Identifier
Created
Classification
Origin
02ROME2415
2002-05-16 15:42:00
UNCLASSIFIED
Embassy Rome
Cable title:  

REPORT OF IFAD SECOND CONSULTATION ON THE SIXTH

Tags:  AORC EAID IFAD 
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UNCLAS SECTION 01 OF 02 ROME 002415 

SIPDIS

TREASURY FOR WSCHUERCH, MJASKOWIAK, JP PASSINO
USDA FOR FAS/LYNN REICH AND DAVID WINKELMAN
STATE FOR IO/EDA ROSE BERSTEIN
USAID FOR AA/PPC;DAA/G/EGAD;AFS

FROM FODAG

E.O. 12958: N/A
TAGS: AORC EAID IFAD EAID AORC IFAD
SUBJECT: REPORT OF IFAD SECOND CONSULTATION ON THE SIXTH
REPLENISHMENT


UNCLASSIFIED

PAGE 02 ROME 02415 01 OF 02 161556Z
UNCLAS SECTION 01 OF 02 ROME 002415

SIPDIS

TREASURY FOR WSCHUERCH, MJASKOWIAK, JP PASSINO
USDA FOR FAS/LYNN REICH AND DAVID WINKELMAN
STATE FOR IO/EDA ROSE BERSTEIN
USAID FOR AA/PPC;DAA/G/EGAD;AFS

FROM FODAG

E.O. 12958: N/A
TAGS: AORC EAID IFAD EAID AORC IFAD
SUBJECT: REPORT OF IFAD SECOND CONSULTATION ON THE SIXTH
REPLENISHMENT


UNCLASSIFIED

PAGE 02 ROME 02415 01 OF 02 161556Z

1. SUMMARY: THE SECOND CONSULTATION SESSION ON THE SIXTH
REPLENISHMENT OF RESOURCES FOR THE INTERNATIONAL FUND FOR
AGRICULTURAL DEVELOPMENT (IFAD) WAS HELD APRIL 18-19,
2002 IN ROME. MARK JASKOWIAK (DIRECTOR, OFFICE OF
SPECIALIZED DEVELOPMENT INSTITUTIONS, U.S. DEPARTMENT OF
TREASURY) REPRESENTED THE UNITED STATES AT THE
CONSULTATION AND AT RELATED CONSULTATIONS HELD WITH LIST
A (DONOR MEMBER COUNTRIES) AND IFAD MANAGEMENT. ISSUES
OF IMPORTANCE THAT WERE DISCUSSED INCLUDED A PROPOSAL BY
MANAGEMENT ENTITLED ""OPERATIONALIZING IFAD'S STRATEGIC
FRAMEWORK;"" A NUMBER OF SPECIFIC POLICY ISSUES SUCH AS
IFAD'S FIELD PRESENCE, PERFORMANCE-BASED LENDING SYSTEM,
RESULTS-ORIENTED ACTION PLANS; AND VARIOUS REPLENISHMENT-
LEVEL SCENARIOS INCLUDING IMPLICATIONS FOR THE USE OF
ADVANCE COMMITMENT AUTHORITY AND LENDING LEVELS. THE
NEXT CONSULTATION WILL BE HELD JULY 2-3, 2002. END
SUMMARY.

OPERATIONALIZING IFAD'S STRATEGIC FRAMEWORK
--------------


2. STRATEGIC FRAMEWORK:. PARTICIPANTS DISCUSSED
IFAD'S PROPOSED STRATEGIC FRAMEWORK AND COMMENDED THE
EFFORT OF BOTH STAFF AND MANAGEMENT. THE CONSENSUS
HIGHLIGHTED THE IMPORTANCE OF THE DOCUMENT AND THE NEED
TO FURTHER DEVELOP IT AS A STRATEGIC TOOL TO GUIDE THE
ORGANIZATION'S ACTIVITIES AND RESOURCE ALLOCATIONS.
DELEGATES FROM THE NETHERLANDS, UNITED KINGDOM, AND
SWITZERLAND WERE AMONG THOSE DELEGATIONS THAT CALLED FOR
MORE DETAILED INFORMATION (I.E., SIMILAR TO A CORPORATE
PLAN) IN THE REPORT. ERITREA, MEXICO, BRAZIL AND ITALY
UNCLASSIFIED

PAGE 03 ROME 02415 01 OF 02 161556Z
SUPPORTED BOTH THE DOCUMENT AND THE REGIONAL ALLOCATION
SYSTEM. USDEL OUTLINED ITS POLICY PRIORITIES FOR THE
REPLENISHMENT, INCLUDING: 1) THAT THE DOCUMENT INCLUDE
MORE DETAILS WITH RESPECT TO THE FOLLOWING: THE CURRENT
ALLOCATION PROCESS, REGIONAL STRATEGIES, AND THE NEED TO

DEVELOP A PERFORMANCE-BASED ALLOCATION SYSTEM FOR IFAD;
2) THE NEED FOR MORE QUANTIFIABLE MEASURES TO PREDICT AND
ASSESS THE PERFORMANCE OF IFAD AND ITS PROJECTS; AND 3)
IFAD'S CATALYTIC ROLE WITH OTHER MDBS, GOVERNMENTS AND
THE PRIVATE SECTOR, SHOULD BE FURTHER ARTICULATED. THE
U.S. WILL CIRCULATE A MORE DETAILED PAPER ON POLICY
REFORM BEFORE THE NEXT REPLENISHMENT MEETING IN JULY.
MANAGEMENT WILL REDRAFT THIS STRATEGIC FRAMEWORK DOCUMENT
FOR FURTHER CONSIDERATION DURING THE JULY 2002
REPLENISHMENT CONSULTATIONS.

FIELD PRESENCE
--------------


3. THE ISSUE OF IFAD'S FIELD PRESENCE WAS RAISED BY MANY
DELEGATIONS DURING THE COURSE OF DELIBERATIONS.
DISCUSSIONS IN SUPPORT OF THIS ISSUE WERE FOCUSED ON
IMPROVING IFAD'S ABILITY TO PARTICIPATE IN POLICY
DIALOGUE, ADVOCATE FOR POLICY CHANGE, BUILD STRONGER
PARTNERSHIPS, AND CO-FINANCE PROJECTS. MOST DELEGATIONS
AGREED THAT IT IS IMPORTANT TO IMPROVE IFAD'S PERFORMANCE
AT THE COUNTRY-LEVEL, BUT WERE SOMEWHAT RESERVED IN THEIR
SUPPORT OF FIELD PRESENCE. USDEL SUGGESTED THAT IN ORDER
TO HAVE A MORE MEANINGFUL DISCUSSION ON FIELD PRESENCE,
MORE INFORMATION WAS NEEDED REGARDING THE DEFINITION OF
FIELD PRESENCE AND LONG-TERM BUDGETARY IMPLICATIONS.
UNCLASSIFIED

PAGE 04 ROME 02415 01 OF 02 161556Z
USDEL ALSO STRESSED THAT SINCE FIELD PRESENCE RELATES TO
IFAD'S ORIGINAL MANDATE AS A NON-IMPLEMENTING AGENCY, ANY
PROPOSED POLICY CHANGE WOULD REQUIRE APPROVAL BY THE
GOVERNING COUNCIL IF NOT A CHARTER REVISION AS WELL.
MANAGEMENT WILL PROVIDE A PAPER ON IFAD FIELD PRESENCE
FOR DISCUSSION AT THE NEXT REPLENISHMENT CONSULTATION IN
JULY 2002.

PERFORMANCE-BASED LENDING
--------------


4. WITHIN THE CONTEXT OF BETTER UTILIZING IFAD'S SCARCE
RESOURCES AND ITS SPECIAL MANDATE TO REDUCE POVERTY AMONG
THE RURAL POOR, THE USDEL EXPRESSED SUPPORT FOR THE
DEVELOPMENT OF A PERFORMANCE-BASED SYSTEM OF ALLOCATING
LOANS. SUCH A SYSTEM WOULD HAVE THE SAME OVERALL GOAL AS
MODELS CURRENTLY IN USE AT OTHER IFIS, BUT WOULD BE
TAILORED TO IFAD'S PARTICULAR MISSION, SIZE, AND
CAPACITY. ALLOCATIONS BASED ON COUNTRY PERFORMANCE WOULD
BETTER ENABLE IFAD TO TARGET LIMITED RESOURCES MORE
EFFECTIVELY. MOST DELEGATIONS, WHILE EXPRESSING GENERAL
SUPPORT FOR THE CONCEPT OF PERFORMANCE-BASED LENDING,

UNCLASSIFIED

UNCLASSIFIED PTQ3551

PAGE 01 ROME 02415 02 OF 02 161556Z
ACTION IO-00

INFO LOG-00 NP-00 AID-00 AMAD-00 CIAE-00 COME-00 CTME-00
DODE-00 ITCE-00 SRPP-00 EB-00 EXME-00 EUR-00 UTED-00
TEDE-00 INR-00 ITC-01 NSAE-00 OES-01 OIC-02 OMB-01
OPIC-01 SS-00 STR-00 TEST-00 SAS-00 /006W
-------------- AF7E79 161602Z /38
R 161542Z MAY 02
FM AMEMBASSY ROME
TO SECSTATE WASHDC 3782
USMISSION USUN NEW YORK
USMISSION GENEVA
INFO USDA FAS WASHDC 2135
DEPT OF TREASURY WASHDC

UNCLAS SECTION 02 OF 02 ROME 002415

SIPDIS

TREASURY FOR WSCHUERCH, MJASKOWIAK, JP PASSINO
USDA FOR FAS/LYNN REICH AND DAVID WINKELMAN
STATE FOR IO/EDA ROSE BERSTEIN
USAID FOR AA/PPC;DAA/G/EGAD;AFS

FROM FODAG

E.O. 12958: N/A
TAGS: AORC EAID IFAD EAID AORC IFAD
SUBJECT: REPORT OF IFAD SECOND CONSULTATION ON THE SIXTH
REPLENISHMENT

UNCLASSIFIED

PAGE 02 ROME 02415 02 OF 02 161556Z
EXPRESSED CONCERN THAT THIS COULD BE VIEWED AS PUNITIVE
TO THOSE IN MOST NEED. THEY WOULD PREFER TO USE THE
CURRENT REGIONAL SYSTEM OF ALLOCATIONS, WHICH STAFF
DESCRIBED AS BASED LARGELY ON NEED (NOT PERFORMANCE) AND
WHICH HAS NOT BEEN UP-DATED SINCE 1997, DESPITE AGREEMENT
DURING THE LAST REPLENISHMENT THAT IT NEEDED
MODIFICATIONS. UNDER THIS APPROACH, PERFORMANCE WOULD BE
CONSIDERED PRIMARILY AT THE PROJECT LEVEL. AT THE
REQUEST OF THE USDEL, MANAGEMENT WILL PROVIDE BOTH A
REPORT ON THE CURRENT ALLOCATION PROCESS USED BY IFAD AND
A PROPOSAL FOR A NEW ALLOCATION SYSTEM BASED ON
PERFORMANCE FOR DISCUSSION AT THE JULY MEETING.

REPLENISHMENT LEVEL SCENARIOS
--------------


5. NO SPECIFIC LEVEL OF COMMITMENT WAS MADE BY ANY
COUNTRY DURING THIS SESSION AND NO CONSENSUS WAS REACHED
ON THE OVERALL LEVEL OR ON TARGET LENDING PROGRAMS. MANY
COUNTRIES EXPRESSED GENERAL SUPPORT FOR BOTH, HOWEVER.
MEMBERS WERE PROVIDED WITH A SERIES OF REPLENISHMENT
LEVEL SCENARIOS FOR ILLUSTRATIVE PURPOSES. THE SCENARIOS
SHOWED THE RELATIONSHIP BETWEEN THE FUND'S LENDING
PROGRAM AND ITS INVESTMENT INCOME AND DIFFERENT
REPLENISHMENT LEVELS. CONCERN WAS EXPRESSED BY THE USDEL
AND OTHER MEMBERS REGARDING IFAD'S INCREASING RELIANCE ON
ADVANCE COMMITMENT AUTHORITY (ACA). USDEL STATED THAT
ACA SHOULD BE USED CAUTIOUSLY FOR TEMPORARY SHORTFALLS
ONLY AND THAT IT IS FINANCIALLY UNSOUND TO BASE
REPLENISHMENT PROPERTIES ON A PERMANENT AND RISING LEVEL
OF ACA. THE USDEL CALLED FOR ILLUSTRATIVE TABLES ON
UNCLASSIFIED

PAGE 03 ROME 02415 02 OF 02 161556Z
COUNTRY-SPECIFIC IMPLICATIONS FOR REPLENISHMENT LEVELS
INCLUDING FLAT (SAME AS IFAD V) AND SEVERAL INCREASED
LEVELS (E.G., 10, 25, AND 50 PERCENT). OTHER MEMBERS ALSO
REQUESTED INFORMATION ON ACA USE IN OTHER INTERNATIONAL
FINANCIAL INSTITUTIONS AND A TECHNICAL NOTE ON THE PERIOD
TO BE USED FOR SETTING THE EXCHANGE RATES FOR
CONTRIBUTIONS TO THE SIXTH REPLENISHMENT.


6. MOST DELEGATIONS NOTED THE PROGRESS MADE BY THE
SECRETARIAT IN MOBILIZING ADDITIONAL RESOURCES FOR IFAD'S

SIPDIS
PARTICIPATION IN THE DEBT INITIATIVE FOR HEAVILY INDEBTED
POOR COUNTRIES (HIPC). USDEL, WHILE GENERALLY SUPPORTIVE
OF ANY PROSPECTIVE BILATERAL CONTRIBUTIONS DONORS MIGHT
ELECT TO MAKE FOR THIS PURPOSE, CONSIDERED THAT SUPPORT
FOR THE HIPC TRUST FUND WAS UNLIKELY GIVEN ITS EXISTING
USD $700M SHORTFALL. IFAD MANAGEMENT COMMITTED TO
PROVIDING MEMBERS WITH UPDATED INFORMATION ON HIPC FOR
THE JULY 2002 REPLENISHMENT NEGOTIATIONS.


7. THE NEXT CONSULTATION WILL BE HELD JULY 2-3, 2002.
HEILEMAN

END

UNCLASSIFIED

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2002ROME02415 - Classification: UNCLASSIFIED