Supplementary memorandum submitted by
the Department for International Development
DFID have agreed to provide a note on how spending
in the OPT over the last few years breaks down into spending on
civil service reform, humanitarian relief etc [Oral evidence,
Q43]. Please see Annex 1. During the oral evidence session we
were also asked to provide a note on child malnutrition data.
This is attached as Annex 2.
DFID ANSWERS TO
WRITTEN QUESTIONS
SUBMITTED BY
THE INTERNATIONAL
DEVELOPMENT COMMITTEE
1. Would the Palestinian Authority (PA) meet
the criteria normally required for qualification for direct budget
support? What criteria will you be using in assessing whether
to move towards directly supporting the PA's budget? How important
is budget support in building the legitimacy of the PA by letting
it be seen that the PA can deliver the services that people expect
from a government?
DFID may normally provide direct budget support
(DBS) to recipient governments provided that the following conditions
are met:
— A thorough evaluation of public financial
management and accountability systems, and associated risks, has
been carried out.
— The government has a credible programme
to improve standards of these systems.
— The potential development benefits
justify the risks, taking account of any safeguards that can be
put in place to buttress and develop these systems.
— These assessments are explicitly
recorded as part of the decision-making process to provide assistance.
As documented in the recent IMF report "West
Bank and Gaza: Economic Performance and Reform under Conflict
Conditions", significant progress has been made in improving
the transparency and accountability of the PA's financial management
systems. Measures taken by Finance Minister Salaam Fayyad to date
include the creation of a Single Treasury Account under the control
of the Ministry of Finance and the publication of the budget and
monthly budget execution reports, which is unique in the Middle
East. A Palestine Investment Fund has also been established through
which all PA commercial assets have been fully consolidated.
DFID has not so far provided DBS to the PA,
although we have supported the European Commission's use of DBS.
We are currently collaborating with the World Bank in the conduct
of a Country Financial Accountability Assessment (CFAA) which
will provide important information about the strengths and weaknesses
of PA systems and identify where further capacity building might
be needed. The CFAA will enable to DFID to properly assess the
case for DBS in line with our own policy on fiduciary risk. Further
judgements will also be required to assess the political risks
that could arise from future scenarios. It will be important,
however, to balance both fiduciary and political risks against
the wider developmental benefits.
World Bank analysis suggests that DBS is the
most effective aid instrument for reducing poverty in the Palestinian
Territory. DBS would help to strengthen Palestinian ownership
of the development process, reduce the transaction costs of aid
and increase the predictability of donor flows. This, in turn,
would enhance the PA's ability to plan for and implement service
delivery improvements, thereby increasing its legitimacy in the
eyes of the Palestinian people. DBS would also increase the scope
for more effective use of donor conditionality in pushing for
key reforms in the PA.
2. What are the key mechanisms for Donor
coordination in OPT? How well are the UN and EU coordinated with
other donors? How can the extent and quality of Palestinian participation
in coordination be improved and what work is DFID doing in this
area? How effective is coordination with NGOs, both local and
international? How do UK development strategies for the OPT interface
with recent research undertaken by the United Nations, the European
Union, independent scholarship, and the World Bank?
Since 1993 a fairly complex architecture for
donor coordination has been put in place. The main mechanisms
are the Ad Hoc Liaison Committee (policy) and the Local Aid Coordination
Committee (operational). A number of more technical sector-focused
donor working groups also exist under this framework. Donor coordination
is generally strong in terms of information exchange and avoiding
a duplication of effort. More work is required in terms of harmonising
aid delivery mechanisms and joint strategising. The UN and the
EU are active participants in donor dialogue, within the limitations
described above. The Palestinian Authority is developing a medium
term stabilisation and recovery strategy and intends to improve
its dialogue with donors about their respective contributions
to that vision. The donor community, including DFID, is supportive
of this initiative. DFID's cooperation with NGOs is good, and
is at its best in areas where there are opportunities for joint
working with the PA, for example in the water sector. International
NGOs in the Palestinian Territory have their own coordination
mechanism, which has regular contact with bilateral donors. Palestinian
NGOs are more diverse and tend to coordinate in a variety of small
networks, but most donors have regular contact with a range of
them. Our strategic vision is significantly influenced by shared
analysis with donor partners, and through policy dialogue with
project partners. Like other donors, we draw heavily on the economic
and analytic work of the World Bank Jerusalem team. We work in
partnership with Palestinian and UK academic institutions on a
range of projects. We often discuss policy and strategy issues
with these and other partners.
3. What has been the impact on DFID funded
projects of the vast influx of funding to the OPT from the United
States? What has been the overall impact on development? Is aid
being politicised? Is openly political aid the best model in an
inherently political situation? Is USAID well coordinated with
other donors? What type of co-ordination does DFID expect to have
with the newly established Joint Palestine Economic Development
Group set up the US Administration in July 2003?
The scale of US development assistance, approximately
15% of total assistance from 1996-2002, has had no significant
impact on DFID's project activity. DFID has not conducted an assessment
of the wider developmental impact of the US programme, which focuses
on water resources, economic opportunities, governance, health
and community services. Donors are striving to find ways to deliver
development assistance that improves the prospects for a just
political settlement. The absence of such a settlement is a fundamental
impediment to the restoration of economic and social progress
in the Palestinian Territory, and thus to poverty reduction. But
until a political solution is achieved, and in the process of
helping to achieve one, DFID sees a significant role for development
assistance. Our assistance is tailored to the intensely political
environment, but is delivered in a way that maintains UK political
neutrality, both between Palestinian parties and between Palestinians
and Israelis. USAID's West Bank/Gaza mission is based in Tel Aviv
but its staff are regular participants in local donor coordination
processes. The Joint Palestine Economic Development Group has
not moved far beyond the conceptual phase. But we support the
broad thrust of the idea and are tracking its progress along with
a range of similar initiatives proposed by the International community.
4. Does the DFID know what the additional
costs are to the development budget as a result of destruction
of infrastructure and the hampering of development work because
of closures, curfews and restricted access? Are these costs are
sustainable? Does DFID track UK funds into the OPTs and monitor/audit
the damage to these funds? Has any attempt been made to collect
this kind of data from those NGOs who are already collecting it?
Has HMG asked the Israeli Government for compensation?
DFID has not made a comprehensive assessment
of additional costs incurred as a result of access restrictions.
This data is difficult to quantify as much of the impact on projects
is manifested through lost time or the need to refocus or relocate
certain activities. Physical damage to DFID projects during the
current intifada has been limited to the destruction of one project
vehicle. The cost of replacing the vehicle was added to the project
budget, from within the existing allocation for the bilateral
programme. DFID places great emphasis on monitoring and auditing.
Mandatory corporate procedures are in place to ensure that this
is uniform across the Department as a whole. Where damage occurs
to one of our projects this is audited in the context of regular
project monitoring. We look to the EC to maintain a comprehensive
audit of damage to EC and member state financed projects, including
those undertaken with NGOs. The UK has not asked the Israeli Government
for compensation.
5. Is DFID involved in building the organisational
capacity of local NGOs? How does DFID ensure that its methods
of aid allocation do not undermine the capacity of local institutions/NGOs?
DFID works with local NGOs on many projects,
particularly in support of social service provision and humanitarian
assistance. We aim to build the capacity of local NGOs either
through partnerships with UK organisations or academic institutions,
or through facilitating policy dialogue between local NGOs and
the PA. DFID has also contributed, with other donors, to the World
Bank's NGO programme in the West Bank and Gaza, which focuses
on enhancing the capacity of local NGOs providing basic services.
Recently expanded DFID staff presence on the ground is also enabling
stronger partnerships with local NGOs, which helps build their
capacity and encourages the involvement of local NGOs in policy
dialogue.
6. Research published in April suggested
that phase one of the West Bank separation barrier would cut off
12,000 people from land, workplaces, schools and social services[5]
What is DFID's analysis of the impact of the fence/wall has had
on access to education and healthcare? How are the needs of those
that have been cut off from all social services being addressed?
How has humanitarian/aid agency access been affected so far? Has
there been any attempt to document how much land has been/is being
confiscated as part of the construction process?
DFID is an active member of the Local Aid Co-ordination
Committee and is represented by the European Union on the Humanitarian
and Emergency Policy Group. Where these bodies undertake analysis
of this kind they do so on behalf of the donor community and DFID
would not therefore seek to duplicate their efforts by undertaking
its own analysis. The shared analysis concludes that the isolation
of communities resulting from construction of the security fence
will compound access difficulties in relation to education and
health care and services. There is likely to be increased pressure
on service providers in these areas due to mobility restrictions
and the consequent need to duplicate services. Where these services
are limited or unavailable there will be increased vulnerability
for those who are ill or in need of specialist medical care. The
analysis also predicts a decrease in educational enrolment and
attainment amongst affected communities. Thus far service delivery
and humanitarian assistance in these areas continues to be met
through existing mechanisms: PA, donors, local/international NGOs
and UNRWA. As construction continues and access difficulties increase,
donors/service providers may need to adapt their approach to ensure
humanitarian needs are being met. UNDP has launched an appeal
specifically focused on areas affected by construction of the
fence. Several agencies are monitoring the amount of land being
confiscated for construction; these include the Palestinian Central
Bureau of Statistics, the Israeli Information Centre for Human
Rights in the Occupied Territories (Btselem), the PLO's Negotiations
Affairs Department, and the Palestinian Environmental NGOs Network
(PENGON).
October 2003
Annex 1
DFID Funding: Palestinian Territory and
UNRWA Programme (all expenditure figures
for 2003-04 are forecasts)
1. Palestinian Territory/UNRWA programme:
Frameworks and (Expenditure) (£m)
| 2005-06 | 2004-05
| 2003-04 | 2002-03
| 2001-02 | 2000-01
|
| Palestine | 11.5
| 11.5
| 10.5
(21.2 )
| 11
(15) | 8
(14.5 )
| 8
(9 ) |
| UNRWA | 15
| 15
| 14
(19 ) | 14
(18.8 )
| 10
(25 ) | 10
(19 )
|
2. Palestinian Territory bilateral expenditure: Approximate PA and Civil Society split (£m)
| | | |
| | |
| 2002-03 | 2003-04
|
| Support to the PA[6]
| 6.7 | 11 |
| Support Via Civil Society | 7.5
| 7.4 |
| Other | 0.8 | 2.8
|
3. Palestinian Territory bilateral expenditure: Approximate break down of expenditure into sectors/types of assistance (£m)
| | |
| 2000-01 | 2001-02
| 2002-03 |
| Support to the peace process | 1.4
| 2.0 | 1.9 |
| Institutional Development & Reform |
1.0 | 2.6 | 3.0
|
| Water Management | 2.1 |
2.2 | 2.9 |
| Education | 0.4 | 0.1
| 0.3 |
| Health | 1.7 | 1.2
| 0.8 |
| Humanitarian | 0.5 | 6.1
| 5.5 |
| Other | 1.8 | 0.8
| 0.6 |
| | |
|
NB: approximate estimates based on actual project spend during
past three years. In 2002-03 we moved away from a sector structure
and sought to express our programme expenditure through the four
following objectives (figures included for the total spend in
these groups during 2002-03 FY):
| (i) | Support for the Middle East Peace Process
| £1.9 million |
| (ii) | Capacity Building and Institutional Development
| £1.3 million |
| (iii) | Support for Improvements to Basic Services Policy Making & Delivery
| £5.8 million |
| (iv) | Support for the Urgent Needs Arising from the Intifada
| £5.5 million |
4. West Bank and Gaza Strip bilateral expenditure: 1996-2002 actual and 2003-04 estimate (£m)
| | |
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
| 5
6
5
8
9
14.5
15
(21) est
| Since the establishment of the Palestinian Authority in 1994 we have provided over £70 million in development assistance, and over £100 million to UNRWA for Palestinian refugees.
Great majority of support for WBGS in form of technical assistance. Humanitarian and emergency assistance increased considerably since onset of intifada. Last two years has been about half of expenditure.
Most funds channelled through independent project managers and NGOs. Recent reforms of PA finances have meant we can now work directly through PA accounts.
Traditional programmes in education, health, water and sanitation and governance.
|
5. UNRWA expenditure: 1996-2002 actual and 2003-04 estimate (£m)
| | |
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
| 8
10
3.5
13
19
25
18.8
(19) est
| Great majority of funds support UNRWA's General Fund.
Small percentage (about £1 million each year) allocated to technical assistance and projects.
Technical assistance programmes include education development and Jenin camp redevelopment. Have in past supported development of UNRWA's finance and personnel systems, and procure policy and practice.
Emergency appeals for WBGS started in 2000. So far contributed over £24 million.
|
6. European Commission funding to the West Bank and Gaza 1994-2002—including UK share
| | |
| 1994-2002 | 1.45 billion euros
|
| UK share 19% | £190 million[7]
|
| UK share 2002 | £31 million
|
7. World Bank funding to the West Bank and Gaza 1993-2002—including UK share
| |
| 1993-2002 | $380 million |
| UK Share 5% | £12,000,000
|
| |
Annex 2
Note on Child Malnutrition Data
Despite international efforts to distribute food in the West
Bank and Gaza, nutritional indicators suggest that relief efforts
are not keeping pace with the decline in the ability of the very
poor in Palestine to purchase food. The World Bank estimates that
per capita real food consumption declined by as much as 25% between
1998 and the end of 2002. Three quarters of Palestinian households
have reported reduced food intake behaviour during the intifada
with a severe impact on child health. The Palestinian Central
Bureau of Statistics Nutrition Survey (2002) and a Rapid Nutritional
Assessment conducted by Johns Hopkins University/Al-Quds University
(funded by USAID and CARE International, 2002) have reported high
levels of malnutrition and anaemia among children between 6 and
59 months and have indicated global acute protein-calorie malnutrition
(GAM) in 9.3% of children across the West Bank (4.3%) and Gaza
(13.3%). If we compare this prevalence to rates in other parts
of the world, as recorded in the UNICEF Global Database on Child
Malnutrition, the percentage rate for GAM in Gaza sits in between
Zimbabwe (13%) and the Democratic Republic of Congo (13.9%).
October 2003
5
"The Impact of Israel's Separation Barrier on Affected
West Bank Communities" Report of the Mission to the Humanitarian
and Emergency Policy Group of the Local Aid Coordination Committee,
30 April 2003. Back
6
Includes Technical Assistance projects. Back
7
Approximate figure based on current exchange rate. Back
| 
