I am pleased to make this statement on behalf of Australia, Canada, Sweden, the United Kingdom and my own country Norway.
This evaluation shows that UNDP’s knowledge on how to engage in sector budget support and pooled funds has improved, through the pilot programs in Nepal and Burkina Faso. We are supportive of allowing the inclusion of this mechanism among the development tools available to UNDP.
Two years ago we shared some views on UNDP’s involvement in this modality. They are still relevant:
Firstly, this modality requires an even more systematic and active risk management, with particular attention to factors that may contribute to funds being diverted from the intended purposes and other risks of fundability. It underscores the need for clear guidelines, which should be regularly updated, as UNDP’s knowledge base grows.
Secondly, as stated in the OECD guidelines on budget support, such mechanisms should combine the two elements of offering a financial instrument and the provision of capacity development assistance. The primary role of UNDP in sector budget support and pooled funding should be to support national capacity building and policy development.
Thirdly, in 2015 we stated that it should not become a common practice of UNDP to channel its scarce regular resources to sector budget support. The mechanism should be used exceptionally, on a small scale, and be based on a clearly expressed demand from the partner country.
In this regard we find the updated guidelines feasible. They clearly defines what UNDP can and cannot get involved with, and outlines four defined roles UNDP can play related to direct budget support. It is stated explicitly that UNDP cannot contribute to general budget support.
We take note of the management response to the evaluation of UNDP engagement of the Direct Budget Support in Burkina Faso, and appreciate how this specifies concrete actions with deadlines.
Finally, we recognize that the 2030 Agenda requires flexible responses, and innovative funding arrangements. We believe the approach echoes with the Busan principles and commitments expressed in the High-level meeting of the Global Partnership for Development Effectiveness in Nairobi in December 2016.
In this context, it appears feasible to maintain the possibility for UNDP to engage in sector budget support and pooled funds.