a. Eradication of extreme poverty and hunger

b. Achievement of universal primary education

c. Promotion of gender equality and empowerment of women

d. Reduced child mortality

e. Improved maternal health

f. Combating HIV/AIDS, malaria and other diseases

g. Ensuring environmental sustainability

h. A global partnership for development

Timeframes. DFID is committed to working towards a set of internationally agreed Millennium Development Goals (MDGs) to be achieved by 2015. These are the overarching aim of our PSA. Further details of these can be found in DFID's 2000/01 Statistics on International Development, pp. 20-21.

Progress towards the achievement of the MDGs in 2015 will not be linear. Certain years may see declines or even reverses in progress due to unpredictable events, such as the spread of HIV/AIDS in sub-Saharan Africa, conflicts, natural disasters or humanitarian crises. Therefore, progress over the 3-year PSA period, whether positive or negative, may not give an accurate picture of trends of longer term progress.

To take account for this, and to ensure continuity with the previous PSA, we have kept 2000 as the baseline year for all targets (i.e. using data available in 2000). Where particular data is not available for 2000 the baseline year used is stated. This approach will allow us to measure progress over a longer period and thus present a more realistic indication of whether we are on track to meet the MDGs by 2015. All PSA outcome targets are set for 2006. Data for 2006 will for most targets be available in 2008.

For the regional targets, we have not based 2006 targets on a straight-line increase over the period 2000-2015 to achieve the MDG. Instead, we have used reliable national targets drawn where possible from Poverty Reduction Strategies, sector strategies and other plans acting as the current basis for donor and government co-operation. The advantage of this method is a closer relationship between targets that the countries we are aiming to support are focusing on and targets expressed and monitored in this PSA. However, there may not always be exact alignment between national targets and the MDGs.

In calculating regional targets we have used simple averages of figures from each key country.

Reporting on sub-targets. DFID has five PSA targets, and each is supplemented by a number of related sub-targets. We will report separately on each sub-target.

For some of the sub-targets, baseline data is only available for a sub-set of the countries which we are monitoring. In these cases, progress will be monitored by keeping this sub-set fixed so that comparisons are for a consistent set of countries over time. Data may become available for additional countries during the PSA period; this will not be included in the formal reporting but we will use this information in the commentary on the figures to give a more complete picture.

Sources. There are known problems with availability, reliability and timeliness of the data for monitoring progress on development outcomes. This is a characteristic of weak statistical systems in poor countries. We have highlighted improving data quality as a specific target in our new Service Delivery Agreement and we are working with developing countries and key international agencies to support statistical capacity building.

Where possible we take figures direct from the databases of the World Bank (for example their World Development Indicators database) or from the UN agency which has responsibility the particular indicator. These are the most comprehensive and comparable sources of data for these indicators but in most cases they rely on weak national statistical systems to provide the country-level data.

The process of data collation by international agencies sometimes adds a considerable timelag to the process, often of 2-3 years or more. This leads to a lack of up-to-date data in these sources. We therefore supplement international statistics with data obtained direct from the countries themselves (where these sources are more up-to-date and use the same definitions).

A set of indicators measuring DFID's contribution towards achieving each PSA objective is set out in the Service Delivery Agreement.

The 16 key African countries chosen for the PSA are Ethiopia, Democratic Republic of Congo, Ghana, Kenya, Malawi, Mozambique, Nigeria, Rwanda, Sierra Leone, South Africa, Lesotho, Sudan, Tanzania, Uganda, Zambia, Zimbabwe. In 2000-01 they received 91% of total DFID spend in Africa. For monitoring purposes, these 16 countries will remain a fixed group over the PSA period

• A sustainable reduction in the proportion of people living in poverty from 48% across the entire region;

"Sustainable" means a downward trend, rather than a reduction in just one year.

The income poverty MDG to which this target relates aims to halve the proportion of people living below a poverty line of $1 per day between 1990 and 2015. The $-a-day poverty line is defined in terms of per capita consumption. Dollars are measured in purchasing power parity (PPP) terms. The US Dollar (or other currencies) will buy more in some countries than others once it has been converted into the local currency. Thus it is desirable to use an alternative exchange rate, so that the dollar would have the same purchasing power everywhere. The PPP exchange rate measures the relative purchasing power of different currencies over equivalent goods and services in their respective domestic markets

Issues
According to the World Bank's Global Economic Prospects 2002 the incidence of poverty in Africa (using the $ a day measure) fell by only 1% in the 1990s. We have not therefore set a target figure for this indicator as any reduction in poverty over the PSA period would be a significant achievement.

Sources
Measurement of progress depends on both national household expenditure surveys, which measure national poverty numbers, and international price comparison surveys. The coverage of these surveys is expanding, and adjustments may be required to include earlier data as the number of countries included is increased or PPP rates are revised. The World Bank collates the international data needed to measure this target. It provides annual estimates of poverty numbers and proportions by region with a two-year lag. All data is taken from the annual World Bank publication Global Economic Prospects.

• an increase in primary school enrolment from 58% to 72% and an increase in the ratio of girls to boys enrolled in primary from 89% to 96%

Primary school enrolment
This target relates to net primary school enrolment - i.e. the total number of pupils of primary school age enrolled as a percentage of the primary school-age cohort. Where net enrolment rates exceed 100% due to discrepancies between population and enrolment data, figures have been constrained to 100%. For the fixed group of 16 key countries only 9 had baseline data (Democratic Republic of Congo, Ethiopia, Lesotho, Mozambique, Rwanda, South Africa, Sudan, Tanzania, Zambia). The 2006 target based on the 'straight line' to 2015 would be 78%. Locally generated targets were available from five of 16 countries. The average of these was used to produce the actual target of 72%.

Gender Equity in Primary Education
In order to calculate progress towards gender equity in primary education, this target will calculate the gross primary school enrolment ratio for girls as a percentage of the gross primary school enrolment ratio for boys. Gross enrolment is used in preference to net enrolment, as the availability of gender-disaggregated data is greater. Gross enrolment is defined as the total number of pupils of all ages enrolled in school as a percentage of the school age population.

Due to grade repetition and the presence in schools of over-age children, gross primary school enrolment often exceeds 100%. So a gross enrolment rate of 100% does not necessarily mean that all children will be at school; there may be older children enrolling for the first time or repeating years.

All of the fixed group of 16 key countries have baseline data. The 2006 target based on the 'straight line' to 2015 would be 94%. The 10 sets of locally generated 2006 targets give a target of 96%

Sources
For both education targets, baseline data available in 2000 relates to 1998. Baseline data comes from the annual World Bank publication World Development Indicators and the accompanying CD-ROM. The World Bank collates data that has been collected by the UNESCO Institute of Statistics.

• a reduction in under-5 mortality rates for girls and boys from 158 per 1000 live births to 139 per 1000; and an increase in proportion of births assisted by skilled birth attendants from 49% to 67%;

Definitions
Definitions of 'under-five mortality' and 'births assisted by skilled attendants' are set out in the annual World Bank publication World Development Indicators and accompanying CD-ROM.

Under- 5 mortality

Issues
All of the fixed group of 16 key countries have baseline data. The target based on the annual straight-line decrease for 2015 would be 105/1000. The locally generated targets were calculated by gathering country-owned targets for 12 of the 16 baseline countries, and imputing figures for the remaining 4 countries. Together, these give a new 2006 target decrease for all 16 countries to 139/1000 - substantially less than the straight line decrease.

Source
Baseline data available in 2000 relates to 1997. Baseline data comes from the annual World Bank publication World Development Indicators and the accompanying CD-ROM. To the greatest extent possible we will use up-to-date, reliable and comparable international data to report separately for boys and girls on this target. To do this, we will use disaggregated figures provided by the annual UN Population Fund publication State of World Population. Occasionally mortality rates will not be identical to the data from World Development Indicators (WDI) due to different methodologies, but overall trends should be the same.

Births Assisted by Skilled Attendants

Issues
There are real difficulties in collecting accurate, regular data on maternal mortality rates (MMR) for many of the poorest countries. Thus neither global nor regional measures of MMR are routinely calculated. However, analysis by the World Health Organisation (WHO) demonstrates a close correlation between MMR and the proportion of women giving birth who are assisted by a skilled health practitioner. As data on skilled attendance at birth is more generally available, it is internationally recognised as a proxy measure of MMR.

For births assisted by skilled attendants a range of data between 1996 and 2000 was used due to incomplete data. The target based on the annual straight-line increase for 2015 would be 71%. For the locally generated target, we used local targets for 14 countries and imputed proportional figures for the remaining 2. The resulting 2006 target increase was to 67%.

Source
Baseline data is obtained from the annual World Bank publication World Development Indicators and accompanying CD-ROM with UNICEF figures on the proportion of births attended by skilled health personnel reported in their annual State of the World's Children (SOWC) report.

• a reduction in the proportion of 15-24 year old pregnant women with HIV from 16%

Current data from UNAIDS shows that in Africa only Uganda has succeeded in reducing prevalence. In Senegal it is static and in every other sub Saharan country prevalence is increasing. Due to the recent emergence of the disease and the lack of suitable models for projecting its growth, it is very hard to predict whether prevalence will increase level off or decrease. Most predictions on the impact of HIV/AIDS over the last 10-15 years have been wrong, overestimating the impact in developed countries and underestimating it in developing countries.

In view of this uncertainty, we have not set a specific target for reduction, as a simple levelling-off of HIV prevalence rates in Africa would be a significant achievement.

Source
Data on HIV prevalence in most poor countries is collected by means of national surveillance, often through anonymous testing, of HIV prevalence among 15-24 year old women attending sentinel antenatal clinics. This information is reported by national authorities on a periodic basis and by UNAIDS through the US Census website.

UNAIDS have pledged to make data for this indicator available in the course orf 2003 (covering the period from 2001). In the meantime, statements about progress will be informed about other relevant HIV data for the same countries.

• Improved effectiveness of the UK contribution to conflict prevention and management as demonstrated by a reduction in the number of people whose lives are affected by violent conflict and a reduction in potential sources of future conflict where the UK can make a significant contribution. [Joint target with FCO and MoD]

Assessment indicators
AHEAD - four out of four sub-targets must be either MET or AHEAD
ON COURSE - three out of four sub-targets must be judged to be ON COURSE
SOME SLIP - two out of four sub-targets judged as ON COURSE
MAJOR SLIP - only one out of four sub-targets judged to be ON COURSE

Progress against the PSA Target in 2000-6 will be measured using:

(a) Global Pool sub-targets on Afghanistan, Nepal, Macedonia, Georgia, Israel/Occupied Territories, Sri Lanka, contribute 25% to PSA target

(i) a 10% reduction in fatalities from a SIPRI baseline of 7,800 in 2000 to 7,000 by 2006
(ii) a 10% reduction in fatalities from an IISS baseline of 19,000 in 2000 to 17,000 by 2006
(iii) a 10% reduction in refugees from a UNHCR baseline of 3,800,000 in 2000 to 3,400,000 by 2006
(iv) a 10% reduction in internally displaced persons from a USCR baseline of 1500,000 in 2000 to 1,350,000 by 2006

(b) Africa Pool sub-targets on Sierra Leone, DRC, Uganda, Rwanda, Burundi, Sudan, Angola, Nigeria, contribute 25% to PSA target

(i) a 20% reduction in fatalities from a SIPRI baseline of 6,500 in 2000 to 5,200 by 2006
(ii) a 20% reduction in fatalities from an IISS baseline of 48,000 in 2000 to 38,000 by 2006
(iii) a 20% reduction in refugees from a UNHCR baseline of 2,400,000 in 2000 to 1,900,000 by 2006
(iv) a 20% reduction in internally displaced people from a USCR baseline of 10,300,000 in 2000 to 8,200,000 by 2006

(c) Conflict Level Assessment Tool sub-targets contribute 50% to PSA target (25% in each Pool) - a new product measuring variations in potential sources of future conflict is being created. Targets and baselines will be set by April 2003.

Definitions

(a) The Conflict Prevention Pools

(i) The Global and Africa Pools were created in April 2001, as policy mechanisms to improve UK conflict prevention policy and impact using a joined-up approach between FCO, MOD and DFID. HMT and Cabinet Office also play an important coordinating role. The Pools bring together peacekeeping and programme budgets, for the first time.
(ii) FCO manage the Global Pool - the Foreign Secretary chairs the cabinet committee and DFID manage the Africa Pool - the International Development Secretary chairs the cabinet committee.

(b) PSA Target

(i) The PSA contains two distinct elements requiring measurement: the number of people whose lives are affected by conflict and a reduction in the potential sources of future conflict. Fatalities, Refugees, IDPs will measure the first element and the new Conflict Level Assessment Tool on variations in the level of conflict will measure the second element.
(ii) Conflict defined by SIPRI is 'the use of armed force between the military forces of two or more governments, or one government and at least one organised armed group and the incompatibility concerns control of government and/or territory'. (iii) 'Where the UK can make a significant contribution' defines the countries/regions where the UK can make an important input to reducing or preventing conflict.

Sub-Target Indicators

(i) Fatalities according to SIPRI refer to 'total battle related deaths, civilian and military caused by warring parties which can be directly connected to the conflict'. IISS use a similar definition.
(ii) A Refugee is defined by the1951 Convention as 'a person who owing to well-founded fear of persecution for reasons of race, religion, nationality, membership of a particular social group or political opinion is outside their country of nationality and is unable or unwilling to return'.
(iii) Internally Displaced People (IDPs) defined by UN Guiding Principles are 'people who are forced or obliged to flee or leave their homes or places of habitual residence, to avoid the effects of armed conflict, situations of generalized violence, violations of human rights, natural or human-made disasters, and who have not crossed an internationally recognized state border'.

Issues

(a) Assessing Progress

(i) An overall assessment of progress will be based not only on data but also on a narrative assessment, to compensate for the weakness of data sources on fatalities, refugees and IDPs e.g. a major outbreak of conflict in one country could increase numbers significantly, distorting progress made in other countries. The UK's diplomatic achievements contributing to reduced conflict will be cited e.g. mobilising an effective international response.
(ii) Progress will initially be measured separately for each Pool, including the impact of programmes/strategies in each Pool, before a joint overall assessment is made against the PSA Target. (iii) The PSA relates to 2003-2006, however baseline data relates to 2000. A time lag of one-year exists before data is available in each year. All baseline data relates to 2000. A final assessment will be made in 2007 using 2006 data.
(iv) The countries selected for assessing fatalities, refugees and IDPs is a specific group - it does not include every country covered by each Pool.
(v) Isolating the UK's distinct contribution from international and other actors is difficult, and the target is subject to high risks e.g. the UK cannot control the policies of other actors, small arms proliferation etc.

(b) Data Limitations

(i) Accurate data on fatalities, refugees and IDPs is not available but is taken from the best available sources. For example SIPRI state the figures represent a minimum indicator but real figures may be much higher.
(ii) Both SIPRI and IISS use the starting marker of 1000 battle-related deaths each year for major conflicts - an arbitrary starting point. To provide a more accurate assessment, additional data from IISS and the States in Armed Conflict 2000 Report is included to capture data on fatalities below 1000 - included in the 2000 baseline.
(iii) SIPRI and IISS utilise different sources in collecting data and produce significantly different fatality statistics for the same conflicts, we will therefore use their data to assess overall trends. (iv) Attributing what proportion of refugee/IDP displacement is caused directly by conflict is acknowledged as problematic. Refugee data is based on the number of refugees from each country and not in each country.

Sources

(a) Fatalities
Stockholm International Peace Research Institute (SIPRI) Yearbook data and International Institute for Strategic Studies (IISS) Military Balance data will be used to measure conflict fatality numbers above 1000. To include fatalities below 1000, data from the States in Armed Conflict Report, University of Uppsala (who produce SIPRI's data) and the IISS Small Conflicts Database (to be launched publicly in January 2003) is also included in the baseline/targets.

(b) Refugees
The United Nations High Commission for Refugees (UNHCR) are mandated to deal with refugees and compile annual data on refugee numbers in 'Populations of Concern to UNHCR'.

(c) Internally displaced persons (IDPs)
United States Committee for Refugees (USCR) data is used for 2000 baseline data because it is the only source available. However all future assessments will use Global IDP project data from the Norwegian Refugee Council - because it is now recognised as the best IDP data source combining data from all the main IDP agencies.

(d) Potential sources of future conflict
The new Conflict Level Assessment Tool will be available in April 2003.

• Effective implementation of the G8 Action Plan for Africa in support of enhanced partnership at the regional and country level.

UK will enter into (in some cases has already entered into) enhanced partnerships with those of the key target countries that demonstrate commitment to these principles

Issues
AAP includes commitments in the areas of peace and security, governance, trade and economic growth, debt, education and digital opportunities, health, agriculture and water. The G8 is not an implementing agency; so all of these commitments will either be achieved bilaterally, or with G8 partners in the relevant forum with competency in that sector (eg WTO/EU on trade, UN on parts of the peace and security agenda).

Very few of the commitments in the AAP actually include concrete targets in the form of figures or dates against which measurement of success can easily be made. The majority can, though, be interpreted as relating in some way to each of the MDGs, and will therefore be measured as part of the targets above (i.e. achievement of the targets above should also be considered achievement of the relevant part of the AAP).

The 4 key Asian countries chosen for the PSA are Bangladesh, India, China and Pakistan. In 2000-01 they received 65% of total DFID spend in Asia. For monitoring purposes, these 4 countries will remain a fixed group over the PSA period.

Data is taken from national sources in all four countries. Where data from country sources is the same as that quoted in World Development Indicators, the latter source is quoted as this is easier to access. Using data from national sources means that there is often a variation in the base year between countries. The aim has been to have a base year as close as possible to 1997.

• a sustainable reduction in the proportion of people living in poverty from 15% to 10% in East Asia and the Pacific and from 40% to 32% in South Asia

"Sustainable" means a downward trend, rather than a reduction in just one year.

The income poverty MDG to which this target relates aims to halve the proportion of people living below a poverty line of $1 per day between 1990 and 2015. The $-a-day poverty line is defined in terms of per capita consumption. Dollars are measured in purchasing power parity (PPP) terms.

Poverty targets for Asia are set separately for the relatively rich East Asia and Pacific region and the much poorer South Asia region. For South Asia, the target is calculated (on a straight-line basis from 1990) as the point that the region will need to have reached by 2006 if it is to achieve the MDG by 2015.

A similar calculation for East Asia would give a target of 14%. However, we expect this to be comfortably achieved by 2006, given that the current level of income poverty is already down to 15%. We have therefore set a more ambitious target for this region of 10% by 2006 (using an expected poverty level based on World Bank growth forecasts up to 2015).

Sources
Measurement of progress depends on both national household expenditure surveys, which measure national poverty numbers, and international price comparison surveys. The coverage of these surveys is expanding, and adjustments may be required to include earlier data as the number of countries included is increased or PPP rates are revised.

The World Bank collates the international data needed to measure this target. It provides annual estimates of poverty numbers and proportions by region with a two-year lag. All data is taken from the annual World Bank publication Global Economic Prospects.

• an increase in gross primary school enrolment from 95% to 100% and an increase in the ratio of girls to boys enrolled in primary school from 87% to 94%

Primary school enrolment

Owing to the unavailability of net enrolment data in some of the four countries, gross enrolment data are used for primary school enrolment. Gross enrolment is defined as the total number of pupils of all ages enrolled in school as a percentage of the school age population.

The 2006 target based on the 'straight line' to 2015 would be 98%. The simple average of the four sets of locally generated 2006 targets give a new target increase of 100%.

Issues
Due to grade repetition and the presence in schools of over-age children, gross primary school enrolment often exceeds 100%. So a gross enrolment rate of 100% does not necessarily mean that all children will be at school; there may older children enrolling for the first time or repeating years. Where reported gross enrolment ratios exceed 100% due to discrepancies between population and enrolment data, figures have been constrained to 100%.

Gender Equity in Primary Education

In order to calculate progress towards gender equity in primary education, this target will calculate the gross primary school enrolment ratio for girls as a percentage of the gross primary school enrolment ratio for boys. Gross enrolment is used in preference to net enrolment, as the availability of gender-disaggregated data is greater.

The 2006 target based on the 'straight line' to 2015 would be 94%. The 4 sets of locally generated 2006 targets also give a target of 94%.

Sources
For educational enrolment, data is obtained directly from the countries. This is due to significant discrepancies between country-supplied and UN population estimates for school-aged children in some of these Asian countries which means that World Development Indicators enrolment figures will not be comparable with the country-supplied targets. The baselines for both targets use data in the range 1996 to 2001.

• a reduction in under 5 mortality rates for girls and boys from 92 per 1000 live births to 68 per 1000; and an increase in proportion of births assisted by skilled birth attendants from 39% to 57 %;

Definitions
All of the fixed group of 4 key countries have baseline data. The target based on the annual straight-line decrease for 2015 would be 64/1000. The locally generated targets give a new 2006 target decrease for all 4 countries to 68/1000. Baseline data available in 2000 relates to 1997 in each country.

As for the child mortality target in Africa, to the greatest extent possible we will use up-to-date, reliable and comparable international data to report separately for boys and girls on this target. To do this, disaggregated data will be drawn from the annual UN Population Fund publication State of World Population and supplemented where appropriate by accurate and reliable national statistics.

Births Assisted by Skilled Attendants

See the Technical Note for this target under the Africa Objective (above) for a description of why this indicator is used. For births assisted by skilled attendants a range of data between 1996 and 2001 was used. The target based on the annual straight-line increase for 2015 would be 66%. The locally generated target increase was 57%.

For baselines for both targets a range of data between 1996 and 2001 was used.

Source
For the four target PSA countries baseline data was drawn from various national sources: Bangladesh - Demographic and Health Survey, China - National Health Service Survey, India - National Family Health Survey, Pakistan - Ministry of Health iPRSP. For reporting purposes, data will be drawn from World Development Indicators and supplemented where appropriate by accurate and reliable national statistics.

• prevalence rates of HIV infection in vulnerable groups being below 5%; and a tuberculosis case detection rate above 70% and cure treatment rate greater than 85% are achieved.

Definitions
"Vulnerable groups" are defined as: injecting drug users, commercial sex workers and STI patients.

Issues
Data coverage of vulnerable groups is poor at present, but we are confident that systems will have improved enough by 2006 for progress towards the target to be measured.

Prevalence rates across Asia vary greatly. In Bangladesh and Pakistan for example, the actual figure is currently below 1%, whereas in India it is currently about 40%. The rate for China is unknown because of poor surveillance systems and reluctance by the Government of China to make information publicly available.

With a rising epidemic, it is very difficult to predict the direction the rates might take by 2006. The target across all four of the countries in Asia is consistent with internationally agreed targets (UNAIDS). The target set is regarded as representing an effective containment of the epidemic. To be achieved, transmission into the general population (a generalised epidemic - as is the case in Africa) will need to be avoided.

Surveillance and data collection systems for HIV in Asia are not strong at present, but are improving. Having a target will provide an impetus to improve systems.

Source
The source of data for current rates and for measurement of progress towards the target is UNAIDS country reports. Data will be collected for each of the vulnerable groups in the 4 countries and than aggregated to a single average figure for each group. Judgements on overall progress against the target will be informed by these 3 figures.

Tuberculosis

Source
The targets for TB in Asia are the global targets outlined in the MDGs; to have halted by 2015 and begun to reverse the incidence of malaria and other major diseases (which includes TB). The indicator for TB is the "proportion of tuberculosis cases detected and cured under directly observed treatment short course".

WHO member states voluntarily report TB data to WHO. We will measure case detection rates and cure treatment rates using these national systems, supported by WHO.

WHO provide annual reports that includes data on case notifications and treatment outcomes from all national control programmes. This provides information on DFID focus countries. Reports are available at http://www.who.int/gtb/ .

The World Bank estimates that in 1999, 77 million people in Latin America and the Caribbean live on less than $1 a day, whilst in the Middle East and North Africa some 7 million live on less than $1 a day. In Eastern Europe and Central Asia some 91 million people live on less than $2 a day.

A full list of country and regions in which DFID works can be found on the Department's website.

• A greater impact of EC external programmes on poverty reduction, including through working for agreement to increase the proportion of EC oda to low income countries from 38% to 70%; and

The baseline used is proportion of EC country specific official development assistance going to poor countries in 2000. "Low income countries" are defined using the World Bank thresholds based on 1998 GNI per capita of US$760, World Development Indicators 2000, World Bank.

Issues
Income group thresholds are updated every year by the World Bank to incorporate international inflation. Thus the thresholds remain the same in real terms over time. However, as countries' economies change (through growth or decline) they may move between income groups. DFID, in line with the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD), update income group classifications every three years. DFID is currently using 1998 income group thresholds and will change to 2001 thresholds for reporting on flows in 2003/4. The list of countries is presently under review pending the publication by the DAC of the 2001 income group thresholds.

 The 38% baseline figure refers to 2000. It has been calculated using the 1998 income group thresholds. For the 2003-06 reporting period, we will be using the 2001 income group threshold.

Source
Geographical Distribution of Financial Flows to Aid Recipients, OECD-DAC and the online database. The data, produced by the European Commission and governed by OECD-DAC guidelines, is checked by the OECD-DAC.

• Ensuring that three-quarters of all eligible HIPC countries committed to poverty reduction receive irrevocable debt relief by 2006;

and work with international partners to make progress towards the United Nations 2015 Millennium Development Goals [joint target with HMT].

The UK is at the forefront of the debate on international debt relief and participates fully in the enhanced Heavily Indebted Poor Countries (HIPC) initiative agreed at Cologne in 1999 that makes provision for the cancellation of around 100 billion US dollars of debt. Under the HIPC initiative a country receives interim debt relief on payments due when it reaches Decision Point and subsequently the debt is irrevocably cancelled at Completion Point.

To reach Decision Point and demonstrate their commitment to poverty reduction, a country must prepare an Interim-Poverty Reduction Strategy Paper (PRSP), to get to Completion Point they need to develop a full PRSP, and usually make progress in implementing it for one year. These documents are drawn up by the country, with the participation of civil society, to show how debt relief and other resources will be targeted on reducing poverty. The country must also be on track with its IMF programme for which there will be a range of conditions, for example on macroeconomic stability or public sector management. Further information about the HIPC initiative is available from the IMF public website

Of the 42 countries classified as HIPCs four are currently expected to have a sustainable burden of debt after traditional debt relief, and one has, so far, not opted to apply for debt relief. Of the remaining 37 countries, 26 have now reached Decision Point with $62 billion in debt relief committed compared with the $100 billion total. Eight of these countries: Bolivia, Mozambique, Tanzania, Uganda, Burkina Faso, Benin, Mali and Mauritania have reached Completion Point and have had the totality of their debts owed to the UK irrevocably cancelled - updates are posted on the World Bank website .

It is very difficult for countries in conflict to make progress in the HIPC initiative, and for HIPCs the World Bank makes an assessment as to whether they are affected by conflict . After the September 2002 assessment was published Cote D'Ivoire became affected by conflict and governance problems. Out of 12 countries yet to reach Decision Point nine are currently affected by conflict. With respect to the Public Service Agreement, countries that have yet to reach Decision Point are not deemed eligible. While the UK Government, working with other countries and the international community will do all it can to promote peace, the resolution of such conflicts is largely contingent upon the actions of the countries themselves.

However, for those countries that are committed to poverty reduction and have reached their Decision Point the Department for International Development and Her Majesty's Treasury will work towards ensuring that three-quarters reach Completion Point by the end of 2006.

Moreover, the UK goes beyond the terms agreed under the HIPC initiative and always provides 100 per cent debt relief on all qualifying debts owing to the Department for International Development, the Export Credit Guarantee Department - which accounts for the bulk of the debt - and the Commonwealth Development Corporation. In addition, for those HIPCs yet to reach Decision Point the UK operates a unilateral 'Hold-in-Trust' policy. For these countries yet to secure debt relief because of civil war, external conflict or the absence of a poverty reduction programme, any debt payments made are held in trust until they can be returned to fund poverty reduction.

Sources

Progress on debt relief will be measured through the six-monthly progress reports produced by the Bank and Fund, and by day-to-day monitoring of Board discussions. A full list of HIPCs and their progress in this process can be found at http://www.imf.org/external/np/exr/facts/hipc.htm  and at www.worldbank.org/hipc.

Definitions
DFID's full Technical Note sets targets for 2006 and measures progress towards the MDGs for 16 focus African countries, 4 focus Asian countries and the following regions: Europe, Central Asia, Latin America, the Caribbean, the Middle East and North Africa.

In addition to measuring progress against the MDGs we will also measure the progress of the international community in delivering effective support for poverty reduction. We will monitor the key indicators in DFID's SDA. These indicators are:-

• Countries accessing IDA resources and their key donors are committed to and supporting effective and sustainable poverty reduction strategies.

Effective and sustainable poverty reduction strategies will be assessed against the processes used, the ex-initial quality of PRSs and the results. The processes and initial quality of PRSs will be assessed against the good practice indicators included in the 2002 PRS Review. The results will be assessed against PRS's own targets and narrative in the annual reviews of the PRS.

Improved effectiveness of EC development assistance measured by:-

i. The establishment of clear and measurable outcomes-based objectives for poverty reduction that support the November 2000 Development Policy declaration and the means to monitor and evaluate them;

ii. Agreement in the Council, Commission and European Parliament to implement these objectives, including by increasing the share of EC ODA going to low-income countries in each annual budget process;

iii. Ensure successful completion of the Commission reform process in external relations by their target date of 2003

• Work towards the achievement of the agreed target for EU average aid to reach 0.39% by 2006 and promoting greater aid effectiveness among donors

EU average aid is net official development assistance (as defined in the Statistics on |International Development glossary) as a proportion of combined Gross National Incomes (GNI). Both aid and GNI figures relate to the 15 EU Member States and do not include those countries joining the EU after 2003.

• Improved institutional effectiveness of 12 multilateral agencies.

Effectiveness will be measured against agencies own corporate performance benchmarks. DFID's International Director's Delivery Plan will set the benchmarks against which to measure change. The 12 agencies to be monitored are: the European Bank for Reconstruction & Development, the World Bank, the Asian Development Bank, the African Development Bank, the International Committee of the Red Cross, the UN Development Programme, the UN Children's Fund (UNICEF), the UN Food Programme, the World Health Organisation, the Food & Agriculture Organisation of the UN, The Office of the United Nations High Commissioner for Refugees (UNHCR) and the UN Educational, Scientific & Cultural Organisation (UNESCO); this list encompasses those multilaterals where DFID's average annual spend (from International Division resources) is expected to be at least £10 million.

Sources

MDGs

The UN Department of Economic and Social Affairs has the remit to report annually on global progress towards the MDGs. Their first report fed into the Secretary General's report to the UN General Assembly on the implementation of the Millennium Declaration, which was published in September 2002. This showed that progress towards the goals is mixed both between and within regions and across the different goals and targets. Many countries have made progress but much of the world, generally the poorest countries, would not meet the targets if current trends continue. In particular, extraordinary efforts will be needed in Sub-Saharan Africa if this region is to reach the targets. At the country level the UN Development Programme is responsible for producing MDG progress reports. The aim is to produce a report for each developing country by 2004. Further details of progress against MDGs can be found in DFID's 2000/01 Statistics on International Development.

Poverty Strategies

Effectiveness of international donor support to Poverty Reduction Strategies will be monitored through the 2005 PRSP Review to be undertaken jointly by the World Bank and the IMF. This will be reinforced by the 2003 Evaluation of PRSPs to be undertaken by the World Bank and the IMF and by DFID's own monitoring, including through the Multilateral Organisations Performance Assessment Network (a joint monitoring network with other shareholders of the MDBs which includes assessment of the role of the UN in supporting PRSPs). The 2002 PRSP Review, including UK, developing country and civil society inputs to it, will be taken as the benchmark.

Institutional Effectiveness of other multilateral agencies
All sources will be agencies own corporate sources, including Annual Reports. Some (but not all) sources will be publicly available.

This target will be judged to have been met if there is agreement at the 'Development Round' of WTO negotiations (launched in Doha in November of 2001 and due to be completed by January 2005) by WTO members taken as a whole to

(a) an average reduction of at least 20% in bound tariffs on industrial goods and
(b) a substantial reduction in support for agriculture.

"Developing countries" are those listed as Low- or Medium-Income in the World Bank's Global Economic Prospects.

An average reduction of at least 20% in bound tariffs on industrial goods

Issues
The databases are thought to be reliable and are updated annually, though it may take longer to incorporate fully data on new tariff offers made as part of a Round. Care must be taken to ensure that the calculation method used to determine if the target has been met, is the same, ie bound tariffs are compared with bound tariffs, only industrial products are used, and the selection of countries formulating the average is the same. The data and methods will come from WTO.

Sources
The ultimate source of data on industrial tariffs is expected to be the WTO Integrated Database or the WTO Consolidated Tariff Schedules database, though estimates of tariff averages are likely to be calculated and published by both academic sources and international institutions, including the WTO itself. These databases are compiled by the WTO Secretariat using notifications from WTO members. They cover the majority of WTO members accounting for the vast majority of world trade, though reporting for some of the smaller members is patchy. Consistency of definitions of bound tariffs and method of assessing progress will be assured with WTO.

Formal measurement will be at the conclusion of the Doha Round. Databases are updated annually though it may take longer to incorporate fully data on new tariff offers made as part of a Round.

A substantial reduction in support for agriculture

Definitions
Production-linked support will be defined as the sum of 'amber' and 'blue' box support as set out in the Uruguay Round Agreement on Agriculture. (See www.wto.org/wto/english/tratop_e/agric_e/agboxes_e.htm .) This will include all support except that which will have no, or at most minimal, trade-distorting effects or effects on production. Assessment of whether the target has been met will be based on a comparison of full implementation of the Uruguay Round Agreement (the baseline) and the commitments agreed at the Doha trade Round It will consider commitments to reduce production-linked support, supplemented by commitments to reduce agricultural tariffs and support for agricultural exports.

Issues
The OECD and WTO will be encouraged to evaluate and estimate the impact of agricultural commitments on producers and consumers in both developed and developing countries arising from the Doha round. Other international institutions and academics may also produce estimates.

Sources
Quality control will be through WTO and OECD procedures. Care must be taken to ensure that the estimates of the impact of commitments agreed at the Doha round are made on the same basis as the baseline figures. For baseline data the WTO annually publishes data for production-linked support, using data supplied by its members. Measurement will be at the end of the round and will involve matching new round commitments against the full implementation of the Uruguay commitments (the baseline). 

Definitions
The proportion of bilateral programme going to low income countries is set out in DFID's annual publication Statistics on International Development. Relevant terms (including 'low income countries') are provided in the glossary and the baseline figure is for 2000/01 as presented in Table 4 'Bilateral Aid by Income Group'. This excludes humanitarian assistance.

The group of low income countries is defined using the World Bank thresholds based on 1998 GNI per capita of US$760, World Development Indicators 2000, World Bank.

Issues
Income group thresholds are updated every year by the World Bank to incorporate international inflation. Thus the thresholds remain the same in real terms over time. However, as countries' economies change (through growth or decline) they may move between income groups. DFID, in line with the Development Assistance Committee (DAC) of the OECD, update income group classifications every three years. DFID is currently using 1998 income group thresholds and will change to 2001 thresholds for reporting on flows in 2003/4 The list of countries is presently under review pending the publication by the DAC of the 2001 income group thresholds.

The 78% baseline figure refers to 2000/1 financial year. It has been calculated using the 1998 income group thresholds. For the 2003-06 reporting period, we will be using the 2001 income group threshold.

The figure for 2001/2 was not available until after DFID's PSA was published (July 2002). Targets have been estimated using 2001 Aid Framework figures for 2003/04. Humanitarian assistance has been excluded from the baseline calculations due to the nature of the aid framework used to estimate the target figure. Humanitarian assistance coming from country lines will therefore be removed when reporting.

The baseline for high risk projects is 24% (2001/02)

The baseline for medium risk projects is 56% (2001/02) 

The baseline for low risk projects is 81% (2001/02) 

The scores relate to whether the purpose of a project is:
1 = likely to be completely achieved
2 = likely to be largely achieved
3 = likely to be partially achieved
4 = only likely to be achieved to a very limited extent
5 = unlikely to be realised
x = too early to judge

The target is measured by annual improvements in VFM^H, VFM^M and VFM^L. We will report improvements in each risk category as well as an aggregate score of all three to track overall progress against this target. DFID will also report the total commitments by risk category, to allow comparison across categories.

Issues
It is assumed that there is a clear relationship between the level of risk attached to a project and the magnitude of the anticipated benefits. The higher a project's risk, the larger the expected benefits. If the risk assessments are accurate, a higher proportion of high risk projects will be expected to fail, but it is expected that the overall aggregate return in each risk category should be comparable. It should be noted that simple rate of return calculations for programme aid, sector level support or technical assistance are rarely carried out and that effectiveness of aid through such mechanisms is assessed through the annual scoring system.