INTERVIEW: Salva Kiir requested World Bank rules for South Sudan
By Mohamed Nagi
Feb 19, 2007 (KHARTOUM) — President Salva Kiir requested World Bank to apply its procedures of procurement and financial management rules in southern Sudan to prevent corruption and build institution for good governance.
The WB representative further said that the president of southern Sudan government demanded, in spite of all the frustrations related to the learning a new management system, that GoSS should use WB rules in order to uphold its good governance goals.
Asked about the role of the WB in the delay of development projects, Diwan said that besides the institutional cause there was a financial one. He indicated that financial contribution of GoSS during 2006 was less than expected.
He confirmed that they disagree with South Sudan government on the appreciation of some projects such as the Juba Hospital project. In addition, he considered that there is a disproportionate attention to Juba. He urged GoSS to develop a workable payroll for the civil service. The WB showed concern about the public borrowing decisions.
The EU envoy to Sudan repeatedly pointed out the EU close follow up of MDTF’s performance. He stated that the WB has increased its efforts.
The following is the text of the interview with Messrs Ishac Diwan and Pekka Haavisto who have agreed to be interviewed together on issues relating to Southern Sudan’s development and the role of EU and MDTFs:
DIFFICULT START
– Slow implementation of the CPA frustrates citizens who had great expectations, but two years later, see no tangible signs of change with basic needs still unmet. What is the GOSS doing to accelerate progress?
Pekka Haavisto: Slow CPA implementation frustrates us all, and poses a threat to long term peace and stability in Sudan, and thus to the main precondition for development. The situation is more complicated than initially anticipated, which obliges us to adjust our expectations on what can be achieved on the development agenda. Among the many obstacles has been the crisis in Darfur, the untimely death of the late John Garang, the deadlock on Abeyei, and insecurity in parts of the South.
Ishac Diwan: The starting point in Southern Sudan is that people’s access to infrastructure and social services are among the lowest in the world. There is a historical window of opportunity with the CPA, and a new government dedicated to meeting people’s needs. The resources from oil and from the international community are sizable, and these will be augmented as the economy and the private sector begin to prosper and diversify.
But the GoSS is starting from scratch – the cabinet is a little more than a year old. There are perhaps 1000 senior civil servants now assembled in Juba, but still no functional payroll across the south, no well established set of financial rules on how to manage and report on accounts, and no clear arrangements yet on the division of responsibilities and budgets between Juba and lower levels of government.
There are no schools for new governments – learning by doing is the only way to go. It is however important to learn fast. The good news is that the GOSS has started to function, has gone through a budget cycle, and can now learn from the successes and mistakes of its first year. It is now crucial for the GoSS leadership to build on these rich experiences and start to systematically make and implement decisions in real time, and in a range of fields, so that results can start flowing in the not so distant future.
But the huge needs of the citizens cannot be fulfilled overnight – the ability of the government to deliver at all levels has to be built first. The late chairman used to say that “disappointment is a function of expectations”, and I think that the new leadership has learned this principle the hard way. To be sure, part of managing expectation involves delivering some quick wins, because visible progress gives people hope, improves the credibility of the GoSS, and therefore gives the new government space to pull out of the current crisis management mode and start planning for more ambitious targets.
There have been, indeed, important achievements in spite of the difficult environment. The GoSS is now focusing on results. The 200 days plan has crystallized priorities and has been a call for action. Basic financial and staffing procedures are now in place. The GoSS is starting to function, and it has initiated workable sectoral programs for capacity building, health, education, justice, water, and infrastructure. The MDTF has supported the preparation of these, working with Government. Other major programs focusing on rural development, and the private sector, will be finalized and approved in the coming months. A high level of effort needs to be maintained now in all ministries. The Parliament and the media are active watchdogs keeping politicians and bureaucrats – and the World Bank! — on their toes. Together with the GOSS, we are confident that the substantial start-up efforts can begin to bear visible fruit in 2007.
– The World Bank is also facing huge challenges: do you have the means to confront this massive task?
Ishac Diwan: Much of our effort is dedicated to managing the Multi-Donor Trust Fund for South Sudan (MDTF-S). You’re right that we faces huge challenges as a partner in the GoSS’s efforts. Our success or failure depends very much on the intensity and quality of our efforts, but also fundamentally on the success or failure of the GoSS in carrying out the programs that the MDTF helps finance. Local ownership and leadership, and local capacity are crucial. After a slow start, we have adjusted to better meet the needs. We have increased our staffing in Juba to 20 covering closely all major technical programs. We are simplifying our procedures and learning how to work with the GoSS in a more flexible manner. We are providing training for government officials. And we have now very solid support in our headquarters at the highest level, so that any pending issues can be resolved fast. But it takes two to tango, and it is necessary that the GoSS steps up to the challenge now and stays focused on the ball in the various sectors under implementation.
EU BLAMES
– How would you respond to the European Union (EU) representative statement that blamed the World Bank for delays in releasing EU contribution to development projects in Southern Sudan?
Pekka Haavisto: Earlier reporting in the Sudan Tribune did not go into details about our views. I am keen to correct perceptions and explain our position better.
First, on the financing. EU funds comprise European Commission (EC) and members states. These in turn finance development, humanitarian support, and security. On the development front, the EC pledged Euro 335 million in Oslo for 2005-2007 for the whole of Sudan. The commitment of the EC to date exceeds this amount: Euro 338 million has been contracted to various delivery mechanisms, including the MDTF-S, UN agencies, and NGOs. Euro 291 million has been paid out. Of these amounts, Euro 48 million was pledged to the MDTFs in Sudan, actually, all of this went to the MDTF-South, and of this, Euro 39 million has been paid out. The support through UN agencies focuses on recovery activities, while we are counting on the MDTF for longer term development activities supporting the GoSS.
Second, on the MDTF’s performance. The MDTF has been slow, but this has been the case also with the other channels we have used, for the reasons discussed above. The MDTF has started to pick up, and the WB has increased its efforts, perhaps partly because of the pressure we have put.
Ishac Diwan: I agree with Mr. Haavisto’s analysis. There were delays and in retrospect, we could have done better if the GoSS had been established more quickly, if we had mobilized faster, if the CPA was being implemented faster…
MIS-UNDERSTANDING ABOUT THE WB ROLE
What are exactly the responsibilities of the MDTF? Howmuch money is exactly involved?
Ishac Diwan: The MDTF was provided for in the CPA as a way to pool and attract donor funds, and reduce the transaction costs for the GOSS of dealing with multiple donors each with separate requirements. In fact ten donors, in addition to the EC and World Bank, have so far contributed $215 million to the MDTF-S, namely, Netherland, Norway, UK, Sweden, Germany, Finland, Denmark, Iceland, Greece, Canada, and we expect to receive an additional $130 million by the end of this year.
At the same time, it is important to note that only a small share of the Oslo pledges went to the MDTF-S – about $350 million, out of the pledged $4.5 billion for the whole of Sudan– and many individual donors, like the EU, also channeled their funds through other mechanisms, like the UN Work Plan and support for NGOs.
As I said earlier, the MDTF-S is unique, relative to other large agencies such as USAID or the UN, in that the programs are run by the GoSS and are based on GoSS ownership and leadership. This also very much contributes to getting the GoSS on its feet faster through learning by doing. All MDTF-S programs are owned the GoSS, who also control decision making in MDTF by chairing its oversight committee. We work on a daily basis with ministers and their staff in helping to define and implement their programs, and to build their capacity.
It is important to note that the World Bank itself does not implement projects – the GoSS does. There seems to be a lot of mis-understanding about this among the public at large, that seems to await the World Bank to deliver directly services and projects that are in reality the responsibility of Government. The cabinet approves MDTF plans and budgets, the GoSS controls the procurement process from start to close, and ministries report on the spending. The procurement rules, and financial management, follow World Bank rules – this is a transition system until these rules are developed in South Sudan. MDTF finance flows into the GoSS budget in proportions that are agreed with the MDTF Oversight Committee. In this process, there has at times been frustration, on all sides, but overall we are very proud to be associated with getting the machinery of government moving, and on starting to be in a position to show greater results on the ground.
IMPLEMENTATION OF JAM PROJECTS
– Has the World Bank delayed or scaled down implementation of projects approved by the JAM, which had detailed priorities in health, education and roads?
Ishac Diwan: First a word about the JAM, which we co-led with the UN, but which, in retrospect, was far too ambitious. It reflected the aspirations of the SPLM leadership against the depth and breadth of deprivation suffered by the people of the south. But in order to be realistic, expectations need to be scaled down in the face of new realities. The main reasons are financial and institutional. After the untimely death of the former chairman, forming a cabinet took time. Some of the main leaders of the JAM ended up as ministers in the GNU. And the civil service is in its infancy, because of the difficulties in integrating the former staff of the Council of the South and those of the SPLM, and also perhaps because SPLA staffing issues have to be resolved first.
On the financial side, the contribution of the GoSS to development has been much lower than expected, partly because oil revenues lagged, but mainly because spending on security and wages has been much higher than expected originally. To illustrate, the JAM predicted that in 2006 the GOSS would invest $780 million in economic and social infrastructure. But whereas the plan for 2006 was ambitious, available data suggests that in reality, GOSS development spending was less than half that amount.
After 15 months of operation, the MDTF-S has commitments for seven programs, amounting to $140 million, and has paid out, or disbursed, about $70 million by January 2007. Total MDTF programs are larger – they amount to almost double the sizes I have quoted earlier, because of GoSS co-finance. MDTF financing, unlike all other donor support, goes through the GoSS budget, in support of GoSS programs in the various key sectors. Actually, the MDTF programs have helped to provide the backbone of the GoSS development programs for health, education, water, justice, and rural development. A lot of the invisible preparation work has been done, and 2007 will be the year when implementation begins to show more tangible results.
Tangible outputs in 2006 included drugs being delivered to 840 medical facilities and one million textbooks distributed to kids at school. Work began on a series of emergency public works in Juba, including government offices, parliament, the hospital, and water supply. The rehabilitation of roads is now underway on main trunk roads across Southern Sudan. Ambitious programs in health and education are now in full swing.
SALVA KIIR REQUEST
– I have heard GOSS officials say that their efforts to implement or initiate projects frustrated by WB bureaucrats? What might this mean?
Ishac Diwan: Our procedures for procurement and financial management are built on decades of experience around the world, including in fragile states, and have merit as a way to prevent corruption, build institutions for good governance and ensure value-for-money. The GoSS wants to apply the same procedures to ensure sound management of their own funds as well, thus the co-financing arrangements. President Kiir recently confirmed to our own president, Mr. Wolfowitz, that in spite of all the frustrations related to learning a new system, he was keen that the GoSS should continue to use these rules in order to uphold its good governance goals. These processes do take time, however, and GoSS’s inexperience in internationally accepted principles of good financial management and procurement has slowed things down to some extent – but these expenditures are much more likely to be free from corruption. And we are learning together how to work faster without losing transparency and efficiency.
The benefit for the people of South Sudan is that the World Bank’s procurement and financial management rules – while time consuming and sometimes frustrating – protect the credibility of the larger program of rehabilitation and development. This credibility is critical to maintaining international support.
– What happened to JAM plans to expand services and infrastructure, and mass capacity building, not only in Juba, but also in counties and states by 2007?
Ishac Diwan: The JAM was phased so that the first stage, focused on recovery needs and getting the foundations for development programs in place, would run through the end of 2007. All sector programs at the state level are now being implemented, and much of the deliveries are expected to take place at the state level and below. The second stage envisaged massive efforts to catch up on development needs.
As the end of the first stage is approaching, we will be calling soon for a meeting of donors to start pledging new support for stage two.
POINTS OF DISCORD
– Has the GoSS become hostage to external paradigms and projects that do not respond to real needs? Is it true that World Bank recommendations, like reducing the proposed size of the Juba hospital, are inappropriate to developmental needs?
Ishac Diwan: The WB is certainly not trying to impose cookie-cutter solutions. The main reason we believe in local ownership is because we know that specificities matter enormously, and approaches that work must be tailored to each and every circumstance. At the same time, one of our advantages is the wealth and depth of experiences from other countries, to help the GoSS make more informed choices.
In the specific case of the Juba hospital, let me first say that the MDTF-S and the GoSS are paying for its complete rehabilitation. The work is ongoing as we speak. But it is true that we have also cautioned government against putting too much emphasis on large hospitals at the expense of health posts and clinics. Too many mega-hospitals in Africa have brought disasters to the health sector. Not only have they been unmanageable, but they have also consumed disproportionately large portions of the small skilled work force and the health budget. Experience shows that mega hospitals should be approached with caution, especially when most of the population is rural and has no access to even primary health care. A few dispersed large hospitals will not reduce the prevalence of tropical diseases. But clean water, preventive and primary care, together with accessible curative units across the land do, and benefit many more poor people, particularly the rural poor.
– Are there other areas where the World Bank disagrees with the GoSS?
Ishac Diwan: Part of our responsibility to the people of Sudan is about raising issues such as the Juba hospital. Several other issues we raised in the past months include what we considered as disproportionate attention to Juba given the existing budget constraints. We have also urged the GoSS to rapidly develop a workable payroll for the civil service which can at the same time weed out ghost workers and ensure that teachers and other state level civil servants across the land are paid regularly. We are now very concerned about the need for greater discipline and coordination in the cabinet about public borrowing decisions.
More broadly, the GoSS is facing a series of difficult choices that have become the subject of very important debates in which we participate. I would list three. A first debate has centered over the issues of capacity building of GOSS staff versus contracting out to UN agencies, NGOs, and consultants. I think that there is now a much greater understanding of the benefits of contracting out, and a greater willingness to do so than a year ago. The ministry of health for example is contracting out primary health delivery to private operators. As a result, it should be possible to cover the needs of five million citizens within two years, and at a reasonable cost. The ministry of finance has hired one of the best firms in the world to do its procurement, and the auditor general is following suit and engaging an external auditing firm to work for his new office. There are many more examples in the making.
A second debate concerns the possible trade-off between good governance and speed. While speed has remained a key objective, it is also clear that the objective of good governance has remained even stronger. The enforcement, for example, of proper procurement procedures, which require sustained efforts, is not seen as an area where compromises are possible. Over time, this decision will pay-off, because the prospect poor governance would shatter the possibility of higher standards of living for the population in the future. Starting on the right foot is invaluable.
A third debate concerns the “right” balance between efforts to deliver results now, and efforts that only deliver in the medium term, but deliver big time. This is a question of balance, and is particular to each sector. To be more blunt, should all the efforts of the minister of education go to delivering 200 new schools every year, starting now, or does he have the political space to plan to deliver say 3000 in 3 years? The typical answer is a two-track approach to ensure tangible benefits today, while establishing the foundation for scaling-up. But different ministries have chosen different weights.
WB AND UN
Why was there such a delay in transferring money to WFP which delayed critical road works?
Pekka Haavisto: A large share of our commitment was meant for this project, but it took the WB and WFP several months to agree. We were not happy with this, which we made known to both institutions.
Ishac Diwan: It is unfortunately true that it took us a long time to negotiate a legal agreement with WFP for roads repair, and essential works were delayed. The delay arose because the legal rules within the UN and the World Bank that regulate our respective responses to fraud and corruption differ. We did reach an agreement, in August 2006, and have now disbursed $30 million to WFP, to allow the work to proceed at full speed. And in November 2006, a total agreement on Sudan was reached, which means that there will be no further delays in signing contracts with UN agencies, at least from our side.
The efforts of UN agencies are very important, and the UN is implementing almost one-third of MDTF programs. Of course UN agencies also receive financing from other donors directly, and only a modest share of their operations is financed by the MDTF. For example, the UN agencies in Sudan received directly from donors and have spent about $1.1 billion on humanitarian and about $120 million on recovery activities during 2006, of which $281 and $50 million respectively was directed to the South.
We have only discussed issues pertaining to development in South Sudan, and the MDTF-South. I hope that we can follow up with a future interview that focuses on the good work we are doing in North Sudan and at the national level as well.
(ST)