«Social Funds and Reaching Proceedings from an international workshop organized by the Poor The World Bank and Experiences and AFRICATIP La Red Social de ...»
• To foster a technological leap in the agriculture sector
• To stimulate more and better rural and urban employment
• To fight poverty, improve living conditions, and increase the chances of human development
• To increase food security
• To strengthen participation of the majority and the historically excluded sectors
• To implement strategies for recovery of natural resources and for sustainable management
• To compensate the historic gaps in public investment in agriculture
• To implement strategies of labor adjustment in rural areas through a process of microindustrialization.
Conclusions The political contributions of the ESF were to orient the governance of the country to a more democratic system so that the neediest could be served. Its economic contributions have been the generation of employment and augmentation of the growth of the country’s GDP. It also contributed to the institutionalization of the struggle against poverty. The SIF, as the successor of the ESF, faces the challenge of eradicating poverty in a systematic and organized manner by becoming the social instrument of the national government. Through its support to projects, it aims to guarantee the application of social policies at the municipal level and to induce local investment in health, education, and basic sanitation sectors.
Both the ESF and the SIF helped redefine the new role of the state. Both institutions have inaugurated a new era in public administration by mainstreaming efficiency, effectiveness, and transparency in operations. The SIF’s relationship with the state ensures that it will change and transform as an institution when needed, since it is the main instrument of social policy of the national government. Its entry into the productive sector is important because it is still too early to see the impact of new redistributive policies. Support for this area is important as Bolivia defines its future.
Financial Resources Mobilization for Social Funds by Hussein M. El Gammal, Managing Director, Social Fund for Development, Egypt The Vision and the Early Years, 1991–93 The primary goal of Egypt’s Social Fund for Development (SFD), created in 1991, was to act as a safety net to protect vulnerable groups from the initial adverse effects of the Economic Reform and the Structural Adjustment Program (ERSAP) that began in 1990, as well as to improve the prospects for success of the ERSAP itself. Its mandate was extended to deal with the estimated 400,000 workers who were compelled to return to Egypt as a result of the Gulf War. Two years later, support from the United Nations Development Programme (UNDP) led to the establishment of the technical secretariat of the fund and thus to an increase in its efficiency.
Objectives The objectives of the SFD derived primarily from the objectives of the ERSAP’s ambitious program whose main goals included: (a) stabilization measures to restore macroeconomic balance;
(b) reduction of inflation; (c) structural adjustment to stimulate medium- and long-term growth;
and (d) efforts to minimize the effects of economic reform on the poor during the anticipated initial period of economic retrenchment. The first three objectives were addressed by the standby agreement with the International Monetary Fund and a structural adjustment loan from the World Bank. The SFD was the instrument to achieve the fourth objective of the ERSAP. Both the World Bank and the UNDP have helped mobilize resources for the SFD. Seventeen donors pledged US$612 million, including an International Development Association (IDA) credit equivalent to US$140 million.
The World Bank required the following goals of the SFD so that it would be eligible for
support to undertake socioeconomic development:
• To mitigate the negative impact of structural adjustment
• To facilitate the implementation of small-scale, development-oriented subprojects
• To mobilize additional resources for poverty alleviation
• To assist the growth of various nongovernmental and community associations to support their developmental activities
• To encourage community participation in developmental activities
• To complement both macroeconomic policies and sectoral development strategies.
The SFD’s Priorities
The SFD’s priorities were established in response to such eligibility criteria. These required:
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• The targeting and active involvement of beneficiaries, both men and women, as an integral part of the design and implementation processes of subprojects
• The consideration by delivery mechanisms of the absorptive capacity of intermediary agencies, including local organizations and the private sector
• In addition to conforming with the goals of ERSAP, the study of sustainability measures, for example, linkages with long-term employment and investment opportunities and the creation of revolving fund mechanisms
• The introduction of program assessment tools, such as a management information system.
Differences Between the SFD and Typical Emergency Funds Short-term emergency funds are normally fast-disbursing, targeted, and temporary in nature.
They simply act as “bridge-financing” institutions while the nation waits for the anticipated results from a broader economywide structural adjustment program. The SFD, emphasizing the long-term perspective from the very start, introduced economic enterprise-oriented activities in its initial phase. Geographic targeting under emergency funds typically focused on regions of greatest need. Under the SFD, however, all the envisioned activities had to serve the entire population regardless of place of residence. Unlike funds of an emergency nature, the SFD’s management structure was adapted to manage long-term activities from the start. To provide emergency relief to target groups without compromising the elements of a longer term
focus, the SFD required the following:
• The introduction of social investment-oriented activities, including community development and labor-intensive public works
• The initiation of economic enterprise-oriented activities, including labor mobility, smallscale enterprises, promotion, and microcapital lending
• Support for sustaining public transport services for Greater Cairo and Alexandria, later dropped from the list of priorities
• The introduction of institution building as an enabling mechanism to reach target beneficiaries most quickly
• Consideration of the factors that could lead to the sustainability of the institution, not only the sustainability of subprojects financed by the SFD.
Parameters that Guided the Design of the SFD’s Organizational Structure Two basic parameters guided the organizational structure and functioning of the SFD programs. The first parameter was to provide for permanency in the structure of the organization so that it could be transformed into more permanent units suitable for the labor adjustment services, small-scale enterprise promotion, and microcapital lending programs. A permanent agency would require specialized expertise, as well as a certain level of autonomy from the government structure. The second parameter emphasized sustainability. This went beyond the maintenance of projects and activities that the SFD supported; rather, it included the sustainability of approaches that could be emulated by government agencies to the point of becoming guiding principles.
By the end of 1993, the SFD had established its basic administrative framework and hired a core staff of professionals. The success of the SFD can be attributed largely to this management
framework, which had the following characteristics:
• A relatively flat organizational structure with minimal hierarchical levels
• Nontraditional functional specialization that emphasized an integrated approach
• Programmatic design with built-in coordination mechanisms
• A focus on potential, as well as on existing, beneficiaries Financial Resources Mobilization for Social Funds 161
• A proactive demand-driven strategy for defining projects
• Political support from the highest level of government
• Self-motivated staff requiring minimal supervision
• An effective system of monitoring to enable the introduction of corrective measures
• The ability to enlist enduring international support by facilitating audit missions
• Transparency of regulations, and flexibility and fairness in implementation.
The SFD’s Organizational Structure The organizational structure is divided into three sets of units. The first set performs the basic
functions of the SFD and comprises five core programs:
• Public Works Program—This program provides job opportunities for the largest number of people, especially for the unemployed and the poor living in vulnerable areas. It finances labor-intensive works to be executed by local contractors in rural areas without using capital-intensive technologies. These works include improvements to public roads, recycling, and the disposal of waste; maintenance of water supply schemes; sewage treatment plants; fencing of public buildings; and construction of small clinics and health care facilities. The program’s activities are synchronized with the activities of the governorates and local communities in accordance with transparently established criteria for cost-sharing and execution. The program’s approach appears to have affected local bureaucracies, who have started adopting the SFD’s methodology for works on a small scale. Because of the great credibility of the program in the eyes of the beneficiaries, local communities demand the services of the Public Works Program, which is proof of the success of a highly visible and effective demand-driven approach.
• Community Development Program—This program uses multiple strategies to empower and mobilize grassroots communities to make decisions and undertake implementation of projects. Its priorities are illiteracy eradication, leadership training for nongovernmental organizations (NGOs) and volunteer groups, institution building, and health care for women and children. The program finances income generation, new employment opportunities, and social development projects; improves the delivery of essential community services; provides credit for working capital and the purchase of equipment for household production; gives grants for establishing and maintaining primary health care for the community; and provides vocational training for the youth and the unemployed.
• Enterprise Development Program—The primary goal of this program is to create local small-scale entrepreneurs and enhance their long-term sustainability. This is done by extending credits and grants to target groups, referring small entrepreneurs to credit institutions, assisting in the improvements or expansion of small businesses, and providing training to managers in finance and marketing. The program also supports the creation of business incubation centers, industrial parks, entrepreneurship training, food services, the establishment and maintenance of electronic libraries, fish farms, handicrafts, light transportation, export development of small industrial products, and distribution and trade of agricultural products. It also conducts feasibility studies and evaluations of projects proposed by aspiring entrepreneurs.
• Labor Mobility and Retraining Program—This program retrains workers who lose their jobs as a result of privatization. In an effort make Egypt’s private sector competitive on the international market, the program supports local industries and small entrepreneurs with training to develop specialized skills to meet the demands of the free market. The program conducts an employment skills inventory and provides training, reorganizes vulnerable industries, and undertakes labor restructuring of the shipbuilding and weaving industries for export markets.
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• Institutional Development Program—This program manages effectively the activities of the technical secretariat and provides services and tools to the core programs so that they can function efficiently. It prepares and reviews agreements with bilateral and multilateral agencies, responds to their auditing and monitoring needs, and represents the SFD at international meetings and conferences. The program conducts surveys and establishes monitoring mechanisms to ensure proper targeting, undertakes follow-up studies, and invests in capacity-building activities for personnel in the technical secretariat and in the sponsoring agencies.
The second set assists the core programs in carrying out their responsibilities by delivering services to beneficiaries, monitoring program activities, and solving any ensuing problems in the field. This set includes about 20 regional offices for the 26 governorates and local communities.
The third set provides all auxiliary services to the programs and donors and consists of the
• Finance Department—This department fills a multitude of national and international reporting requirements for various stakeholders. It analyzes raw data to assess trends for making policy-level decisions and works closely with the management information unit to compile reports on disbursements and project expenditures.
• Personnel and Training Department—Training is of utmost priority for SFD management. This department offers training programs and facilitates professional meetings for its personnel. Programs are offered on topics such as marketing, feasibility studies, effective leadership, decisionmaking and problemsolving, financing of innovative small business enterprises and financial analysis, computer programming and its applications, environmental assessment and technology management, change engineering, the design and implementation of technical cooperation, the development of NGOs, project evaluation and management, survey techniques and analysis, and privatization and related issues. It is worth noting that only two employees staff this department.
• Management Information Systems Department—Apart from meeting necessary management requirements for decisionmaking and forecasting, the department maintains an information system that monitors all SFD operations and activities. In addition to providing information for the SFD Secretariat, it provides information to beneficiaries, regional offices and local units, the government, sponsoring agencies, target groups, NGOs, and others. This unit played a dynamic role in the design of the social impact study, the design of questionnaires and subsequent data analysis, and the transfer of telecommunications technology to improve the information network between headquarters and regional offices.
• Credit Department—This department performs five functions. First, it develops financial packages for programs supported by the SFD in conformity with donor requirements. Second, it collaborates with financial intermediaries to structure projects and define procedures for monitoring and implementation. Third, it serves as a clearinghouse for beneficiary profiles and their performance. Fourth, it manages a system for tackling loan defaults. And fifth, it prepares monitoring reports such as semiannual interest rate reports that compare market interest rates with the varying interest rates charged by different donors for beneficiaries. The department disburses credit to sponsoring agencies and beneficiaries through commercial banks that have a wide network of branches.
• Planning and Projects Department—Targeting effectiveness is of prime concern for this department. It developed a control system for operations that provides the necessary flexibility, especially in an environment where operations are expanding, complexities are growing, and decentralization is becoming increasingly important. Recognizing the need for adequate, but not excessive, control mechanisms, the department adopted an approach that allows it to grow incrementally as operations expand.
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