MENA Transition FundEleventh Steering Committee Meeting

December 10, 2018 (Paris, France)

Meeting Minutes

Key Decisions

1) Before the Steering Committee (SC) meeting took place, TCs cancelled, inter alia, the following projects (and associated amounts): Tunisia AfDB Work Readiness Programme ($2.56 million) Tunisia AfDB-OECD Enhancing Domestic Resource Mobilization through Effective Tax System

Design and Improved Transparency and International Cooperation ($2.4 million) The Regional (Egypt, Morocco, Tunisia) EIB Logismed Soft Project (partial cancellation of

funds amounting to $1.67 million)

2) On September 26, 2018, the SC virtually approved a Tunisia AfDB Public Employment Services Project for $2.56 million in lieu of the cancelled Tunisia AfDB Work Readiness Programme.

3) The available funds in the Trust Fund as of December 10, 2018, including from cancellations, were committed to projects submitted for additional financing in the final round of funding, as well as other activities as recommended by the Full-Scale Evaluation (FSE) of the Fund.

4) Funds available on December 10, 2018 amounted to $12.1 million, including $2.7 million that was expected to be refunded by the AfDB1, and investment income. The SC approved the following projects for additional financing in the amounts set forth below, to be funded with available funds, for a total of $9.8 million: Egypt OECD-WB Equal Access and Simplified Environment for Enhancing Investment Climate

for $2.48 million Jordan IFC Integrated Inspection Management System for $0.35 million (also extended to

August 30, 2021) Jordan OECD Open Government Partnership National Action Plan for $0.3 million Libya OECD SME Development Strategy for $0.64 million Libya WB Health Sector Support ASA Program for $1.3 million Morocco WB Accessing Overseas Employment for $1.9 million Morocco WB New Governance Framework for $1.09 million Tunisia WB Broadband Internet and ICT for Education Acceleration Project for $0.5 million Tunisia OECD Supporting the Design and Implementation of Economic and Social Reforms

for $0.75 million Regional Youth in Public Life for $0.5 million (equally split between Jordan, Morocco and

Tunisia)

1 The refund of $2.7 million from AfDB was received by the Trustee on December 18, 2018.

5) The Jordan OECD Promoting Women’s Participation in Parliaments project also submitted a request for additional financing of $0.2 million. Although the SC underlined the relevance of the project, there was no consensus on the request. The request was therefore not approved: (i) as the closing date of the project had lapsed and would have required a waiver from the SC to re-open the project; and (ii) in fairness to other TCs who were not able to submit similar requests given the approaching End Approval Date of December 11, 2018.

6) The SC agreed to allocate $2 million from the available funds to finance project implementation completion reports for existing projects, in line with the recommendation in the FSE. ISAs may submit requests to the Coordination Unit (CU) in an amount not to exceed $40,000 for each project completion report, and such requests will be reviewed and considered on a ‘first come, first serve’ basis. Upon notification from the CU, the Trustee will commit the requested amounts to respective ISAs, subject to funds being then available in the Trust Fund. Projects for which the SC has approved funding of at least $3 million are eligible to request funding for this purpose.

7) The SC also allocated $0.2 million for a thematic study to learn from the Fund’s experiences and lessons. These funds will be supplemental to the administrative budget already approved by the SC. The study will be commissioned in January 2021 for completion by the end of the calendar year (and the Fund’s End Transfer Date). The aim is capture as many lessons as possible from projects, most of which are expected to have closed or be largely implemented by 2021.

8) Project progress reports will be updated annually (rather than bi-annually) starting June 2019 for the remainder of the Fund’s life.

9) Future SC meetings or discussions, should that be required, will take place virtually and be moderated by the CU (unless otherwise decided by the SC).

Summary of Meeting

1) Remarks by Co-Chairs

The eleventh and final meeting of the Transition Fund’s Steering Committee (SC) took place in Paris, France on December 10, 2018. A list of meeting participants is presented in Annex 1.

The Canadian and Jordanian co-Chairs welcomed members of the SC and thanked the OECD for hosting the meeting. They emphasized the important role the Fund has played in transition countries, resulting in several successes across various fronts. A read out of the remarks is available in Annex 2.

At the end of these remarks, an introduction of the agenda by the Acting Executive Secretary, Thomas Djurhuus followed (see Annex 3).

2) Full-Scale Evaluation of the Transition Fund

ECORYS was competitively selected to carry out the FSE of the Fund and presented key conclusions and recommendations as follows (see Annex 4):

Overall, the FSE concluded that the Fund was a success story and already had demonstrable impact, despite the limited capitalization amount, i.e. it punched well beyond its financial weight. Specifically, the FSE concluded the following:

o Leverage and effectiveness: MENATF projects are highly effective and the Fund has significant leverage and catalytic effects through its choice of intervention modalities, implementation agencies and partnerships

o Country ownership and efficiency: Delegating project implementation to ACTs positively contributed to country ownership and reforms. Meanwhile, project implementation by ISAs positively contributed to administrative processes, in particular procurement for technical assistance, but reduced country ownership and limited reform impacts.

o Political leadership: The lack of political leadership of the Deauville Partnership resulted in the Fund’s strategic ambiguity, a lack of identity and limited possibilities for fundraising.

o Relevance, complementarity and responsiveness: The Fund proved to be flexible and responsive both to external and internal challenges but could have benefitted from more institutionalized strategic guidance.

o Sustainability of reforms: The Fund and its projects could have developed a better understanding and formulation of transition pathways in ACTs. This could potentially hamper the Fund’s sustainable impact on reforms.

o Partnerships, regional synergies and learning: The Fund’s objective to foster partnerships was achieved, but to a limited extent. As a result, learning and regional synergy effects across MENATF projects could have been stronger.

o Governance: The organizational arrangements in place resulted in effective governance of the Fund

o Project quality-at-entry: Despite well-developed quality-at-entry procedures at ISAs and an established review process through the Roster of Experts in the Fund, the quality of project design was at times sub-optimal, particularly during the Fund’s early phase.

In terms of recommendations, the FSE put forward three recommendations for SC consideration

as follows, two of which were adopted (see decisions #6 and #7 above):o Completion reports: Foster learning through quality implementation completion reports

and impact assessmentso Thematic study: Carry out thematic syntheses across projects of interest for future fundso Capacity building: Mainstream and scale-up through continued capacity building,

linkages with complementary activities and learning events

3) Update by the Trustee

The Trustee presented the Fund’s current funding status (see Annex 5).

Total donor pledges received amounted to $252.4 million.

Total cash contributions received from donors amounted to $242.4 million, plus approximately $5.4 million accumulated in investment income.

Funding decisions totaling $235.7 million were made before the SC meeting for projects and administrative budgets (net of all cancellations).

Cash available at the time of the SC meeting, net of reserved funds for previously approved projects, was $12.1 million (with $2.7 million contingent upon refund from the AfDB).

4) CU Presentation

The Acting Executive Secretary gave a brief presentation highlighting key trends in portfolio progress and the overall status of the Fund as follows (also see Annex 6):

Progress towards objectives has improved significantly. About 92 percent of the portfolio is rated in the satisfactory range. This has also been confirmed by the FSE.

Overall disbursements have increased to 52 percent or approximately $124 million.

The Acting Executive Secretary indicated that the End Approval Date is December 11, 2018, after which no new projects are expected to be approved, but implementation support will continue through December 11, 2021, for ongoing projects. In terms of next steps, the following was noted:

Unless otherwise decided by the SC, no new funds will be transferred to ISAs after the End Transfer Date of December 11, 2021 – all projects are expected to close before this date.

The CU will continue to provide progress reports annually rather than bi-annually. Project cancellations may result in additional funds materializing, which the SC can no longer

allocate. Therefore, following the final closing of the Trust Fund, a letter will be sent by the Trustee to each donor, providing the amount to be refunded, as well as options for the donor, to either: (a) accept a refund in cash, (b) instruct the trustee to transfer the funds to a different trust fund, or (c) instruct the trustee to transfer the funds to a “Donor Balance Account”, pending further instructions.

Finally, day-to-day project-related operations will continue including closing date extensions and restructurings until December 11, 2021 when all projects are expected to have closed.

5) Comments from the IFI Coordination Platform Secretariat

The IFI Coordination Platform (IFI CP) highlighted the strong incentives for ISAs to work together within the framework of the MENA TF to coordinate actions, avoid duplications and enhance the impact of projects in the ground. The IFI CP is a coordination platform for IFI activities coupled with some high-level strategic dialogue concerning the IFI’s actions in the region. Through the IFI CP, some ISAs designed joint projects, but the IFI CP acted more as a soft coordination mechanism between IFIs. . It noted the importance of capitalizing on the outcomes of projects and pilots, and of the Transition Fund generally adding that the fruitful cooperation among ACTs, G7 partners and IFIs should be prolonged. It also reminded SC members of the G7 meeting that will take place on December 11, 2018, to determine the outcome of the Deauville Partnership and the outlook of the IFI CP; which could take the form of high-level regional dialogue. (see Annex 7 for full remarks).

6) Eleventh and Final Call Approvals

Eleven projects totaling $10 million were submitted for SC consideration. The list of projects submitted with a breakdown of funds requested and allocated is provided in Annex 8. Below is a list of projects approved and not approved:

The following projects were fully approved:o Egypt OECD-WB Equal Access and Simplified Environment for Enhancing Investment

Climate for $2.48 million o Jordan IFC Integrated Inspection Management System for $0.35 milliono Jordan OECD Open Government Partnership National Action Plan for $0.3 million o Libya OECD SME Development Strategy for $0.64 million o Libya WB Health Sector Support ASA Program for $1.3 million o Morocco WB Accessing Overseas Employment for $1.9 million o Morocco WB New Governance Framework for $1.09 million o Tunisia WB Broadband Internet and ICT for Education Acceleration Project for $0.5

million o Tunisia OECD Supporting the Design and Implementation of Economic and Social

Reforms for $0.75 million o Regional Youth in Public Life for $0.5 million (equally split between Jordan, Morocco and

Tunisia)

The Jordan OECD Promoting Women’s Participation in Parliaments project also submitted a request for additional financing of $0.2 million. Although the SC underlined the relevance of the project, there was no consensus on the request. The request was therefore not approved: (i) as the closing date of the project had lapsed and would have required a waiver from the SC to re-open the project; and (ii) in fairness to other TCs who were not able to submit similar requests given the approaching End Approval Date of December 11, 2018.

7) Other Items and Closing Remarks

The co-Chairs thanked the SC members for joining the meeting (see Annex 9 for closing remarks). At the end of the meeting, the WB showcased a short video on the experience of the Morocco Overseas Employment Project (Annex 10), while the IsDB gave a presentation on the Yemen BRAVE project (Annex 11).

Annex 1: List of Meeting Participants

Country/IFI Participants

CANADA Rachna MishraMarie-Claude Gagnon

FRANCE Morgane Bastardie Florent-Babacar Dieng

GERMANY Thomas Piesch ITALY Fabrizio NavaJAPAN Hiroto SUGANO

JORDANZeina Toukan Asma BishmafMarwan Refai

KUWAIT Lulwa Fuad AlBader LIBYA Abubaker Jaffal MOROCCO Khalid KENSIQATAR Mohammed Abu-KhadijaRUSSIA Kirill Bogomolov

SAUDI ARABIAFahd Al-Nowaiser Turkey Al-Turkey

TUNISIA Karim Bououni UK Will WhiteUS Anthony Marcus

AfDBYacin FalYasmine Eita Yasser Ahmad

EIB Giovanni CamisaIFC Raffaele Boldracchi

IsDBAmadou DialloBakkar Ali Maasher

OECD Nejla SeulaGuillaume Lecarosdecossio

OFID Mahmoud KheneWORLD BANK Renaud SeligmannIFI Coordination Platform Nicolas PinaudTrustee Darius Stangu

Coordination UnitThomas DjurhuusHayat Al-HaraziSuzanne Parris

European Union Alessia SquarcellaOdoardo Como

Annex 2: Welcome and Opening Remarks

Canadian Co-Chair Remarks

Ladies and Gentlemen,

It is a great pleasure for me, along with my co-chair from Jordan, to welcome you all to this last Steering Committee meeting. I would like to express my sincere appreciation to the OECD for generously hosting the meeting in Paris.

At the outset, let me underline that providing support – both through development funding and politically - to countries in the Middle East and North Africa region remains important given the multitude of challenges the region continues to face. I would also like to underline the progress that has been achieved over the last several years in the region, including collaboration on efforts related to promoting global peace and security, and ensuring sustainable development.

While the Deauville Partnership has now been officially concluded, it has provided a starting point for G7 partners, Arab Countries in transition, regional stakeholders and International Financial Institutions, to build upon and further promote sustainable and inclusive growth.

Through our collective efforts, the Deauville Partnership has resulted in a success on a number of fronts of which we can be proud - including the promotion of economic stabilization, job creation – including for women and youth, strengthening governance, promoting increased trade and investment in the region, and fostering economic and social development.

The main purpose of today’s Steering Committee is to understand the outcomes of the final evaluation of the Transition Fund, assess and deliberate on new projects presented by ACTs and Implementation Support Agencies, and discuss possible future allocations of funds to projects after today.

Throughout this Steering Committee, we should seek final funding decisions on proposals that will achieve broad and tangible results for ACTs, and that will leave a strong foundation for future efforts to build upon.

I look forward to a fruitful meeting,

Jordanian Co-Chair Remarks

Ladies and Gentlemen,

Welcome to the Final Steering Committee Meeting. I would like to extend appreciation to OECD for hosting this meeting. The Transition Fund was one of concrete outcomes of Deauville Partnerships to discuss priorities and challenges and to review reforms through support of the Transition Fund. To date, 86 projects have been funded with close to 240 million USD allocated through the G7 and regional partners.

The Transition Fund has been instrumental in advancing reforms in critical areas for the Region after the Arab Spring. This includes reforms in the areas such as targeting women for gender inclusion, decentralization, doing business reform, stabilization, etc. We have 11 projects submitted for additional funding for approval and these top-up funding requests including Jordan’s requests.

The Deauville Partnership came together in response to the Arab Spring and to support the Region, yet the Region is still facing challenges such as instability, low economic growth, unemployment. We look forward to the discussion on the Full-Scale Evaluation of the MENA Transition Fund and to the discussion on next steps. Thanks to the Coordination Unit for their efforts over the past 6 years, putting together all the meetings, reviewing requests and managing the Transition Fund. Would like to thank Hayat for her support extended over the past 6 years.

Annex 3: Agenda

MENA Transition Fund Final Steering Committee MeetingDecember 10th, 2018 (Paris, France)

Welcome Coffee 8:30 am – 9:00 am

Session 9:00 am – 10:30 am

1. Welcome by Co-Chairs (Canada and Jordan)

2. Introduction and adoption of the agenda (Executive Secretary)

3. Presentation by ECORYS on the Full-Scale Evaluation of the MENA Transition Fund Q&A session

Coffee 10:30 am – 10:45 am

Session 10:45 am – 12:00 pm 4. Update by the Trustee (Trustee)

5. Update by Coordination Unit (Coordination Unit)

6. Comments on the operation of the Transition Fund to date (IFI Coordination Platform Secretariat, on behalf of ISAs)

7. Presentation of additional financing project proposals by transition countries (with any needed information from ISAs) Q&A, Discussion of proposals and Assessment rounds

Session 1:00 pm – 3:30 pm 8. Presentation of additional financing project proposals by transition countries (with any

needed information from ISAs) Q&A, Discussion of proposals and Assessment rounds

Lunch 12:00 pm – 1:00 pm

Coffee 3:30 pm – 3:45 pmSession 3:45 pm – 5:00 pm

9. Wrap-up and final funding decision on proposals

10. Any other business including frequency of progress reporting, format of SC discussions going forward, absorption of funds after the End Approval Date, etc.

11. Recap of decisions made (Executive Secretary)

12. Conclusion by Co-Chairs

~ ~ Meeting Ends ~ ~

A reception will be hosted after the meeting until 6:00 pm in the Roger Ockrent room

Annex 4: ECORYS Presentation on Full Scale Evaluation

Annex 5: Trustee Financial Presentation

Annex 6: Coordination Unit Update

Annex 7: IFI Coordination Platform Remarks

Emphasize that we, the ISAs, believe that the MENA TF projects have been very useful. Despite the fact that:

o Their amounts were limited; and sometime there was perhaps a feeling that the reporting, the procedures, and related aspects were somewhat heavy and complex compared to the amounts at stake;

o All of us, also faced a number of challenges in the delivery of those projects, be it because:

Of the circumstances in which they had to be delivered: political instability, insecurity, lack of stable interlocutors, etc. – that was the case in particular with our friends of Libya and Yemen;

Or of the fact (which on the other hand brought in important value added) that several of those projects brought together a variety of stakeholders – governments, administrations, private sector organisations, CSOs, etc. - which are not necessarily used to talking to each other.

But, we think those projects were useful: o They were demand driven, carefully negotiated with the authorities, at various levels

and in different parts of the government, and thus countries had a real ownership –we believe - on projects that were really addressing critical needs at the domestic level;

o They involved a wide spectrum of stakeholders, and in this regard, truly contributed to improve the economic governance of countries, and perhaps enhance mechanisms of consultation, transparency, leading to a more inclusive process of policymaking;

o The amount of funds destined to each project was certainly limited, but they were nonetheless well targeted, catalytic and really responding to needs formulated by countries; and therefore contributing to unlock specific obstacles to growth or to foster the improvement in policymaking;

o They also constituted an incentive for IFIs to work for countries as I said, but also work together, design joint projects, and make the most of their synergies and complementarities. This was obvious for an Organisation like the OECD who has a strong expertise on structural and governance issues and who found it very useful to partner with other organisations which have an intimate knowledge of the countries through their presence on the ground.

Let me conclude that it would be a pity, in our humble view [consensus by IFI coordination platform members], not to capitalise on the progress and outcomes of those projects and of this process more generally: Even if there is a termination of the Transition Fund activities, we shall figure out how this fruitful cooperation among ACTs, G7 partners and IFIs can be prolonged;

It could perhaps be mainstreamed in the context of the G7 activities, for instance in the FASS track of the G7, and build on the Compact on Economic Governance, which was designed with the kind support and sponsoring of our German colleagues – the Compact could indeed continue to inform a collective dialogue in the G7 but also at the country level, between ACTs, G7 partners and the IFIs on reform priorities and support to the latter. The IFI coordination platform could continue to inform this dialogue too.

But this is merely some food for thought, for your kind consideration. Thank you for the opportunity.

Annex 8: Project Funding Requested and Allocated

Country # Project Name ISA Direct Cost Indirect Cost ISA Direct Cost Indirect Cost

Egypt 1 Enhancing the Investment Climate in Egypt OECD 468,500 31,500 WB 1,746,000 231,600

Jordan

1 Integrated Inspection Management System IFC 297,000 53,000

2 Jordan’s Open Government Partnership National Action Plan OECD 278,100 21,900

3 Promoting women’s participation in parliaments OECD 176,130 13,870

4 Youth in Public Life (Jordan activities) OECD 153,882 12,118

Libya1 SME Development Strategy OECD 602,190 40,487

2 Health Sector Support ASA Program WB 1,300,000 14,300

Morocco1 Accessing Overseas Employment WB 1,700,000 190,600

2 New Governance Framework WB 999,000 87,200

3 Youth in Public Life (Morocco activities) OECD 153,882 12,118

Tunisia1 Broadband Internet and ICT for Education Acceleration

Project WB 500,000 5,500

2 Supporting the Design and Implementation of Economic and Social Reforms OECD 703,687 47,313

3 Youth in Public Life (Tunisia activities) OECD 153,882 12,118

**Project in Red was not approved, and funding not allocated

Annex 9: Closing Remarks

Canadian Co-Chair Closing Remarks

Thank you once again for joining us here today for what has proved to be a fruitful discussion. As I mentioned earlier today, the Deauville Partnership has helped achieve important progress in recipient countries since the creation of the Transition Fund in December 2012 - notably in improving governance, fostering sustainable and inclusive economic growth, promoting job creation, regional competitiveness and integration, as well as important business reforms. We have seen that coordination and technical assistance between donors, IFIs, ISAs, and recipient countries has been fundamental in ensuring project success. The question of continued coordination and provision of support to Middle East and North African countries will be discussed by G7 countries tomorrow, to ensure that our future efforts continue to help advance important reforms and transition in the MENA region. The project proposals discussed here today will undoubtedly achieve broad and tangible results for recipient countries - and provide a foundation on which to build future successes. Over the course of today we discussed a number of recommendations, including: ensuring regular reporting on project implementation; ensuring that our efforts are supporting sustainable practices and capacity building, and; using any remaining funds to evaluate lessons learned. We also heard that the fragility of recipient countries needs to be taken into consideration at the outset of project implementation, in order to help mitigate and manage risks. Before we close this final Transition Fund Steering Committee, I would like to extend a sincere thanks to the Coordination Unit, the World Bank and the OECD for supporting today's meeting, as well as for their efforts over the last several years. I would also like to thank my co-chair from Jordan. Members of the Steering Committee are now invited to attend a reception next door to celebrate the conclusion of the Steering Committee's Transition Fund meeting.

Jordanian Co-Chair Closing Remarks

Thank you for your support, spirit and partnership, specifically to the World Bank as Coordination Unit and to the OECD as host. As a country in transition and behalf of the other countries in transition, let me express our sincere appreciation. We can note many success stories and many policy reforms underway.

Annex 10: Morocco Overseas Employment Project

Presentation sent as a separate attachment due to size.

Annex 11: IsDB Presentation on Yemen BRAVE Project

Presentation sent as a separate attachment due to size.