteful competition, and V. Facilitating Strategic emphasize the achievement of concrete results. To Planning and date, the PHRD Fund has contributed $3 million to sup- Participatory Approaches port these efforts. in Poverty Reduction Building capacity at any level of a society involves Quantitative more than transferring skills and knowledge. It must Achievements of also provide opportunities for these skills to be effec- the PHRD Fund tively applied in the development process. In order to be sustainable, responsive and effective, the develop- Performance Indicators ment process of any country must be driven by a well- Demonstrating Impact conceived development strategy. Those charged with Overall, the quantitative achievements of the PHRD designing, implementing and evaluating this strategy Fund over the past 15 years demonstrate the tremen- need tools and training if they are to be successful. The dous reach PHRD programs have had throughout the PHRD Fund provides significant support to programs developing world and the impact they have had on designed to assist developing countries in formulating, developing capacity and creating the foundations for implementing and evaluating their own development sustainable development. These quantitative indica- strategies, including the development of Poverty tors are featured in Box 3. jphrd fund 9 Box 3: PHRD Fund Achievements: Quantitative Indicators Development Goal: Poverty Reduction PHRD Development Objective: Improved development effectiveness and sustainability, and partnership development Programmatic Programmatic Programmatic Programmatic Area 1: Area 2: Area 3: Area 4: Improve design Strengthen capacity Increase transparency Rapidly respond to and implementation of institutions, civil and effectiveness emerging development of development society organizations, of development needs or crises projects and programs and human resources policy frameworks Performance Indicators: Performance Indicators: Performance Indicators: Performance Indicators: ■ Since 1987, 70% of ■ Between 1987 and ■ Between 1987 and ■ Since the first PHRD Funds 1999, 28% of PHRD 1999, 19% of PHRD contribution in 1996, amounting to $1.2 TA Grant funds TA Grant funds have the Japanese billion, have been spent financed HR and been used to finance Government has helping World Bank institutional policy development contributed $92.5 client countries prepare development activities. work. million to post-conflict and implement large- reconstruction ■ An estimated 143,000 ■ PHRD Fund has scale development assistance. public and private contributed $55 million projects, financed by sector officials from to policy development ■ Nearly $29 million in the World Bank. 150 countries have programs since 1998. grants were approved ■ 1,150 PHRD Technical acquired knowledge for China, Korea, ■ Between fiscal 1987 – Assistance grants have about development Indonesia, the 2000, $1.7 billion helped more than 140 policies, approaches, Philippines, Thailand has financed 4,250 countries in the and practices in World and Vietnam, to assist person-years of preparation of 1,050 Bank Institute (WBI) in the economic technical services to World Bank supported training programs. recovery process: developing countries, projects, amounting to ■ PHRD is the largest many of theses services The Miyazawa $95 billion in Bank donor contributor to contributing to Initiative provided lending. WBI, total contri- improved policy US$18 million for ■ Every dollar of PHRD butions— $33 million. frameworks. financial restructuring, to date has contributed training, and regulatory ■ Ninety-six percent of to about $100 of Bank reform. all scholars awarded investments and about scholarships from the US$10 million was $211 of total JJ/WBGSP attained allocated for similar investments in their degrees, most of purposes under the development projects. whom returned to their separate Financial home country to Sector Program for contribute to the same countries development and China. CHAPTER 3 PHRD Challenges and Performance Improvement Measures “I am pleased to know that Japan endorsed the recent trust fund policy reforms proposed by the Bank, including changes to the CTF program to align trust funded activities with Bank priorities. I am also pleased that Japan has agreed on a results-oriented approach for other PHRD activities and has shifted to streamlined and simplified procedures for grant implementation.” — James D. Wolfensohn The World Bank and the Government of Japan have These achievements have not been without chal- jointly managed the PHRD Fund for 15 years. While lenges. As PHRD is a facilitator and not an imple- the objectives of the Fund have remained constant, menter, the program can only guide the grant Japan and the Bank have worked to continuously adapt implementation process by setting guidelines and poli- and improve the Fund’s operating policies and proce- cies that are conducive to effective implementation dures to be both responsive to its clients while enabling and management. At times, these guidelines conflict the effective implementation of grants. As demon- with on-the-ground realities experienced during imple- strated by the comments of PHRD Fund managers and mentation. The challenge has been to create a good clients included in this report, the PHRD Fund is vital balance between accountability on the one side, and to building the national capacity of developing coun- flexibility and responsiveness on the other. These chal- tries and to preparing larger investment operations. It lenges, and the numerous performance improvement is the only trust fund in the Bank that provides this measures implemented by the Government of Japan kind of comprehensive support and has proven to be and the World Bank designed to address these issues, effective in facilitating the effective preparation and are discussed below. implementation of development projects, quickly responding to development crises, building human resources and institutions, and affecting policy reform Creating Accountability and development. while Remaining Flexible and Responsive “We must continue to explore new value-added directions for Bank-administered Japanese trust Each national country environment is unique and pres- funds. This requires keeping PHRD grants at the ents a distinct set of challenges to grant implementation. cutting edge of development to meet the changing Delays in procurement and disbursement are fairly nature of development priorities. At the same time common as is the need to amend grant implementation we need to explore further simplification in grant plans and activities to adjust to a changing environment processing for efficient and effective use, without and new developments. One of the challenges PHRD compromising on our fiduciary responsibilities.” managers have had to face is creating a balance between PHRD policies, procedures and approval processes and —Sajjad Shah the need for flexibility and adaptation to country devel- Japan Trust Funds Administrator opments. World Bank Task Team Leaders, one of the jphrd fund 11 clients of PHRD, cite rigidity as one of the difficult fea- The World Bank Japan Trust Funds Team, photographed at the World Bank Headquarters in Washington, D.C. ( by Michele tures of PHRD grants. While TTLs believe that the Iannacci, Bank Photographer). PHRD Fund must set particular guidelines and policies to drive the implementation process, they feel some of the procedures are not always conducive to the chang- number of approved PHRD grants dropped by about ing nature of developing country environments and, 50% (figure 8). This reduction in the demand is due to therefore, not always responsive to the needs of grant a number of contributing factors: recipients. PHRD Fund managers have made many ■ PHRD has improved quality control, accountabil- efforts to streamline the application, approval and ity, and greater recipient ownership/execution to amendment processes for PHRD grants and these efforts continue to improve grant performance and bene- have improved the process, but many TTLs believe fits — factors which have contributed to greater additional work needs to be done to be truly responsive selectivity in the use of PHRD grants as staff are to clients’ needs. These specific issues will be discussed already over-burdened with regular Bank portfolio in more detail in the next chapter of this report. responsibilities. ■ A reduction in the World Bank lending program and the shift to provision of non-lending support Decrease in Demand for to clients. Technical Assistance Grants ■ Task Team Leaders (TTLs) and managers are gener- ally more reluctant to apply for trust funds after the Demand for PHRD Technical Assistance grants has CTF audits and given the level of complexity of declined in recent years. Between FY97 and FY01, the managing grants. 12 ANNUAL REPORT 2002 number of performance improvement measures to Figure 8: Technical Assistance Grant address some of the main concerns raised by their Approvals, FY97-02 clients. Specifically, over the past two years, a Seven- 253 244 $135 mil $125 mil Point Agenda was implemented to further improve the 203 185 effectiveness of both the PHRD Fund and the JSDF. $95.4 mil $87.5 mil Improvement measures have included: 127 $65.5 mil ■ Dissemination of PHRD Guidelines and Operating 97 $61.6 mil Policies, and conducting workshops for grant pro- posal preparation and implementation of PHRD grants (FY2001). ■ Proposals focus on outputs and deliverables FY97 FY98 FY99 FY00 FY01 FY02 (FY2001) ■ Limit the term of grants to a maximum of 4 years ■ TTLs have concerns over lags between grant (initiated September 2000). approvals and grant agreement signings, slow dis- bursements, and the frequent need to extend grant ■ Streamlined procedures for submission of proposals, closing dates. grant reallocations, and extensions (FY2001). ■ Inadequate counterpart funding. ■ Require evidence of client ownership — signed client letter (February 2001). ■ Lack of proper match between Regional and PHRD priorities. ■ Approval of Annual Policy Document by the donor applicable to the allocation for the fiscal year (from ■ Fast track project preparation. July 2001). While the number of applications received in FY03 ■ Increased frequency of calls for proposals through Round 1 increased significantly, it is important for introduction of a third round (FY2001). PHRD managers to recognize the contributors to ■ Reduction in time for donor approvals (FY2002). decreased demand and, where possible, address them proactively. ■ A one-page streamlined request form outlining the overall development objectives and the main expenditure categories, transcribed into the Performance grant legal agreement (March 2001, Revised Improvement Measures September 2001). To respond to the challenges of the PHRD Fund and, Additional operational issues and performance based on lessons learned from reviews of active grants, improvement measures are detailed in Box 4 on the fol- the managers of the PHRD Fund have implemented a lowing page. jphrd fund 13 Box 4: PHRD Operational Issues and Performance Improvement Measures FY02 Operational Issues/Challenges FY02 Improvement Measures Focus on outcomes and The grant funding proposal has been further simplified by eliminating results, instead of detailed superfluous information and shortening the checklist required by Japan. inputs. The key binding elements of the proposal are the development objectives and the main expenditure categories that go into the agreement. Project preparation is a The project development objectives and grant expenditure categories are dynamic process – the main binding features of the grant. making changes to grants difficult. Restructuring of grants The Bank and the Government of Japan have simplified the amendment requires donor approval. process, which is now more responsive to the need for rapid approvals of changes. Changes in the technical assistance components can be cleared internally at the Bank to meet the Project Development Objective outlined in the one- page funding proposal. Not all activities required for preparation can be In the grant proposal, up to 10 percent of the grant amount may be included identified so early in the for unidentified technical assistance which may be necessary to advance the project preparation process. overall development objectives of the grant. PHRD supports consulting Up to 10 percent of non-consultant costs may be requested. Proposals may services, difficult to include consulting services to promote beneficiary participation. promote beneficiary involvement. For minor changes, task Changes of up to 30 percent in grant components/expenditure items may be teams still require approved by TTL: total non-consultant costs cannot exceed 10 percent. approvals. The PHRD Portfolio Fiscal Year 2002 Performance Technical Assistance for Project Preparation and Implementation World Bank Institute Joint Japan/World Bank Graduate Scholarship program Japan Post Conflict Fund Innovative and Rapid Response programs Special programs CHAPTER 4 Enhancing Project Design and Improving Performance: PHRD Technical Assistance for Project Preparation and Implementation “By failing to prepare you are preparing to fail.” —Benjamin Franklin “PHRD is the single most important trust fund in and, at times, unresponsive to the project preparation the Bank.” cycle and the needs of clients. This is in part due to the need for accountability and compliance with the —World Bank Regional Cofinancing Coordinator Bank’s operating procedures for loans and credits. PHRD is not alone in this characterization. Trust funds The PHRD Technical Assistance Program for Project in general are considered to be excessively difficult Preparation/Implementation (TA) has been and con- to apply for and manage, especially if amendments tinues to be a primary instrument for institutional to grants are required. Grant recipients are less critical capacity building and investment operation design in of PHRD processes and procedures and generally the World Bank. No other trust fund exists in the Bank believe the benefits of TA grants far outweigh any pro- that supports the breadth of project preparation activi- cedural difficulties. ties with the degree of flexibility and specificity as PHRD. The general consensus in the Bank and in recipient countries is that PHRD TA grants are invalu- “The Bank’s clients are mainly public sector enti- able to the effective preparation of investment opera- ties of developing countries which lack resources, tions and have significant impact on the capacity of knowledge, and behaviors to develop and imple- recipients/counterparts, the level of local ownership of ment successful government policy and services the project, and the quality of the project design. programs for their citizens. The PHRD Fund is a PHRD grants develop the capacity, skills, and knowl- jewel in that it provides those resources not other- edge of local recipients through technical assistance wise available to developing countries, and arms that enables them to work jointly with WB teams to them with knowledge and skills to design and better understand the particular development environ- implement Bank-financed operations. A unique ment in which they are operating, explore alternative feature of PHRD grants is that funds are untied, approaches to development issues, and design a more and allows the recipient to also tap local experts responsive and targeted investment operation. from the private sector, and this further increases local ownership and leadership along with higher While there is little doubt that TA grants have chances for success.” an enormous impact on project preparation and —Patricia Kleysteuber performance, Bank staff members find PHRD TA Senior PHRD Officer grant processes and procedures somewhat cumbersome 16 ANNUAL REPORT 2002 Impact of Project “The best activity where the recipient benefited Preparation/ the most from the grant was the public participa- Implementation tion process, something they had never done Technical Assistance before. Through the consultation, the entity iden- Grants tified the key concerns and recommendations of interest groups that should be included into the On Recipients – the Project – project design…they now understand how to the Bank Task Team incorporate local concerns into the design, to be According to Bank staff and grant recipients alike, able to listen to NGOs and other groups and con- PHRD TA Grants have a dramatic impact on all aspects sider them part of their stakeholders. I think that of the project preparation process. Three areas of is positive.” impact are considered to be the most dramatic and important for the development process: (1) the — World Bank Task Team Leader, ECA Region increased capacity of counterparts in project design, management, and implementation; (2) the provision of procurement processes, financial accounting standards, much needed technical inputs to inform the project and effective management and administrative design and create a solid technical basis for project processes. Technical inputs such as sector analyses, implementation; and (3) the increased level of owner- policy frameworks and business plans are often non- ship of the project by counterparts, implementers, and existent. Development models and reform processes stakeholders. Each of these areas of impact contribute that have been successful in other countries are unfa- to a better quality project design and a development miliar. Experience with the process of consultation with environment that is more conducive to change. experts, institutions, and stakeholder is extremely lim- Capacity, ownership, and technical feasibility – these ited. One of the strengths of the TA grant program is are the ingredients for a successful development project. that it enables the Bank and grant recipients to collab- oratively design a comprehensive project preparation package of inputs to address these and other challenges “I started with people who had little (professional that might be present in a particular country environ- management) knowledge but had dedication and ment. Through the financing of human resources commitment to learn, and the experience was just development, technical assistance, studies, public astonishing. With PHRD support, they have learned so much about this new business opportu- nity (energy efficiency) and are becoming quite professional.” —World Bank Task Team Leader Europe and Central Asia Region Impact on Recipients – the Managers of Development The majority of Bank staff and grant recipients alike believe the level of preparedness of grant recipients and executing agencies is consistently low before the imple- PHRD grant manager presenting project design for Croatia Energy mentation of a TA grant. Knowledge and skills are lack- Efficiency project in Dubrovnik. A PHRD TA Grant financed ing in long-term strategic and project planning, project preparation work. jphrd fund 17 Box 5: TA Grant in Focus: Preparation of Croatia District Heating and Energy Project “PHRD helped us better understand what can be As the proposed project would affect a number of dif- done to improve energy efficiency and how our ferent interest groups in Croatia, a public participa- project could have the most impact in this area. We tion program was incorporated into the grant prepared a business plan for HEP-ESCO (Croatian activities. A local consultant was hired and worked Electric Utility Company - Energy Efficiency with the ESCO team to facilitate a total of nine Corporation), which was a new and very useful Round Table discussions, involving government, process for us, and we worked to develop the most NGOs, industry representatives, suppliers, the media, effective design for the project. This would not have and financial institutions. happened without the PHRD.” “This was something completely new for us, and — Gordana Lucic very useful. We had the chance to meet with a Project Manager, HEP ESCO Team, Croatia number of different people, present our project to them and ask for their inputs into the project. The PHRD TA Grant for the Croatia District We will use this information during the project and Heating and Energy Project supported the prepara- we think it will be very important to the success of tion of this national energy efficiency project. The the project.” grant financed four major components; the develop- ment of a fiscal business plan for the newly developed — Gordana Lucic Energy Efficiency Corporation, the development of Project Manager, HEP ESCO Team, Croatia an initial investment project, the implementation of a public participation program, and project prepara- Through the participation program the ESCO and tion and capacity building development for clients. Bank teams identified the key concerns of project During implementation, the grant was amended to stakeholders and the input and recommendations of include a social assessment and affordability study. these various groups were then reflected in the final design of the project. The results were also included The ESCO team managed the grant in its entirety. as part of the Environmental Management Plan, Activities were implemented collaboratively with required by the Bank. local and international consultants and the resulting products included a comprehensive Business Plan for “The success of the PHRD-funded activity in ESCO, eight pre-feasibility studies, market studies, an Croatia is due to the dedication, commitment and inventory and assessment of potential local partners ownership of my client team… I acted as a facilita- and an analysis of the legislative framework. Out of tor, and they acquired the knowledge and the capac- the eight pre-feasibility studies, two were selected for ity to move forward with the project preparation. further study and resulted in one being developed into The Project Manager always reminded me of HEP- an investment grade audit. Two areas of focus were ESCO’s motto which is ‘step-by-step’, reflecting the selected as part of the project, a street lighting project strategy and practical need to progressively gain and an energy efficiency improvement project for experience, build solid capacities, and deliver a high schools. The project was designed to enable range of services to the ESCO customers.” these focus areas to become models for the rest of the —Rachid Benmessaoud country. The ESCO capacity building and Business WB TTL for Croatia Energy Project Plan development process resulted in ESCO being officially established and registered, meeting one of the critical conditions for appraisal. 18 ANNUAL REPORT 2002 information/communications activities and other tional processes also benefit the project by informing a inputs, the Bank and grant recipients can effectively wide audience about the objectives of the project and prepare both the players and the playing field in which how the expected benefits will impact different socie- the future development project is to be implemented. tal groups. The “on-the-job” training that is provided by TA These experiences taken together increase the level of grants is commonly viewed as the most effective institutional ownership of the project preparation method to address skill deficiencies and build capacity process and the future investment project because the in areas that are immediately applicable to recipient future implementers of the project are making many of work. PHRD grant managers, most often the future the decisions that will shape their own development. managers of the project, gain direct experience in proj- By empowering clients with skills and the authority to ect planning methods, managing consultant teams, and make decisions, commitment and ownership is learning to apply the Bank procurement and disburse- increased over quick lending results. This has far reach- ment procedures on a smaller scale. This experience ing benefits, not just for a single project, but for the builds their capacity to apply these important skills on development process as a whole. a much larger and more complex scale and the skills learned during this process are required if project “The PHRD grant laid the foundation for real implementation is to be effective and the project ben- capacity building to take place. We did the assess- efits sustainable at an institutional level. ments and created the plans during the grant period. Now the government can use those plans In addition to technical and project cycle manage- to develop capacity where it is most needed and ment skills, TA grants finance a number of public will have the most impact.” involvement activities that provide grant recipients —Task Team Leader, Africa Region with experience in incorporating local concerns into the project design and engaging a diversity of groups in the project from the start. These practices are new to Impact on the most grant recipients and enable them to think more Development Project holistically about the development process while pro- PHRD TA grants have two clear objectives – facilitate viding them with much needed input from a variety of the preparation of identified World Bank financed interest groups. The public consultation and educa- projects and build capacity for implementation. All of the activities financed by a TA grant should be con- “After many failed judicial reform efforts, tributing to the development of a high quality project Peruvians have now started a completely different design. Bank Task Teams and grant recipients agree reform that involves the three Branches of Power that PHRD TA grants dramatically improve the qual- and civil society in a fully coordinated effort. ity of the project design – project objectives are more PHRD has been a key instrument to support a fully achievable and measurable, activities are well targeted, participatory process in the development of a joint there is a clear monitoring plan, and there is a more strategy that is consistent with the priorities of the thorough assessment of local risks that may affect proj- majority of the population — prompt and effective ect implementation. A number of World Bank reports justice services, accessible to the poorest groups (in demonstrate that the higher the quality at entry and particular, women and indigenous peoples).” greater level of ownership, the more effective the development project. —David Varela Task Team Leader Justice Services Modernization Project The products developed as a result of the preparation Latin America & Caribbean Region process have a tremendous impact on the effective jphrd fund 19 Box 6: TA Grant Outcomes Box 7: TA Grant in Focus PHRD TA Grants help recipients in numerous ways, Preparation of Benin HIV/AIDS Project for including: Abidjan-Lagos Transport Corridor The objective of the project is to increase access to ■ Explore the views of potentially affected or con- HIV/AIDS prevention services along the Abidjan- cerned stakeholders through consultation, work- Lagos transport corridor, with particular attention to shops and other participatory approaches. migrants and populations living in the border areas. ■ Examine the severity of the underlying sector problems, and acquire modern management skills. The PHRD TA grant to support project preparation is financing the following components: ■ Examine policy options for solving the project issues and develop policy reforms. 1. Preparation of a common HIV/AIDS ■ Explore scientific/technical methodologies (fea- prevention policy. sibility studies). This component will define the common policy to be adopted for the implementation of the project by ■ Finance environmental and social impact assess- comparing the content of the national HIV/AIDS ments, and needs assessments. program of each of the five countries to define the ■ Establish Financial Management Systems and common scope of intervention by the project, the develop international accounting standards. adoption of common slogans and logos in both English and French as well as in the local languages. ■ Draw up implementation plans, procurement A workshop will also take place to discuss and adopt schedules, and monitoring indicators. the coordinated policy by the representatives of the five countries and of key stakeholders, such as the representatives of local communities, private sector implementation of the development project. Studies, transport company senior management, and NGOs surveys, technical analyses, information system currently in operation at the proposed project sites. designs, social assessments, HR development plans, these are just a few examples of the products developed 2. Preparation of a project implementation manual. with PHRD funding which serve as the technical foun- This component supports the preparation of the dations on which the development project is based. project implementation manual that governs the Additionally, PHRD TA grants provide much needed management of the project and the specified roles training to those charged with implementing the future and responsibilities of the involved parties. The project, preparing the way for more effective project manual will describe the selection criteria for eligi- management and implementation. ble activities, guidelines for the cost estimate for the eligible activities, procurement methods, disburse- In those grants that included participatory activities as ment methods, standard contract clauses, monitor- part of the preparation process, both TTLs and grant ing and evaluation methods with performance recipients believed the stakeholder engagement indicators and auditing methods. process greatly benefited the project by educating a greater number of stakeholders about the project activ- 3. Elaboration of the three-year work program. ities and benefits while creating an opportunity for This component will help define the scope of work them to provide input into the design, creating a of the prevention campaign activities site by site. It greater degree of ownership and a better quality design. also assesses the capability of the existing health facilities to participate in voluntary blood testing and counseling activities combined with the train- ing of their staff for that purpose. 20 ANNUAL REPORT 2002 Impact on the World Bank Technical Assistance Task Team Grant Implementation From the technical standpoint, TA grants have signifi- Challenges cant positive impact on the Bank Task Team. Project preparation processes are complex, time consuming, All TTLs interviewed believe grant implementation and require a tremendous amount of technical analysis procedures to be the most challenging aspect in utiliza- and know-how. Grant recipients require varying tion of the grant funds. The timing of the PHRD grant degrees of assistance from the Task Team, especially cycle, as shown in Diagram 1, does not correspond, and early in the grant cycle, e.g. managing procurement is not always responsive, to the project preparation processes and understanding Bank procedures. World cycle of the Bank (identification, preparation, pre- Bank project processing requirements are also signifi- appraisal, appraisal, negotiation). Several instances cant for the TTLs. PHRD TA grants provide the much were cited by TTLs that the PHRD grant for the proj- needed assistance, enabling TTLs and recipients to ect was not active until the team was about to go hire the highest quality consultants to carry out the through appraisal due to delays in approval by the work of preparation. In this arrangement, the consult- donor and processing the trust fund effectiveness. ants do the technical work and develop the outputs, grant recipients become the preparation managers, “We have a Bank project cycle, which is most of guiding the work of consultants and ensuring high the time determined by the client’s urgent needs quality outputs are developed on schedule, and the and a Board date which drives the scheduling. TTL becomes the facilitator, guiding the preparation When grant funding does not come on time to start process and preparing for negotiations and loan the activities to mobilize consultants, it delays the approval by the Board. whole preparation process. This is a real problem.” “PHRD is critical to developing quality project —Regional Coordinator, The World Bank design. Through the implementation of the grant, the original concept for the project completely The difference in timing between the project prepara- changed and we ended up splitting the project into tion process and the TA grant process is considered to two separate projects. I later applied for a PHRD be the greatest challenge for TTLs and grant recipients grant to support the newly identified project as in grant implementation. All preparation phases are well. PHRD provides a great opportunity to look scheduled back from the Board date. When a TA grant at alternative approaches and to maximize the is not approved quickly, or if the funding is delayed, project potential.” preparation activities cannot start and consultants may —Task Team Leader, East Asia and Pacific Region not be mobilized (Diagram 2). This can create delays in the project preparation process. As the Board date for the project is fixed and TA grants close by that time, a In addition to much needed resources, TA grants pro- delay in grant funding can cause grant recipients to lose vide the Bank team with the opportunity to test the a portion of grant funds because there is insufficient original development hypothesis more thoroughly and time to implement some of the preparation activities. investigate alternative approaches to development This process can be detrimental to the project prepara- issues. This process only deepens the Bank’s under- tion process for both the Bank and the grant recipients. standing of the distinct development factors of a par- ticular country, leading to a more targeted and A related challenge is the need to provide a significant achievable response and improving the quality of the level of detail about the design of the future develop- project design and the implementation process. ment project and the specific preparation activities required at such an early stage in the preparation cycle. jphrd fund 21 Diagram 1: Technical Assistance Grant Project Cycle Proposal Govt/Bank/ Legal Est. Accounting Grant Preparation Japan Approval Agreement & Disbursement Implementation 1–3 months 3–6 months Signed procedures 6 –48 months 1–12 months 1–3 months Diagram 2: Delays in the Grant Approval and Implementation Process Project Project Project Project Identification Preparation Pre-appraisal Appraisal Submit grant Obtain grant Implement Amend Close grant proposal delays approval grant grant Submit grant delays amendment At this early stage, after just one identification mission, recipients, especially for procurement and disburse- TTLs find it difficult to know exactly what specific ment. TTLs agree with this assessment, believing that resources will be procured as part of preparation, often the procurement requirements of a $500,000 grant being in the situation where they are making a number need not be as detailed as those for a $50 million of assumptions that do not always remain true. This is investment operation. to be expected to some degree and would not be prob- lematic to grant implementation if the amendment As described in Chapter 3 of this report, the World process were streamlined. Delays in grant amendment Bank and the Government of Japan have put in place approvals have significant impact on grant implemen- new procedures to respond to some of the obstacles tation because they hold up a number of preparation associated with the effective implementation of activities being implemented. TTLs and grant recipi- PHRD TA Grants. These include streamlining the ents agree that developing an activity plan is an impor- proposal process, working to quickly respond to grant tant part of the TA grant application and is a necessary amendment requests, and decreasing the up-front part of the process. Although the plan is considered to time required to gain grant approval. These steps be a flexible road map, amending the plan can be time have been successful in improving the efficiency and consuming to the Bank and recipient. effectiveness of the PHRD Fund’s processes and pro- cedures. Additional measures will be taken in FY03 to Becoming familiar with Bank procedures is the great- continue to streamline procedures and improve pro- est implementation challenge mentioned by grant gram effectiveness. CHAPTER 5 The PHRD Human Development Programs “The mind is not a vessel to be filled, but a fire to be ignited.” —Plutarch $1.8 million in FY02, which accounted for approxi- “Where demand for knowledge is great—as mately 15 percent of total donor contributions to WBI expressed in country assistance strategies developed for the fiscal year. In addition, there were ongoing pro- by the Bank and its members—there WBI now grams from FY01 that were carried forward to FY02 in focuses its expertise, nimbly and responsively.” the amount of $2.4 million. —James D. Wolfensohn In FY02, WBI delivered nearly 600 learning activities (214,115 client training days) and reached more than The World Bank Institute 48,000 participants in 150 countries through collabo- and the Joint Japan ration with more than 160 partner institutions. Even World Bank Graduate under the constraints of a reduced budget and in the Scholarship Program midst of a realignment, WBI exceeded its plan. Although the budget has decreased by 10 percent in WBI Overview real terms over the past three years, the number of The World Bank Institute (WBI) supports the Bank in meeting its operational and corporate priorities—espe- cially the Millennium Development Goals—aimed at Figure 10: Regional Distribution of WBI Training Grants Approved in FY02 poverty reduction and sustainable development world- percentage of total allocations wide. WBI’s thematic capacity-building programs, Sub-Saharan aligned with the World Bank’s corporate priorities, sup- Africa Global Middle East port the Bank’s knowledge agenda by providing 6% & North Africa courses, seminars, and policy advice on issues central to 17.6% 6% poverty reduction and sustainable development. Box 8 Central presents highlights of the programs to which the Asia 6% PHRD provided funding in FY02. PHRD Impact on WBI Programs 17.6% 41% Asia (general) The Government of Japan, through the PHRD Fund, East Asia has and continues to be the largest single donor & the Pacific for WBI programs. Through the PHRD WBI Training 6% Grants, the Government of Japan contributed South Asia jphrd fund 23 breakdown of the programs approved in FY02 as per- Figure 11: Sectoral Distribution of WBI centage of the total allocation. Training Grants Approved in FY02 percent of total allocations Community Implementation Partnership Banking Empowerment with Japan & Social Inclusion & Finance Ninety-four percent of the programs approved in FY02 12% Health & Attacking 6% Population make use of the Japanese resource persons or institu- Poverty 6% 6% tions which provide invaluable inputs to WBI activi- Social Multi- 6% Protection ties to enhance the training content, incorporating Sectoral 12% Japanese as well as East Asian development experi- Governance/ ences. These inputs provide a valuable sense of per- 12% Market Solutions for spective that WBI would not have otherwise been able Development to acquire. 17% Education 17% Environmental 6% Management Natural Resources The Brain Trust Program: Management Sharing Successful Asian Development Experiences offerings has increased by 39 percent. Trust Fund allo- The Brain Trust Program, solely funded by the PHRD cations, especially those from the PHRD Fund, have WBI Training Grants, is a special program established enabled WBI to significantly extend its reach. The per- by the Government of Japan and managed by WBI. centage of offerings of WBI products in Africa The Program conducts comparative studies on increased by 7 percent and in East Asia by 3 percent. Japanese and East Asian development management experience and benefits a large number of people in our A Focus on Asian Countries client countries through its publications and knowl- Although WBI is a global unit, 71 percent of programs edge dissemination activities. The research findings approved by Japan in FY02 are for Asian countries, of and policy lessons which come out of the studies car- which 17.6 percent are specifically targeted to East ried out by the Program provide important policy les- Asia, which is the region identified by the Japanese sons and guidelines for policymakers in developing public as being the most important for Japan. In addi- countries. The Program also promotes the exchange of tion, Asian countries are often represented at the ideas among Japanese and non-Japanese scholars, tech- global programs. PHRD funding enables WBI to sub- nical experts and policy makers. The cumulative con- stantially reach countries in Asia. The regional distri- tribution to the Program since its inception has bution of WBI Training Grants approved in FY02 is reached $4 million. presented in Figure 10. The major dissemination activities in FY02 include a In the case of the sectoral distribution, all programs half-day seminar on small and medium-sized enter- support one or more identified themes (social sectors, prises, communities and markets, and local govern- environment, finance), with the highest concentra- ment development in Japan, a day-long event entitled tion in the social sectors, including community “Rethinking the East Asian Miracle”, and a seminar empowerment and social protection (41 percent), and on environmental management in Japan. In addition environment and natural resource management (24 Japanese experience was shared within the Bank percent). Six percent of the programs specifically through a series of seminars on comparative institu- address poverty issues. Figure 11 provides the sectoral tional analysis; Japanese economic development; 24 ANNUAL REPORT 2002 Box 8: FY02 Highlights of WBI Programs Funded by Japan PHRD WBI Training Grants Reporting on Water, a Key Environmental Issue pose of the dissemination is to present and discuss the One of the ongoing programs funded by the PHRD is Japanese experience of controlled decentralization of the Water Resources Management Program. Water the government – known as the “integrationist” model issues are among the leading topics of public debate in – for its potential as a framework for guiding the inter- many countries. Although articles on water appear governmental reform in many other East Asian as well daily, much of the information is inaccurate or biased. Central Asian countries. The convergence of the high Journalists who really understand the implications of interest in East Asia and Central Asia for carrying out water policy can play an important role in building intergovernmental reform and the fact that Japan has consensus among policymakers, NGOs, and the made a transition from a highly centralized unitary public at large. system to an “integrationist” model makes this topic especially relevant, credible, and timely. In preparation for the upcoming Third World Water Forum, WBI is cooperating with the governments of The purpose of the dissemination activities is not to Japan and the Netherlands on a two-year global promote the Japanese model of intergovernmental learning initiative for journalists. The program famil- relations as no one model fits all circumstances, but to iarizes journalists with policy issues to build a climate present the Japanese experience as a potential frame- for discussion and debate of water issues at the local, work for guiding the reform process in East Asian and regional, national, and international levels. Issues Central Asian countries. Some of these countries are include pricing, equity, and sustainability in the pro- facing many of the same challenges in decentraliza- vision of water supply and sanitation services. tion that Japan faced over the past half-century. Activities financed by PHRD support include face-to- face workshops, distance learning, field visits, elec- Clean Air Initiatives for Asian Cities (CAI-Asia) tronic discussions, and web-based activities. Global PHRD-WBI Training Grants, have provided substan- and regional electronic networks of professionals tial support for the Initiative for several years. CAI- reporting on water will foster dialogue among jour- Asia is a regional partnership of cities, national nalists and provide a channel through which to government agencies, private sector companies, supply journalists with information on the manage- NGOs, academia, international development agen- ment of water resources. cies, and foundations. It was established to address air quality issues in Asia. “The most useful aspects of the workshop were a Through regional policy dialogues and workshops to clear outline of the indirect costs that are paid by share knowledge and experiences, a network of over the poor, discussion of the institutional issues, and 500 CAI professionals was formed and the coordinat- pointers on the specific questions applicable to par- ing committee of CAI-Asia was created. The former ties involved in public-private partnerships.” has greatly promoted the communications and — Catherine Richards knowledge-sharing among people and institutes and the Middle East Economic Digest the latter formed by cities and organizations is gradu- ally taking the leadership of the CAI-Asia and Decentralization: Intergovernmental Relations responsible for the direction and work program of Dissemination of the Japanese model for achieving CAI-Asia. CAI-Asia has been quickly emerging as a intergovernmental reform, funded by PHRD, has been leading, highly visible and active regional network in highly successful and valued by participants. The pur- the area of air quality management. jphrd fund 25 Box 8, continued Corporate Governance and Social Responsibility Directors in East Asia Network (IDEA.net) was Part of WBI’s commitment to knowledge sharing is launched. In December 2000, in order to expand the helping to promote business ethics and good gover- coverage of the reform agenda, the Institute for nance within client countries. By aiding the private Solidarity in Asia (ISA) was founded sector in adopting international business ethics prin- ciples and governance, it is attacking corruption and By June 2001, the Government of the Philippines forging partnerships to aid in the improvement of the adopted the corporate governance agenda for 2002- investment climate. 2004 which was drafted by ICD. Furthermore, ICD led other members of IDEA.net in the formulation of The Philippines is one of good examples to illustrate Guidelines for Proper Corporate Governance the impact the program has on participating coun- Practices which were endorsed by APEC for volun- tries. Over 3,000 people representing public and pri- tary adoption at the Shanghai Ministerial Meeting. In vate sector, civil society, academia, and young December 2001, the Office of the President con- generation have been involved in various training ducted a National Socio-Economic Summit, which and capacity building activities of this program. The highlighted and adopted the recommendations for cooperation with the Philippines started in October governance reform made at the November 2001 ISA- 1999 with activities related to corporate governance ICD conference. In January 2002, the Governance and the establishment of the Institute of Corporate Advisory Council submitted a Governance Reform Directors (ICD). In October 2000, the Institute of Agenda to the President of the Philippines. and “Development with Alternative Strategic defines as priority. Additionally, grant proposals sub- Options: Another View on the Poverty Reduction mitted to the Government of Japan vary greatly in Drive and Beyond.” terms of objectives and activities, complicating the approval process. Strengths and Another strength of the PHRD funded WBI activities Challenges of the is that they fill an important gap in development pro- PHRD Fund grams targeting Asia. No other donor contributor has Asia as its geographic focus. PHRD support provides According to WBI staff members, one of the strengths much needed assistance to these countries and does of the PHRD is that the funds it provides are flexible so effectively. and can be used to support a number of different types of development programs. This flexibility differs from As with the PHRD Technical Assistance program, other WBI donor funds, many of which have numerous PHRD processes and procedures are perceived as chal- restrictions on the way funds may be allocated. lenging for WBI staff. Grant proposals are perceived as being activity-based, requiring an excessive level of This strength, however, presents a challenge for WBI detail. It is recommended that proposals be more pro- Task Team Leaders and managers. While the criteria grammatic-based and should correspond to a distinct for the use of PHRD funds for WBI is fairly broad, set of programmatic targets established jointly by the TTLs site this as a primary reason for grant proposals Bank and the Government of Japan. being either rejected or delayed. Because the criteria set forth by the Government of Japan is so broad, TTLs Finally, the grant approval process is perceived as find it difficult to know what types of activities Japan excessively lengthy and not responsive to the WBI 26 ANNUAL REPORT 2002 training cycle. The WBI grant proposals for FY02 were The World Bank and the Government of Japan not approved on time. If the impact of PHRD contri- require that scholarship recipients return to their butions to WBI is to remain significant, the approval home country or work on development after their process must be streamlined to be more responsive to studies, thereby ensuring that the knowledge and skills WBI work plans and implementation processes they receive during their programs contribute to development in their respective regions and countries. WBI and the Government of Japan have taken meas- The Program alumni come from Central Banks, min- ures to address some of these challenges. WBI has istries and civil service departments and institutions, appointed a Senior Advisor to represent WBI in including universities and schools, that actively par- Japan, stationed in the World Bank Tokyo Office ticipate in the development process in their countries. starting FY03. The appointment was made in line with With an 80% rate of return to their home countries WBI’s new strategy to integrate with operations, focus (76%) or to another developing country (4%), the on country needs, customize capacity building prod- JJ/WBGSP scholars create a community of well- ucts for clients countries in Asia, and to decentralize trained cadre who are highly positioned in policy- its operations. This position also responds to the making circles. requirements of the Tokyo Office, which aims at strengthening the Bank’s relationship with Japanese Regular Program development stakeholders. In fiscal 2002, the Regular Program provided 130 scholarships, from nearly 2,723 applicants, to mid- career professionals, mainly from developing countries ComplEmenting Training to pursue graduate studies in subjects related to eco- with Graduate Studies: nomic and social development at universities located The Joint Japan/World in World Bank member countries. In 2002 Africa sub- Bank Graduate mitted about 57 percent of total applications followed Scholarship Program by South Asia with 13 percent of total applications. Africa continues to receive the most scholarships Overview (30%). East Asia received the next highest number of The Joint Japan/World Bank Graduate Scholarship scholarships with 20%. Latin America and the Program, JJ/WBGSP, provides opportunities for gradu- Caribbean followed with 15%. ate studies leading to a master’s degree in development- related fields for mid-career professionals from the With the exception of the Africa and South Asia World Bank member countries. WBI complements Regions, the number of applications received from its training programs through the management of other regions has been below desired levels. The the Joint Japan/World Bank Graduate Scholarship Scholarship Program has initiated efforts to increase Program (JJ/WBGSP), solely sponsored by the the number of applications from the Middle East and Government of Japan. North Africa Region, which has traditionally had the lowest number of submissions of all regions. In fiscal Since its establishment in 1987, the program has awarded year 2000, the Scholarship Program disseminated 1,843 scholarships as a result of the processing of 39,000 application materials directly to renowned institutions applications for study at universities in member coun- and NGO’s in the education field. Since 2001, the tries. In addition, scholarships have been awarded to 648 application forms in four languages have been avail- participants for study at the various Partner Institutions. able on the JJ/WBGSP website and applicants can also In 2002, the Program awarded 189 scholarships to apply online. scholars from about 86 countries with emphasis on Low Income Countries Under Stress (LICUS). jphrd fund 27 Partnership Program National Graduate Institute for Policy Studies (Public with Universities Finance). The Japanese university programs differ from The JJ/WBGSP supports eleven Partnership Programs the other Partnership Programs in that they are open in universities around the world. These programs enable only to scholars selected and supported by JJ/WBGSP. scholars to receive specialized training in key areas of A partnership program begun at Harvard University in development, such as economic policy management or 1999 provides a Master of Public Administration in infrastructure management. All Partnership Programs International Development. The program lasts 21 lead to a Masters degree. Applicants are selected on the months including a three-month internship. basis of achieving gender and geographic balance as in JJ/WBGSP plans to sponsor a maximum of 15 new the Regular Program. scholars each year. The Program in Economic Policy Management at Columbia University lasts 14 months The programs developed at McGill University in including the 3 months for the internship. Canada and Université d’Auvergne-CERDI in France have been transferred to four African universities A Tracer Study conducted during fiscal 2000 reported under the sponsorship of JJ/WBGSP and the African that 97 percent of scholarship recipients obtained the Capacity Building Foundation (ACBF). The francoph- degree for which the scholarship was given. Eighty- one programs are being held at Cocody University in five percent of the recipients are meeting the pro- Cote d’Ivoire and Yaounde II University in Cameroon gram’s objectives either by working in a developing and are of 15 months duration including three-months country or in an international aid agency. JJ/WBGSP internships. The Anglophone program at Makerere alumni are highly placed in public service in their University in Uganda and the University of Ghana are home countries, where they contribute to human of 18 months duration and also include 3-month resource development, capacity building, and poverty internships. Both programs lead to Masters degrees in reduction in the developing world. Examples include Economic Policy Management. Five additional part- Milen Veltchev, the Minister of Finance in Bulgaria nership programs are on-going at four Japanese univer- who was voted the `Best Finance Minister in Europe’ sities – University of Tsukuba (policy management), in 2001, and Abdoulaye Abdoulkader Cisse, the Yokohama National University (infrastructure man- Minister of Trade, Industry and Handicrafts in Burkina agement and public policy and taxation), Keo Faso who received his Ph.D from the University of University (tax policy and management), and GRIPS, Toulouse while on scholarship. CHAPTER 6 Responding to Crises and Emerging Development Challenges “We must adjust to changing times and still hold to unchanging principles.” — Former president Jimmy Carter in his Noble Peace Prize acceptance speech Innovative and Rapid izations, implementing small-scale pilot projects; these Response Programs processes characterize innovative programs and set them apart from traditional development projects. The Today’s world is an uncertain and ever-changing place. PHRD Fund provided significant funding to five inno- Poverty, starvation, illiteracy, environmental degrada- vative programs in FY02; the Critical Ecosystems tion, violent conflict, HIV/AIDS; these are just some Partnership Fund, infoDev, the Development Gateway, of the problems that shape today’s development agenda the Cities Alliance and the Climate Change Initiative. and require urgent and innovative action. The PHRD Fund recognized early on that to be effective as a cata- lyst for development and change, it must be flexible, innovative and rapid in its response to emerging crises. Today, the PHRD Fund is one of the largest trust fund Deforestation is one of supporting innovative programs designed to respond to the major threats to newly emerging development challenges and to rapid natural habitats around response programs helping countries out of crisis. the world, due to out- dated agricultural practices and logging. Innovative Programs Responding to Emerging Development Challenges Critical Ecosystems Partnership Fund (CEPF) Environmental destruction - urban poverty - The earth’s biological and environmental diversity is the digital divide - global warming under ever increasing threat. The destruction of natu- An innovative program is not defined by the develop- ral habitat and species continues at ever increasing ment problem to which it is responding, but by the way rates, with little understanding of the long-term conse- this response is conceived, implemented and evalu- quences for our own survival. The Critical Ecosystems ated. Innovative programs stress the means by which Partnership Fund (CEPF) takes aim at this global prob- development outcomes are achieved, and not just the lem by providing timely, strategic assistance for conser- outcomes themselves. Creating partnerships, funding vation work in the planet’s most biologically rich and non-formal organizations, enabling the participation of threatened ecosystems. The CEPF is a partnership a diversity of stakeholders, decentralizing implementa- between the World Bank, the Global Environment tion, leveraging the funds of other development organ- Facility (GEF), Conservation International (CI) and jphrd fund 29 other institutions to create a new biodiversity funding projects which demonstrate the development opportu- instrument that combines technical and financial nities offered by information and communication tech- strength, field knowledge, administrative agility and nologies (ICTs). infoDev’s mission is to promote the flexibility, and a knowledge system to facilitate infor- application of these technologies and the sharing of mation communication. The combination of these best practices for social and economic development, strengths allows CEPF to provide a significant total with a special emphasis on the needs of the poor in amount of targeted funding in small- to medium-sized developing countries. field projects in a more streamlined fashion than has been possible to date. With the support of a $6.5 million grant from the PHRD Fund, infoDev is launching a new flagship ini- The CEPF is innovative in its approach and has tiative - the ‘Incubator Initiative’ aimed at fostering adopted a new strategy for project delivery that entrepreneurship and private sector development in attempts to overcome typical obstacles and delay developing countries. This initiative will be dedicated through a non-traditional set of working arrangements to the establishment of a network of incubators to facil- between the Bank and NGOs. CEPF makes grants to itate the emergence and development of small and the leading international, national, regional and local medium size ICT enabled enterprises in developing NGOs and other conservation-oriented stakeholders countries. infoDev will work with governments, private in the world’s most critically threatened ecosystems in enterprises, investment banks as well as universities Bank client countries. and research centers in developing countries. In FY02, Japan officially joined the World Bank, GEF, The Initiative is designed as a three-year program, MacArthur Foundation, and Conservation International aimed at promoting economic growth and competi- as a full donor partner of the CEPF. The arrangement for tiveness through the following objectives: the administration of the contribution between the Government of Japan and the World Bank was signed on ■ Improving performance in existing incubators in June 12, 2002 at the 3rd Donor Council Meeting in developing countries, achieving higher ‘survival rates’ Washington. Japan’s contribution includes the amount of of incubated companies, growth and sustainability. $5 million as an initial contribution. It is expected the ini- tial disbursement of $5 million will be made in early 2003. ■ Promoting a synergetic approach focused on the needs of incubators in developing countries, based InfoDev on improved knowledge, networking and capacity The Information for Development Program (infoDev), building. is a multi-donor grant facility that supports innovative ■ Seizing new opportunities offered by the more advanced use of ICTs within incubators, assessing Box 9: Activities of the incubators’ strategies and processes. Incubator Initiative ■ Fostering entrepreneurship and competitiveness in Activity 1: Creation of the infoDev Incubator developing countries, supporting the analysis and Support Center (iDISC) testing of new incubator approaches, and the dis- semination of best practices in this field. Activity 2: Support to existing incubators in devel- oping countries. As part of Phase I of the Incubator Initiative, by July 1 Activity 3: Technical Assistance and support for 2002 the Request for Proposals for the establishment of new and start-up incubators. the infoDev Incubator Support Center (iDISC) was 30 ANNUAL REPORT 2002 published on the infoDev website and broadly dissemi- growing amount of information available online, and nated through the infoDev-l distribution list and sev- empowers virtual communities of learning to address eral international electronic lists or global reach. The key development issues. The PHRD Fund contributed deadline was September 2, 2002. $5 million in FY02. Forty-six proposals for the establishment of the infoDev Development Gateway supports four programs: Incubator Support Center (iDISC) were received from all regions, including 31 proposals from 20 developing The Development Gateway portal, a key initiative countries. This list was published on the infoDev web- of the Foundation. An interactive portal facilitating site, and the proposals were screened according to the access to information and knowledge on development criteria in the RFP. Fifteen proposals were short-listed and poverty reduction, the Gateway works in partner- for Panel Review. Following presentations by the three ship with the public and private sectors and civil soci- finalists, the Panel selected the joint proposal from ety, providing a space where people can share Association of Science Parks and Business Incubators experiences on development. Among other resources, (ANPROTEC, Brazil) and the International Business the Portal offers information on major development Incubator (IBI, USA). The panel agreed that although topics, an extensive online directory for information the three finalists were strong and very competent can- on development projects and activities (AiDA), a didates, the proposal from ANPROTEC-IBI fulfilled all global online marketplace (dgMarket), and links to a the criteria defined in the RFP and provided the best growing network of national portals (Country and most cost-effective combination of long-term and Gateways). The Portal also features data and statistics proven expertise on supporting business incubation in for more than 200 countries and a bookstore with a developing country settings and international network- wide range of publications on development. ing capabilities for assisting the target beneficiaries in developing countries. A network of Research and Training Centers with hubs in the developing world, to exchange ideas Terms of Reference of the contract for the establish- and test ICT applications that will benefit the ment and operation of the iDISC are being drafted and poor. Under this program, support is provided for test- the contract/agreement is expected to be signed by ing applications to help agricultural communities early January. obtain information on market prices; developing and disseminating databases of basic medical knowledge; As part of Phase II of the Incubator Initiative, the call and the development of cyber kiosks for rural commu- for proposals has been announced. This round is nities. The Government of India has identified the expected to l allocate between 15 - 25 grants to incu- National Centre for Software Technology as a node of bators in developing countries, one grant per country. the Research and Training Network. The NCST will focus on research activities related to software devel- The Development Gateway opment, working closely with the Indian Institute of The Development Gateway promotes the use of ICT Technology – Mumbai. This center was launched in for poverty reduction and sustainable development in September 2002. order to help countries overcome the digital divide through practical and dynamic programs. The flagship The Government of the Republic of Korea has identi- program is the “Development Gateway,” a compre- fied the Korea Information Society Development hensive on-line portal providing users with access to Institute to provide training, focusing on e-government development information, resources, and tools, pro- and ICT policies. The center was launched on viding a space to contribute knowledge and share November 13, 2002, and the first training course will experiences. The Gateway helps users navigate the be held in December 2002. jphrd fund 31 The Governments of Pakistan and Rwanda have both expressed interest in hosting a Research and Training Center, and discussions are underway. China’s contri- bution to the Foundation includes the establishment of a Research and Training Center with a particular focus on distance learning. This center will focus on developing cutting edge distance learning technolo- gies, connecting people within China and with the A slum outside of Mexico City. rest of the world. vision for their city, analyze its economic prospects An ICT Development Forum for debate and and establish clear priorities for actions and invest- knowledge sharing on key ICT issues, promoting ments, and partnerships and synergies between civil society and the public and private sectors. The ICT ■ City-wide and nation-wide slum upgrading to Development Forum will bring together a cross section improve the living conditions of at least 100 mil- of leaders and entrepreneurs to help find ICT solutions lion slum dwellers by 2020 in accordance with the to address poverty and address issues of connectivity. Cities Without Slums action plan. The first of these events is expected to be held in May 2003 in Germany. The Alliance membership currently includes Japan and nine other donor Governments, the World Bank, The Foundation also offers a Grants and Asian Development Bank, UN organizations, and the Investments Program to support ICT projects and major international associations of local authorities. programs at the local, national, regional, and global The Alliance is not a program with separate imple- levels, which are helping to overcome the digital mentation capacity but rather a strategic partnership to divide. Under the scope of this program, the improve the coherence and impact of the Members’ Foundation allocated in May 2002 US$1.25 million to urban development cooperation activities. help Country Gateways begin to offer the services out- lined in their business plan. In August, 2002, the Cities Alliance members approved nearly $15 million Foundation made the first disbursement to MIGA for in funding allocations for 20 activities in 10 countries the FDI Exchange in the amount of US$200,000. during FY02 in its two areas of focus –city development strategies (CDS) and slum upgrading. Included were Cities Alliance new CDS programs in six countries: It is estimated that 2 billion people will be added to the world’s population over the next 30 years. Ninety-eight ■ City-regional development strategies (CDSs) in the percent of this expansion will take place in developing poorest regions of Western China, and in Rio countries and much of this increase will be in urban Grande do Sul state of Brazil; areas. The Cities Alliance is working to respond to this emerging challenge before it reaches crisis proportions. ■ CDSs for the capital cities of Addis Ababa The program seeks to create a global alliance of cities (Ethiopia), Kingston (Jamaica) and Aden (Yemen); and their development partners committed to improve and, the living conditions of the urban poor through imme- diate and tangible action in two key areas: ■ CDSs for three local governments in Burkina Faso. ■ City development strategies (CDS) which link the In addition, $500,000 was allocated, through ear- process by which local stakeholders define their marked funding from PHRD, for an initiative to build 32 ANNUAL REPORT 2002 Heavy industry the bulk of the remaining 20 percent is associated with is one of the agriculture and changes in land use, such as deforesta- major contributors tion. Overall, reducing the threat of climate change to pollution. will require large reductions in greenhouse gas emis- sions. Developing countries need assistance on how to reconcile economic growth, primarily fueled by coal, oil, and gas, with protecting the environment. The objective of Japan Climate Change Initiative networks of Asian cities to share knowledge and expe- Grants (CCIG) Program is to provide grants to recipi- riences to facilitate development and implementation ent country’s government entities to: of their development strategies. Titled, “City Networking and Investment Marketplace 1. support the inclusion of climate-change concerns in Development in Asia,” this initiative builds on FY01 the country’s development planning process; and, PHRD funding that supported national CDS programs in The Philippines and Indonesia. 2. prepare and implement Bank-financed projects which support reduction in emission of green-house Alliance members also joined the efforts of local gases and promote energy efficiency or adaptation to authorities that are moving to meet the impact targets the adverse impact of climate change, in concert with of the Alliance’s “Cities Without Slums Action Plan,” economic growth and eradication of poverty. which has been adopted as a Millennium Development Goal (Target 11). Leading the way was São Paulo The Government of Japan contributed $5 million in (Brazil), one of the largest cities in the world, which is April, 2002 to support the Climate Change Program. using Cities Alliance funds to design a large-scale Seven Climate Change grant funding proposals were upgrading program targeting 790,000 residents in its approved for $4.3 million in October 2002 and repre- most violent and deprived slums (linked to $189 mil- sent about 85 percent of the $5million allocation for lion in investments from city resources). The Alliance the Climate Change Program (see Box 10). also supported the efforts of the Kenyan Government to formulate a national slum upgrading policy and to The approved Climate Change programs fall into three begin design of an upgrading program for Nairobi. The categories: city of La Paz (Bolivia) and four cities in Mozambique received Alliance support to improve slum conditions 1. Carbon Sequestration Pilots: Grants which assess in flood prone areas, and several slum upgrading initia- the financial, institutional or social design of afforesta- tives in three different Indian states. In addition, the tion projects for carbon sequestration – the lessons Alliance approved US$10 million to establish a learnt from these grants would facilitate the design Community-Led Infrastructure Finance Facility and replication of carbon sequestration activities (CLIFF), which will support the efforts of organizations through the Clean Development Mechanism (CDM) of slum dwellers to improve their housing and sanita- and Joint Implementation instruments of the Kyoto tion conditions. Protocol (JI-KP). Japan Climate Change Initiative 2. Mainstreaming of Energy Efficiency and Renewable Grants (CCIG) Energy Investments: Grants which facilitate the main- About 80 percent of greenhouse gas emissions from streaming of renewable-energy and energy-efficiency human activities are related to the production and use investments – the outputs of these grants would pro- of energy—and particularly the burning of fossil fuels; vide technical demonstration or information on viabil- jphrd fund 33 was made through a new window of PHRD, the Post- “For Kiribati, climate change is not just an envi- Conflict Reconstruction Assistance Program. The Post ronmental problem, it is putting our very survival at Conflict Reconstruction Assistance Program became risk. While we cannot stop it, we can try to mini- the Japan Post-Conflict Fund (JPCF) in FY99 and is mize the risks we face, by adapting to the changing co-administered by the Post Conflict Fund Secretariat circumstances. To implement such changes, we in the Post Conflict Unit and RMC. need a good understanding of the way climate change affects us and the options we have to deal Since the first contribution in FY96, the Japanese with it. But we also need to understand how these Government has contributed $92.5 million to Post- risks affect our local communities, and how we can Conflict Reconstruction Assistance activities. help them cope with adverse climatic circum- stances. The PHRD grant allows us get the right Beginning in FY00, post conflict support has been lim- expertise and organize those consultations, so that ited to support the reconstruction of East Timor (its we will be equipped to select the best adaptation new name is Timore Leste). Japan’s PHRD funding for investments. And even better, by the time we start the East Timor grants was approved in two phases. The the actual investments, the public consultations and first phase was approved in January 2000 for $2 million increased understanding will already be paying off to support the initial work required as the multi-donor in terms of increased awareness of the climate risks East Timor Trust Fund was not established at that that we already face, here and now.” time. The $2 million grant from the JCPF assist with — Sofia Bettencourt the East Timor Community Empowerment and Local Task Team Leader Government Project to familiarize the East Timorese with the democratic principals of participation and representation. In the second phase, funds were trans- ity which would enable replication and scale-up of ferred from PHRD to the multi-donor TF for East renewable energy and energy efficiency activities. Timor. PHRD transferred $14.1 million in FY00 and an additional $9.8 million in FY01. In FY02, Japan 3. Preparatory Work for Adaptation Operations – Grants allocated an additional $2.1 million for East Timor. that carry out the preparatory work for subsequent This means a total of $28 million has been allocated/ climate-change adaptation operations – grant outputs transferred to the East Timor Trust Fund. would determine the design of projects that address adaptation to the adverse impacts of climate change. Crisis Response – The Japan Post Conflict Fund Conflict is a major constraint to development with crit- ical impact on physical, economic, and social capital, as well as the social fabric of the countries involved. During 1990-2002 alone, there were 56 major armed conflicts in 44 different locations in the world, exacer- bating poverty and disrupting development efforts. Japan began its support for post conflict activities with its announcement in early 1996 at a G7 meeting in The Kiribati Climate Adaptation Working Group and stakeholders Paris of its intention to contribute up to $50 million to designing the various project elements, jointly with the Bank’s project help in the reconstruction of Bosnia. The contribution preparation mission led by Sofia Bettencourt, South Tarawa, Kiribati. 34 ANNUAL REPORT 2002 Box 10: FY02 Climate Change Grants Approved October, 2002 (i) Carbon Sequestration Pilots farms in China. The pilot would demonstrate inter- ventions which enhance windfarm electricity pro- Bulgaria: Forest Fuel Switch Pilot ($891,660) duction and economic viability, and thus promote This proposal seeks to support pilot afforestation in their replication. order to assess the viability of carbon sequestration. The outputs of the project would help in the design Czech Republic: Energy efficiency and renewable of carbon-sequestration projects within the JI-KP energy Projects selection, methodology develop- framework. ment and awareness program ($350,500) This proposal seeks to create and strengthen the Romania: Public outreach and support program capacity to identify, prepare and process climate- for climate change mitigation through afforesta- change mitigation projects within the JI-KP frame- tion ($503,340) work. It would enable the country to take advantage The proposal seeks to support afforestation projects so of carbon financing to mainstream renewable energy as to evolve an institutional model for social partici- and energy efficiency. pation. This model would facilitate replication of afforestation projects within the JI-KP framework. Bulgaria: Sustainable Use of Geothermal Resources ($770,000) Mexico: Marketing Sequestered Carbon from The proposal seeks to pilot geothermal energy proj- Mexican hillside shade coffee ($625,600) ects utilizing JI-KP resources. The pilots would create The proposal seeks to establish the viability of support- the transactional experience necessary to replicate ing the shift to hillside grown coffee through the addi- such projects. tional revenue generated from carbon sequestration within the CDM framework. The outputs would facili- (iii) Preparatory Work for tate the replication of this activity which promotes Adaptation Operations carbon sequestration and sustainable development. Kiribati: Adaptation Project Preparation (ii) Mainstreaming of Energy ($645,580) Efficiency & Renewable Energy The proposal seeks to support the Government to Investments adapt to climate change and sea-level rise through mainstreaming adaptation in national economic China: Wind Farm Performance Improvement planning. The project would also support the prepara- Program ($494,530) tion of a pilot adaptation project to reduce vulnera- The proposal seeks to support a pilot to improve the bility to climate change, climate variability and technical and commercial performance of wind- sea-level rise. Challenges of Post Japan and the World Bank are jointly working to make Conflict Assistance it easier for recipient governments to apply for, receive In a time of crisis, government authorities are faced and disburse post conflict grant money. These meas- with a number of challenges that affect the provision ures will increase disbursement rates and enable a of an effective and coordinated response. At times, the more effective response on the ground when it is coordination of international assistance creates a new most needed. set of distinct challenges and the Government of CHAPTER 7 Japan – World Bank Partnership Program The Japan – World Bank Partnership Program sup- World Bank intellectual partnership through the ports activities that build relationships between exploration of both growth and governance in East Japanese and Bank researchers on key development Asia under conditions of rapid regional as well as issues, stimulate public interest in Japan for interna- global integration. To date, Japan has contributed tional development issues, and strengthen aid coordi- $15.5 to the program. nation initiatives. Funds support the Joint Japan-World Bank Study of East Asia’s Future In FY02, Japan approved six grants for $2.8 million Development Prospects to strengthen the Japan- (see Box 11). Box 11: Partnership Activities Approved: FY02 1. Japan-World Bank Policy Dialogue Enhancement 4. Establishment of a Japan-World Bank Public Support - $385,000 Outreach Support Fund - $258,000 2. Global Development Awards - $500,000 5. Strengthening of Partnership between the World Bank and the Japanese Private Sector, Phase II - 3. Promotional Activities for the Japan Social $172,800 Development Fund Review Meeting in Tokyo - $25,830 6. Joint Japan- World Bank Study of East Asia’s Future Development Prospects, Phase II and III - $1,500,000 CHAPTER 8 PHRD Special Programs The PHRD Fund supports a number of Special According to the PHRD Monitoring Unit, between Programs designed to address a variety of capacity build- FY88 and FY99, Japanese consultants have contributed ing, knowledge sharing and policy development areas. an estimated 3,000 man-months of expertise to the These programs include the Japan Staff and Consultant World Bank. Trust Fund (JSCTF), the Africa Capacity Building Foundation, and the Russia Financial Institutions As part of the JSCTF program, five grants were Development program. The PHRD Fund provides approved in FY02 amounting to $1.8 million (see financial support to these programs through the Box 12). approval of specific grants developed by government institutions and development stakeholders, including In FY02, and as part of the Consultant Trust Fund Non-Governmental Organizations (NGOs). The grants reform process, the JSCTF was adapted to be more in approved for each program in FY02 are detailed below. line with the overall objectives of other trust funds in The Japan Staff and Box 12: FY02 JSCTF Large Scale Consultant Trust Fund Activities Approved in FY02 Creating Opportunities for Japan- China - Policy Advice on Implementation of World Bank Collaboration Clean Coal Technology (CCT) Projects: $493,600 The purpose of the Japan Staff and Consultant Trust China - Review of Legal Framework of Coal Fund (JSCTF) is twofold: Sector: $337,800 1. Compliment the Bank’s activities in economic and China - Second Anhui Highway Project – sector work, lending development, project appraisal Preparation: $187,850 and supervision; and, Global - Engendering Information and Communication Technologies (ICT) - Sector 2. Provide opportunities to the Japanese consulting Work: $460,100 industry to gain exposure to the Bank’s work to exchange experience and expertise and create Turkey - Energy and Environment Review- greater development collaboration. Special Studies: $346,980 jphrd fund 37 the Bank and to move more towards a standardization strengthens government capacities in policy analysis of processes and procedures. Starting in FY03, the and development management by training mid-level Japan Consultant Trust will be managed outside the managers in economic ministries throughout Sub- PHRD Framework. The major changes to the new CTF Saharan Africa. program are: In FY02, five grants were approved for a total of ■ To simplify the application process, operational $4.1 million. A description of each grant is included in managers have been delegated to responsibility Box 13. to approve CTF assignments which are less than $100,000. Proposals over this threshold would be submitted to the donors in two rounds during Russia Financial the year. Institutions Development ■ Requirements and conditions of different donors Supporting Restructuring and have been simplified: donors can now choose to Financial Management select between Country/Region and Sector/Theme In FY02, the PHRD approved a $1.2 million grant only, instead of varying requirements of the past. to provide technical assistance support for the development of financial institutions in Russia. The ■ All CTFs are 100% tied to the hiring of donor Russian Federation: Financial Institutions Develop- nationals or firms; however, up to 25% of a contract ment Project (FIDP) follows two main programs value can be sub-contracted to non-nationals by a supported by PHRD: the Financial Institutions firm registered or incorporated in the donor country, Development Program ($21 million) and Privatization Implementation Assistance ($15 million), which were ■ Planning for CTFs would be done up-front by oper- both closed in December 2000. ational units who would also ensure that activities are aligned with Bank strategic priorities. The Russian Federation: Financial Institutions Development Project (FIDP) aims to provide key ele- ments of support to the Financial Institutions The Africa Capacity Development Program. The proposed grant includes Building Foundation components in the areas of bank restructuring, moni- toring and supervision, legal support, intermediation Building Capacity Sustainable for and risk management, and strategic planning. Poverty Reduction in Africa The African Capacity Building Foundation (ACBF), based in Harare, Zimbabwe, is an independent, capac- The Multilateral ity-building institution established in November Investment Guarantee 1991 through the collaborative efforts of three multi- Agency lateral institutions (the African Development Bank, the World Bank, and United Nations Development Promoting Foreign Direct Program), African Governments and bilateral donors. Investment into Emerging The establishment of ACBF was a response to the Economies severity of Africa’s capacity problem and the Through a special contribution under the Miyazawa challenge to invest in indigenous human capital and initiative, MIGA continued its program to Enhance institutions in sub-Saharan Africa. The initiative Flows of Foreign Direct Investment to Asia. MIGA’s 38 ANNUAL REPORT 2002 Box 13: African Capacity Building Foundation Grants Approved in FY02 Kenya – Strengthening Corporate Governance ences; research activities including local and regional and Social Responsibility $1 million conferences, seminars and workshops; and informa- The grant intends to promote good corporate gover- tion dissemination, including acquisition of library nance in Kenya as a means of enhancing private materials, as well as computer upgrading. sector development through capacity building, train- ing and exchange of good practice. Primary activities Nigeria – Strengthening Development Policy funded by PHRD include: (a) training, to include Center (DPC) $1 million workshops, seminars, conferences for the private With the support of the PHRD grant, the DPC, a gov- sector, public sector and civil society; (b) core pro- ernment entity established in 1994 with the purpose gram activities through consultancy and other profes- of developing and disseminating alternative policy sional services that promote good governance, options to Nigerian stakeholders, will carry out highlight best practice, and provide for the creation of research and training in areas agreed with major public awareness; and (c) regional seminars and stakeholders that include the government, the private exchange programs. sector and civil society. Grant activities include: (a) training in areas of budget analysis, poverty and Kenya – Strengthening Institute of Policy and public expenditure, decentralization, public sector Analysis Research (IPAR) $500,000 performance and private sector development; (b) The Institute of Policy Analysis and Research (IPAR) research and policy analysis in areas such as technol- was established in 1994 as an autonomous policy ogy policy change, consultations and poverty reduc- think tank with the main goal of strengthening policy tion, legislative-executive relations and economic analysis and research in Kenya. With the support of integration; and (c) outreach and dissemination. the PHRD grant, IPAR will be strengthened through the provision of the following activities: (a) Training, South Africa – Empowering Civil Society in workshops, seminars and an internship program sup- South Africa – South African Non- porting expanded capacity in economics, policy, and Governmental Organization Coalition (SAN- development; (b) field research activities, with IPAR GOCO) $1 million hosting Visiting Fellows who will undertake research The objective of the SANGOCO project is to and training activities. The duration of the fellowship empower civil society in South Africa and contribute will depend on the candidates’ research program; and to the orientation of development policies and pro- (c) the acquisition of new computers, books, journals gram for the eradication of poverty in South Africa and training materials. and the improvement of the quality and quantity of resources allocated to poor communities. Primary Namibia – Strengthening Namibian Economic activities to be funded with PHRD grant resources will Policy Unit (NEPRU) $612,616 include a “War on Poverty” Campaign, empowerment The grant aims to strengthen NEPRU through the of the NGO Network and institutional development provision of a number of capacity building activities activities including the training of SANGOCO staff, including: training and career development, includ- a seminar series and exchange program for experience ing support for specialized studies and short term sharing and developing research capacity in the courses through seminars, workshops and confer- national Secretariat and support for provincial offices. jphrd fund 39 efforts under this initiative focused on technical gram, which was due to conclude in FY02, was assistance as well as raising awareness of its guaran- extended through March of FY03. tees program. The technical assistance goals include developing and implementing targeting strategies to FY02 marked the conclusion of MIGA’s flagship mobilize and promote investment opportunities; Promote Africa Program. This three-year initiative identifying and fostering sectors with solid potential established the first field presence for the Agency and for investment promotion; and devising targeted facilitated sustained and immediate technical assis- work programs. tance delivery to this priority region. Transitional PHRD funding received in the first quarter served as Other key objectives involve assisting in the develop- bridge between the formal conclusion of the Promote ment and implementation of information technology Africa program in August 2001, and the establishment tools and promotional materials. In FY02 activities car- of a MIGA field office in Johannesburg in January ried out under the initiative took place in the Republic 2002. Evaluation of the program’s effectiveness and of Korea, the Philippines and Thailand. MIGA’s pro- developmental impact was also begun in FY02. CHAPTER 9 Financial Performance of the PHRD Fund by Program: Fiscal Year 2002 PHRD Technical Figure 12: Regional Distribution of Technical Assistance Program Assistance Grants In FY02, 97 TA grants were approved, amounting to $22 mil $61.6 million, a decrease of 30 grants and $4 million from FY01. $14 mil $12 mil Regional Distribution (Table 1) $7 mil The Africa Region experienced the most significant $2 mil $2 mil increase in PHRD grants over FY01, with a 4 percent increase. TA grants in the Eastern and Central Asia Africa East Asia South Europe & Middle Latin region decreased by 5 percent from FY01 levels. & Pacific Asia Central East & America Asia North & the Africa Caribbean ■ Africa - 33 grants totaling $22.3 million amount- ing to 36.18 percent of the portfolio. Figure 13: Sectoral Distribution of Technical ■ East Asia and Pacific – 20 grants totaling $14.1 Assistance Grants million amounting to 22.9 percent of the portfolio. Human Resource Development ■ South Asia – 2 grants totaling $2.2 million 19.6% Public Multi-Sector Management amounting to 3.6 percent of the portfolio. 14.9% 12.8% ■ Europe and Central Asia – 23 grants totaling $12.3 million amounting to 19.9 percent of the portfolio. Energy 5.2% 10.4% Agri- culture ■ Middle East and North Africa – 5 grants total- Private 12.1% 8.9% ing $2.8 million amounting to 4.5 percent of the Sector Environment Development 16.2% portfolio. Infrasctructure jphrd fund 41 Table 1: Regional Distribution of Technical Assistance Grants by Round, FY02 Round 1: Round 2: Round 3: Total: Number Amount Number Amount Number Amount Number Amount Region of Grants ($ millions) of Grants ($ millions) of Grants ($ millions) of Grants ($ millions) Total (%) Africa 13 7,874,183 7 4,710,177 13 9,712,063 33 22,296,423 36.18% East Asia 9 6,145,790 5 3,871,030 6 4,112,200 20 14,129,020 22.93% and Pacific South Asia 2 2,192,000 0 0 0 0 2 2,192,000 3.56% Europe and 5 2,275,380 10 4,973,545 8 5,044,735 23 12,293,660 19.95% Central Asia Middle East and 1 399,800 2 1,365,795 2 1,059,550 5 2,825,145 4.58% North Africa Latin America 5 2,544,400 6 3,324,348 3 2,023,300 14 7,892,048 12.81% and the Caribbean Total 35 21,431,553 30 18,244,895 32 21,951,848 97 61,628,296 100.00% ■ Latin America and the Caribbean – 14 grants through collaboration with more than 160 partner totaling $7.9 million amounting to 12.8 percent of institutions. the portfolio. ■ WBI proposals submitted to PHRD for funding Sectoral Distribution were not approved in FY02, delaying the results of The energy and human development sectors had the PHRD-funded WBI activities. most dramatic decrease from FY01 levels, each decreas- ing by 9 percent. The private sector development and Joint Japan/World Bank Graduate public sector management sectors experienced the Scholarship Program most significant increases from FY01, each with 8 per- cent and 6 percent respectively (Figure 13). ■ FY02 PHRD contributions to JJ/WBGSP: $10.2 million, a three percent decrease from FY01 levels. WBI and Joint Japan ■ The Regular Program provided 130 scholarships, World Bank Graduate from nearly 2,723 applicants. Scholarship Program ■ Africa submitted about 57 percent of total applica- World Bank Institute tions followed by South Asia with 13 percent of ■ FY02 PHRD contributions to WBI Training total applications. Program: $1.8 million, a 28 percent decrease from FY01 levels. ■ Africa continues to receive the most scholarships (30%). East Asia received the next highest number ■ In FY02, WBI delivered nearly 600 learning activi- of scholarships with 20%. Latin America and the ties (214,115 client training days) and reached Caribbean followed with 15%. more than 48,000 participants in 150 countries 42 ANNUAL REPORT 2002 Innovative Programs and Partnership Program Responding to Crises In FY02, Japan approved six grants for $2.8 million. ■ The Government of Japan contributed US $31.5 million to support recently developed innovative programs designed to address particular develop- PHRD Special Programs ment challenges with new approaches. These spe- cial allocations supported the following The Japan Staff and Consultant innovative programs. Trust Fund As part of the JSCTF program, five grants were ■ The Development Gateway (US $5 million); approved in FY02 amounting to $1.8 million. ■ Poverty Reduction Strategy Papers (US $10 The Africa Capacity Building million); Foundation ■ infoDev’s “Incubator Initiative” (US $6.5 million); In FY02, five grants were approved for a total of $4.1 million. ■ Critical Ecosystems Partnership Fund (US $5 million); Russia Financial Institutions ■ Climate Change Initiative (US $5 million). Development In FY02, the PHRD approved a $1.2 million grant to Crisis Response programs provide technical assistance support for the develop- ■ The Government of Japan contributed $2 million ment of financial institutions in Russia. for the reconstruction of East Timor. Annexes Annex 1 List of Approved Technical Assistance Grants in FY02 Annex 2 Administration of Japan PHRD Grants Program Annex 3 PHRD FY03 Annual Policy Document ANNEX 1 List of Approved Technical Assistance Grants in FY02 Africa Region Country Grant Name Amount (US$) Benin HIV/AIDS Project for Abidjan - Lagos Transport Corridor $440,440 Burkina Faso Poverty Reduction Support Credit III (PRSC) $357,010 Burkina Faso Transport Sector $850,000 Chad Agricultural Services and Producer Organization $440,000 Congo Urban Water Supply $800,000 Cote d’Ivoire Multi-sector HIV-AIDS $1,000,000 Eritrea Water Resources Development $725,175 Ethiopia Water Supply and Sanitation $657,200 Ethiopia Pastoral Community Development $426,690 Ethiopia Poverty Reduction Support Credit (PRSC1) $825,977 Ethiopia National Information and Communication Technology $969,595 (ICT) Capacity Building Ethiopia Education Sector Development Program II $800,000 Ghana Public Sector Management Reform II $772,567 Ghana Poverty Reduction Support Credit $603,812 Kenya Lake Victoria Environmental Management Project (LVEMP)/Kenya - Phase 2 $639,214 Kenya Privatization and Private Sector Competitiveness $846,000 Madagascar Second Mining Sector Reform $715,000 Madagascar Third Environment Program Support $698,700 Malawi Third Social Action Fund (MASAF 3) $386,680 Malawi Multi-Sectoral AIDS Program (MAP) $700,000 Nigeria Lagos Metropolitan Development $650,000 Nigeria Niger Delta Institutional Strengthening and Development $675,000 Regional West Africa Power Market Development $829,900 Rwanda National Water Resource Management $1,015,450 Sao Tome Social Sector Support $449,700 and Principe jphrd fund 45 Africa Region, continued Country Grant Name Amount (US$) Sierra Leone Institutional Reform and Capacity Building (IRCB) $770,220 Tanzania Lake Victoria Environmental Management Project (LVEMP)/ $719,689 Tanzania - Phase 2 Tanzania Poverty Reduction Support Credit 2 $362,481 Uganda Capacity and Performance Enhancement Program $378,114 Uganda Third Poverty Reduction Support Credit (PRSC3) $779,500 Uganda Lake Victoria Environmental Management Project(LVEMP)/ Uganda - Phase 2 $689,239 Ethiopia Road Sector Development Program Phase 2 $677,270 Gambia Third Education Sector Program Phase II $645,800 AFRICA REGION TOTAL $22,296,423 east asia and pacific region Country Grant Name Amount (US$) Cambodia Basic Education $386,600 China Gansu and Inner Mongolia Poverty Reduction $557,250 China Hunan Urban Development $1,268,500 Indonesia Urban Water Supply (Adaptable Program Loan) $910,000 Indonesia Kabupaten Governance Reform Initiatives $669,500 Indonesia Kecamatan Development II $401,000 Indonesia Sustaining Microfinance $500,000 Lao PDR Land Titling II $613,000 Mongolia Second Ulaanbaatar Services Improvement $970,000 Mongolia Poverty Reduction Support Credit $592,000 Philippines Diversified Farm Income and Market Development $828,340 Philippines Health Sector Reform $1,032,100 Philippines Judicial Reform Support $298,500 Philippines Urban Shelter and Community Infrastructure Learning $250,000 and Innovation Loan (LIL) Philippines Public Sector Strengthening Loan $1,093,800 Samoa Second Infrastructure Asset Management $477,600 Tonga Tonga Health Sector $349,300 Viet Nam Public Financial Management Reform $742,880 Viet Nam Urban Upgrading $998,150 Viet Nam Rural Energy II $1,190,500 EAST ASIA AND PACIFIC REGION TOTAL $14,129,020 46 ANNUAL REPORT 2002 SOUTH asia region Country Grant Name Amount (US$) Bangladesh Health and Population Sector Program $1,500,000 Pakistan Sindh Structural Adjustment Credit $692,000 SOUTH ASIA REGION TOTAL $2,192,000 europe and central asia region Country Grant Name Amount (US$) Albania Institutional Strengthening and Environmental Remediation $250,020 Albania Poverty Reduction Support Credit II $499,900 Armenia Fifth Structural Adjustment Credit (SAC5) $400,000 Armenia Utility Restructuring $500,000 Azerbaijan Rural Infrastructure (AZRIP) $562,450 Bulgaria Forestry $564,270 Bulgaria Rural Finance Adaptable Program Loan $562,705 Croatia Social and Economic Recovery $425,360 Georgia Public Sector Management Reform $490,000 Kazakhstan Forestry Reform and Rehabilitation $410,600 Kazakhstan Ust-Kamenogorsk Environmental Remediation $860,700 Kyrgyz Financial Sector and Business Development (FINBUS) $700,000 Republic Moldova TB/AIDS $370,000 Russia Customs Reform $633,000 Slovak Social Development Fund $327,280 Republic Turkey Renewable Energy $483,000 Ukraine Statistical System Modernization (MOST) $169,500 Ukraine Social Protection Reform Administration $457,900 Ukraine Equal Access to Quality Education $768,400 Uzbekistan Public Finance Management Reform $500,000 Yugoslavia Serbia Health $500,000 Yugoslavia Second Private and Financial Sector Adjustment Credit $1,451,000 Tajikistan Rainfed Agriculture Development $407,575 EUROPE AND CENTRAL ASIA REGION $12,293,660 jphrd fund 47 latin america and caribbean region Country Grant Name Amount (US$) Brazil Integrated Water Management and Basic Services for the Poor $860,000 in the Sao Paulo Metropolitan Region Colombia Higher Education Financing Reform $300,000 Costa Rica Ecomarkets $302,250 Grenada OECS Education Development $151,400 Guyana Poverty Reduction Support Credit (PRSC) $330,000 Mexico Second Air Quality and Transport $1,310,000 Mexico Water and Sanitation Modernization $799,310 Nicaragua Sustainable Forestry Investment Promotion 2 (PROFOR2) $650,000 Nicaragua Rural Microfinance Development $563,638 Panama Sustainable Management In Agricultural Landscapes $361,750 in Panama’s Canal Watershed Venezuela Agricultural Extension $240,400 Colombia Department of Cundinamarca $300,000 Cundinamarca Education Quality Improvement Guatemala Basic Health for Vulnerable Groups $1,043,300 Paraguay Financial Sector Adjustment Loan $680,000 LATIN AMERICA AND CARIBBEAN REGION TOTAL $7,892,048 middle east and north africa region Country Grant Name Amount (US$) Algeria Rural Employment 2 $399,800 Iran - Islamic Solid Waste Management $883,750 Republic of Morocco Integrated Forestry Development $482,045 Tunisia Export Development II $498,250 Yemen - Second Basic Education Expansion (BEEP-II) $561,300 Republic of MIDDLE EAST AND NORTH AFRICA REGION $2,825,145 ANNEX 2 Administration of Japan PHRD Grants Program The PHRD Fund extends untied grants to meet the Japan. Data on approved PHRD grants and other per- technical assistance and human resource development tinent information on the program is made available needs of developing countries. The World Bank acts as on the PHRD website, a section of the World Bank’s trustee and administrator of PHRD grants and chan- Web page. Since 1997 PHRD Annual Reports have nels grant funds to the recipient or beneficiary. been translated into Japanese and made available to Administration of the grant and execution of the tech- the public. Starting in 1998, the World Bank also has nical assistance activities are carried out according to been conducting periodic seminars to familiarize the the terms and conditions of a formal grant agreement Japanese consulting industry with the operations of between the Bank and the recipient government. PHRD and the World Bank. There are regular meet- The Resource Mobilization and Cofinancing Vice ings between Japanese private sector associations, Presidency of the Bank is responsible for the overall including those representing the consulting industry. A management of the program. In administering the consultant in the World Bank’s Tokyo Office acts as program, it cooperates closely with the Bank’s six the liaison between the Japanese consulting industry regional vice presidential units, which are responsible and the World Bank’s operational units. These initia- for the Bank’s operational programs in its member tives are significant steps in an ongoing process to dis- countries, including task management responsibility seminate information on PHRD in the donor country for each technical assistance grant. and to help ensure greater participation of the business community in the PHRD–funded program. It also Governance demonstrates the Japanese government-World Bank The PHRD Coordination Committee is a senior-level partnership’s strong commitment to make PHRD an joint Japan-World Bank body that meets at least twice important and transparent instrument of Japan’s devel- a year to formulate PHRD funding policies and pro- opment leadership in poverty alleviation. gram priorities. A special Monitoring and Evaluation Unit was established in 2000 in the Resource Grant Application and Mobilization and Cofinancing Vice Presidency’s Trust Review Process Funds and Cofinancing Department at the World Bank Upon receiving the Japanese government’s approval of to intensify supervision, oversight, and accountability the funding allocations, RMC notifies the six regional of technical assistance activities. vice presidential units of the availability of funds. These units are invited to prepare and submit funding Donor Coordination proposals. They are presented to RMC by their The World Bank has improved the accessibility and regional cofinancing coordinators in matters relating dissemination of information on PHRD operations in to PHRD technical assistance grants. The proposals for jphrd fund 49 grant funding are prepared by the project task teams units, which are primarily responsible for grant admin- and are initially reviewed by departments in the istration, several other Bank units are concerned with regional vice presidential units, including sector man- the management and administration of PHRD grants. agers, and cleared by the respective country directors. The proposals are then reviewed by each regional cofi- The Legal Department prepares grant agreements and nancing coordinator. Based on a careful review of the coordinates the document review and clearance region’s priorities, the coordinators submit their process. The Loan Department disburses the grant regions’ package. Proposals for PHRD grants undergo a funds into a special account managed by the recipient, rigorous and transparent screening process to ensure disburses payment requests, and ensures the integrity of the selection of only high-priority operational activi- the financial management. The Accounting depart- ties that meet the PHRD Fund’s objectives and selec- ment responsibilities include accounting for the funds tion methodology and are included in the country and financial reporting. Other Bank staff, such as pro- assistance strategy process. curement specialists and the Human Resources Group (personnel), may also have responsibilities in the over- This regional screening of proposals is followed by an sight of selection of services and goods. For large Bank- independent review of the proposals by RMC. RMC executed contracts only, the General Services seeks to ensure that the submitted proposals are for Department prepares contracts, and coordinates the the preparation of priority projects in the Bank’s bidding of firms. Finally, field staff in the Bank’s resi- lending program, are reasonably costed in compliance dent missions often carry out important support and with established Bank norms, and are consistent with monitoring responsibilities in the course of their oper- the donor’s and the Bank’s policy, sector objectives, ational duties. and selection criteria for funding. Finally, RMC sub- mits the total package of Bank-wide funding propos- Monitoring Performance and als for the tranche to the Japanese authorities for Evaluating Results their review and approval. RMC conveys the Bank policy recognizes the need to assess how well Japanese authorities’ decisions on the package of pro- each grant meets its stated development objectives. posals to the regions and other Bank offices involved Accordingly, performance monitoring during delivery in grant implementation, including the Accounting, of the technical assistance, including annual status Loan, and Legal Departments. reports, is mandatory for all PHRD grant-funded activities. An evaluation on completion is also Organizational Arrangements mandatory for PHRD–funded activities of $1 million Transparency during the entire process of selecting and or more. Regional vice presidential units carry out a evaluating proposals for PHRD grants and executing systematic annual review of their entire trust fund the grant-funded activity is further strengthened by the portfolio, which includes monitoring the progress of internal organizational arrangements within the Bank. PHRD grant-funded activities and evaluating them In addition to RMC and the regional vice presidential on completion. ANNEX 3 PHRD FY03 Annual Policy Document JAPAN PHRD TECHNICAL Environment, Resettlement, Environmental ASSISTANCE GRANTS Action Plans; (c) Participatory Community PROGRAM FY03 POLICY Development, NGOs, and Civil Society GUIDELINES AND PROGRAM Involvement; (d) Women in Development ALLOCATION Initiatives; and (e) Promotion of Innovative Uses of Information Technology for Bridging the 1. Objective. To provide technical assistance grants Digital Divide. to recipient countries or their agencies to, help pre- (ii) Proposals for Climate Change Initiatives, for which pare or implement Bank-financed projects or programs. separate operating guidelines have been agreed, Grants approved under the program are subject to the may support the acquisition of knowledge in criteria set forth in these Guidelines. assessment of the impact of local green house gases (GHG) emissions in the recipient country, and to 2. Focus. Technical Assistance grants would maintain support initiatives, including pilot activities, for a poverty focus. Final submission to the Japanese the reduction of GHG emission as developing authorities for each allocation for project preparation countries increase energy production to improve grants, will have the following priorities: at least 35% standards of living and promote industrial growth. of the total amount requested will be for IDA Countries, and at least 35% of the total amount (iii) For IDA and lower-middle income countries, propos- requested will be for Asian Countries. als for Project Implementation for capacity building activities for recipient countries in support of on- 3. Priority Areas and Activities. Grant funding pro- going Bank-financed Project(s) with an aim to posals may be submitted for the following areas: achieve smooth implementation of the Project(s). (i) Proposals for technical assistance to support the 4. Amount. Submissions of grant proposals to the Preparation of Projects in the Bank’s lending pro- Government of Japan must abide by the funding ceil- gram for lower and lower-middle income coun- ings agreed between the Government of Japan and the tries1. For upper-middle income countries, Resource Mobilization and Cofinancing Vice proposals would be eligible only to support the Presidency (RMC). RMC will invite proposals from following priority areas,: (a) Education, Health, the Bank’s Regional Vice Presidential Units informing Nutrition, Water and Sanitation, Social them of the total amount available and the notional Protection, and Social Development; (b) allocations for the Regions. 1 As defined in the World Development Report 2002 jphrd fund 51 5. Funding Proposal Grants are approved by Japan can include capacity building activities if they are essen- on the basis of a standard One-Page Funding Proposal, tial for project preparation. Workshops, local consulta- which becomes the legally binding document with tions and training costs may be included if the requests respect to the donor. The Proposal will contain the clearly demonstrate these activities will enhance the Project Development Objectives, the grant objectives quality of project preparation/implementation. and its Expenditure Categories. 9. Ineligible Expenditures. The following expendi- 6. Supplementary Information. The Proposal tures are ineligible: study tours, foreign training, imple- attaches supplementary information (Detailed Back- mentation of pilot programs, civil works, purchase of ground Information) which lists the grant components vehicles, salaries for civil servants in recipient coun- and respective grants outputs and key performance tries, and Bank staff (open-ended, term, and seconded indicators with a detailed budget, as well as a checklist. staff) salaries or travel expenses. Up to 10 percent of the grant amount may be included for studies to be determined during grant implementa- 10. Schedule. PHRD grant proposals would be sub- tion which would be necessary to advance the overall mitted to Japan three times in a year (see below). GOJ development objectives of the grant. The TTL moni- would confirm its decisions (approved or rejected) on tors grant outputs and submits a semi-annual Grant proposals within four weeks from submission. Status Report documenting progress and agreed changes. Requests must be in line with the Country 11. Grant Execution Arrangements. Grants for Assistance Strategy objective(s). The follow-on Project Implementation would be recipient-executed, Project must be in the Bank’s lending program. without exception. Project Preparation Grants would normally be executed by the recipient’s project imple- 7. Checklist. All questions must be answered. menting agency; however, the Bank may waive the Country risks (political, social, etc.) associated with requirement for recipient execution based on the writ- the proposed grant/project need to be clearly identi- ten request from the recipient Government in accor- fied, and risk mitigation actions must be explained in dance with Bank policy (see OP/BP 14.40). Grant the checklist. Preference will be given to proposals closing date for project preparation grants would be the which: demonstrate country ownership of the techni- same as the expected Approval Date of the ensuing cal assistance (for example through cost sharing and Bank-financed project. Grant implementation periods for recipient endorsement of proposed grant activities); project preparation may continue up to six months support projects with prospects of cofinancing with after the Project Approval Date, as long as it is no later Japanese agencies (such as JBIC); and promote collab- than the expected date of Effectiveness of the follow- oration with local and international NGOs (preferably on Loan/Credit, to complete ongoing contracts signed Japanese NGOs) and civil society organizations. before the closing date for the grant. Any exceptions would need to be fully justified and would require 8. Eligible Expenditures. Eligible expenditures RMC’s clearance. RMC clearance is also required of all include: (i) consultant services essential to carry out the grant closing date extensions: extensions will normally project preparation, including technical experts, studies, only be granted if the Project Board Approval date slips surveys, feasibility designs, environmental and social and work is still needed to be completed, or to com- impact assessments, economic and financial analysis, plete contracts awarded before the original closing date project management and administration experts, and subject to a satisfactory explanation. The total term of grant audits; (ii) non-consultant costs, up to 10% of the the grant should not exceed four years from grant total grant amount, for local training, and minimal approval date. The Bank, through the designated Task equipment and operating costs essential to carry out the Team Leader of the project, would carry out its fiduci- technical assistance. Proposals for project preparation ary responsibilities for grant supervision, with due 52 ANNUAL REPORT 2002 attention to economy and efficiency, and in accor- (i) For small changes in the scope of a technical assis- dance with the standards applicable to Bank tance component (a change up to 30 percent of the Loans/IDA Credits. amount for a component as budgeted in Detailed Background Information is considered to be 12. Progress Reporting. Task Team Leaders will be small), TTLs should seek advice from Legal in case responsible for preparing semi-annual Grant Status an amendment is required to the grant agreement Reports, rating the status of grant implementation, for approval by the Country Director. A request documenting the acquisition of consulting services or does not need to be submitted to RMC. other grant-financed inputs, as well as completion of deliverables. In addition, a final progress report will be (ii) For significant changes in the scope of the prepared documenting actual cumulative inputs and Technical Assistance, the request must be outputs through the grant implementation period. approved by the Country Director. The request should be cleared with RMC and Legal. 13. Reallocation of Funds (Expenditure Significant changes are defined as: (a) a change of Categories). Reallocation of grant funds would be car- more than 30 percent in the amount of a compo- ried as follows. Under no circumstances, the total nent; or (b) adding a new component. amount for all non-consultant cost expenditure cate- gories can exceed 10 percent of the grant amount: (iii) For significant changes in the Development Objectives of the Bank-funded Project, a request (i) For reallocations up to 30 percent of the amount for must be submitted to RMC for submission to the an approved expenditure category, TTLs should Government of Japan. GOJ would provide its seek advice from Legal and the Loan Department approval/rejection within two weeks from receipt (for recipient-executed grants) in case an amend- of the request from RMC. ment is required to the grant agreement. A request does not need to be submitted to RMC. 15. Grant Cancellation Policy. The balance of grants are subject to cancellation under the following (ii) For reallocation of funds to new eligible expendi- circumstances: (i) the Project has been dropped ture categories (see above), a request must be sub- (signed contracts can be paid with RMC’s approval); mitted to the Country Director for approval. The (ii) the Project is presented to the Board or Approved; request should be cleared with RMC, Legal and (iii) the grant agreement has not been signed 12 the Loan Department (recipient-executed grants). months after approval of the grant; and (iv) no imple- mentation progress including zero disbursements for six (iii) For reallocations of funds greater than 30 percent of months after signature of the grant agreement. RMC the amount for an approved expenditure category, may clear exceptions on the basis of a satisfactory a request must be submitted to RMC for submis- explanation. sion to the Government of Japan. GOJ would pro- vide its approval/rejection within two weeks from 16. Visibility. The Bank will encourage signature cer- receipt of the request from RMC. emonies for PHRD grants in the field, with the inclu- sion of Japanese embassy officials. It will also encourage 14. Changes in Scope of Grant Components or Bank staff in the field to invite local and international Project. Where a change is needed in the Technical press to these ceremonies. Staff should inform RMC at Assistance supported by the Grant or the Project least ten days in advance of the signing ceremony. The Development Objectives, the Legal Department Bank will also make efforts to expand the visibility of should be consulted if any amendments/approvals are the PHRD Fund through continued widespread distri- required as described below: bution of the PHRD Annual Report, inclusion of jphrd fund 53 PHRD information in relevant Bank documents and FY03 PHRD TECHNICAL occasional information sessions on PHRD for Japanese ASSISTANCE Program NGOs and the private sector in Tokyo. Allocation 17. Maintenance of Documentation. Operational The FY03 allocation, to be approved through three departments will keep copies of documentation, related rounds during the fiscal year, is as follows: to PHRD grants, for example, Terms of Reference and contracts for consultants, reports and other outputs Amount prepared by consultants, status reports, etc., in accor- Allocations by Area (US $ million) dance with the Bank’s document retention policy. Project Preparation 95 Climate Change Initiatives 5 Project Implementation 10 Total Amount 110 SCHEDULE PROPOSED FOR FY03 PHRD TECHNICAL ASSISTANCE PROGRAM Date of Submission Round Announcement to Japan: October 2002 December 2002 January 2003 March 2003 April 2003 June 2003 The Faces of the PHRD: Partners in Development Croatian Energy Efficiency Project Team, led by Ms. Gordana Lucic, and team members: Goran Slipac; Jasmina Fanjek; Hrvoje Glamuzina; Goran Labar; Branimir Steko; Sonja Boji “PHRD moves from a supply driven situation where the Bank provides all the know how, to a demand driven one, where the client defines what is to be done. It puts us into much more of a role of project facilitator than a developer.” — Rachid Benmessaoud Task Team Leader, ECA Region RESOURCE MOBILIZATION AND COFINANCING TRUST FUNDS OPERATIONS PHRD PROGRAM THE WORLD BANK 1818 H STREET, NW WASHINGTON, DC 20433 USA EMAIL: PPROGRAM@WORLDBANK.ORG WWW.WORLDBANK.ORG/RMC/PHRD/PHRD.HTM