How the Multilateral Development Banks are adapting to the needs of MICs: The views of the clients

1. Increasing Competitiveness in the African Middle Income Countries:How can the Multilateral Development Banks best support the African MICs? How the Multilateral Development Banks are adapting to the needs of MICs: The views of the clients Ali Mansoor, Financial Secretary, Mauritius March 2008, Cairo

2. Achievements • Instruments broadly OK • Analytical and Advisory Assistance (AAA) • Technical Assistance (TA) • Budget Support • Project Financing • Guarantees • Private Sector Support • SME Support • Special Initiatives/Global Public Goods

3. Achievements (continued) • Use of Country Systems well underway (Procurement and Safeguards) • Cost of Funds reasonable except for special programmes, global public goods & periods of stress/external shocks • Paris Declaration Process and Annual Business Plan

4. Achievements (continued) • Knowledge institutions with good sharing of international experience • International comparators e.g. Doing Business to situate challenges • Honest Broker over policy differences and peer review role

5. Areas for improvement • Insufficient administrative budget for AAA, Capacity Building and TA • Need a global approach to link lending to Administrative Resources • Link administrative resources to impact e.g. use of Country Performance & Institutional Assessment (CPIA)? • Stronger Peer Review Role to upgrade quality of work by government staff and consultants • More innovative instruments for infrastructure including PPP and regional projects • Concessional financing for project preparation (expand ADB MIC facility), special programmes, global public goods and exceptional circumstances (e.g. large external shocks)

6. Areas for improvement (continued) • Stronger emphasis on competitiveness agenda, integration into the global market; and opening up: • Link to important events and issues such as Economic Partnership Agreements (EPAs), Japan TICAD IV, US Congress Duty Free Quota Free initiative • Mobilise additional and predictable resources under Aid for Trade • Stronger Country Presence including field office • Bolder push on POLICY REFORM side of Regional Integration and link to national development agenda • Improve internal coordination and coordination with development partners (e.g. Annual Business Plan)

7. Areas for improvement (continued) • Promote peer learning • Twinning of Ministries • Exchange Programmes for staff • Multi-Disciplinary Centre of Excellence • Accelerate Progress on Country Systems • Better communication over products and services

8. Areas to focus: Knowledge as a public good • How to produce more of it and how to pay for it? • Incentives in public sector dictate against fee for service • Annual membership fee to be rebated against borrowing • Expand ADB MIC grant for project preparation and pay back through borrowing (but make link global and not with a one to one link)

9. Areas to focus: Making the Paris Declaration work • Stronger coordination via Annual Business Plan • Feed Annual Business Plan into a Budget Embedded in a Medium Term Expenditure Framework--Role played by Poverty Reduction Strategy Papers (PRSPs) in low income countries • Strengthen Programme Based Budget to focus on outputs and outcomes via monitorable indicators

10. Areas to focus:Reducing the cost of borrowing • Focus on special situations and expand ADB MIC grant approach • Response to large external shocks • Global Public Goods • Renewable Energy; • Sustainable Development/Environmental Protection; • Disaster management/prevention; • HIV/AIDS; • Communicable Diseases especially Malaria • Project Preparation • Capacity Building and Technical Assistance