Workshop on Sector Approaches in the Context of EU Integration Sarajevo, Bosnia and Herzegovina March 2010 Debriefing of the Workshop on Sector Approaches Sarajevo – March 2010

Where have we come from? Pre-2007: Simple exchange of information between EC and other donors Pre-2007: Simple exchange of information between EC and other donors From 2007: Enhanced donor coordination From 2007: Enhanced donor coordination Conferences in 2008 and 2009: More focus given to aid effectiveness Conferences in 2008 and 2009: More focus given to aid effectiveness Agreement to move towards working together through a sector approach Agreement to move towards working together through a sector approach

State of Play Key conclusion of October 2009 conference on aid effectiveness, reaffirmed in GAERC conclusions of December 2009: Key conclusion of October 2009 conference on aid effectiveness, reaffirmed in GAERC conclusions of December 2009: A move from a project based to a sector wide approach would improve the effectiveness and efficiency of financial assistance by strengthening ownership by the beneficiary countries and harmonisation between governments and donors working towards specific, well-defined results. Overall objective of the workshop: Overall objective of the workshop: to provide the opportunity to identify working methods for the formulation of sector approaches and to deepen expertise in their practical application in the context of enlargement.

What is a sector approach? A way of working together between government, donors and other key stakeholders A way of working together between government, donors and other key stakeholders A process aimed at: A process aimed at: broadening government and national ownership over public sector policy and resource allocation decisions within the sector broadening government and national ownership over public sector policy and resource allocation decisions within the sector increasing the coherence between policy, spending and results increasing the coherence between policy, spending and results reducing transaction costs reducing transaction costs

What is a sector programme? Government owned Three core elements Policy/strategy Sector and donor coordination Sector budget and medium term perspective Other key elements Institutional setting and capacity issues Performance monitoring systems

Support to sector approaches A sector approach is NOT a financing modality but rather a framework of programming and evaluation A sector approach is NOT a financing modality but rather a framework of programming and evaluation Support to a sector programme within a sector approach can be provided by inter alia: Support to a sector programme within a sector approach can be provided by inter alia: Projects Projects Resource pooling Resource pooling Sector budget support Sector budget support

Other national revenues Sector Budget Support Through Treasury Sector Programme Co-financed activities 'Pool Fund' Donor X Donor Y Donor X Donor Z Projects PPP Own Funds Financing Modalities.

What does it mean in an Enlargement context? A sector programme for an IPA beneficiary country should identify what is needed to modernise a sector and align it to EU standards. A sector programme for an IPA beneficiary country should identify what is needed to modernise a sector and align it to EU standards. Should be based on a country's own national development plan and be underpinned by the EU's overall enlargement policy as well as by the country's Accession/European Partnership and SAA. Should be based on a country's own national development plan and be underpinned by the EU's overall enlargement policy as well as by the country's Accession/European Partnership and SAA. Should allow for EU integration priorities to be strategically planned for and sequenced at an early stage. Should allow for EU integration priorities to be strategically planned for and sequenced at an early stage.

Objectives of the workshop How best to design sector approaches How best to design sector approaches How to link sector approaches to EU integration objectives How to link sector approaches to EU integration objectives How to manage the governance of sector approaches How to manage the governance of sector approaches How to establish a performance assessment framework for a sector approach How to establish a performance assessment framework for a sector approach

Main findings Recognition that EU integration is the main driver for country strategies Recognition that EU integration is the main driver for country strategies Countries have progressed in setting up a framework for programme based/sector approaches Countries have progressed in setting up a framework for programme based/sector approaches Building blocks are in place in most countries: Building blocks are in place in most countries: a coordinating body at center of government a coordinating body at center of government a policy framework to link national strategies and EU integration priorities a policy framework to link national strategies and EU integration priorities a programming framework, linked to the budgetary process a programming framework, linked to the budgetary process Best practices abound Best practices abound

Main Challenges Common understanding still need to be further developed, both in countries and among donors on concepts and methods Common understanding still need to be further developed, both in countries and among donors on concepts and methods Hierarchy /Integration of strategies in a coherent framework - National plans - sector strategies - NPAAs Hierarchy /Integration of strategies in a coherent framework - National plans - sector strategies - NPAAs Setting objectives/indicators require a performance assessment system - Decision making/ statistics/ analysis/ feed back Setting objectives/indicators require a performance assessment system - Decision making/ statistics/ analysis/ feed back Linking budgetary processes / programming Linking budgetary processes / programming Developing/maintaining capacity (human resources) Developing/maintaining capacity (human resources)

Practical issues Timing required to develop PBA/Sector approaches (2 years in average) Timing required to develop PBA/Sector approaches (2 years in average) Timeline for planning IPA: what can be reasonably achieved in 2010, and in the current financial perspective (by 2013) Timeline for planning IPA: what can be reasonably achieved in 2010, and in the current financial perspective (by 2013) Regulatory constraints Regulatory constraints Synchronisation between donors/with countries Synchronisation between donors/with countries

Next steps Identification of sector or policy areas - define policy / result oriented indicators Identification of sector or policy areas - define policy / result oriented indicators Continue work at country level by authorities/donors Continue work at country level by authorities/donors Toolkit for programming Toolkit for programming Continued assistance to prepare strategies and make them operational Continued assistance to prepare strategies and make them operational Continued development of budgetary and programming processes Continued development of budgetary and programming processes Strengthening human resources Strengthening human resources

Which sectors should we focus on for the MIPDs ? Criteria Criteria Sector programme exists or under development Sector programme exists or under development Full political ownership by the country Full political ownership by the country Broad consensus among donors that the sector programme is sound and should be supported Broad consensus among donors that the sector programme is sound and should be supported Sector should be a priority for enlargement Sector should be a priority for enlargement Main focus on public governance stressed Main focus on public governance stressed

What does it mean for IPA financial assistance? Most IPA support under a sector approach will still be through projects BUT… Most IPA support under a sector approach will still be through projects BUT… Better targeted Better targeted Part of a better defined sector strategy, encouraging better prioritisation and sequencing of IPA assistance Part of a better defined sector strategy, encouraging better prioritisation and sequencing of IPA assistance Sector budget support ONLY in exceptional circumstances Sector budget support ONLY in exceptional circumstances Move towards multi-annual programming Move towards multi-annual programming

What does it mean for all donor assistance? Working through a sector approach with Government and other donors should : Working through a sector approach with Government and other donors should : Allow for better identification of longer term priorities Allow for better identification of longer term priorities Promote better division of labour between donors Promote better division of labour between donors Enhance performance management and increase focus on results Enhance performance management and increase focus on results Better value for money and more efficiency and effectiveness