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Publications, 2/10/2005

Ex-Ante Evaluation of Finnish Development Cooperation in the Mekong Region

pdfEx-Ante Evaluation of Finnish Development Cooperation in the Mekong Region (PDF, 2,46 MB)

REPORT 2005:1
ISBN 955-742-478-9, ISSN 1235-7618

EXECUTIVE SUMMARY

Finland's new development policy recognizes the Mekong Region as one of the regions where long term development cooperation will be continued. In order to implement this political decision the Ministry for Foreign Affairs (MFA) commissioned the ex-ante evaluation to look 5 to 10 years forward and make recommendations for the future cooperation in the Mekong River region. Cooperation will focus on Cambodia, Laos, Thailand and Vietnam. China and Myanmar also belong to the group of the six Mekong countries but are not considered as primary Finnish cooperation partners in this context.

In accordance with the new development policy this ex-ante evaluation takes a broad view and considers potential cooperation from the perspective of foreign policy coherence, not only as continued development cooperation. The evaluation is guided by the current development priorities, plans and policies of the Mekong River Commission (MRC), the Asian Development Bank (ADB) and other donors and the riparian countries. The evaluation also takes into account the experiences of past Finnish cooperation in the region and assesses potential cooperating partners in the region. On the basis of this, the evaluation proposes action through which the MFA could formulate a strategic approach to regional cooperation in the Mekong region. The proposals take into account the requirement of coherence, coordination and complementarity of the Finnish activities.

In carrying out the ex-ante evaluation the team was further guided by key development policy issues and the potential value added of Finnish cooperation. The focus in development is poverty reduction. Success is largely measured by the achievement of the Millennium Development Goals and the evaluation report contains an assessment to this end. Respect for human rights, democracy, promotion of gender equality, good governance, and sound economic management are also taken as essential cornerstones of development. The Helsinki Process on Globalization and Democracy has been adopted as one of the priority areas in the new Finnish development policy. A major part of the technical issues considered are related to environmental and water sectors of the region. They have been identified as major resources in turning poverty to a prosperous future around the large river and its basin.

Regional development cooperation in the region started in 1957 with the establishment of the Mekong Committee, which has evolved into the MRC. The MRC agreement was signed in 1995 and areas of cooperation cover all fields of sustainable development, utilization, management and conservation of the water and related resources of the Mekong River basin including, but not limited to irrigation, hydro-power, navigation, flood control, fisheries, timber floating, recreation and tourism, in a manner to optimize the multiple-use and mutual benefits of all riparian countries and to minimize the harmful effects that might result from natural occurrences and man-made activities.

ADB is financially the strongest development agency in the Mekong Region. Today regional cooperation is a core component of ADB's overarching goal to reduce poverty. ADB played the role of facilitator for the GMS Programme, which started in 1992 and covers the six countries bordering the Mekong River. It has the objective of promoting economic and social development among the countries by strengthening economic linkages. The main element of the Programme is to build five economic corridors connecting the countries east-west and north-south and to have an interconnecting telecommunications and power network covering the whole region.

In assessing the development actors the evaluation concludes that MRC and ADB remain the most potential development partners for Finland in the region. MRC as the weaker agency of the two needs more support. Other actors such as the World Bank (WB), IOM, ESCAP, MPDF and perhaps IUCN could play a minor role as partners. The WB is planning to activate its role in the region and is currently preparing its new Mekong Water Resources Assistance Strategy (MWRAS) for the Mekong basin. The intention is that the WB's strategy will also feed into MRC's upcoming new strategy. This is a process where the evaluation recommends Finland to be an active partner.

The ex-ante evaluation concludes that while the results from cooperation with MRC and ADB has generally been satisfactory Finland's possibilities to influence project design has been restricted by limited Finnish administrative resources. Having an impact particularly on ADB's projects and programmes would require early and active involvement from the Finnish side. Furthermore, co-financing of technical assistance with ADB is untied and has occasionally led to unsatisfactory performance of consultants from a third country.

The evaluation recommends that Finland continues cooperation with both MRC and ADB. In doing so Finland should strongly advocate a clearer division of labour between the two agencies, which could be a basis for much better and closer cooperation between them and for avoiding unnecessary competition. MRC's potential is in its regulatory role, as a center of excellence on data and information, and as a development agency in identifying development needs and participating in pre-investment studies. ADB's role as a development financing institution is clear and strong. ADB has not been strong when expanding its activities to large environmental and other studies in the region.

The ex-ante evaluation has undertaken a general study of the region from a political, economic, social and developmental point of view. A more detailed study was carried out on national development plans and the achievement of MDGs by the countries. In short, the analyses strongly indicate that there is a continuing need for encouraging regional cooperation, as well as supporting and enabling the smaller countries to benefit from such regional cooperation. Encouraging cooperation between the countries is a political process where Finland should consider various ways of acting. The important reforms the countries are facing require support, and there is a true need for development cooperation. On the economic side, while ADB is supporting increased links through the economic corridors, Finland could have a pivotal role in increasing economic links through improved navigation along the river. Finnish regional cooperation is well justified.

In accordance with the ToR sectors, themes or areas of potential cooperation in the future are identified in this ex-ante evaluation. During the evaluation it appeared that there were different expectations within the MFA with perhaps a stronger emphasis being on a new and innovative approach. It was clear that this evaluation should not be an identification mission, where a list of potential projects would be presented for Finnish support. In responding to the aforesaid the evaluation takes into account that Finland aims at focusing cooperation in long-term cooperation countries to three main sectors. Consequently the evaluation has assessed cooperation possibilities through three broader but strategic clusters:

Governance
Livelihood
Transport and communication.

The governance cluster is discussing regional governance mechanisms. The assessment indicates that for a variety of reasons, not least the common resources of the Mekong basin, there is a need for better regional governance mechanisms. Any meaningful governance mechanism has to emerge from the regional context. However, Finland could have a strong advocacy and supportive role in that direction. The Helsinki Process is one of the avenues proposed in the governance cluster. Supporting MRC to develop a stronger governance role is another recommended option. The institutional mechanisms of ADB's GMS should also be discussed as an option and ASEAN definitely should be consulted. In addition, there are other governance issues with a regional effect that Finland could support such as harmonization of navigational rules and of water legislation in the countries.

The livelihood cluster covers areas which would improve people's chances to 'make a living' and increase their standard of living. As there are different coping strategies this cluster recommends Finland to support a variety of activities. There is still need to increase knowledge of the resources and functioning of the eco-system of the basin and modeling of various development scenarios. Based on previous success, this is an area where Finland should continue her support. Other initiatives range from supporting increased use of non timber forest products to supporting the private sector and improving access of fishermen and farmers to the market along the river. An important proposal is to support through ADB's Phnom Penh Plans the establishment of a regional research center on ethnic minorities who generally are among the poorest and most vulnerable populations in the region.

Transport and communication cluster has been clearly identified as an important factor of economic development of the Mekong countries. Finland has supported the mapping of the river and its navigational routes. It would only be natural that Finland continues her support in order to make the increasing navigation on the river more orderly and safe. In addition to river patrolling and increased rescue preparedness Finland could support the development of vessel inspection rules and systems. Also support to establishing private small scale boat and motor repair shops could be considered. Developing a communications system along the river, between boats and harbours and between various harbours and authorities is an essential requirement for the development of the river transport and communications system.

A financial frame for the future cooperation is needed to have a basis for a strategic approach, with a three year commitment authority, as is the case with long-term partner countries. The annual disbursements are recommended to be in the range of 10 million euros.

A strategic approach would also require additional human resources to manage the regional programme. In accordance with the trend to strengthen field offices (Embassies) in the long-term partner countries the evaluation recommends strengthened presence in the region by establishing an office for regional cooperation in Vientiane where the headquarters of MRC is located. The 'field manager' of the regional cooperation, although located in Vientiane, should cover all the projects, including those financed through the ADB. The new development policy indicates that regional cooperation will be considered from a comprehensive point of view and a dialogue is foreseen with the institutions (MRC, ADB, ESCAP etc.) and the countries in the region. Therefore, the field manager to be nominated and stationed in Vientiane should have sufficiently wide experience, including that of development cooperation.

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