OBJECTIVE I: To reduce poverty through provision of more focused and co-ordinated development assistance by the international community to low and middle income countries.

PSA Target

Delivery

1. An increased focus by DFID on poor countries, particularly those with effective governments pursuing high growth and pro-poor economic and social policies, as demonstrated by:

1(a)

• An increase in the proportion of total bilateral country specific development aid (DFID programme excluding humanitarian assistance) going to low income countries from 71% in 1998/99 to 80% in 2002/03

• An increase in the proportion of total bilateral country specific development aid (DFID programme excluding humanitarian assistance) spent in low income countries pursuing sustainable, pro-poor policies (e.g. with active IMF Poverty Reduction Growth Facilities (PRGFs) or equivalent programmes) from 50% in 1998/99 to 65% in 2002/03.

Definitions

The ‘proportion of bilateral country specific development aid (DFID programme excluding humanitarian assistance) on low income countries’ is from DFID’s annual publication Statistics on International Development. Relevant terms are provided in the glossary and the baseline figure is presented in Table 5 ‘Bilateral Aid by Income Group’.

‘Poor countries’ are low income countries (using World Bank thresholds based on 1995 GNP per capita of US$765) World Development Indicators 1997, World Bank.

Ways of measuring ‘good policy’: For the majority of countries where DFID supports a bi-lateral programme, the major criterion for assessing a country’s policies will be a positive review of its Poverty Reduction Strategy (PRS), including the associated PRGF programme. The quality of implementation of a country’s PRS is reviewed annually by the Boards of the IMF and World Bank (see 1(c) below).

Some significant DFID partner countries, in terms of DFID financial support, have active Enhanced Structural Adjustment Facility (ESAF)/PRGF programmes; pursue sound macro-economic and pro-poor policies but are not developing formal poverty reduction strategy papers agreed with the World Bank and IMF (e.g. China, Bangladesh and India). In such cases, DFID relies on the conclusions of its country strategy papers and supporting annual performance reviews.

The quality of a country’s policies can be assessed by reference to the Public Information Notices published by the IMF on its website. The policy of the IMF is that IMF assessments of a country’s annual performance will be published unless the concerned country specifically requests that it not be published. The DFID listing of ‘good policy’ countries will be updated annually as some countries will move in and out of the target group. The baseline was the IMF International Financial Statistics - October 1999.

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), updates income group classifications every three years. DFID is currently using 1995 income group thresholds and will change to 1998 thresholds for reporting on flows in 2000. Six countries will then be moved out of the low income country listing (Albania, Bosnia & Herzegovina, Equatorial Guinea, Georgia, Guyana, Sri Lanka) and six countries will be added (Indonesia, East Timor, Korea Dem Rep, Lesotho, Moldova, Turkmenistan), having an effect on the PSA target. 1998 income group thresholds are specified in the World Bank Atlas 2000, World Bank (US$760 and below).

Targets have been estimated using 1999 Aid Framework figures for 2002/03 and assuming that all performance funds will be allocated to low income and ‘good policy’ countries. Humanitarian assistance has been excluded from the baseline calculations, however 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.

1 (a) an increase in the percentage of DFID’s bilateral programme going to poor countries, particularly those with favourable policy environments;

1 (b) an increase in the percentage of EC development assistance going to poor countries;

1(b)

an increase in the proportion of EC country specific official development assistance going to poor countries (low income countries) from 50% in 1998 to 55% in 2002.

DFID will work to achieve this target by:

1. building support, with HM Treasury and FCO collaboration, within the Commission, Council and European Parliament for reallocation of resources as a means of improving the effectiveness of EC programmes. The recently agreed Declaration on the EC's development policy will be a key tool in this;
   
2. supporting, through the Treasury and FCO, annual budget decisions which reflect improved allocations.

Definitions

‘Official development assistance’ is net, as defined in Statistics on International Development’s glossary. Using country specific data (i.e. only assistance allocated to countries, excluding all regional or unallocated amounts with the exception of assistance to the Ex-states of Yugoslavia). Poor countries are low income countries (using World Bank thresholds based on 1995 GNP per capita) World Bank Atlas 1997, World Bank.

The baseline used is proportion of EC country specific official development assistance going to poor countries in 1998 (the most up to date data available in 2000) and DFID will, by necessity, report with a two year lag (so in 2004 we will be reporting on the proportion of EC assistance going to poor countries in 2002).

DFID is currently using 1995 World Bank income group thresholds (US$765 and below) and will change to 1998 thresholds (US$760 and below) for reporting on flows from 2000 onwards. This change may have an effect on the PSA target as some countries move (see ‘issues’ above).

Source

Geographical Distribution of Financial Flows to Aid Recipients, OECD-DAC and the online database [www.oecd.org/dac/htm/online.htm#dac/o] ] and the online database [www.oecd.org/dac/htm/online.htm#dac/o] ]

1 (c) adoption and implementation of effective Poverty Reduction Strategies by 2004 in all countries accessing International Development Agency (IDA) high impact or adjustment lending.

PRSPs are nationally developed plans that are agreed with the IMF and World Bank and have been developed in a participatory way and which aim to deliver poverty reduction. From 2001, a country will require a PRSP (or at least an Interim PRSP) to access funding under the IMF PRGF or IDA concessional lending.

Source

Annual Joint Staff Assessments of PRSPs are carried out by the IMF and World Bank. Summaries of the Joint Staff Assessments and discussions of these assessments by the IMF’s and World Bank’s Boards are published on their respective internet sites, unless the concerned country specifically requests that they not be published.

OBJECTIVE II: To promote sustainable development through co-ordinated UK and international action.

PSA Target

Delivery

2. To promote the integration of developing countries into the global economy through co-ordinated UK and international action, including by:

• DFID and HMT working with the international community to bring 20 countries to Enhanced Heavily Indebted Poor Countries (HIPC II) Decision Points by end 2000 and a further 5 by end 2001. Building on this, the aim is for all HIPC countries to have reached their completion point by end 2004.

2 (a) relief of unsustainable debt by 2004 for all heavily-indebted poor countries (HIPC) committed to poverty reduction, building on the internationally agreed target that three quarters of eligible HIPCs reach decision point by the end of 2000 (Joint Target with Treasury) and;

2(a)

Definitions

‘Sustainability’ in this instance is the ratios defined in the World Bank and IMF paper "Modifications to the Heavily Indebted Poor Countries Initiative" July 26 1999.

‘Decision Point’. Countries are required to demonstrate their commitment to poverty reduction by producing a poverty reduction strategy and implementing pro-poor economic policies and reform programmes. They then reach Decision Point; this is when the World Bank and IMF calculate the amount of relief required to bring a country’s debt to sustainable levels, and it is the milestone at which debt relief starts to flow, on a conditional basis. At Decision Point a country agrees with the Boards of the IMF and the World Bank the actions that it will complete in order for its debt relief to be delivered irrevocably. A country participating in HIPC II must reach Decision Point, as a pre-condition for agreeing its Interim PRSP with the IMF and World Bank (see 1(c ) above).

2 (b) gaining international agreement on the integration of social, economic and environmental aspects of sustainable development into poverty reduction programmes.

2(b)

Some countries’ Poverty Reduction Strategies (PRS) recognise that better environmental management is important to improve the health, increase the livelihoods and reduce the vulnerability of poor people1. The UK is working with the World Bank to ensure that the Joint Assessment guidance to assess PRS includes poverty-environment links, and that environmental and natural resource agencies have the skills to integrate environmental issues into the PRS process. Where PRS do properly integrate the environment, and adhere to their stated principles then this can be considered a "national strategy for sustainable development (nssd)". 2

The indicator for nssds agreed by the OECD DAC is "effective processes for sustainable development". Criteria to measure "effective processes" are being developed by an OECD DAC Task Force on guidance for nssds co-led by the UK (DFID). The guidance, to be completed by April 2001, will propose a set of criteria for effective sustainable development strategies, and a menu of options for measuring countries against these criteria. DFID will also assist the UN to prepare similar guidance in the run-up to the Rio plus 10 UN conference. The results of this guidance will be used to monitor this PSA target.

1 For an analysis of Poverty-environment links see the DFID Target Strategy Paper on Achieving Sustainability: the Environment and Poverty Elimination

2 See DFID Background briefing on "Strategies for sustainable development: can country level strategic planning frameworks converge to achieve sustainability and eliminate poverty", September 2000

3. 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)

Progress will be measured at:

• High level: against relevant statistics on the incidence of new conflicts, conflict-related displacement and the number of war related casualties in all countries and regions in which activities are funded by resources from the Africa and Global Conflict Reduction Joint Pools. Changes in the level of risk of future conflict will also be assessed in countries with programmes funded by the Joint Pools.

• Intermediate level: against the achievement of objectives for programmes funded from the Joint Pools.

Definitions

‘New conflicts’: the Stockholm International Peace Research Institute (SIPRI) and International Institute for Strategic Studies (IISS) data reports on all major armed conflicts (new and old that have resulted in more than 1000 war related casualties).

The United Nations High Commission for Refugees (UNHCR) produce data on an annual basis on refugee and internally displaced populations.

‘War related casualties’ is defined by SIPRI, in its Annual SIPRI Yearbooks, as conflict related deaths in (‘000s) in disputes between conflicting parties.

IISS also produces data on an annual basis on fatalities resulting from armed conflicts around the world, presented in its annual publication, ‘The Military Balance’.

Success at a high level will be measured against the existing relevant data. The baseline for this will be provided from SIPRI and IISS for war related casualties and incidence of new conflicts (at country and regional levels). The baseline for conflict related displacement (at country and regional levels) will be taken from UNHCR data.

At intermediate level, success will be measured against the outcome of individual programmes.

Issues

There is a considerable amount of uncertainty regarding the reliability of data for this target. Much of the data comes from anecdotal evidence and there are legitimate questions about its accuracy. Realistically, the data will be of limited value in measuring success, since there are many factors in play besides UK conflict prevention activity.

The SIPRI Yearbook has been published annually since 1993 and includes a table on major armed conflicts during the previous year. The table contains data on: location; contested incompatibility (whether government or territory); year started; names of warring parties; number of troops involved; total battle-related deaths during the conflict and number of battle related deaths in the relevant year. Although SIPRI is widely respected as a source of data, it uses an arbitrary cut off point to define war related casualties. There is also a one-year time lag on the data for both SIPRI and IISS.

IISS’s annual publication ‘The Military Balance’ includes a chart that covers conflict and the associated financial costs and fatalities. The figures shown are cumulative but by comparing one year with the next it is possible to derive annual figures.

UNHCR produces an annual statistical review. This contains a number of detailed tables on ‘Populations of concern to UNCHR’. These tables contain data on numbers of: refugees; asylum seekers; returned refugees and internally displaced people. Data are also available by: age and gender; place of origin; legal status and type of recognition. In using UNHCR data, it is problematic to assume that conflict rather than other factors is affecting the various ‘populations of concern’. However, in conflict zones, the assumption is probably valid.

OBJECTIVE III: Improved education outcomes in key countries receiving DFID education support.

PSA Target

Delivery

4. Improved Education Systems in the top ten recipients3 of DFID Education support demonstrated by:

4 (a) an average increase in primary school enrolment from a baseline established in 2000 of 75%, to 81% on the basis of data available in 2004; and

4 (b) Improvements in gender equality in education, particularly primary education.

• By 2004, 75% of DFID bilateral commitments for education in our top ten recipients of bilateral education assistance will support multi-donor programmes, implementing government-agreed sector strategies.

Definitions

The top ten countries chosen are those with the highest total ‘live’ financial commitments (i.e. funds approved by the Secretary of State) in the Education sector and the Education portfolio based on September 1999 data. They represent over 70% of total Education commitments as at September 1999 and, for monitoring purposes, will remain a fixed group over the period of this PSA even though the top ten may change over the three years of the PSA.

Bilateral commitments refer to DFID Policy Information Marker System (PIMS)-eligible commitments (>=£100,000) as of September 1999, where a commitment is an arrangement for assistance incorporated in a signed agreement specifying terms and conditions. Multi-donor programmes are programmes where a number of donors are working together with the recipient country.

The emphasis is on primary education since that is the focus of the International Development Target (IDT) to which we are committed in the 1997 White Paper. The PSA refers to "education systems" because primary education cannot be expanded and sustained in a vacuum. Education is an integrated sector, and primary education requires the existence of the secondary and tertiary level, both to provide incentives to learn and more obviously to provide teachers. Thus our focus is on the primary level but we recognise that it must sit within a system and that countries must have a balanced approach to education development.

The indicator for primary school enrolment of 81% enrolment in 2004 was set by estimating the annual straight line increase in net enrolment required over the period 2000-2015 to achieve the 99% indicator of success identified for the IDT. This is a simplified approach to a complex process but is, nonetheless, useful. Progress in each country is unlikely to be similar. Global totals will be provided in annual reporting for comparison.

The baseline figure for gender equality is 86%. Gender equality is calculated as the gross enrolment ratio for girls as a percentage of the gross enrolment ratio for boys. Gross is used in preference to net enrolments as the availability of gender disaggregated data is greater. Gross enrolment is the total number of pupils of all ages enrolled in school as a percentage of the school age population. Because of grade repetition and the presence in schools of over-age children, this often exceeds 100%. Net enrolment is the total number of pupils of school-age only enrolled as a percentage of the school-age cohort. Where reported net enrolment ratios exceed 100% - because of discrepancies between population and enrolment data - they have been constrained to 100%.

Issues

Data available in 2004 is liable to only cover 2001 due to reporting lags and publication availability. It is possible that some countries will not provide further data over the next four years due to resource constraints within countries, possible inadequacies in their statistical systems, or breakdowns in reporting lines between countries and international agencies. Baseline data relates to 1990 - 1996 for gender equality figures and a range between 1981 and 1996 for school enrolment.

The indicators used in the PSA are drawn from the International Development Targets and show only part of the picture as they do not cover measures of educational quality or attainment.

Sources

All data will come from the World Bank’s World Development Indicators book and CD-ROM. The World Bank collate data that has been collected by the UNESCO Institute of Statistics.

3 The top ten recipients of DFID Education Support are Bangladesh, China, Ghana, India, Malawi, Pakistan, South Africa, Tanzania, Uganda, Zambia. For monitoring purposes, this target group of countries will remain fixed over the PSA period, 2001-2004

OBJECTIVE IV: improvements in health outcomes in key countries receiving DFID health care assistance.

PSA Target

Delivery

5. Improvements in child, maternal and reproductive health in the top ten recipients4 of DFID health care assistance demonstrated by:

Definitions

The top ten countries chosen are those with the highest total ‘live’ financial commitments (i.e. funds approved by the Secretary of State) in the Health sector based on September 1999 data. They represent over 75% of total Health commitments at September 1999 and, for monitoring purposes, will remain a fixed group over the period of this PSA, even though the top ten recipient countries may change.

The target for under five mortality and births attended by skilled attendants was set by estimating the annual straight line increase in these indicators required over the period 2000 to 2015 to achieve the international targets (as set out in Shaping the 21st Century: The Contribution of Development Co-operation, OECD DAC). This is a simplified approach to a complex process but is, nonetheless, a useful indicator of the adequacy of progress towards the targets. Progress in each country is unlikely to be similar. Global totals will be provided in annual reporting for comparison.

Issues

Nine of the top ten recipients are the same as for the Education Sector target (see Objective III above). The exception is China. Although DFID supports a growing health programme in China, this is still exceeded by DFID support to Kenya.

Data available in 2004 is likely to cover only the period up to 2001 due to reporting lags and publication availability. It is possible that some countries will not provide further data over the next four years due to such things as resource constraints or differing priorities within countries, possible inadequacies in countries statistical systems, or breakdowns in reporting lines between countries and international agencies. Baseline data relates to 1997 for under-five mortality figures and a range between 1991 and 1995 for births assisted by skilled attendants. Therefore, assessments of progress will usually be based on incomplete data.

5 (a) a decrease in the average under-5 mortality rate from 132 per 1,000 live births in 1997, to 103 on the basis of data available in 2004;

5(a)

The spread of HIV/AIDs is having an immense impact on mortality rates within Africa and is widely considered to be an important factor in the observed increases in under-5 mortality rates in the last few years in some countries. Containment of HIV/AIDs will certainly be important, if the under-5 mortality target is to be achieved.

5 (b) an increase in the proportion of births assisted by skilled attendants from a baseline established in 2000 of 43% to 50% on the basis of data available in 2004; and

5(b)

There are real difficulties in collecting accurate, regular data on maternal mortality rates (MMR) for many of the poorest countries. Analysis by WHO demonstrates a close correlation between MMR and the proportion of women giving birth who are attended by a skilled health practitioner. The higher this proportion the lower the MMR. Because data on skilled attendance at birth is routinely collected, it is a proxy measure of performance and is internationally recognised as such.

5 (c) improved access to reproductive health care

5(c)

Contraceptive prevalence (the proportion of couples using contraception) is a useful proxy for assessing access to reproductive health care services because it offers a snapshot of access to and use of family planning - a key element of reproductive health and is collected on a reasonably routine basis. Aggregate data on contraceptive prevalence needs to be used with care. For example, it does not capture sexually transmitted infections, unmarried women are usually excluded from the surveys used to gather such data and it includes use of all methods, including ineffective traditional ones. A baseline of 32% (covers the period 1990-98) for the extent of contraceptive prevalence in the 10 target countries will be used to track changes in prevalence during the PSA reporting period.

Sources

All data is obtained from the World Bank’s World Development Indicators CD-ROM and book. This contains definitions for ‘under five mortality’, ‘births assisted by skilled attendants’, and ‘reproductive health’.

4 The top ten recipients of DFID health care assistance are Bangladesh, Ghana, India, Kenya, Malawi, Pakistan, South Africa, Tanzania, Uganda, Zambia. For monitoring purposes, this target group of countries will remain fixed over the PSA period, 2001-2004

Value for Money

PSA Target

Delivery

6. Improved value for money and effectiveness of projects in DFID’s bilateral programme, as demonstrated by a year on year improvement in the index of their evaluated success.

Performance indicators for high, medium and low risk projects are, respectively:

VFMH = Total commitment value of high risk projects approved at Director level and above and 1 or 2 / (Total commitment value of all high risk projects approved at Director level and above (excluding those scoring x)) x 100

VFMM = Total commitment value of medium risk projects approved at Director level and above and scoring 1 or 2  / (Total commitment value of all medium risk projects approved at  Director level and above (excluding those scoring x)) x 100

VFML = Total commitment value of low risk projects approved at Director level and above and scoring 1 or 2 / (Total commitment value of all low risk projects approved at Director level and above (excluding those scoring x)) x 100

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 VFMH, VFMM and VFML. DFID will report both the VfM scores and also the total commitments by risk category, to allow comparison across categories.

Issues

Within DFID, 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 will be assessed through more qualitative assessments, included in DFID annual country programme reviews or in sector reviews.

Currently, a low proportion of projects are scored, even though a high proportion by value. It is anticipated that the majority of DFID’s projects will be scored and the data will be accessible through DFID’s information systems by late 2001. Likewise, action is in hand to improve entry of information on risk into DFID’s information systems.