MDTF Progress Report

Guiding Principles for MDTF Recognition of govt. ownership and leadership in context of the JAM. Full transparency and openness. Mutual accountability between govt. and the donors. Recognition of urgent need to build capacity of govt. Effective donor coordination. Support peace process through econ./social programs. Solid financial management and accountability standards.

The MDTF-National Strategy Two central goals – consolidation of peace and pro-poor growth, to help reach the MDGs and to make peace sustainable. Guiding principles for prioritization: Support priority national investments to consolidate peace Support state- and locality-level investment programs sp. in war affected zones Focus on pro-poor rural development Make decentralization work Lay the groundwork for good governance -- private sector; civil society, support to media and rule of law Key priorities: Three Areas, other war affected areas in Northern States, marginalized urban areas, the East, and, once peace is established, Darfur.

The MDTF-South Strategy Special emphasis on: ownership and capacity building enabling GOSS to prioritize recovery and development needs Harmonizing development assistance Guiding principles for prioritization: effective core of public sector administration – core capacity to plan/ finance GOSS programs with key accountability mechanisms in place access to basic services – consolidate peace and generate social capital through rapid scale-up of education/health programs priority sector programs in place, including basic infrastructure (roads, electricity, water) transition from subsistence-based livelihoods to development-oriented economy -- support to agriculture and private sector devt. Cross-cutting strategic objectives: explicit recognition of the regional dimension in all programs importance of transparency and accountability avoid crowding out the nascent local private sector and civil society

MDTF-N portfolio at a glance Support priority national investments to consolidate peace Census, DDR, New currency, Emergency National Infrastructure Support state- and locality-level investment programs Community Development Fund, Recovery and Development in Three areas Focus on pro-poor rural development Ag. reform, Pro-poor PSD, rural water and sanitation Making decentralization work CB for decentralization, CB for H and E Lay the groundwork for good governance Rule of Law project: Capacity Building for the Judiciary Technical Assistance Facility Legend: GA signed; FPP approved; IPP approved; under prep.

MDTF-N: challenges MDTF small relative to GNU budget: key is to influence pro-poor reforms Implementation difficulties: coordination; reforms Size of potential portfolio large relative to resources available Three areas and other war affected areas require stronger focus Darfur?

MDTF-S: portfolio at a glance Sector Programs with MDTF Education Umbrella Health Transport and Infrastructure program Water and Sanitation Rural development (Agriculture, Livestock) Investment Projects under MDTF CB for Public Services; other CB initiatives Rapid Impact Emergency Project Core Fiduciary Services Census, DDR, currency Rule of Law (including Police Institutions) Legend: GA signed; FPP approved; IPP approved; under prep.

MDTF-S Portfolio: Challenges CB program remains fragmented Procurement, external audit agents; Institutions and HR; Capacity for ten states; Rule of law Portfolio spread wide but unavoidable Challenges of implementation in GoSS large in the ST Tensions between goals of CB/quick wins, and recovery/ sustainability of programs Are recovery programs sufficiently funded, esp. IDPs? Co-financing sector programs promising TA; Fiduciary standards; Harmonization of donors Size of portfolio about right Donor Coordination on Capacity Building and Institutional Development There are currently a number of donor initiatives in this area (including the recent idea of a Capacity Building Forum) and there is a need for prioritization, sequencing and coordination. During the mission the effort will be to: Get agreement with the GOSS for the need for an overall strategy and suitable institutional arrangements for addressing this issue. Facilitate discussions among donors on the need for agreeing on a strategic framework and approach. This will also be linked with Ashraf Ghani's mission (see below). Capacity Building Projects for the South Hold discussions with GOSS (MOL PS & HRD) and the MDTF on reviving the IPP on CB submitted by the GOSS and deferred in the last IOC meeting. Hold discussions with the GOSS (MOFEP) on capacity needs for Public Expenditure management. Preparation of Capacity Building project for the north The IPP for the project was approved in the last IOC meeting.

Available Funding – National MDTF (In USD m.) 2005-06 2007/08 Total Paid In 63 62 Current Pledges* 128 65 193 Approved FPPs 33 35 68 Approved IPPs 64 81 145 IPPs in process 87 53 140 * Pledge for 2005 was about USD61 m. ** 2007 Figures are indicative only, actual funds requirements/disbursements will be spread out over additional years of implementation.

Available Funding – South MDTF (In USD m.) 2005-06 2007/08 Total Paid In 142 Current Pledges* 256 84 340 Approved FPPs 101 351 452 Approved IPPS 45 67 112 IPPs in process 35 15 50 * Pledge for 2005 was about USD104 m. ** 2007 figures are indicative only, actual funds requirements/disbursements will be spread out over additional years of implementation.

The way forward Agreement on process from IOC to OC Strategies/pipelines to be refined at next OC in light of finance available + SC recommendations Stronger TS for implementation, esp. in Juba Urgent attention to WB-UN contracting Improve coordination wt donors (incl. Arab, Asia)