Beirut, Lebanon, 20-24 March 2000




Historical Background

1. In the early 1960s, a number of Arab countries of the Near East began to provide direct bilateral assistance to other less fortunate countries in the Region to develop their agricultural and economic sectors. A proposal to channel part of this aid through FAO, under a special Trust Fund (TF) programme, was endorsed by the 11th FAO Regional Conference for the Near East (NERC), held in Kuwait in September 1972.

2. Subsequently, several country visits were made by a "Special Standing Committee" which resulted in pledging the total of US$ 29 million from Bahrain (1 million); Iraq (5 million); Kuwait (5 million); Qatar (3 million); Saudi Arabia (10 million) and the United Arab Emirates (5 million). In late 1975, the Libyan Government agreed to allocate US$ 3 million to the Programme. Out of these pledges, some US$ 22.1 million were actually received from 5 countries. The Near East Cooperative Programme (NECP) therefore came to existence in 1976.

3. These financial contributions and their cumulative interest, which amounted to US$ 6.3 million over the years, were used to finance eight regional projects and 37 country projects, agreed upon between donor and recipient countries and executed by FAO. All regional and country projects funded under the NECP have been completed. The unspent balance to date amounts to US$70 586.

New Priorities and a Changing Economic Environment

4. Recent changes have occurred affecting the economic environment prevailing in the oil-producing donors of the Programme. The aftermath of the second Gulf War resulted in major reductions in oil revenues, which led to some government price control, market interventions, review of subsidies, and some internal borrowing to help balancing national budgets. New economic priorities emerged in these donor countries and affected their contribution to the regional funding institutions. However, the basic commitment to these main Regional and International agencies continued, such as support to IFAD, the Islamic Development Bank, the Arab Fund for Social and Economic Development (AFSED) as well as the financial support to some national development funds, such as Saudi Development Fund, Abu Dhabi Development Fund and Kuwait Development Fund.

5. On the other hand, the last two decades witnessed significant positive agricultural development indicators including intensive use of agricultural inputs, large-scale farming-particularly in desert-type areas, accelerated rate of land and water utilization resulting in the inevitable emergence of some negative agricultural and environmental consequences. Desertification, land degradation, groundwater depletion, pollution from pesticides, loss of prime agricultural lands, etc. are serious issues facing many of the Near East countries.

Need for a Fresh Approach

6. The FAO Regional Office for the Near East (RNE), which provides the Secretarial assistance to the NECP programme, has presented some alternatives and modalities to reactivate this programme over the last three Sessions of the Regional Conference. It became clear to the Secretariat that the interest in re-activating the NECP Programme in its `old' scope, has been eroded. Any new modality should benefit from lessons learned and ought to be targeting national priorities and individual needs of the participating countries.


The Trust Fund (TF) arrangements proved to be an efficient and effective modality, which a respective Member Country could establish with FAO in order to achieve the implementation of the following objectives:

National Trust Fund Projects

7. Prompt and well-targeted project execution at the national level. Countries would identify projects based on their individual needs and requirements. Project documents would be tailored to address those targeted needs. Priority projects could benefit from the FAO flexible administration as well as its international pool of technical expertise.

8. Better governance of financial resources. The budget allocation, disbursing of funds and daily expenditures would be jointly managed by the FAO and the Government, following the financial rules and regulations of the FAO/TF modality. This would ensure full transparency and appropriate audit of project budget expenditures and outputs.

9. Mobilizing national cadres. The TF arrangement would rely on qualified national cadres and deploy them as "national consultants" to participate effectively in project implementation.

10. Favourable and agreeable terms on the overhead charges. For TF projects, reasonable agreements could be reached regarding the project administraion charges. Those charges, however, could be more favourable to Governments than any other technical assistance agreements.

11. Address some major regional issues. It is well known that quite a few issues and activities could not possibly be dealt with only at the national level. Examples are many, such as trans-boundary plant and animal pests and diseases (desert locust, foot-and-mouth, screwworm, etc.), inter-regional marketing and trade, desertification, WTO negotiations-particularly on Agriculture, quality control, exchange of water resources data as well as standards and specifications of products, etc.

12. Strengthening of inter-country and regional technical cooperation. The majority of the Near East area falls in the arid/semi-arid region, therefore, some valuable experiences and success stories in the utilization of natural resources for agricultural production could be shared, in order to secure sustainability of those resources.

Regional Trust Fund Projects

13. Address intra-regional issues. Cooperation and coordination is imperative in dealing with issues of serious impact on the environment such as combating desertification, desert locust control, land degradation, utilizing of ground and water resources and the new terms of marketing and trade. The Region countries are currently involved in similar cooperation through their affiliation in the Convention to Combat Desertification (CCD), Joint Committee for Arab League Ministers for Agriculture and Environment (JCDAR), Desert Locust Control for the Central Region, and others. In addition, it cannot be overemphasized that exchange of technical data and establishing linkages among water data banks in countries who are utilizing transboundary ground and surface water resources, is highly advisable to all beneficiaries.

14. Address basic issues of regional or global concern. For trade negotiations with WTO, it becomes obvious that the world community is moving towards formation of trade and economic blocks and that no room would be available to small or isolated partners. This change in international trade environment following the establishment of WTO and the emergence of several regional economic blocks (EU, NAFTA, ASEAN, etc.) would call for closer co operation among countries of the Near East. By the same token, dealing with international standards and specifications as manifested in the Sanitary and Phytosanitary (SPS) Agreement and quality control issues could not be done by one country in isolation from its neighbours.

15. Strengthening intra-regional cooperation for promoting agricultural production. The Near East Region is still considered a net importer of food commodities. Among the Region's 29 Member Countries, eight are listed as Low-Income Food Deficient Countries (LIFDC's). Promoting agricultural production, particularly food, is on the top of the agenda of all `agricultural development plans' of Member Countries in the Region. Cooperation among countries in the area of agricultural research , biotechnology, efficient and low cost technologies and project management skills, would all lead to synergy of efforts and complimentarity of resources.

16. A vehicle to approach regional or international funding agencies. The TF arrangement could provide `seed money' to finance agriculture sector review, project identification and formulation missions and implementing pilot phase projects that could initiate the interest of traditional donors. The TF projects could also play a catalytic role in bridge-financing of projects or attracting funding for well targeted TCP projects of regional dimension.


Available Alternatives

17. Few alternatives for implementing the cooperation between Member Countries of the Region and FAO were stated in Document No. NERC/98/INF/6, submitted to the 24th NERC held in Damascus, March 1998. Below is a brief account of these alternatives outlaying the modality of Governmental contribution to the NECP.

18. Countries could provide individual voluntary TF contributions to the NECP to be deposited with FAO in the name of the contributing country, and could not be used without its approval. Annual financial statements would be provided regularly to participating countries, regarding their own contribution. Any participating country could withdraw from the NECP and dispose of the remaining part of its contribution, provided advance notice is given to FAO, according to terms and conditions to be agreed upon among participating parties.

19. Countries could make TF contributions which would remain at their disposal and the NECP could only use the accrued earnings. In this case, a minimum level of contributions should be defined for each country, in order to secure funds for the Programme. The conditions related to the use and withdrawal of funds, stated in the first alternative above, could apply.

20. Countries could provide contributions, according to an agreed upon scale based on some indications like GDP, GNP, share of agriculture in the economy, etc. The conditions related to the use and withdrawal of funds stated in the first alternative could also apply.

Suggested Modus Operandi

21. The programme could fund projects of Regional or Sub-regional interest. Priority would be given to projects aiming at assisting in resolving problems of concern to more than one country of the Region, such as the agricultural production, water management, desertification control, intra-regional trade, harmonization of agricultural policies, human resources development, etc.

22. Project ideas could emanate from participating Countries or Sub-regional Organizations, based on actual needs. In this case cost of the project would be charged to the NECP either from the participating country's own funds or shared among countries participating in the Programme.

23. Projects could be proposed by FAO to the NECP-participating Countries to seek their interest and approval. In light of the replies received, the total cost of the project(s) to be funded would be proportinally divided with prior agreement among these countries.

24. The NECP operations would be reviewed annually by Tripartite Review Meetings composed of the donor, recipient country and FAO. These meetings would review the status of the Programme and could conduct mid-term review of the operational projects to be fed into the final assessment of the Programme through field visits and meetings with officials from recepient countries. The cost of these review meetings would be charged to the NECP budget on a pro rata basis or other formula to be agreed upon by participating countries.

25. FAO would be the technical executing agency of the NECP assistance and would provide, from the TF funds, the staff necessary for an Operation Unit (with national counterparts) in order to secure effective implementation of the programme activity, including:

26. The NECP would be encouraged to establish cooperation mechanisms with regional funding agencies like the Islamic Development Bank and others, whereby projects would be funded on cost-sharing basis.