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Major Programme 3.2: Support to Investment

(all amounts in US$ 000)
  Programme 2004-05 Programme of Work ZRG 2006-07 Programme of Work ZNG 2006-07 Programme of Work RG 2006-07 Programme of Work Trust Fund
321 FAO/World Bank Cooperative Programme 35,761 32,391 32,699 32,391 0
322 Investment Support Programme 19,367 22,548 19,474 24,848 3,903
Total 55,128 54,940 52,173 57,240 3,903
Programme Change from 2004-05 Programme of Work at MP level (189) (2,955) 2,111  
Percent Change (0.3%) (5.4%) 3.8%  

Substantive thrusts under ZRG conditions

428.     This major programme is aimed at promoting investment in agriculture, rural development and sustainable use of natural resources. The Investment Centre (TCI) will continue to work closely with its international and national partners to generate investment for agriculture and rural development from international and domestic resources, helping to reverse the declining trend of the last decade. Assistance (including building local capacity) in the preparation of investment and complex technical cooperation projects that respond to the priorities of developing and transition countries, and which meet the funding criteria of multilateral and bilateral financing agencies, remains the main focus of work, involving cooperation with some 20 major financing and related institutions. On average, TCI recovers 54 percent of the total cost of its support to investment from partner financing institutions.

429.     TCI will interact with international financing institutions and national governments through its diagnostic and analytical work in pursuit of viable investment programmes. This will include giving a stronger rural focus to key strategic exercises, such as the Country Assistance Strategies (CAS) of the World Bank and national Poverty Reduction Strategy Papers (PRSPs), as well as strengthening governments’ capacity to formulate agriculture and rural development projects and programmes. The ‘regionalization’ of TCI operational services will facilitate cooperation with partner financing and bilateral donor institutions.

430.     TCI will also support FAO's programmes at large, e.g. through the formulation of expanded national programmes for food security, and post-emergency recovery and reconstruction projects, in collaboration with TCOS144 and TCE145, respectively. It anticipates increased activities concerned with mobilising transfers to countries of a non-lending nature: ‘debt relief’ through the use of debt-for-development swaps, support for sector-wide approaches (SWAps) in agriculture and the exploration of environment-friendly options for attracting resources for carbon sequestration and other non-traditional forms of development assistance.

431.     The programme structure has been refined in line with the Medium Term Plan 2006-11, to streamline planning, target setting and financial monitoring and reporting. In line with expected strong increase in demand from the World Bank, particularly for Africa, a sizeable part of the major programme’s overall resources will continue to be committed to the cost-sharing agreement between FAO and this key partner. The shift in resources from Programme 3.2.1 to Programme 3.2.2 is an adjustment to reflect the actual cost of operations under these two programmes in the present biennium. It should be noted that the level of activities undertaken with cooperating institutions other than the World Bank had been reduced in the PWB 2004-05.

Real Growth Scenario

432.     TCI would be able to restore activities with cooperating institutions under Programme 3.2.2 to its former level. This would mean expanding work beyond core partners such as IFAD, WFP and AfDB146 and encouraging more collaboration with regional banks such as AsDB, IsDB, CAF, CDB147 , etc.

Zero Nominal Growth Impact

433.     Work with the World Bank would remain at its present level so as not to jeopardise the cooperative programme which is defined through a firm contractual arrangement. However, there would be no capacity to respond to the Bank’s demand for supplementary services in support of its increasing lending programme in agriculture and rural development.

434.     Programme 3.2.2 with non-World Bank cooperating institutions would be reduced very significantly, if compared with the current level of ISP work. ZNG would entail reductions in the level of cooperation with core partners (IFAD, WFP and AfDB) and require freezing activities with other 19 cooperating institutions, including AsDB, IsDB, EBRD148 and CAF.

144 SPFS Monitoring and Coordination Service

145 Emergency Operations and Rehabilitation Division

146 International Fund for Agricultural Development (IFAD); World Food Programme (WFP); African Development Bank (AfDB)

147 Asian Development Bank (AsDB); Islamic Development Bank (IsDB); Caja Andina de Fomento (CAF); Caribbean Development Bank (CDB)

148 European Bank for Reconstruction and Development

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