World Bank vs Ethiopia: Response to Dr. Ishac Diwan's letter
Ethiopian American Civic Advocacy May 24, 2006
Dear Dr. Ishac Diwan,
We thank you for your response of 17 May to our article on the proposed World Bank led project named “Protection of Basic Services”, or PBS. Despite the choice of an appealing-sounding name for the project, we continue to be very concerned about the nature of this project, and more generally, that the World Bank, with other donors in tow, has chosen to lend financial and moral support to the Ethiopian government — at a time when the government has shown in repeated incidents that, if its power is questioned, it does not hesitate to crack down massively on its population, especially on the rural poor and those with the least voice (even if the brutality and oppression of the rural population makes it less often into the media limelight than violence against Addis Ababa residents).
Is the PBS a form of budget support or not?
We would like to respond to the specific points you made in regard to the modalities of the PBS. Firstly, we are well aware that the World Bank has officially classified the PBS as an “investment loan” rather than as “direct budget support”, and that the Bank discontinued the Poverty Reduction Support Credit (PRSC) as of December 2005 which we mentioned in our earlier article. It is after perusing the content of the PBS project, and after discussion with others who have equally examined the PBS, that we came to the conclusion that it amounts to a reintroduction of ‘budget support through the back door’. As mentioned in our earlier article to the Ethiopian public posted on Ethiomedia, PBS funnels aid money to regional and wereda (district) government budgets, in the form of block grants. As we said, support to the subnational government budgets is still support of government budgets. Regional and district governments are part of the government system in Ethiopia — hence, just because the loan is no longer channeled directly to the federal government budget, but rather to the subnational government budgets, it is no less a form of budget support. We are critical on the basis of the substance of the loan, not its formal labelling.
What are the hopes that the aid money going to regional and wereda budgets are not blank cheques?
The May revised project information document (PID) states that the block grants to the regional and wereda budgets will be monitored on the basis of the funding allocations, and that this monitoring will be used as a condition for disbursement. However, the February PID states:
“the PBS itself has no direct mechanism to influence choices made at the local government level”. This statement is no longer present in the May version of the PID. Is that because the PBS has indeed been redesigned to introduced mechanisms for influencing budget choices, or is it structurally the same as the February conception of the PBS, on this point? Returning to the monitoring of the regions’ / weredas’ aid block grants as described in the May PID, the document does not further elaborate what thresholds of divergence of actual spending patterns from budgeted allocations would set off a discontinuation of spending. It would not be possible to make an ex post assessment of whether the PBS is adhering to its description with so limited elaboration on what it takes for disbursement conditions to be met.
Getting (monitoring) institutions right? Getting incentives right? The problems of monitoring oneself
Furthermore, clearly the quality and reliability of the monitoring exercise is determined by who undertakes the monitoring, and whether the monitoring agency is sufficiently independent, has the appropriate capacity, and most importantly does not have a conflict of interest between the monitoring activity and other mandates. The PID states that it is the government’s Ministry of Finance that will be responsible for oversight, monitoring, and evaluation of the aid block grants to the regions’ budgets. We believe that neither the independence nor the conflict of interest criteria for a credible monitoring agency are met in the ministry of finance. The minister of finance directly reports to the prime minister. As we elaborated in our previous article, the political dynamics in Ethiopia today are such that the government under prime minister Meles Zenawi has all the incentives in place to divert public resources for the use of political control. We also gave a few out of many examples showing that this is already taking place.
The political dynamics are not promising for the PBS’s success in getting services to the poor
The combination of the repressive nature of the prime minister on the one hand, and the high political instability that ensued from the recent exercise of heavy repression and lack of popular legitimacy on the other hand, point to strong incentives as well as willingness to use all institutions under the government’s control, including the finance ministry, to ensure that funds are made available for expenses associated with political control. The violation of “good governance” rules of proper monitoring and evaluation of subnational budgets is minor, compared to the violation of “good governance” rules that suggest not imprisoning the entire opposition leadership, not ordering killings, torturing, and beating of rural residents, and not creating an atmosphere of fear and suspicion throughout the country. If government institutions can be ordered to undertake the major violations — as we have clearly seen has happened — then government institutions can certainly be ordered to undertake the minor violation of improper budget monitoring, in order to prevent the discontinuation of aid flow.
Aid budget support to subnational governments are especially subject to such political influence not only because of the choice of a monitoring agency that is fully incentivised to diverge from the good-monitoring mandate, but also because practically all subnational governments are controlled by the same ruling party that has exercised repression and brought about the instability mentioned above. To repeat from our prior article: All 9 regional governments of Ethiopia are controlled by the EPRDF and allied parties, as a result of the May 2005 elections so riddled with irregularities that the results are not credible. Nearly all 550 district governments are controlled by the EPRDF and allied parties as a result of the most recent wereda elections which took place in 2001/02 and were even more fraudulent. It is easier for a ruling party to control the budgets of subnational governments when all these subnational governments are under its control.
The next wereda elections were originally to take place in 2006, and the government recently decided to delay them to 2007. If the regime continues on the path it is right now, it is at this point nearly impossible to imagine how such elections would not be accompanied by another round of repression and violence, motivated by the government’s desire to ensure control at the wereda level. The PBS project’s decision to funnel large amounts of money through regional and wereda budgets may, in an aid-curse kind of way, exacerbate electoral violence, as the presence of this money increases the government’s stake in ensuring control of wereda governments and their budgets. It may also do even further reputational harm to the project as the political control over aid may come starkly to light in the context of a troubled local election.
We are rather distressed that the various iterations of the PID, while referring in the introduction to the “heightened risk on the governance front” that led to discontinuation of the PRSC loan, appear to have been written by authors who have hermetically sealed blinders on when it comes to how the political dynamics, the recent history of repression and nationwide insecurity, and the motivations and incentives of the current political authorities could heavily compromise the PBS. The above thoughts are but a few ways in which the bad political governance interfaces with aid interventions.
All this would be bad enough if that meant that hundreds of millions of rich countries’ taxpayers’ dollars may end up being squandered. Worse than waste, this large project at this time sends a strong message to this brutal leader as well as to others around Africa that, as long as they are allies of the West, they will continue to be supported politically (through diplomats) and financially (through aid agencies) whether or not they unleash terror on those citizens, rural and urban, poor and nonpoor, who dare think they are empowered and have a voice. We would not even mention this point in a letter to a World Bank country director if indeed the Bank had historically been an apolitical body as it claims to be. The painful history of prolonged Bank support to African despots like Congo’s Mobutu who were on the “right” side of the Cold War but perpetuated and deepened poverty of their population is too long and sufficiently documented elsewhere to belabour here. We have some hope that the current president Paul Wolfowitz will take more seriously the implications of bad political governance — which is more than just economic corruption, the issue the Bank is currently very preoccupied with — for poverty, and decide on interventions in Ethiopia and elsewhere on the basis of a more sophisticated understanding and acknowledgement of the political governance–poverty nexus.
How does one empower the rural poor to demand services from the government, in a time like this?
In our previous article, we emphasised yet another way—particularly pertinent in the context of the PBS — that oppression may lead to continued poverty: In a country in which the rural poor cannot hold local, regional, and national government to account for the financing and provision of the services they need to complement their private economic activities, they are not going to get these services delivered effectively, if at all. Your article refers to two strong components to address this, and the May PID has new language, not present in the February PID, that refers to the “demand side” of public services. We welcome incorporation of such components. We are, however, disappointed by the distribution of PBS funds across the four components. No such information of the amounts per component was available in any of the PID versions, but we found a powerpoint presentation.
you posted on the Bank’s country site, where the distribution over the entire PBS period is as follows:
Component 1: Support of regional and wereda governments’ budgets: $750 million, or 90.3% of the total.
Component 2: Health subprogramme: $67 million, or 8.1%
Component 3: Capacity building for the local budget process: $7.2 million, or 0.9%
Component 4: “Strengthening citizen’s voice”: $6 million, or 0.7%.
Thus, the vast majority of the PBS funds are going for the budget support component, and less than 1% of the funds are allocated for “strengthening citizen’s voice”, the demand side of public services. It is misleading to so heavily emphasise the “empowerment” nature of PBS when its share of the funds is nearly nil.
It is furthermore intransparent how Component 4 is to be designed. The PID refers to “pilot initiatives aimed at strengthening citizens’ voice and enhancing accountability of public sector service providers to citizens”. How would the PBS go about doing that? There is no information on this that we could discern. We believe the first necessary (but not sufficient) step to empowering the poor to prioritise and demand basic services is through political accountability of local government officials to the citizens they are supposed to serve — yes, it is the D word again: democratic principles, that are a necessary condition for the emergence of political voice of the poor through their ability to vote into or out of power local governments. The current situation in Ethiopia couldn’t possibly have contributed more to the voicelessness of Ethiopia’s rural residents. It is in this context that the PBS will enter the scene. We are, once again, frustrated about the large political blindspot reflected in the project documents: How does one go about empowering the rural poor when, leave alone them, even the urban well-off population have to be careful what they say and to whom they speak, out of realistic fear of political reprisal, arrest, or worse.
We nevertheless ask: How will Component 4 seek to increase the political voice of the poor? What tools will Component 4 give Ethiopia’s rural people to incentivise political and administrative bodies to be as effective as they can be in serving the poor? An as yet unspecified non-government agency is supposed to implement this component. There are many government operated non-government organisations (or, to shorten the oxymoron, GONGOs) in Ethiopia, such as REST, ACSI, etc. How do you plan to distinguish between these and truly non-government agencies?
In sum: The PBS is not appropriate for Ethiopia. Others call for a halt to all development aid. We simply call for a halt of budget support, in name or in substance.
To keep this letter within manageable length, we have not elaborated on other concerns, including how additionality would be ensured even in the absence of political corruption, how priorities among the basic services will be established, etc. To conclude, we find that the PBS is in substance, though perhaps not in name, indeed a form of (subnational) budget support, and is likely to be severely challenged by both the institutional arrangements for project monitoring and implementation, as well as by the political dynamics and risks in Ethiopia today.
We reiterate that we find the budget support / block grant nature of the project to be inappropriate on both economic development and ethical grounds. As you are likely aware, many other voices who are distressed about how political violence will first and foremost contribute to Ethiopia’s deprived population languishing in a poverty trap, have called for a discontinuation of all aid to the government and to limiting financial support to humanitarian assistance. They are calling on donors to stop placing allied despots above the people who suffer under their reign. Most recently, Professor Theodore Vestal, longtime scholar of Ethiopia, stated: “Let us make this our mission: To use the full panoply of weapons in the democratic arsenal to bring pressure to bear on democratic donor nations to live up to their aspirations and to withhold all but humanitarian assistance to Ethiopia until human rights abuses and glaring deficits of democracy have been meaningfully addressed by the FDRE.” Former Ambassador and US assistant secretary of state for Africa Herman Cohen stated : “The international community should understand that economic development in Ethiopia will be impossible as long as you have this political stalemate and repressive form of governance. There is no reason to continue economic development assistance until this is corrected. Ethiopia should remain an object of humanitarian assistance until there is internal change.”
We are calling for much weaker conditions of changing the status quo of the aid loan that you designed: Not for the unconditional stop of all development aid, but merely for the halt to providing money directly into government coffers, whether we are talking about federal, regional, or wereda governments — all of which are contolled by the same political party machinery responsible for the ruthless crackdown on Ethiopia’s rural and urban population.
On process: Engaging with civil society on the PBS
On process, we believe that it is positive that the World Bank has recognised the benefits of consulting with stakeholders on significant and contested loans like the PBS. Reviewing the Bank country site’s [Ethiomedia: please create a link to www.worldbank.org/et ] information on these consultations, we were, however, especially disappointed that the civil society group in Ethiopia you consulted with did not include key institutions that would have been especially well equipped and would have the requisite skills and knowledge to discuss the political context of the PBS (e.g. the Ethiopian Human Rights Council) and the economic development merits of the project (e.g. Ethiopian Economic Policy Research Institute). The political consultations with opposition parties did not take place with the elected leadership of CUD, collectively held in prison by the ruling party, but rather with one single individual who has been given chairmanship by the ruling party in the course of a fraudulent restructuring of the original CUD party. The fact that the CUD leadership is in jail has not prevented representatives of other major international agencies to consult with them; we are saddened that the Bank has not shown the stature (and the independence from the prime minister) to include the genuine, as opposed to the illegitimate, CUD leadership in consultations.
Conspicuous by its absence from the Bank country site on PBS consultations is the consultation with intellectuals and activist leaders in the Ethiopian community abroad which took place a few months ago. We learned from some who were present then that there was a strong call not to provide aid to the government at this time of instability at which the aid is highly likely to be misused. We understand there will be one more consultation on Tuesday, 23 May, in Washington DC. This, however, is two days before the loan goes to the Bank Board of Directors, which happens on 25 May. As traditionally the board approves nearly every loan that comes before it, we regret that input at this time may not have any chance to be even potentially considered. Nevertheless, we contacted you to be given the opportunity to attend the meeting, and express our concerns and thoughts about the PBS, given that we have been very active in raising awareness on the role of aid in Ethiopia and specifically on the PBS. We still hope to hear from you before the meeting.
Respectfully,
Ethiopian American Civic Advocacy
eacadvocacy@gmail.com
--------
1 Again, here there is a difference between the two PIDs on the question whether the aid block grants go to regional and wereda governments, or only to regional governments (which then pass on resources to the weredas through the standard intergovernmental transfer system): The February PID says the PBS constitutes a “funding of the block grant to regional governments who in turn deliver basic services or make transfers to local governments”. The May PID says the PBS will provide “resources to regions and local authorities based on agreed plans for delivery of basic services”.
-------------
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Dear Dr. Ishac Diwan,
We thank you for your response of 17 May to our article on the proposed World Bank led project named “Protection of Basic Services”, or PBS. Despite the choice of an appealing-sounding name for the project, we continue to be very concerned about the nature of this project, and more generally, that the World Bank, with other donors in tow, has chosen to lend financial and moral support to the Ethiopian government — at a time when the government has shown in repeated incidents that, if its power is questioned, it does not hesitate to crack down massively on its population, especially on the rural poor and those with the least voice (even if the brutality and oppression of the rural population makes it less often into the media limelight than violence against Addis Ababa residents).
We would like to respond to the specific points you made in regard to the modalities of the PBS. Firstly, we are well aware that the World Bank has officially classified the PBS as an “investment loan” rather than as “direct budget support”, and that the Bank discontinued the Poverty Reduction Support Credit (PRSC) as of December 2005 which we mentioned in our earlier article. It is after perusing the content of the PBS project, and after discussion with others who have equally examined the PBS, that we came to the conclusion that it amounts to a reintroduction of ‘budget support through the back door’. As mentioned in our earlier article to the Ethiopian public posted on Ethiomedia, PBS funnels aid money to regional and wereda (district) government budgets, in the form of block grants. As we said, support to the subnational government budgets is still support of government budgets. Regional and district governments are part of the government system in Ethiopia — hence, just because the loan is no longer channeled directly to the federal government budget, but rather to the subnational government budgets, it is no less a form of budget support. We are critical on the basis of the substance of the loan, not its formal labelling.
The May revised project information document (PID) states that the block grants to the regional and wereda budgets will be monitored on the basis of the funding allocations, and that this monitoring will be used as a condition for disbursement. However, the February PID states:
“the PBS itself has no direct mechanism to influence choices made at the local government level”. This statement is no longer present in the May version of the PID. Is that because the PBS has indeed been redesigned to introduced mechanisms for influencing budget choices, or is it structurally the same as the February conception of the PBS, on this point? Returning to the monitoring of the regions’ / weredas’ aid block grants as described in the May PID, the document does not further elaborate what thresholds of divergence of actual spending patterns from budgeted allocations would set off a discontinuation of spending. It would not be possible to make an ex post assessment of whether the PBS is adhering to its description with so limited elaboration on what it takes for disbursement conditions to be met.
Furthermore, clearly the quality and reliability of the monitoring exercise is determined by who undertakes the monitoring, and whether the monitoring agency is sufficiently independent, has the appropriate capacity, and most importantly does not have a conflict of interest between the monitoring activity and other mandates. The PID states that it is the government’s Ministry of Finance that will be responsible for oversight, monitoring, and evaluation of the aid block grants to the regions’ budgets. We believe that neither the independence nor the conflict of interest criteria for a credible monitoring agency are met in the ministry of finance. The minister of finance directly reports to the prime minister. As we elaborated in our previous article, the political dynamics in Ethiopia today are such that the government under prime minister Meles Zenawi has all the incentives in place to divert public resources for the use of political control. We also gave a few out of many examples showing that this is already taking place.
The combination of the repressive nature of the prime minister on the one hand, and the high political instability that ensued from the recent exercise of heavy repression and lack of popular legitimacy on the other hand, point to strong incentives as well as willingness to use all institutions under the government’s control, including the finance ministry, to ensure that funds are made available for expenses associated with political control. The violation of “good governance” rules of proper monitoring and evaluation of subnational budgets is minor, compared to the violation of “good governance” rules that suggest not imprisoning the entire opposition leadership, not ordering killings, torturing, and beating of rural residents, and not creating an atmosphere of fear and suspicion throughout the country. If government institutions can be ordered to undertake the major violations — as we have clearly seen has happened — then government institutions can certainly be ordered to undertake the minor violation of improper budget monitoring, in order to prevent the discontinuation of aid flow.
Aid budget support to subnational governments are especially subject to such political influence not only because of the choice of a monitoring agency that is fully incentivised to diverge from the good-monitoring mandate, but also because practically all subnational governments are controlled by the same ruling party that has exercised repression and brought about the instability mentioned above. To repeat from our prior article: All 9 regional governments of Ethiopia are controlled by the EPRDF and allied parties, as a result of the May 2005 elections so riddled with irregularities that the results are not credible. Nearly all 550 district governments are controlled by the EPRDF and allied parties as a result of the most recent wereda elections which took place in 2001/02 and were even more fraudulent. It is easier for a ruling party to control the budgets of subnational governments when all these subnational governments are under its control.
The next wereda elections were originally to take place in 2006, and the government recently decided to delay them to 2007. If the regime continues on the path it is right now, it is at this point nearly impossible to imagine how such elections would not be accompanied by another round of repression and violence, motivated by the government’s desire to ensure control at the wereda level. The PBS project’s decision to funnel large amounts of money through regional and wereda budgets may, in an aid-curse kind of way, exacerbate electoral violence, as the presence of this money increases the government’s stake in ensuring control of wereda governments and their budgets. It may also do even further reputational harm to the project as the political control over aid may come starkly to light in the context of a troubled local election.
We are rather distressed that the various iterations of the PID, while referring in the introduction to the “heightened risk on the governance front” that led to discontinuation of the PRSC loan, appear to have been written by authors who have hermetically sealed blinders on when it comes to how the political dynamics, the recent history of repression and nationwide insecurity, and the motivations and incentives of the current political authorities could heavily compromise the PBS. The above thoughts are but a few ways in which the bad political governance interfaces with aid interventions.
All this would be bad enough if that meant that hundreds of millions of rich countries’ taxpayers’ dollars may end up being squandered. Worse than waste, this large project at this time sends a strong message to this brutal leader as well as to others around Africa that, as long as they are allies of the West, they will continue to be supported politically (through diplomats) and financially (through aid agencies) whether or not they unleash terror on those citizens, rural and urban, poor and nonpoor, who dare think they are empowered and have a voice. We would not even mention this point in a letter to a World Bank country director if indeed the Bank had historically been an apolitical body as it claims to be. The painful history of prolonged Bank support to African despots like Congo’s Mobutu who were on the “right” side of the Cold War but perpetuated and deepened poverty of their population is too long and sufficiently documented elsewhere to belabour here. We have some hope that the current president Paul Wolfowitz will take more seriously the implications of bad political governance — which is more than just economic corruption, the issue the Bank is currently very preoccupied with — for poverty, and decide on interventions in Ethiopia and elsewhere on the basis of a more sophisticated understanding and acknowledgement of the political governance–poverty nexus.
In our previous article, we emphasised yet another way—particularly pertinent in the context of the PBS — that oppression may lead to continued poverty: In a country in which the rural poor cannot hold local, regional, and national government to account for the financing and provision of the services they need to complement their private economic activities, they are not going to get these services delivered effectively, if at all. Your article refers to two strong components to address this, and the May PID has new language, not present in the February PID, that refers to the “demand side” of public services. We welcome incorporation of such components. We are, however, disappointed by the distribution of PBS funds across the four components. No such information of the amounts per component was available in any of the PID versions, but we found a powerpoint presentation.
you posted on the Bank’s country site, where the distribution over the entire PBS period is as follows:
Component 1: Support of regional and wereda governments’ budgets: $750 million, or 90.3% of the total.
Thus, the vast majority of the PBS funds are going for the budget support component, and less than 1% of the funds are allocated for “strengthening citizen’s voice”, the demand side of public services. It is misleading to so heavily emphasise the “empowerment” nature of PBS when its share of the funds is nearly nil.
It is furthermore intransparent how Component 4 is to be designed. The PID refers to “pilot initiatives aimed at strengthening citizens’ voice and enhancing accountability of public sector service providers to citizens”. How would the PBS go about doing that? There is no information on this that we could discern. We believe the first necessary (but not sufficient) step to empowering the poor to prioritise and demand basic services is through political accountability of local government officials to the citizens they are supposed to serve — yes, it is the D word again: democratic principles, that are a necessary condition for the emergence of political voice of the poor through their ability to vote into or out of power local governments. The current situation in Ethiopia couldn’t possibly have contributed more to the voicelessness of Ethiopia’s rural residents. It is in this context that the PBS will enter the scene. We are, once again, frustrated about the large political blindspot reflected in the project documents: How does one go about empowering the rural poor when, leave alone them, even the urban well-off population have to be careful what they say and to whom they speak, out of realistic fear of political reprisal, arrest, or worse.
We nevertheless ask: How will Component 4 seek to increase the political voice of the poor? What tools will Component 4 give Ethiopia’s rural people to incentivise political and administrative bodies to be as effective as they can be in serving the poor? An as yet unspecified non-government agency is supposed to implement this component. There are many government operated non-government organisations (or, to shorten the oxymoron, GONGOs) in Ethiopia, such as REST, ACSI, etc. How do you plan to distinguish between these and truly non-government agencies?
In sum: The PBS is not appropriate for Ethiopia. Others call for a halt to all development aid. We simply call for a halt of budget support, in name or in substance.
To keep this letter within manageable length, we have not elaborated on other concerns, including how additionality would be ensured even in the absence of political corruption, how priorities among the basic services will be established, etc. To conclude, we find that the PBS is in substance, though perhaps not in name, indeed a form of (subnational) budget support, and is likely to be severely challenged by both the institutional arrangements for project monitoring and implementation, as well as by the political dynamics and risks in Ethiopia today.
We reiterate that we find the budget support / block grant nature of the project to be inappropriate on both economic development and ethical grounds. As you are likely aware, many other voices who are distressed about how political violence will first and foremost contribute to Ethiopia’s deprived population languishing in a poverty trap, have called for a discontinuation of all aid to the government and to limiting financial support to humanitarian assistance. They are calling on donors to stop placing allied despots above the people who suffer under their reign. Most recently, Professor Theodore Vestal, longtime scholar of Ethiopia, stated: “Let us make this our mission: To use the full panoply of weapons in the democratic arsenal to bring pressure to bear on democratic donor nations to live up to their aspirations and to withhold all but humanitarian assistance to Ethiopia until human rights abuses and glaring deficits of democracy have been meaningfully addressed by the FDRE.” Former Ambassador and US assistant secretary of state for Africa Herman Cohen stated : “The international community should understand that economic development in Ethiopia will be impossible as long as you have this political stalemate and repressive form of governance. There is no reason to continue economic development assistance until this is corrected. Ethiopia should remain an object of humanitarian assistance until there is internal change.”
We are calling for much weaker conditions of changing the status quo of the aid loan that you designed: Not for the unconditional stop of all development aid, but merely for the halt to providing money directly into government coffers, whether we are talking about federal, regional, or wereda governments — all of which are contolled by the same political party machinery responsible for the ruthless crackdown on Ethiopia’s rural and urban population.
On process, we believe that it is positive that the World Bank has recognised the benefits of consulting with stakeholders on significant and contested loans like the PBS. Reviewing the Bank country site’s [Ethiomedia: please create a link to www.worldbank.org/et ] information on these consultations, we were, however, especially disappointed that the civil society group in Ethiopia you consulted with did not include key institutions that would have been especially well equipped and would have the requisite skills and knowledge to discuss the political context of the PBS (e.g. the Ethiopian Human Rights Council) and the economic development merits of the project (e.g. Ethiopian Economic Policy Research Institute). The political consultations with opposition parties did not take place with the elected leadership of CUD, collectively held in prison by the ruling party, but rather with one single individual who has been given chairmanship by the ruling party in the course of a fraudulent restructuring of the original CUD party. The fact that the CUD leadership is in jail has not prevented representatives of other major international agencies to consult with them; we are saddened that the Bank has not shown the stature (and the independence from the prime minister) to include the genuine, as opposed to the illegitimate, CUD leadership in consultations.
Conspicuous by its absence from the Bank country site on PBS consultations is the consultation with intellectuals and activist leaders in the Ethiopian community abroad which took place a few months ago. We learned from some who were present then that there was a strong call not to provide aid to the government at this time of instability at which the aid is highly likely to be misused. We understand there will be one more consultation on Tuesday, 23 May, in Washington DC. This, however, is two days before the loan goes to the Bank Board of Directors, which happens on 25 May. As traditionally the board approves nearly every loan that comes before it, we regret that input at this time may not have any chance to be even potentially considered. Nevertheless, we contacted you to be given the opportunity to attend the meeting, and express our concerns and thoughts about the PBS, given that we have been very active in raising awareness on the role of aid in Ethiopia and specifically on the PBS. We still hope to hear from you before the meeting.
Respectfully,
Ethiopian American Civic Advocacy --------
-------------Is the PBS a form of budget support or not?
What are the hopes that the aid money going to regional and wereda budgets are not blank cheques?
Getting (monitoring) institutions right? Getting incentives right? The problems of monitoring oneself
The political dynamics are not promising for the PBS’s success in getting services to the poor
How does one empower the rural poor to demand services from the government, in a time like this?
Component 2: Health subprogramme: $67 million, or 8.1%
Component 3: Capacity building for the local budget process: $7.2 million, or 0.9%
Component 4: “Strengthening citizen’s voice”: $6 million, or 0.7%.
On process: Engaging with civil society on the PBS
eacadvocacy@gmail.com
1 Again, here there is a difference between the two PIDs on the question whether the aid block grants go to regional and wereda governments, or only to regional governments (which then pass on resources to the weredas through the standard intergovernmental transfer system): The February PID says the PBS constitutes a “funding of the block grant to regional governments who in turn deliver basic services or make transfers to local governments”. The May PID says the PBS will provide “resources to regions and local authorities based on agreed plans for delivery of basic services”.
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