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This is an example of how does a silent partnership work. This document is useful for studying silent partnership.
SILENT PARTNERSHIPS By Hanke Koopman 1. Introduction This paper discusses the concept of „Silent Partnership’ as a policy instrument for delivering aid in the education sector, with a view to assess its potential as an effective policy tool. The organisation of the paper is as follows. First this concept will be defined and related to the concept of delegated co-operation, which is being discussed in the context of OECD/DAC. A following paragraph deals with the genesis of „Silent Partnership‟. This discussion will be followed by a description of three silent partnerships. Subsequently encountered difficulties will be mentioned, followed by an assessment of the real and potential benefits for national governments and agencies in support of better education. Attention will also be paid to the conditions, which determine its added value. 2. Terminology. The concept of „Silent Partnership‟ emerged at the time of the Second World Conference on Education for All in Dakar. Swedish Sida (Sida 2000) may be credited for being the first one to describe the Silent Partnership. “This entails an agreement with another donor agency to carry out assessments, participate in the dialogue and negotiations and take on other identified actions such as monitoring and evaluations on behalf of Sida.” The concept was later further elaborated (Sida 2002): “being a silent partner means that Sida channels its support via another like-minded donor agency and that the partner country in question only needs to have contact with one party instead of two.” The Dutch ministry for development cooperation (the Netherlands 2002) defines Silent Partnership as: “an arrangement between two or more like- minded funding agencies which allows one or more partners to channel a financial contribution to the education sector of a country with which they do not have a bilateral relationship, through a partner which is active in that country and in the sector.” Continued by: “It goes without saying that the partner country concerned is in full agreement with this construction and needs the financial support.” The active partner does not receive a fee from the silent one: mutuality is the principle. Other bilateral agencies of the informal “Nordic plus” group used similar descriptions. The term “sleeping partner” is used synonymously with silent partner. The latter expression is preferred because silence does not mean ignorance or indifference whereas „sleeping‟ has this connotation. The term ‘Delegated Co-operation’ was introduced by OECD-DAC as an input for the Rome conference on aid efficiency. In that report the terms Delegated Co-operation and Silent Partnership are used synonymously, but with another meaning. The report (OECD/DAC 2003, p89) states: “Delegated Co-operation occurs when one donor (a “lead donor”) acts with authority on behalf of one or more donors (the “delegating donors” or “silent partners”). The level and form of delegation vary, ranging from responsibility for one element of the project cycle for specific project to a complete sector programme or even country programme.” This definition indicates that Delegated Co-operation must be seen as an umbrella concept encompassing many variations of delegation, including co-financing with the IFI‟s and UN organisations, whilst Silent Partnership is used in those cases where the passive/silent donor has no presence and/or no bilateral relationship including education in the country. 1 In order to avoid confusion, it is recommended to use the term Silent Partnership only in those cases, where the delegating donor has no bilateral relationship in the education sector, and/or no presence at partner country level. 3. Genesis, meaning and development of Silent Partnerships During and after the Dakar conference, donors and partner countries discussed the need for reducing and harmonizing the many different rules and regulations of the donors and their requirements for administrative and financial reporting, in order to reduce the heavy workload of the partner countries, thus preceding the broader discussions in OECD/DAC on harmonisation of procedures and aid effectiveness. Time spent on burdensome bureaucratic processes could be better used for core business, thereby enhancing ownership over their education reform and the effectiveness of donor support. It must be noted that similar discussions were taking place in the health sector at that time. Another factor playing a role in developing new forms of aid mechanisms, originating mainly from the donor side, were the rising financial commitments for (basic) education in response to Dakar and the UN. Millennium Development Goals. Achieving Education For All by 2015 would require new financial resources from partner countries and donors. The partner countries themselves (ownership) were to be in charge of reforms in the sector and the development of implementation strategies in partnership with the stakeholders. These concepts are at the heart of the often quoted paragraph 10 of the framework of action: no countries seriously committed to Education For All will be thwarted in their achievement of this goal by a lack of resources.” The adaptation of the Millennium Development Goals (MDG‟s) invited donors to prioritise financial support for basic education. Most donors complied and some with substantial amounts. Spending these new financial resources in some partner countries where more donors were already supporting education did not always correspond with the pace with which these countries were able to reform their education sector. The donor money committed could not always be absorbed directly whilst other countries struggled with shortage of financing resources. Nor was it always possible for bilateral donors to come to the aid of these needy countries directly because they face constraints by their own development aid policies in the selection of countries to finance education. Funding via the UN organisations like UNESCO or the IFI‟s like the World Bank, was not always possible in cases where the bilateral donor has no development relationship with that country, or because the activities of those organisations and institutions are not in line with the policy and strategy of the bilateral donor. The sector wide approach and the (sub) sector budget support policy initially advocated by the Nordic plus group for instance, was not always shared by the multi-laterals and the Banks. This was reason why some of these bilateral donors decided to investigate whether other bilateral like-mindeds might be willing to channel their funds to the host country. A conducive factor for promoting partnerships was the fact that at partner country level, the necessity of harmonisation and co-operation had already been recognised at the end of the 1990s and had resulted in joint policy dialogues and actions in a few countries. In Zambia, this resulted in a joint preparation fund, which will evolve into a sub sector budget support mechanism managed and owned by the partner country. The concept of Silent Partnership was clearly fed by these experiences. The Nordic plus group was first to promote it. Comparable education sector policies and mutual trust was crucial as was the desire to be flexible and to act swiftly and efficiently. Education expertise in the field office or embassy of the active partner was also felt to be very important. Donors involved 2 stipulated that agreement with the partner country on the following important conditions was basic to the functioning of this modality: The education sector is prioritised in the partner countries‟ PRSP and in the education sector plan the EFA goals and MDG‟s are targeted. A realistic financing gap and a financing modality at (sub) sector budget support level or a pooled funding mechanism. The Silent Partnership concept was advantageous for the partner country because it reduced its transaction costs, while more financial resources became available. The active partner moreover had more finance and resources available in the country concerned. The silent partner’s costs would also be reduced considerably by savings on personnel and other transaction costs. No fee is involved for the silent partner to the lead donor; it is intended to be reciprocal. 4. THE FUNCTIONING OF THE SILENT PARTNERSHIPS The first silent partnership, according to our terminology, regarded the delegation of a whole country programme by Sida to Norway. Norway manages Swedish grants and programmes in Malawi according to Norwegian guidelines and has the authority to also represent Sweden in the projects and programmes under the agreement framework. This example was soon followed by partnerships in the education sector: in Mali between the Netherlands and Sida (January 2002), in Rwanda between DFID and Sida (June 2002) and in Malawi between DFID and the Netherlands (July 2002), the latter mentioned agencies being the silent partner. So far, no other silent partnerships were concluded. In this paragraph the functioning of these three silent partnerships in the education sector will be discussed. Mali In Mali the Swedish-Dutch silent partnership was initiated by Sweden asking the Dutch to manage their education support to Mali. The Netherlands and Mali had a development co- operation programme; basic education being one of the sectors, while Sida did not have such a relationship. Both countries wished to promote donor coordination and to reduce the administrative burden of partner countries and the development partners by entering into a partnership. Mali had developed a 10 year education sector plan, was working on an investment strategy and foresaw a shortage of finances despite the increase of its education budget and higher donor commitments. Moreover, Mali attached great importance to donor harmonisation and co-ordination in order to reduce its own transaction costs and to enhance its efficiency. To this end the “Cadre Partenarial” (code of conduct) was signed in September 2001 by the government of Mali and most donors regulating joint reviews, a sector wide approach as the guiding principle for projects and programmes and working towards (sub) sector support of the 10 year Education Development Plan (PRODEC). The Dutch focussed on quality improvement, access expansion and improved decentralised management through Mali‟s sector investment plan 2001-2004. Sida had a preference for sub sector and programme support and was interested in financing the programme through the Netherlands, which had an education expert in the field and an embassy in Bamako with a delegated mandate for Dutch aid to Mali. The education division at headquarters in Stockholm and The Hague analysed both education policies and priorities and involved their legal, administrative and financial departments in order to streamline procedures. 3 Sida made a system-based audit, i.e. screened the Dutch procedures concerning general development policies, aid modalities and methods, instruments for quality measurements, monitoring and evaluation as well as procedures and financial administration. On the basis of these findings, Sida‟s Chief Controller visited the Netherlands. All agreed there were no hindrances for Sweden to have the Dutch in charge of their financial and administrative issues as they were sufficiently compatible. The administrative and financial harmonisation with Mali was taken care of by the Dutch Embassy in Mali on the advice of headquarters. Mali‟s own administrative and financial framework could be used to transfer the Swedish/Dutch support to a special budget line of the ministry of Finance. In the arrangement between Sida and the Netherlands mutual obligations have been laid down. The main financial arrangements concern the amounts of money for the first phase of the investment plan, the establishment of an interest bearing bank account for the Swedish contribution in the Netherlands to be operated by the Dutch Embassy in Bamako (RNE) and the bi-annual formal request for transfer of funds to Sweden based on a call for funds of the Mali government. Sweden receives, through RNE copies of the annual audit report from Mali. The reporting, participation in the joint annual reviews on the Sector Programme in Mali, and the annual meetings between the Netherlands and Sweden on the Silent Partnership, as well as progress and evaluation reports of MOE in Mali have been covered also. The financial support of the Netherlands for 2002-2005 amounts to € 43.889.765 and Sweden contributed 100 mill. SK (ca. € 10 mill. for three years). The silent partnership‟s share of the financing of the implementation of the government‟s education plan was 35% and constituted 22% of the total external financing in 2004 This contribution was the largest , followed by that of the World Bank. Rwanda The Silent Partnership in Rwanda was, like in Mali, initiated by Sida. DFID was active in the country and supported the education sector via a budget support mechanism, in which part of the general budget support (“the education window”) is linked to progress in the education sector. DFID is the lead donor in this sector and co-ordinates the policy and co-operation dialogue with the Ministry of Education (MINEDUC). When the Silent Partnership between Sida and DFID was signed, the Education Sector Strategic Plan (ESSP) was being developed. It was officially launched in 2003. Sida was present in Rwanda but not in education and wanted to support the sector within the framework of the country‟s new ESSP. For both donors the reduction of Rwanda‟s transaction costs was important, as was improved efficiency of their own organisations. It was therefore decided that DFID would become responsible for the monitoring and audit of the British and Swedish contribution within the framework of the Budget Support Programme that DFID had already developed with Rwanda. This would incorporate the above mentioned mechanism. In their Memorandum of Understanding (MOU) applied procedures and practices were specified. The budget support was later supplemented by support of both donors to the accomplishment of a capacity development plan. The government of Rwanda expressed a strong preference for linking external support, both in terms of strategy and funding, to the (draft) ESSP and urged other donors to follow. Sweden signed a bilateral MOU with Rwanda, stating its contribution would follow the British example. On the basis of the two separate MOU‟s of DFID and Sida, the two organisations signed an agreement sanctioning this modality of delegation and specifying the mutual obligations: The UK is responsible for the monitoring and audit of both contributions and furnishes Sweden with an annual brief overview of the functioning of this aid modality 4 and with reports on strategic matters and key-issues for discussion. Evaluations, assessments and other relevant papers will be sent to the silent partner as inputs for their annual meetings. Monitoring of progress in education via this modality of budget support takes place on the basis of shared indicators of progress at an aggregated level, i.e. the percentage of expenditure for targets such as the increase in net enrolment and reduction in drop out rate. This partnership will be renewed in 2005 because the three parties involved consider that this model has strengthened the objective of partner country ownership, especially in relation to the priorities of Rwanda‟s Poverty Reduction Strategy Plan (PRSP). The precise modalities are still under discussion between Sweden and the U.K. Sweden „s contribution was SK mill. 30 per year plus SK mill. 4 for the capacity building programme ( total € 3.4 mill) whilst DFID committed a total general budget support of £82 mill. (€130 mill) for 3 years of which an unknown part under the “education window”. This makes it difficult to relate these amounts to the education sector. Malawi The Silent Partnership in this country was initiated by the Netherlands, which neither had a representation in Malawi, nor a bilateral relationship although some activities were supported as part of regional level programmes. The Dutch were able to support education outside their “concentration countries” because basic education is a priority and Silent Partnerships were accepted as an alternative aid modality. DFID had a long and extensive development co-operation relationship with Malawi, also in the education sector, and both agencies attached great importance to reducing the administrative burdens of partner countries by harmonising procedures between donors. The Government of Malawi had pronounced a desire for greater donor cooperation because the many donors (10) active in the sector with mainly projects constituted a heavy burden on the limited government capacity. It therefore welcomed this new initiative as a step towards a sector wide approach (SWAP). The donor group was in the process of a joint review of progress and a common code of conduct. The education sector plan prioritised the basic education sub-sector. As the implementation strategies were being developed, DFID supported three key issues of the plan: system change, (focussing on strengthening the Ministry of Education, Science and Technology MoEST) in its planning and management systems), the national Primary Education System (improved teaching of literacy and numeracy in the first 4 classes) and the decentralisation of primary education to the districts (access, management, community involvement learning materials). The programme was jointly developed by MoEST and DFID, implemented by the government, supported by the education specialist in DFID and financed on a special government account for basic education. The Dutch funds were channelled to DFID to be transferred jointly with its own contribution to Malawi. This was new to DFID because in the Rwanda case, Sida transferred its funds directly to the government. The arrangement, like the previous two, further stipulates the modes of monitoring, reporting, evaluations and annual meeting between the two donors in Malawi. Support by DFID for education is £78.7 mill. ( € 125.mill) for 7 years and the Netherlands committed € 29.2 mill. for 4 years, making DFID the second biggest donor in commitments and the first in expenditure over 2003-2004. 5. MAJOR DIFFICULTIES ENCOUNTERED. The experiences of the three partner countries and bilateral donors are generally positive: the first two silent partnerships, initially for two years, will be extended and the last one overcame 5 its initial problems. No problems have been reported that can not be overcome within the newly established arrangements, but the process of getting a new aid modality on its feet, has had its hiccups. Most of the problems were on the donor side; no serious flaws have been mentioned by the partner country. The only reference made by Mali and Rwanda concerned the new financial reporting formats, necessary for the jointly selected and agreed upon policy oriented education targets in their general budget report in Rwanda and the sub-sector budget support in Mali. However, both governments agreed that these new formats had to be developed anyway for the future when additional finance would be channelled through sector budget support. For the involved donors, start-up difficulties concerned legal issues and conflicts with the existing format of general development procedures, including financial and administrative ones and, finally, the donor visibility at country level. From the legal perspective new procedures had to be developed in order to authorise the active partner to act on behalf of the silent one. It took some time before the different legal requirements of the countries were well incorporated into these new agreements and the same was true for administrative and financial issues. A problem arose in Sweden when the government doubted the legality of this kind of arrangements with Britain and the Netherlands, which was solved last year by Sida having to sign a short agreement with the partner country comprising an article on the mandate of delegation of funds. The co-operation between Britain and the Netherlands in Malawi was hindered by internal financial procedures in the banking system DFID had to work with in order to merge the Dutch grant with the British money for the programme. Not much communication took place between the agencies in the first 18 months: the silent partner was too silent and the active partner had to get used to the new role of keeping the silent partner informed. Sweden and the Netherlands also had to overcome an initial uneasiness about mandates of embassies and agencies at the one hand and headquarters on the other. The silent partnerships were initiated at headquarters and the representatives and the actors at field level had to grow accustomed to their new roles and responsibilities. This was especially the case for agencies that worked with a decentralised organisation model. The silent partners had no problem with their invisibility at country level. They were content with their role at important meetings and annual reviews for which they were invited to participate by the active partner and the partner country. 6. REAL AND POTENTIAL BENEFITS The benefits the partner countries mention is the availability of more resources for the education (sub) sector that otherwise would not have been there. After initial adaptations their transaction costs were reduced: progress reporting, assessments, studies and financial audits had to be sent to and discussed with one donor only. For the silent partner, the three cases clearly demonstrate benefits because it enabled them to make financial contributions without having to deploy staff, experts and infrastructure to manage their investment. Compared to co-financing with multi lateral organisations and IFI‟s, it was cheaper because the silent partners agreed to have these arrangements without fees involved. In Mali the Swedish funds have been transferred according to the procedures without serious problems or delays. In Rwanda, Sida itself transferred the resources. In both countries the modality of (sub) sector support and budget support with the education window made it easier to follow the mutually agreed upon instalment rhythms as the indicators of progress were 6 defined at meso- level. This is not the case in Malawi, where the indicators were set against progress at micro- level in the different programmes. The disbursements of both the active and silent partner lagged behind. As this was also the case for other programmes, it is not typical for Silent Partnerships. The active partner in Mali stated that although the administrative burden had increased, this was to an acceptable level. All three donors underlined the added value of mutual learning experiences mainly professionally, but also in terms of administrative harmonisation and flexibility. For the active partner, silent partnerships imply more work, especially in the first year when these arrangements on harmonisation and cooperation are brand new. But through “learning by doing” and accumulated experience it may be expected that such „costs‟ will diminish for new undertakings. The cost-effectiveness of the silent partnerships for both the silent and active partner obviously increases with the scale of the transfer of funds. This relationship between costs, including adaptations of procedures and the volume of the funds entering such a partnerships should be recognised. Most gains can be made at (sub) sector level. Through adding support of both donors, the active one became the biggest contributor in Mali and in Rwanda, and in both cases their role in discussions, reviews and negotiations became more significant. In Mali the Netherlands was the lead donor before the Silent Partnership with Sweden was established. Through this partnership its influence in the donor community gained more weight in discussions on sector support and joined donor financing, which was highly appreciated by the government. The same process is developing in Malawi, where DFID‟s voice gained importance in similar discussions. Now that these initial, mostly administrative and financial difficulties with respect to the harmonisation of procedures have been resolved by and large, cross-fertilisation benefits will emerge with the OECD/DAC initiative on harmonisation and delegated partnership for effective aid delivery. So, the potential for Silent Partnerships is increasing. The following examples demonstrate the success of this new approach: Norad will support the education sector in Mali via a subcontract with Sida within the framework of the arrangement with the Netherlands. Because Norad has no presence in Mali and both countries will conclude a Silent Partnership agreement delegating the whole country programme to Sida, it is more efficient for Norad to use this financing channel. New partners are Canadian CIDA and the European Union as was announced at the informal meeting of the Nordic plus group and discussions on silent partnerships focus on Senegal, Namibia, Nicaragua and Ghana. The French ministry of Foreign Affairs and DFID are developing an “Anglo French FTI strategic Partnership” in Niger, an interesting new departure that was inspired by working closely together through the FTI group. These new developments demonstrate that Silent Partnerships, starting 3 years ago with only three donors, are now becoming an accepted modality of aid policy for a growing number of agencies. 7 THE SIGNIFICANCE OF SILENT PARTNERSHIPS. The significance of future silent partnerships will depend firstly and foremost on the partner country‟s policies, priorities and preferences for aid modalities. In the three country cases a PRSP or comparable document prioritising education, was basic as was the (development) of an education sector plan targeting the MDG‟s and EFA goals and a short- and medium term financing gap. 7 Secondly, the policies and possibilities of the donors play an important role in the choice of modalities: comparable policies and priorities, a preference for financing modalities, a presence at country level including an education expert and mutual trust. Thirdly, the future significance of the Silent Partnerships has to be seen in the context of the possibilities that other modalities of Delegated Co-ordination may offer. The pace and direction of the OECD/DAC efforts in harmonisation is very important in this respect. These discussions may yield new models of delegation, which may also have an impact on the scope of future Silent Partnerships. It is therefore recommended that education policy makers are participating in this debate in order to maintain required elements. In summary For the partner country the added value of the Silent Partnerships will be the possibility to receive the much needed financing from those donors that can only contribute via a like- minded donor that is already present and without transaction costs. For the bilateral donor the present advantage of the Silent Partnership, being the sole modality to contribute swiftly and efficiently without overhead costs to education development in those countries in which they have no presence and/or relationship in education development cooperation, will prevail for the future. Hanke Koopman, 13 April 2005 8 References Sida (2000)“Policy and Guidelines for Sector Programme support” Sida (2002) Draft paper on Activity levels in Sida‟s sector programmes: ”Principles and experiences of Silent Partnership” The Netherlands ministry of Foreign Affairs (2002) “Policy paper on Silent Partnership” OECD/DAC (2003) “Report on harmonising donor practices for effective aid delivery” DAC (2005) “Draft report on Aid effectiveness for the second high-level Forum” CIDA (2004) “CIDA‟s Action Plan to Promote Harmonisation (2004-2005)” DFID (2005) Draft policy guidance note “How do I jointly fund programmes with other donors” Norad (2003) Position Paper “Principles for delegated Co-operation in Norad” World Bank (2003) Information Note “Harmonisation of operational policies, procedures and practices For the three Silent Partnerships in Mali, Malawi and Rwanda: The 3 arrangements between the active and the silent partner. The reports, minutes of the annual meetings, meetings with governments concerned, reports to headquarters and assessments on progress and future developments. 8
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