5. Frequently Asked Questions
This section describes pending issues and seeks to provide preliminary answers to some of the outstanding questions regarding the implementation of the EIF.
1. What is the Integrated Framework?
The Integrated Framework (IF) initiative was launched in 1997 by six agencies (i.e. the IMF, ITC, UNCTAD, UNDP, the World Bank and the WTO), as mandated by the first WTO Ministerial Conference held in December 1996 in Singapore. The idea behind the IF was that better coordination and pooling of resources by the agencies would support least-developed countries (LDCs) in making trade issues a national development priority and building trade capacity. After ten years of limited results, the IF is currently being reformed into the enhanced IF. The reform focuses on increasing ownership on the part of LDCs through more sophisticated in-country structures, including a national implementation unit. A Geneva-based Secretariat will cater for capacity building needs. At the country-level, the IF translates into a four-step process: i) building awareness about trade: ii) identifying needs and responses; iii) integrating identified trade priorities into the national development strategy; and iv) implementing this plan.
2. What is the enhanced Integrated Framework?
At the Hong Kong Ministerial Conference in December 2005, WTO members recognised the “urgent need to make the Integrated Framework (IF) effective and timely” in order to “meaningfully integrate LDCs into the multilateral trading system”. To this effect, they recommended to enhance the IF and gave a deadline to do so by the end of 2006. The IF was reformed a first time in 2000, but still failed to deliver the results expected by both LDCs and the IF Agencies in terms of capacity building and coordination of the trade and development communities. The enhanced IF results from the persistent shortcomings of the IF. It puts the recipient country in the driving seat by increasing the responsibilities of a more sophisticated in-country structure, it creates an independent Secretariat, which will act as a “helpdesk” to ensure a smooth IF process, and establishes a new independent financing mechanism to absorb/ prepare for the increase in funding.
3. What are the objectives of the enhanced Integrated Framework?
In accordance with the proposal of the Development Committee of the World Bank and the IMF at their annual meeting in September 2005, an Integrated Framework (IF) Task Force was created within the WTO, to formulate Recommendations for an enhanced IF: A summary of the recommendations:
- Increased, additional and predictable financial resources to implement Action Matrices;
- Strengthened in-country capacities to manage, implement and monitor the IF process; and
- Enhanced IF governance.
The enhanced IF is expected to function as a catalyst for mobilising resources for large-scale programmes emerging from the priorities defined at the country-level, and as a mechanism for coherence and coordination in addressing trade capacity needs.
4. What are the Integrated Framework governing bodies?
To view an illustrated set-up of the governing structure of the Integrated Framework, please click here and for further detail, please consult the link below the chart.
5. What is the difference between the Integrated Framework Steering Committee and the National Steering Committee?
The Integrated Framework (IF) Steering Committee is the overall governing body of the IF. It is based in Geneva and is composed of all LDCs, IF donors and the six IF agencies. The National Steering Committee is a political authority present in each IF country. It includes high-level members of the LDC Government, as well as representatives of the civil society and the private sector. It ensures that the IF process is conducted/piloted by the recipient country itself (ownership).
6. When will the enhanced Integrated Framework be launched?
The enhanced Integrated Framework (IF) is expected to be launched in 2008, once both the Executive Director of the Executive Secretariat and the Trust Fund Manager are selected. The United Nations Office for Project Services (UNOPS) was selected on 15 April 2008. The nomination of Ms Dorothy Tembo, Zambia, as the EIF Executive Director of the future EIF Executive Secretariat was announced officially on 21 August 2008.
The official launch of the EIF will occur shortly after the establishment of the EIF Executive Secretariat on 13 October 2008.
7. Which countries are eligible for the enhanced Integrated Framework?
Assistance under the enhanced Integrated Framework (IF) will remain restricted to the least-developed countries (LDCs). Initial suggestions on extending coverage to other low-income countries did not garner support. However, the Task Force on Aid for Trade has recognised the need to support non-LDC developing countries in trade mainstreaming, needs assessment and in accessing funding for assistance projects (see FAQ for Aid for Trade).
8. Are least-developed countries (LDCs) which are in the process of graduating from their LDC status eligible for the enhanced Integrated Framework?
The Integrated Framework (IF) Board may decide to allocate funds to LDCs which are in the process of graduating from their LDC status, on an ad hoc basis and for a limited period of time. To benefit from such flexibilities, the LDCs which are concerned shall apply to Tier 1 before the end of their transitional period.
9. What activities will be funded through the enhanced Integrated Framework?
The funds available under the enhanced Integrated Framework (IF) will finance two tiers of projects, called Tier 1 and Tier 2. Tier 1 seeks to build greater in-country capacity and to promote recipient country ownership. Tier 2 provides funding for small priority projects identified in the Action Matrix, as well as project development activities, feasibility studies and seed projects.
10. What does the Tier 1 of the enhanced Integrated Framework correspond to?
Tier 1 will finance domestic capacity building, including:
11. How should a country apply for Tier 1 project funding?
The National Implementation Unit formulates the project proposal in consultation with other national bodies. It may request the assistance of Integrated Framework (IF) agencies in doing so, if needed. The project proposal must contain a short description of the project objective and strategy, as well as an estimated budget, execution modalities and background information on existing IF bodies at the national level. To view a sample project, please click here.
12. What are the funds available for Tier 1 projects?
The Integrated Framework (IF) Trust Fund will make USD 77 million available for Tier 1. Each IF country will dispose of up to USD 2 million over a maximum of five years under Tier 1. Up to USD 50’000 will be available for each LDC newcomer as “pre-DTIS support”, i.e. preparatory activities to ensure the active participation of all stakeholders in the IF process, such as awareness-raising workshops and designation of the IF national bodies. LDCs will dispose of a maximum of USD 400’000 to prepare their first DTIS, and a further USD 200’000 corresponding to two updates of the DTIS. In addition, support to national implementation arrangements is foreseen, with a maximum of USD 300’000 per year.
13. What is the process for project approval under Tier 1?
Projects under Tier 1 will be subject to a first appraisal by the Executive Secretariat of the IF and a fiduciary appraisal by the Trust Fund Manager. This process could include a fact-finding mission in the recipient country. Reports of the appraisals will then be fed to a national committee (i.e. the Tier 1 Appraisal Committee (TAC1) chaired by the focal point) for review. TAC1 will evaluate the project on the basis of the information received and will recommend it for approval. The project will finally be submitted for approval to the the IF Board after a final quality control is performed by the Executive Secretariat.
14. What does the Tier 2 of the enhanced Integrated Framework correspond to?
Tier 2 will cover activities emerging from priorities set out in the Action Matrices. It will fund project preparation, feasibility studies and small-scale projects. Tier 2 activities will include:
- assistance in complying with WTO or other trade policy commitments;
- support to countries in their WTO accession process;
- preparatory support for infrastructure and other large project implementation;
- harmonisation of Action Matrices with national development plans;
- capacity-building for the National Implementation Unit and other enhanced IF institutions;
- assistance in developing national and sectoral export strategies;
- independent implementation of small projects identified in Action Matrices in order to enhance the supply-side response of the country;
- small and medium enterprises competitiveness projects;
- strengthening of trade support institutions; and
- design of sector-wide approaches (SWAp) in priority sectors.
15. How should a country apply for Tier 2 project funding?
The National Implementation Unit formulates project proposals in consultation with other national bodies, the enhanced Integrated Framework (IF) Executive Secretariat and selected partners. The format of the proposal will be decided by the National Implementation Unit, and must specify intended beneficiaries, in addition to the elements required for Tier 1 proposals. The National Implementation Unit may request the assistance of all relevant institutions, including the IF agencies.
16. What are the funds available for Tier 2 projects?
Total budget for Tier 2 projects is estimated at approximately USD 320 million, half of which is to be funded by the Integrated Framework (IF) Trust Fund. The remainder of the budget for Tier 2 will be financed by bilateral donors. The financing ceiling is set at USD 12 million per country.
17. What is the process for project approval under Tier 2?
Tier 2 projects will be screened at the country level by a national committee (the Tier 2 Appraisal Committee) chaired by the Focal Point, and approved formally by the National Steering Committee. The Executive Secretariat of the enhanced Integrated Framework (IF) will examine their financial feasibility and obtain approval from the IF Board.
18. Are projects under Tier 1 and Tier 2 executed by the LDC government?
The preferred modality for Tier 1 projects is execution by the LDC government, through the National Implementation Unit. However, if this is not deemed to be feasible, a second option exists under Tier 1, i.e. execution by a selected Integrated Framework (IF) agency.
Similarly, Tier 2 also contains two options for execution: government or non-government execution, e.g. by a UN agency, development agency or a non-governmental organisation.
The most suitable option for a specific project under either tier is determined by the respective national appraisal committee. After approval of the project, funding will be transferred to the selected agency for implementation, which will bear overall responsibility and accountability for the project management.
19. Is there a deadline for project implementation?
The enhanced Integrated Framework (IF) funding cycle will last five years, starting in 2008. During this life span, LDCs may request at anytime funding under Tier 1. The IF Board may decide to extend the IF cycle, if enough funding is available. Each Tier 2 project proposal shall specify a tentative deadline, which should not exceed the life span of the IF initiative.
20. How much funding will be made available for the enhanced Integrated Framework?
At the Donor Conference that was held in Stockholm, Sweden, on 25 September 2007, USD 113 million were secured, which covers the two first years of operations of the EIF. Additionally, donors have signalled commitments equivalent to 70 per cent of the targeted USD 250 million over the next five years cycle (including USD 25 million roll-over from the previous IF trust fund). National “trade basket funds” will enable collection of complementary funds from in-country donors with the support of the donor facilitator. Contributions from non-resident donors and broader Aid for Trade could also be channelled through this fund.
21. How will the enhanced Integrated Framework resources be disbursed?
Enhanced Integrated Framework (IF) financing will be released in part by the IF Trust Fund and also through bilateral contributions in the case of larger Tier 2 projects. The United Nations Office for Project Services (UNOPS) was selected in April 2008 to be the Trust Fund Manager.
The IF Board will decide how much is allocated to each LDC for small-scale projects under Tier 2. Countries are encouraged to seek other sources of financing (bilateral, international organisations) for larger projects to complement limited resources available in the Trust Fund. This could be done through national trade basket funds.
22. What are the new organs in the enhanced Integrated Framework governance structure?
Three new organs will reinforce the Integrated Framework (IF) governance: the Executive Secretariat of the IF, the IF Board and the Trust Fund Manager.
23. How will the strengthened Integrated Framework governance structure help improve coherence under the enhanced Integrated Framework?
The enhanced Integrated Framework (IF) will be managed by a new Executive Secretariat, which will be independent from the IF agencies. The Secretariat will work as a “help desk” for LDCs in accessing funding under the IF. The Secretariat will receive policy guidance from the new IF Board and report on its activities to this body.
The IF Board will be in charge of the oversight of the Trust Fund management, delegate specific tasks to the Trust Fund Manager, and grant the Executive Secretariat the power to authorise disbursements for Tier 1 Projects.
The Trust Fund Manager will be granted observer status on the IF Board. The new accountability framework of the enhanced IF was approved in December 2007. Among other issues, this framework aims to clarify the accountability mechanisms between the Trust Fund Manager and the governance structures in Geneva and in the recipient country.
Details about this framework should be soon available in the new IF manual, which the Programme Implementation Unit of the IF prepared.
24. How will the enhanced Integrated Framework improve coordination at the national level?
Coordination among national stakeholders will be reinforced through several mechanisms:
Moreover, to make sure Tier 2 project implementation is transparent and to foster a continued stakeholder process, both the minutes of the Tier 2 Appraisal Committee and the annual project progress reports will be released on the website of the IF.
25. What will the National Implementation Units do?
As part of the enhancement of the Integrated Framework (IF), a newly set-up National Implementation Unit will assist the national focal point at the local level. This Unit is expected to raise awareness of the IF, strengthen coordination and address delays in project implementation at the country level. Among other tasks, the National Implementation Unit will participate in the formulation of the project proposals, and organise IF implementation meetings with local stakeholders in order to assess IF progress in the country.
26. Will the civil society and the private sector be associated to the enhanced Integrated Framework process?
Yes, at the country level. As recommended by the Integrated Framework (IF) Task Force, the Focal Point and the National Implementation Unit shall establish a permanent dialogue with the civil society and the private sector, in order to facilitate the participation of all stakeholders in the IF process.
Until now, all national stakeholders, including those at the political level, were only involved in the IF process at the validation stage, which was late to ensure country ownership. Under the enhanced IF, all stakeholders, including the private sector, will be involved from the pre-DTIS stage.
27. Why do countries need to revise their Diagnostic Trade Integration Studies?
Diagnostic Trade Integration Studies (DTIS) are elaborated on the basis of the conclusions of the Poverty Reduction Strategy Papers (PRSPs). First generations of PRSPs focused on education and health. New generations of PRSPs have introduced trade priorities in the national development strategies. As a result, in certain countries, the DTIS may need to be revised so as to include the conclusions of the most recent PRSP, and reflect progress made since the first/latest DTIS.
28. How is the enhanced Integrated Framework helping mainstream trade into national development plans?
A number of measures/incentives have been introduced in the enhanced IF to ensure trade mainstreaming. The performance of the reinforced in-country structures will be evaluated according to their record in contributing to the mainstreaming of trade into Poverty Reduction Strategy Papers (PRSPs), and the reflection of this process in the Diagnostic Trade Integration Studies (DTIS). Most importantly, the progress made in mainstreaming trade into national development plans/ PRSPs will be a criterion to determine the level of country funding.
Generally, the National Implementation Arrangements will work jointly with other stakeholders (i.e. the donor facilitator, the Executive Secretariat and IF agencies) to ensure that technical assistance projects address national trade priorities, as reflected in the DTIS. To clarify this link, proposals of Tier 2 projects must now explain how the project will contribute to mainstreaming efforts.
29. What is foreseen for monitoring and evaluation of the enhanced Integrated Framework?
The new Integrated Framework (IF) Executive Secretariat will be responsible for monitoring and evaluation of the overall IF process and of country project implementation. In addition, the IF Steering Committee will hold periodic comparative reviews to foster exchange of best practices in IF implementation at the country level. Recourse will also be made to the Creditor Reporting System (CRS) database of the OECD’s Development Assistance Committee (DAC) to record fund flows.
The Task Force also recommends the appointment of an independent auditor. More work under this item is underway within the interim Board of the IF.
30. What were the criteria for selection of the Trust Fund Manager?
Selection criteria for the Trust Fund Manager included financial expertise, a solid track record in working with governments and international agencies, and demonstrated independence to avoid conflicts of interest. Local presence in all potential recipients is not a prerequisite for selection. Nevertheless, the Trust Fund Manager should be able to contract local service providers in every country where it is not represented. The new Trust Fund Manager is the United Nations Office for Project Services (UNOPS). It is a UN agency with headquarters in Copenhagen, Denmark. It is expected that the enhanced IF activities will be carried out by the Geneva office by staff dedicated to the enhanced IF, supported by regional offices in Africa and Asia.
31. Will there be an independent auditor under the enhanced Integrated Framework?
The Board and the Executive Secretariat of the enhanced Integrated Framework (IF) will be responsible for monitoring the implementation of the programmes under the enhanced IF. On the financial side, the Trust Fund Manager will carry out an internal audit of the accounts. In addition, the Task Force recommended an independent audit. It is still uncertain whether an auditor will be hired to monitor the activities of the trust fund manager. Following the Trust Fund Manager selection in April 2008 (the United Nations Office for Project Services (UNOPS)), this issue would be clarified shortly. The Compendium describing the modus operandi of the enhanced IF will be revised in line with the rules and regulations of the Manager.
32. Why an independent Trust Fund?
Under the Integrated Framework (IF), the Trust Fund was managed by the UNDP and funded on a multi-donor basis. In addition to this, the UNDP was also involved in the preparation of the Diagnostic Trade Integration Studies (DTIS) at the country level.
The Task Force for an enhanced IF assessed that responsibilities should be clarified, and in this case separated. It further acknowledged that the current level of funding was insufficient to meet the needs of LDCs in the IF. In order to increase the level of funding, and to create the capacity at the national level for implementation of larger projects, the Task Force concluded that a multilateral trust fund would be the best available option. Such a fund would have its own financial policies, rules and audit procedures. The United Nations Office for Project Services (UNOPS) was selected on 15 April 2008 to be the Trust Fund Manager. The timetable for the operationalisation of the enhanced IF Trust Fund is in the course of preparation.
33. How does the Integrated Framework fit into Aid for Trade?
As recommended by the Aid for Trade (AFT) Task Force, AFT will be channelled through existing mechanisms. For least-developed countries (LDCs), the concrete process available to implement AFT is the IF. It provides the platform enabling LDCs to identify trade-related assistance priorities, and to present them to donors. However, the scope of projects which will be financed under AFT is broader than under the IF. This has not yet been translated into the Diagnostic Trade Integration Studies (DTIS).
In other words, the IF prepares LDCs to receive larger scale projects through AFT. Non-LDCs (in particular non-LDC International Development Association (IDA)-only countries) could set up a process similar to the IF in order to benefit from AFT.
34.
How can the gender dimension be integrated into the Enhanced Integrated Framework?
On 29 and 30 April 2008, the ITC, the WTO and the governments of the Lao People’s Democratic Republic and Zambia jointly organised a Roundtable to examine means to integrate the gender dimension into the enhanced Integrated Framework (IF). Members of the IF Interim Board as well as a number of national experts took part in the discussions. It was noted that a reference manual on gender prepared by ITC and the other organisers was being finalised. The manual aims to help LDCs, through their respective focal points, to integrate the gender issue into the Diagnostic Trade Integration Studies (DTIS) and the Action Matrices. In this view, participants discussed ways to engage women (e.g. train women on economic issues) in the consultative process of the IF. Indeed, as women are mostly employed in the informal sector, they play only a marginal role in this process which is reserved to the formal sector. Following the event, a virtual network will be set up between participants to enable them to continue the work. The IF Interim Board was provided with a list of recommendations to be discussed at a later session of the Board, including suggestions on how to incorporate the gender dimension into the DTIS. At the end of the meeting, the possibility of holding another Roundtable on the same issue was mentioned and remains to be confirmed.
35. What Happens Next?
Geneva-based Governance: The launching of the enhanced Integrated Framework (IF) will probably be postponed until fall 2008, due to delays in operationalising the new enhanced IF structure. The United Nations Office for Project Services (UNOPS) was selected on 15 April 2008 as the Trust Fund Manager. The nomination of Ms Dorothy Tembo, Zambia, as the Executive Director of the future EIF Executive Secretariat was announced officially on 21 August 2008. The IF Executive Secretariat which is housed by the WTO, was announced to be fully operational on 13 October 2008. The formal launching event of the EIF will be held in the following months. Until that date, the unit responsible for the IF within the WTO, called the Programme Implementation Unit (PIU), ensured the transition. The PIU prepared a new IF manual to inform recipient countries on the procedures of the enhanced IF, which should be made available to all shortly in its final version.
In-country governance: Until the enhanced IF is fully operational, the PIU recommends organising the National Implementation Arrangements according to the terms of reference proposed in the Compendium of working documents presented on 1 May 2007. It is also recommended that countries seek interim funding from the main donors (if needed) in order to intensify implementation of the Action Matrix.
Monitoring and Evaluation: The IF interim Board is seeking to appoint an independent auditor of the accounts of the Trust Fund. The principles of the Paris Declaration on Aid Effectiveness need to be translated into workable monitoring and evaluation processes at the in-country level.
Outreach Activities: The Executive Secretariat seeks to set up discussion spaces for all IF stakeholders on the IF web site. The aim is to create four “virtual families” (respectively the French-speaking, the English-speaking and the Portuguese-speaking communities, plus the donor facilitators). The Executive Secretariat (and prior to its establishment, the PIU) is organising a number of in-country activities to raise awareness of the enhanced IF and of the link between the IF and Aid for Trade.
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