INTER-AMERICAN AGENCY FOR COOPERATION AND DEVELOPMENT(IACD)

MANAGEMENT BOARD OEA/Ser.W/XX. AICD/

September 2001Original: English

INTER-AMERICAN AGENCY FOR COOPERACION AND DEVELOPMENTSECOND QUARTER REPORT

April - June 2001

TABLE OF CONTENTS

I. OVERVIEW.....................................................................................................................................

II. GENERAL......................................................................................................................................

A. Meetings of the Agency..........................................................................................................1. First Special Meeting of CIDI – May 17 ........................................................................2. Sixth Meeting of Management Board – May 16..............................................................

A. Agency Participation in International or Inter-American Meetings……………………….............1. Summit of the Americas………………………………......................................................2. Preparation of CIDI Ministerial Meetings or Meetings for Program Development........... 3. Meetings of Observer Missions to the OAS...................................................................4. Director General’s Visit to Spain and Israel....................................................................5. Other General Activities................................................................................................

III. PROGRESS UNDER NEW AND EXISTING PROGRAMS............................................................

A. Department of Development Programs...................................................................................1. CIDI Programming...........................................................................................................

a. Ongoing FEMCIDI Projects..........................................................................................b. 2001 FEMCIDI.............................................................................................................

2. Progress in New Technical Cooperation Programs...........................................................a. Transparency Initiatives in the area of E-Government..............................................b. Rural Electrification and Telecommunication Initiative..............................................c. Program on Municipal Development........................................................................

3. Trust of the Americas........................................................................................................a. Connectivity Initiatives.............................................................................................b. Transparency Initiatives..........................................................................................

B. Department of Information Technology for Human Development.............................................1. Fellowships and Training...............................................................................................

a. Graduate Fellowships.............................................................................................b. Undergraduate Fellowships.....................................................................................c. Applications for 2001 Fellowship Cycle....................................................................d. Short-term Specialized Training..............................................................................e. Development Activities............................................................................................

2. Progress in Developing New Technical Cooperation Programs......................................a. The Educational Portal of the Americas...................................................................b. Development of Teacher Training Program.............................................................e. Cooperation Agreements........................................................................................

C. Department of Operations and Finance...................................................................................1. Alternative Sources of Financing for Technical Cooperation...........................................2. Accounting System/Remediation Plan...........................................................................3. Financial Statements.....................................................................................................4. Accounting for FEMCIDI Projects..................................................................................

SECOND QUARTER REPORTApril - June 2001

I. OVERVIEW

The attention of the Agency in the Second Quarter of 2001 was taken up substantially with support to the preparations and then the immediate follow up to the Summit of the Americas. In order to ensure its effective support to this process, one of the important decisions taken during the period was the creation of an Office of Policy, and the appointment of a Director to that Office. The Office started to give immediate priority to the topics of the CIDI Strategic Plan and the upcoming Ministerial Meetings under CIDI. The Program Departments of the Executive Secretariat continued to increase their scale of activity with new financing and technical support, and the Finance Department took steps to improve the Agency’s financial management and control system.

ll. GENERAL

A. Meetings of Agency

1. First Special Meeting of CIDI – May 17

Given the intention to reserve the Regular CIDI Annual Meeting for specific approval of the new Strategic Plan, it was decided to hold a Special Meeting of CIDI on May 17 to approve a number of important Resolutions, including some requiring the attention of the upcoming General Assembly. These Resolutions dealt with: The Strategic Plan for Partnership for Development 2002-2005; Follow Up and Implementation of Mandates of the Third Summit of the Americas within the framework of CIDI and the IACD; The 2002 Program Budget for the CIDI area and; Specialized or Sectoral meetings of CIDI in 2002, including provisions in specific Resolutions dealing with the First Meeting of Ministers of Science and Technology, Ministerial Meeting on Sustainable Development, Twelfth Conference of Ministers of Labor, Second Meeting of Ministers of Education, and First Meeting of Ministers of Tourism .

The Resolution on the Strategic Plan, subsequently confirmed by the General Assembly (AG/RES1806(XXXI-O/01), set out a number of guidelines for preparing the Plan, and authorized its approval at CIDI’s Sixth Regular Meeting to be held in later 2001. This date was subsequently confirmed for November 8th at OAS Headquarters.

The Resolution on follow Up to the Summit of the Americas Mandates (CIDI/RES 100 (1-E/01) instructed the Secretary General to present, before September 30,2001, a Plan for organizing the support of the General Secretariat in the implementation of Summit mandates in the area of cooperation, with the purpose of rationalizing the human and

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financial resources of the Secretariat. The Plan should also include measure for organizing the support of the Secretariat to political and technical meetings in priority areas for development.

In addition, the Special Meeting of CIDI approved a definitive procedure for election of the members of the IACD Management Board. These procedures were followed for the elections during the CIDI meeting of four new members to the Board: Belize, Brazil, Peru, and St.Vincent and the Grenadines replacing St.Kitts and Nevis, Jamacia, Argentina and Venezuela, to take their place at its next meeting set for October. Finally, the Meeting approved the list of new CENPE members for the 2001 FEMCIDI evaluation exercise, subject to final decisions by CEPCIDI on the composition of each Committee taking into account the number of final projects presented and budgetary resources available.

1. Sixth Meeting of Management Board – May 16

The Meeting received and took note of a number of documents from the Executive Secretariat on:

Revision for the Criteria for Selection and Evaluation of Partnership for Development Activities Changes to the Rules of Procedure of CENPES Issues relating to 2002 IACD budget IACD Remedial Plan in response to 2000 Report of the OAS Board of Auditors First Status Report on the 2001 FEMCIDI Programming Process

The first two documents were referred to the consideration of a future meeting of CEPCIDI. This meeting had not yet occurred as of the date of this Report. With respect to the first Report on the 2001 FEMCIDI Programming process, the Board noted and approved the Secretariat’s information on the project profiles received prior to April 30 and its criteria for their assessment.

On the third item, the particular issue that was highlighted in the discussion concerned the use of the 15% FEMCIDI to the Regular Fund and specifically the possibility of reserving 3% of this allocation to IACD public information activities. With respect to this item, the Board noted that this proposal required the attention of other OAS political bodies.

The outgoing Chairman of the Board, Mr. Michael Jay of Canada, tendered his final report which gave his perspective on the accomplishments achieved by the Board during its first year of operation and the challenges lying ahead. Members expressed their appreciation for his leadership and skill in guiding the Board during his term.

B. Agency Participation in International or inter-American Meetings

1. Summit of the Americas

Along with the Chairman of CEPCIDI, the Chairman of the Management Board, the Director General represented the Agency at the Third Summit of the Americas Meeting in

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Quebec City on April 20-22. In the Follow Up portion of the Plan of Action to the Summit, the Ministers are directed to encourage….” Efforts of the IACD to secure financing from both traditional and new sources, including new partnerships with the private sector, and its efforts to have the goals of the Summit inform the development of its Strategic Plan 2002-2005”.

On the eve of the Summit, a special ceremony hosted by Mme Aline Chretien, the wife of the Prime Minister of Canada, inaugurated the Museum of the Americas whose Foundation’s Board of Directors includes the IACD Director General and which has been a strong supporter of the Agency’s new programs.

2. Preparation of CIDI Ministerial Meetings or Meetings for Program Development

Sub-regional Meetings of Experts in Education and International Cooperation

In the April to June period, IACD’s Department of Information Technology for Human Development and the Unit for Social Development and Education held three meetings of experts in Education and International Cooperation. The first of these meetings, for the countries of the Mercosur, Bolivia, and Chile was held on May 21 and 22 in Buenos Aires, Argentina. The second meeting, for the countries of the Andean Region and Paraguay, the third, for Central America, Panama, and the Dominican Republic were held in Washington, D.C. on June 18 and 19, and June 21 and 22 respectively. The meeting for Canada, Mexico and the United States and the meeting for the Caribbean are planned for the July-August period.

The objectives of these meetings were:

To strengthen dialogue with Ministries in order to identify exemplary programs related to the priorities contained in the Plan of Action of the Third Summit.

To explore technical and financial cooperation mechanisms for the implementation of horizontal cooperation strategies within, and between, sub-regions.

To assist with the diversification of human resources training programs for integrated socio-educational development based on the needs of each country.

To create a Network of Experts in Education able to monitor and evaluate implementation of best practices in the Region.

The participants were asked to select, in conjunction with the Minister of Education, an exemplary education program that the Ministry had developed in keeping with the priorities set forth by the Third Summit. In addition, The Unit for Social Development and Education presented a vision for creating a system to promote horizontal technical cooperation between countries. The participants were then invited to submit their exemplary programs to be included in a portfolio at the Ministerial meeting in September.

3. Meetings of Permanent Observer Missions to the OAS

The IACD hosted two meetings on April 10th and June 14th with the OAS Permanent Observer Missions with the goal of promoting the Agency’s new directions and strengthening the dialogue on practical modalities for enhanced collaboration in the area

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of technical cooperation in the Americas. Presentations were made on the Agency’s role in support of the Summit of the Americas process, the concept of best practices (Sustainable Technical Cooperation) programming and the role that institutions from Observer countries could play in this process. The Agency provided information on the needs for technical assistance of OAS member states as expressed in the project profiles received under the FEMCIDI programs. Those Observer Missions attending the sessions were from Denmark, the European Union, Finland, France, Germany, Israel, Korea, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland Thailand, and the United Kingdom.

The Agency gave detailed presentations on several areas which could be of interest to best practice institutions in the Observer countries: Distance Education and Teacher Training; Municipal Development; Small Business Incubators; Connectivity through Information Technology for Rural Areas, and e-Government Programs.

The participants reported that their authorities had welcomed the Agency's new initiative for increasing practical forms of collaboration with the Observer countries. There was strong support to working with the Agency in various aspects of social development, such as on gender issues and poverty alleviation, as well as governance programs, especially involving civil society organizations. These areas were in line with their countries’ priorities in the Americas. The Director General committed the Agency to submit proposals to the POM on the areas where their countries are focused with the goal of exploring the possibilities of co-financing and working together.

4.Director General’s Visit to Spain and Israel

Mission to Spain (June 25-July 1)

The purpose of the mission was to meet with Spanish institutions interested in strategic alliances. Understandings on cooperation in the transfer of best practices from Spain were reached with the Spanish Agency for International Cooperation (AECI), with a dependency of the Ministry of the Economy which promotes the export of best Spanish technical capacity abroad, "Expansion Exterior ", and with Compañia Española de Financiamiento al Desarrollo (COFIDES). In addition, detailed discussions were held with the Spanish Instituto de Credito Oficial, and a decison taken that an agreement will be signed in the coming months that will offer financing opportunities for OAS member states to tap into new financial resources for best practices projects .

A cooperation agreement was signed with the Universidad Nacional de Educacion a Distancia (UNED), and a joint program of activities was defined for the period 2001-2002. During the "Conferencia Internacional Virtual Educa 2001”, the Director General made a presentation on the Educational Portal of the IACD.

Collaboration on cooperation activities in Latin America were discussed with the Secretary General of the Ibero -American Secretariat for Cooperation (SECIB), Jorge Alberto Lozoya, and it was agreed to follow up with proposals for joint work in the education and technology areas.

Mission to Israel (April 26- May 2)

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The Director General of the IACD travelled to Israel to hold meetings with executives from the Center for International Cooperation (MASHAV) of the Ministry of Foreign Affairs and discuss future activities to be carried out within the framework of the cooperation agreement between the IACD/OAS and the Government of Israel. Also, meetings were held with executives from various institutions such as the Golda Meir International Training Center, the Israel Institute of Technology (TECNION) and the Israel Export Institute.

Various proposals were discussed and at the present projects are being prepared in the areas of technological incubators, the training of teachers through distance learning methods, training on pre-school education, and courses for marketing executives.

1. Other General Activities -- the Strategic Plan

As noted above, the Special Meeting of CIDI decided to postpone approval of the new Strategic Plan until the Regular Meeting of CIDI in November, while the General Assembly Meeting in Costa Rica in June defined the Guidelines for the new Plan. In parallel, and following its approach of engaging informal consultations as was done with national Cooperation Agencies and the Management Board in February, the Executive Secretariat prepared an Assessment of the 1997-2001 Plan. This assessment was circulated to delegate. Further documentation was provided to the CEPCIDI Sub-Committee being set up to coordinate preparation of the new Plan in the Third Quarter.

III. PROGRESS UNDER NEW AND EXISTING PROGRAMS

During the April-June period, the Departments of Development Programs and Information Technology for Human Development continued to pursue the main lines of action of the 2000/2001 Business Plan. For all but a handful of projects the 2000 FEMCIDI cycle was closed and the programming of 2001 FEMCIDI resources entered its active phase with the submission of project profiles. This was accompanied by an acceleration of efforts to mobilize additional resources and design new technical cooperation programs. The 2001 PRA and SPECAF fellowship selection process was completed. At the same time, the expansion of the number and value of fellowship awards and training programs continued through strategic alliances with universities and the conclusion of agreements with a variety of institutions committed to providing training. Strengthening of the Agency’s financial control and accounting systems was given high priority and the decision made, in consultation with OAS management, to align the Agency with the improved ORACLE system being adopted by the General Secretariat.

A. Department of Development Programs

1. CIDI Programming a) Ongoing FEMCIDI Projects

Fifty-three (53) projects from previous years that had been given an extension from the original Dec 31st termination date were completed by July 31st, 2001. There are still a number of outstanding final reports from these projects. For eight (8) of the projects that

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were to complete their activities by July 31st, 2001, the Board had earlier approved the extension of the execution period to December 31st, 2001.

As of August 31, seventy-seven (77) projects from the eighty-four (84) approved last November, for execution by the end of 2001, plus the eight (8) that were given another extension, had expended 53% of the programmed resources currently in the FEMCIDI account. A detailed report on the 2001 execution process is being prepared for the Management Board.

II. 2001 FEMCIDI

In line with the new FEMCIDI programming cycle approved early in 2000 through amendment to Article 17(d) of the FEMCIDI Statutes, over 350 project concepts were received from the member states by April 30. Of these, 260 were registered as eligible in line with the existing Criteria for the Selection and Evaluation of Partnership for Development Activities.

Following this, the eligible projects were analyzed by IACD staff with inputs from some OAS Units and the 2000 CENPE members. In the case of the Science and Technology area, the Inter-American Commission (COMCYT) reviewed all project concepts and provided its comments. A total of 103 project concepts were placed in the preliminary Programming Proposal. Subsequently, an additional 5 project concepts from Suriname and Dominica were added as a result of the Management Board decision to allow those countries to participate in the 2001 programming process, after having pledged contributions to FEMCIDI. The total funding requirement was set at a minimum of 150% of the pledged contributions in line with the agreed modifications to the FEMCIDI programming regime.

The preliminary Programming Proposal was distributed to the member states and the OAS Offices on June 15th along with the sectoral distribution of the 2001 FEMCIDI pledges. A call for presentation of final project submissions by August 30th and the format for doing so were sent out to all countries at the same time.

At its Sixth Meeting on May 16, 2001 the Management Board received a Secretariat paper on revisions to the existing Criteria for Selection and Evaluation of Partnership for Development Activities and a proposal for changes to the Rules of Procedures of CENPES regarding the composition of the CENPES. The Management Board decided to send both documents to CEPCIDI for its consideration. These revisions are scheduled to be effective in 2002.

In the meantime, approval of the 2001 CENPE members was given by the Special CIDI Meeting on May 17, 200. At its July 31st meeting, CEPCIDI approved the dates of Oct. 10-12 for the 2001 CENPE meetings. It was agreed that the CENPE of Culture will meet by electronic means given the minimal number of projects they need to evaluate and the limited amount of resources pledged to the sectoral account.

Since the preliminary Programming Proposal was sent out, IACD Regional Coordinator staff have been providing assistance to institutions in the member states to help them develop their FEMCIDI proposals.

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IACD staff met with the specialized Units and Offices of the OAS/GS to consider how the projects could be further enhanced for possible outside funding in addition to FEMCIDI resources. A number of strategies were developed, and a full report on these enhancement efforts will be presented at the October meeting of the Management Board at the same time as the final Programming Proposal.

The final Programming Proposal is scheduled to be sent on out on September 15th to the member states. This Proposal and the full texts of the projects presented in final versions will be sent at the same time to the 2001 CENPES members via special delivery. The projects received in electronic format will be registered in an special page of the Agency’s Web site developed just for the use of the CENPES members in dialogue among themselves and as appropriate with staff, prior to the CENPE meetings.

The work plan priority in this area for the first quarter of 2001 has been to initiate the new FEMCIDI projects approved in November 2000 and start implementing the revised FEMCIDI regime and its modified programming cycle. In the case of the former, execution agreements for the original 69 projects approved last November were prepared and sent out to the executing agencies by the end of December, and the additional 14 approved projects were sent out by mid February.. Simultaneously, 64 other projects carried over from last year are still active on the basis of special extension given by CEPCIDI for these projects until July 2001. In parallel to these operations, the Secretariat worked intensively with the Missions, through CEPCIDI, and received the latter's authorization (February 8th) to apply new FEMCIDI programming procedures through amendment to the existing Statutes, subject to a performance review at the end of 2001.

Unfortunately, due to slow submission of project execution plans by the recipients, as of mid March only 40% of the approved projects had begun their activities and received initial funding advances, notwithstanding efforts by regional coordinators to encourage more rapid action. This situation is of special concern to the Secretariat since it risks diverting staff from giving priority to beginning the new programming cycle. Under the revised FEMCIDI procedures, the new cycle begins several months earlier in the year than in the past and requires a much more intense involvement by the Executive Secretariat. Division staff has been very active in explaining the new procedures to the countries as project profiles (concepts) are due by mid-April. At the time of this report, 21 proposals had been received from 6 countries.

In line with direction from CEPCIDI, work began on defining new project evaluation criteria for FEMCIDI which will be submitted to the May meeting of the Management Board.

2 2. Progress in Technical Cooperation Programs under the Best Practices Initiative3

a) Transparency Initiatives in the area of E-Government The objective of the initiative is to further the goal of greater transparency and efficiency in the delivery of public services at the same time as promoting use of new technologies for the modernization of such services. With support of the US Specific Funds, the first phase of the E-government program has involved putting in place a number of high

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quality cost effective government procurement systems at the national, provincial and municipal levels. Descriptive profiles were developed covering the US, Canada, Mexico, Chile, Western Australia as well as systems still under development in Argentina, Brazil, Colombia and Peru. As a result, a number of procurement service products have been identified and are currently being developed. The IACD received confirmation to provide such services from the Chilean Direccion de Aprovisionamientos del Estado (DAE), the Mexican Secretaria de Controloria y Desarrollo Administrativo (SECODAM) and the equivalent Western Australia entity. The IDB and the World Bank have been invited to participate and co-sponsor this work.

Current Status of the Procurement Initiative Visits were made to Chile/DAE and Mexico /SECODAM along with representatives from Peru, Dominican Republic and the Andean Community Secretariat interested in acquiring the former’s services, to jointly design the terms of reference for collaboration. Funding was obtained from other donors to help sponsor these missions. As a result, the Agency received requests for project assistance for the development of Internet-based government procurement systems from:

Peru, for a system similar to the one of Mexico. El Salvador, for a system similar to the one of Chile The Secretariat of the Andean Community for the development of a program proposal for USAID or other potential donors to help the Andean member countries

build up their government procurement systems capacities. This capacity is required by all regional free trade agreements and would constitute a first step in the development of modern procurement systems throughout the Andean region.

IACD is also preparing a Regional Technical Cooperation and Training Program in Government Procurement for Smaller and Less Developed Countries to be proposed to donors specifically interested in supporting the smaller and less developed countries of Central America and the Caribbean region in the area of government procurement.

In parallel, IACD began the preparation of a Program for Small Business Enterprise participation in e-government procurement and e-commerce transactions in general, in cooperation with CONUPIA of Chile, the North-South Center of the University of Miami and the Multilateral Investment Fund of the IDB. The need for SMEs to receive structured technical assistance and training to participate in e-government procurement and other forms of e-commerce has been an additional priority highlighted by the Agency’s Advisory Panel on Transparency, as well as by government policy makers and procurement practitioners.

The Agency has initiated the systematic identification of best practices at the sub-national government levels, including procurement as well as licenses, and real property registration and tax administration. The goal in this case would be those of increased revenue generation and more effective utilization of municipal resources. IACD has initiated a dialogue with the Montgomery County Administration in Maryland, based on preliminary indications that this is a recognized best practice in municipal e-government. Consultations with the World Bank and ITESM of Mexico have identified the possibility of IACD contributing the e-government component to ongoing municipal administration training programs co-sponsored by those institutions.

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Other Transparency Initiatives

a. Customs and Ports Administration

Last December, IACD and Caribbean-Latin American Action (CLAA) initiated a process of identification of best practices in modernization of ports and customs management. Consultations with private sector users and public sector customs managers led to a joint mission to Trinidad and Tobago in May to explore possibilities for the development of a technical cooperation and training program from that country to support other OAS member countries in improving their customs management systems. A similar process is underway with Chile.

Trinidad and Tobago has confirmed that their country is committed to complete its customs reform and modernization and is willing to support other countries in the region in earlier stages of this process. This latter possibility will be explored with the national Customs Reform and Modernization Commission during a forthcoming joint IACD - CLAA mission that will take place in August 2001.

b. E-Government Academies

With the support of Microsoft and the participation of the Secretary General of the OAS, the Director General of the IACD made a presentation on the concept of an E-Government Academies Initiative to high level government representatives on March 19 in the Annual Meeting of the IDB in Santiago, Chile.

Subsequently, the Agency established a partnership with the North-South Center at the University of Miami, Microsoft, COMPAQ and KPMG for the further development of this initiative.

The first phase involves the organization of a number of high level national or sub-regional workshops with funding from these private sector partners in order to provide representatives of best practice institutions and experienced analysts with an opportunity to define strategies for the development of e-government in their countries. The workshops are being designed in consultation with interested governments beginning in Chile and followed by Brazil, Mexico, Argentina, Panama and Barbados.

c. Rural Electrification and Telecommunication Initiative

The Agency has undertaken a major initiative in rural electrification and telecommunication as part of its Sustainable Technical Cooperation Program. The goal is to provide low-cost, sustainable electrification and communication systems using renewable energy sources. These systems will be coupled with areas for connecting to telephone, computer and Internet services and installed in community service buildings (e.g. schools, health clinics and churches) in rural villages that do not have access to grid-based electricity or telecommunications.

The design phase of this project is currently underway with the collaboration of the General Secretariat’s Renewable Energy Initiative, and Winrock International has been contracted. The latter is also making a considerable in-kind contribution to the study. The study will focus on five countries (Guatemala, Honduras, Bolivia, Colombia and

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Belize); data collected from these five will be used as a model for engaging other OAS Member States in this initiative.

Innovative financing mechanisms are being explored to fund this important hemisphere-wide initiative. Fruitful discussions have been held with private sector entities such as Leucadia Corporation to provide technical cooperation in the advancement and funding of the project.

The Agency is working with governments, other development organizations and the private sector to identify experts and systems that can serve as “best practices”, and will eventually work with the providers to tailor their products to particular community needs. The solutions developed will be in the form of appropriate “technology packages” consisting of the energy generation and telecommunications services, “training packages” including both systems and computer training for the beneficiary community. An important component of the initiative will be institutional strengthening at the national and local levels.

d) Program on Municipal Development

The objective of the program is to provide technical assistance and training to achieve better local government development in the member states. The project and activities envisioned will assist the institutions in the improvement of their managerial capabilities from a development point of view. During the period April-June, the activities carried out covered the following:

A network of contacts was established with public and private sector institutions active in municipal development.

A training program in municipal management was drafted and organized in three modules: political aspects (how administrators should work in a political setting), social aspects (needs of low income populations, citizen participation, etc) and technical aspects in management of municipal services.

A survey of mayors was carried out in two countries (Venezuela and Bolivia) in order to identify their training priorities.

A meeting of a Best Practices Advisory Group was convened on May 8th with the participation of the institutions located in Washington such as the World Bank, IDB, ECLAC, USAID, Pan American Development Foundation, and the Unit for Promotion of Democracy.

Partnerships were established with Empresas Publicas de Medellin (EEPPM), Brazilian Institute of Municipal Administration (IBAM), Research and Urban Planning Institute of Curitiba (IPPUC) for the supply of best practices municipal services. An agreement between the IACD and Empresas Publicas de Medellin (EEPPM), signed during the recent OAS General Assembly, defines a framework for the supply by the latter of technical cooperation and training related to municipal telecommunication services, energy, water supply and sanitation, and strategic planning. Similar agreements with the two Brazilian institutions in their areas of expertise are under negotiation.

Agreements for co-financing Best Practices technical assistance and training are being negotiated with CAF and CABEI for municipalities in the Andean and Central American region respectively. In the case of CAF, the agreement will be signed at the beginning of September. With respect to CABEI a general cooperation agreement already exists with IACD, and a draft work program is under consideration.

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The Agency and UNDP agreed to collaborate on municipal development in a number of operational areas with special emphasis on Central America.

The initiatives currently underway will be presented to a second meeting of the Best Practices Advisory Group to be held in the Third Quarter. This meeting may also include participants from institutions from the private sector, as well as Civil Society Organizations.

Trust for the Americas

During the April-June period, the Trust moved to extend its existing program thrusts and partnership arrangements in its two program areas of Connectivity and Transparency. Its Board of Directors Meeting on May 15th examined the situation of the Trust’s financial resources, and the Director General of the Agency reported on the OAS Audit Report for 2000 which contained observations on the financial accounts of the Trust which had been incorporated with those of the Agency during 2000.

A. Connectivity Program – Information Technology for Social Development

The Connectivity Program continued to promote the development of disadvantaged sectors of society through ICT related technical assistance and training, using Net Corps Americas (NCA) as its core delivery instrument and targeting people with disabilities, women, microenterprises and low-income youth. The most recent deployment of volunteers brought the total up to 70 in 21 countries in Latin America and the Caribbean, with a calculated value in professional services of over one and a half million dollars.

During the first half of 2001, over $385,000 in cash receipts were processed from the total grants previously received. Another $600,000 in software received from the private and public sector contributors to the various projects being implemented under this Program. All activities described below were funded by these external sources.

People with Disabilities

This project’s main objective is to train people with disabilities in the use of state of the art technology adapted to their circumstances to create employment opportunities and facilitate their integration into the workforce. Funding for these activities comes from the U.S. Department of Labor/Bureau of International Affairs grant of $798,000, Microsoft El Salvador - $50,000 in cash and $50,000 in software; e-Bay Foundation for $50,000; the World Bank for $150,000, and Premier Programming in the equivalent of $506,000 consisting of software for the blind.

III. In El Salvador, the first Training Center for People with Disabilities in Central America -- created in a partnership with the US Department of Labor -- was opened in June and officially dedicated by El Salvador's First Lady. Agreements were signed with the Ministry of Labor and the Association of Infocenters of El Salvador to ensure that the national network of telecenters will use technologies adapted for the

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disabled. Nine volunteers from Spain, Argentina, and Colombia were deployed in Nicaragua, Guatemala and Honduras in June. Rotary International chapters in Guatemala, Honduras and Nicaragua have asked for proposals for disabilities training centers patterned after the Salvadoran model which they will be prepared to support. In Ecuador, the Trust is providing software to the Fundacion Esquel to provide training for disabled youth.

The Project will continue working in Central America and aims to expand in the Andean Region where it will to create micro-enterprises for technology training for people with disabilities Funding proposals totaling over $1.2 million are to be prepared to: Microsoft Central America, Fundacion Telefonica of Peru and the Multilateral Investment Facility.

Women and Low Income Youth as Future Leaders in Technology

These projects objective is to support women and youth organizations in the Andean and the Caribbean Regions to use technology effectively and to increase the number of women participating in technology-related careers. Initial funding for project activities comes from a Cisco Systems grant of $50,000 and an eBay Foundation grant of $53,000. An advisory committee has been established including Ana Milena Munoz de Gaviria, Carmen Rosa Graham (IBM-Director for Latin America), Gloria Bonder (a senior professor on gender and technology from Argentina) and Liliana Miranda (head of a Mexican-American technology incubator).

In Colombia, the Trust negotiated an arrangement between the local CISCO Networking Academies and the Colombian training arm, SENA that will promote training programs for low-income women The Trust has deployed one Spanish volunteer to provide training to two NGOs that serve women while the Empresa Telefonos Bogota (ETB) and the Chamber of Commerce of Bogota have agreed to provide job opportunities for the female Academy graduates. This project fully supports the Connectivity Agenda of the Colombian Ministry of Communications

In other Andean countries, the Trust sent Net Corps Americas (NCA) volunteers to the Gender Affairs Offices of Ecuador and Venezuela , to two Colombian NGOs focussed on gender issues, as well as NGO for indigenous women in Bolivia and Peru. In Ecuador, the Trust created a telecenter for low-income youth in partnership with the Programa Muchacho Trabajador and graduated its first class, which included 80 participants. This Quito program is now being replicated in Guayaquil and Ambato. Two volunteers from Mexico and Argentina provided the training of trainers in these communities. Two more volunteers, from Colombia and Peru will be deployed in September.

Given the high demand from Andean governments and NGOs, the women and low income youth project plans to expand within this region in the coming months. Funding proposals are

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being submitted to the Inter-American Development Bank, the International Youth Foundation, IBM’s Andean Regional office, Microsoft Peru and Compaq Colombia.

At the same time, in the Eastern Caribbean States, an agreement was promoted by the Trust between CISCO Systems and the Dominica Ministry of Education to have CISCO launch the first of several training centers in the Eastern Caribbean on how to build and maintain computer networks, with special emphasis on women and low income youth as principal clients. This activity is in support of the Education Plan of the OECS countries.

Also in the Caribbean, a NetCorps project that began in 2000 continued to bring training in IT techniques to micro-enterprises in the Caribbean, especially small hotelieres, national hotel associations and small agribusiness-related enterprises with funding from USAID, and CIDA Seven Net Corps volunteers were deployed in late May, for a period of 6 to 10 weeks to provide small hoteliers in the Caribbean with basic computer training (word processing, and spreadsheet and database management), web design, development and maintenance, computerized accounting and reservation systems,etc. They assisted approximately 50 properties in St. Vincent, Jamaica, Trinidad and Tobago, Bahamas, Guyana and Barbados.

Transparency Initiatives

Between April and June, the Trust began planning and fund-raising for a multi-stakeholder conference on anti-corruption in the final semester of 2001 in the Southern Cone which the Argentine Government has agreed to host. In addition, the Mexican Government indicated its interest in organizing a similar event in Mexico in the early part of 2001. Work also began on a general program with the OAS Office of the Rapporteur for Freedom of Information to promote freedom of expression and access to information. This builds on its investigative journalists training program by focussing specifically on the needs of journalists

IV. Department of Information Technology for Human Development

1. Human Resource Development and Training

In the April to June period, the OAS Fellowship Program processed and awarded the new applications for the 2000 - 2001 cycle, as well as for extensions of past due fellowships.

a. Graduate Fellowships

The processing of 441 applications to the Regular Training Program (PRA) continued in the April to June period. In June, 170 new fellowships were awarded for graduate (masters and doctorate) studies and research at universities throughout the region. The majority of the fellows are studying in the US (54,0%) with a significant number in Brazil (8,0%), Canada (5,5%), Chile (12,9%), Costa Rica (8,0%), and Mexico (8,0%). In addition to the new awards, the Fellowship group also processed extensions for some 104 fellowships, which were originally awarded in 2000 and extended for an additional year. The approximate cost for the 2001 fellowship awards and extensions is US$5,326.359.50.

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b. Undergraduate Fellowships

Under the Special Caribbean Fellowships Program (SPECAF), 28 new fellowships were activated for the 2001 fellowship cycle. This program provides scholarships for undergraduate studies in development areas that are priorities for the Caribbean region, taking into account those fields that have an impact on integral and sustainable development. In addition, the Fellowship Program granted 22 extensions of fellowships from 2000. The approximate cost of the new awards and the extensions for one academic year is US$974,432.

c. Short-term Specialized Training

The Fellowship Program's short-term specialized training courses include those provided by OAS member and observer states and technical units.

(i) Program for Horizontal Cooperation Among Member States (CHBA)

During this quarter, the Agency has publicized 38 courses, conducted selections for 30, and awarded 220 fellowships to the following countries: Antigua and Barbuda (2), Argentina (14), Bolivia (13), Brazil (3), Chile (10), Colombia (13), Costa Rica (15), Dominican Republic (7), Ecuador (17), El Salvador (14), Guatemala (16), Haiti (4), Honduras (12), Mexico (8), Nicaragua (12), Panama (13), Paraguay (12), Peru (12), Uruguay (13), and Venezuela (10).

(ii) Program with Observer States for Specialized Training (PEC)

During this quarter, the Agency has publicized, conducted selections for 3 courses, and awarded 15 fellowships to Argentina (1), Barbados (1), Chile (2), Colombia (1), Costa Rica (2), Ecuador (1), El Salvador (2), Haiti (3), Mexico (1), and Peru (1).

(iii) Program of Specialized training by OAS Technical Units (CEAT)

This program is designed to provide professional training awards in various areas of OAS technical units. Of the two courses announced in the first quarter of 2001, the Agency selected and awarded 41 fellowships to the following countries: Argentina (4), Bolivia (3), Brazil (1), Chile (1), Colombia (1), Costa Rica (2), Dominican Republic (1), Ecuador (2), El Salvador (2), Guatemala (1), Honduras (3), Jamaica (3), Mexico (2), Panama (2), Paraguay (3), Peru (2), Surinam (1), Trinidad and Tobago (1), USA (3), Uruguay (1), and Venezuela (2). In the second quarter one course was announced entitled, “Challenges Radio in the New Millennium”. This course will be held in Quito, Ecuador, and the total estimated value of this course is $54.000.

(iv) Leo S. Rowe Fund

During the months of April, May, and June, the Leo S. Rowe Fund provided interest-free student loans to 19 graduate and undergraduate students of Latin

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American and Caribbean countries for a total amount of $122,700. The Secretariat has considered and worked with some applicants, who, unable to present a traditional guarantor, have presented institutions as a guarantee from their countries. In April, the IACD signed an agreement of cooperation with Fundacyt (Ecuador) and LASPAU. With this agreement, LASPAU, an institution from Harvard University, will guarantee 20 loans to students from Ecuador who will study at US universities.

c. Development Activities

(i) The Americas Leadership Fellowship Program “Alberto Lleras”

In order to honor Mr. Alberto Lleras, first Secretary General of the OAS and a visionary man who promoted the education and the exchange among the citizens of the Americas, the IACD named The Americas Leadership Fellowship Program after him. This Program aims to establish a broad-based consortium of universities to co-finance scholarships and fellowships. This will multiply the sources of financing from university and state budgets to increase the limited resources of the OAS. To date, the IACD has signed 8 agreements and is currently negotiating with 39 universities that have received a preliminary approval from their authorities in order to establish an agreement for co-financing fellowships. In addition, the IACD has furthered discussions with the Midwest Universities Consortium for International Activities (MUCIA), composed of the so -called five US Universities, to expand the Fellowship Program and undertake joint technical cooperation Programs. Annex III to this report provides a list of the universities contacted. Any outsourcing agreement reached with LASPAU, IIE or ACT will include the requirement that consortium links should be expanded and tuition reduction and waivers negotiated.

(ii) E-Becas

The Fellowship Program will offer electronic fellowships—e-becas—as a cost-effective alternative for expanding learning opportunities in remote communities in the Americas. E-becas is a new concept that will allow the e-fellows to participate in higher education without leaving their own country during the length of the fellowship period. The Technological Institute of Monterrey (ITESM) has already formalized the provision of 340 fellowships for distance education courses to be offered through the Educational Portal of the Americas. A similar process is taking in place with the National University of Distance Education in Spain (UNED), by way of an agreement of collaboration and cooperation signed by the Agency and UNED to provide distance learning opportunities to students in the Americas. In addition, the IACD initiated negotiations with other leader academic institutions to secure new offers of e-becas. Currently, the Agency is negotiating 100 fellowships with Project Zero of the Graduate School of Education of Harvard University.

(iii) Inter-Agency co-financed opportunities and educational loans

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The Fellowship Program continues seeking new ways to collaborate with agencies involved in the award and financing of fellowships of general. These will involve the co-financing of fellowships with collaborating universities and developing loan programs as a supplementary way to assist fellowship applicants who may not qualify for grant financing. In this regard, the Agency finalized negotiations with LASPAU and the Fulbright Program to co-finance 20 fellowships in the area of environmental conservation and management.

The Agency has signed an agreement with the Pan American Association of Educational Credit Institutions (APICE) to co-finance or reciprocal guarantee of fellowships. With this Program the Leo Rowe Fund will provide student loans for graduate and undergraduate fellowship programs. This agreement will provide more opportunities for students who apply but are not selected for fellowships due to a limitation in number of fellowships available or who have received a partial fellowship and need additional resources to complete financial requirements.

(iv) Improving Service Coverage

The Fellowship Program is working to improve the services provided to students. Currently we are working on more user-friendly application forms, a web page, and to update the Fellowships handbook. We are also working to create more innovative types of scholarships to widen the coverage of our service.

2. Progress in Developing New Technical Cooperation Programs

a. The Educational Portal of the Americas

During consultative meetings with Microsoft Corp. and ITESM in Monterrey, Mexico, the design and layout of the Educational Portal of the Americas in Spanish, English, French and Portuguese was approved. During this period, the Division continued to research and format content for the Portal, including information regarding distance learning programs, fellowship opportunities and online courses for the ongoing professional development of teachers. Advisory committees were formed with regional educational experts to authenticate the content of courses and fellowship offerings. Strategic alliances were formed with public and private sector institutions such as the World Bank, Inter-American Development Bank, Roberto Marinho Foundation, Industry Canada, Cisneros Foundation, PAHO, and universities and higher education institutions throughout the Americas and Spain. In addition, the Division completed a training program in the administration and hosting of the Portal, and purchased new hardware, software and telecommunication lines to ensure optimal functionality of the Portal for its launching on September 24-25 at the Meeting of Ministers of Education in Punta del Este, Uruguay. The Portal will be launched in English and Spanish and will be available in French and Portuguese by the end of 2001.

b. Website of the Agency (www.iacd.oas.org)

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The website of the Agency was launched in April 2001 in English and Spanish. After coordinating with other Agency departments, the initial services offered through the website include: general information about the IACD (who we are, director’s message, frequently asked questions, etc.), information regarding all projects offered through the Agency (FEMCIDI, horizontal cooperation, new best practices fund, etc), information regarding the OAS fellowships program and student loans, an online digital library, news events in the area of development and cooperation, and links to other related sites. The Division maintains a help desk for all visitors to the website and continues to compile, maintain and format information on a daily basis to ensure accuracy and relevancy to the Agency’s goals.

c. Extranet System

The Division has designed and developed the framework of an extranet system, a restricted access site through which the Agency will organize online fora and chats with different development groups. The first phase of the extranet system will be launched in October for the 2001 CENPES members, the content of which is being closely coordinated with other Agency departments. The CENPES forum will allow members to pre-evaluate 2001 project proposals online and discuss mechanisms to strengthen future FEMCIDI projects and programming cycles. The groundwork is currently being laid to develop a second forum for national development agencies, which will be launched in the final quarter of 2001. To encourage use of the extranet site, the Division has prepared a user manual to assist those that may not be familiar with navigating this type of site.

C. Department of Operations and Finance

1. Alternative Sources of Financing for Technical Cooperation

During the first and second quarters of the year, agreements were signed with four institutions to help finance technical cooperation projects brought to them by the IACD/SEDI. Two U.S. banks, Bank of America and Riggs National Bank, are among the four. Bank of America is the Agency’s primary banking relationship, with extensive international and regional experience. Riggs, a traditional Washington, D.C. banking institution, is also working with the Agency on a specific technical cooperation initiative. These two agreements amount to $115 million.

The IACD also entered into an agreement with the Export Development Corporation of Canada, the official Canadian entity charged with promoting Canadian exports, which sets out the EDC’s willingness to finance and/or guarantee Canadian technical cooperation projects for other Member States of the Organization, and to work with IACD in that effort. Another Canadian private sector entity with which an agreement was signed during the Quebec Summit was Bank of Nova Scotia, which has an extensive Latin American and Caribbean network of banks and branches.

In keeping with the objective of bringing other resources to bear, the Agency is currently in conversations with ICO, the Spanish Official Credit Institute, to sign an agreement

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whereby ICO will bring its resources to bear in transferring Spanish technical expertise and cooperation. We anticipate signing an agreement with ICO in the first week of October. In addition, conversations are underway with Mexico’s Banco Nacional de Comercio Exterior to help finance Mexican technical cooperation.

2. Accounting System/ Remediation Plan

EF Kearney was chosen in April 2001 to conduct the review of IACD’s accounting system and to recommend alternatives. Their report was presented in June and circulated to Management Board members. It concludes that IACD should use the Oracle Financials system, and should migrate to that system in January 2002, when the rest of the General Secretariat will be converting to Oracle 11i. The report recommends that the Agency retain its own set of books within Oracle, and that the General Secretariat acquire the Grants Accounting and Multi Organization modules. The General Secretariat has in fact committed to acquire the modules that will allow the Agency to account effectively for its operations. In the meantime, the Agency will continue to use QuickBooks and will close 2001 in that system.

In response to a finding of material weakness in internal controls by the External Auditors, IACD prepared a Remediation Plan designed to correct those weaknesses. The Remedation Plan is basically on target, with the important exception noted above: the accounting system will be changed in 2002 and not in 2001.

3. Financial Statements

Summary financial statements of the funds managed by IACD are attached to this document, along with detailed statements of FEMCIDI activity and Specific Fund activity to June 30, 2001.

4. Accounting for FEMCIDI Projects

The Operations Department successfully concluded a test run with the National Office in Uruguay for reporting on FEMCIDI projects. The template is currently being distributed to all National Offices along with an instruction memorandum. By September 30 th, all National Offices will be reporting in accordance with a uniform format using common criteria.

We have also requested that Executing Entities cooperate with us by reporting FEMCIDI project activity in the format developed by the Department.

In addition, the Operations & Finance Department is reconciling all FEMCIDI project accounts and closely following up with National Offices upon completion of the projects to ensure that unused funds are returned to the general FEMCIDI accounts on a timely basis.

V. CONCLUSION

In spite of budgetary and personnel limitations, the Agency made important strides in its efforts to reorganize itself internally to fulfill the responsibilities assigned to it in its Statutes and to lay the

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groundwork for new means of increasing horizontal cooperation through the use of grant financing and cost reimbursement to providing countries.

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ANNEX I: REPORT ON MEETING OF DEVELOPMENT OPPORTUNITIES GROUP

IACD DEVELOPMENT OPPORTUNITIES ADVISORY GROUP MEETINGFRIDAY, JANUARY 12, 2001

The IACD has established an informal Advisory Group of leading former finance ministers and development experts to help it craft the most effective instruments to meet the member governments' development needs. The first meeting of the group, held on Friday, January 12, 2001, was preceded by a dinner hosted by Enrique Iglesias for the IACD at the Inter-American Development Bank (IDB)

PARTICIPANTSMembers of Advisory GroupDomingo F. Cavallo, Former Finance Minister, ArgentinaGuillermo O. Chapman Jr., Former Finance Minister, Panama/ President, INDES, PanamaManuel Hinds, Former Finance Minister, El SalvadorShahid Javed Burki, Former VP, Latin America, Word Bank/ CEO Emerging Markets PartnershipRichard Fletcher, Principal Advisor, Inter-American Development Bank (IDB)IACD Staff & ConsultantsRon Scheman, Director General, IACDJohn Rahming, Former General Manager, Inter-American Investment Corporation, IDBHumberto Petrie, Former Argentine Executive Director, IDB/ IACD consultantSantiago Montoya, Partner, Leading Edge, Argentina/ IACD consultantSheila Donovan, Director of Operations, IACDJohn Wood, Director, Development Programs, IACDAlvaro Lopez Caycedo, Product Development, IACDOrlando Mason, Product Development, IACDCarlos Humud, Product Development, IACDPaloma Adams, Advisor to Director General, IACD

DIRECTOR GENERAL'S REPORT

LRS opened the meeting with introductions and a review of the IACD's plans to accelerate technical cooperation and training in LAC through its Sustainable Technical Cooperation Program (SUSTEC). He also reported on the IACD's progress at opening lines of credit and securing guarantees for Latin American and Caribbean (LAC) technical cooperation and training programs (OPIC-$200M facility, First Union Bank - $50M line of credit). This was followed by a description of the MOU signed by the IACD and Microsoft to create E-government Academies in the Americas.

To initiate the meeting, LRS described the operational issues behind the new IACD concept to develop best practice products and services:

The IACD will identify development bottlenecks via 2 channels:(i) IACD, World Bank and IDB will work together to identify basic bottlenecks and to create the services and products that will help countries overcome these. The issues handed down by the Presidential Summits and the OAS mandates generated at the CIDI Ministerials will guide the primary services.(ii) IACD will create ad hoc committees to identify very specific/ unique development bottlenecks common to most countries.

The IACD will establish Best Practices Committees composed of representatives of the IDB, World Bank, CEPAL and the Sub-regional development banks where relevant. These Committees will be familiar with the extensive best practice research done by these agencies and be able to draw on it. Ad hoc Committees will be created comprising the users in the private and public sectors to comment on and reinforce best practices identified by the development agencies.

The IACD will act similar to the role of a project manager in project finance—pool resources and pay various suppliers of goods and services.

Governments will also be able to access IACD best practice products and services using their IFI loans. In that situation the Agency won't have to provide financing.

The IACD will be reimbursed under the SUSTEC Program by having management fees built into the contracts.

ADVISORY GROUP COMMENTS ON SUSTECThere was consensus among the participants that if the IACD is successful at implementing the SUSTEC program it will not only provide a much needed service to the LAC countries but also serve the IFIs involved in providing technical cooperation and training as part of their loan packages.

Link between Quality and Credibility in IACD successThere was also agreement that the success of the IACD will depend not only on its ability to access financing for social development, but primarily on its success at inspiring confidence in LAC governments that it is offering a quality service via a simple delivery mechanism. They noted that while the countries trust the IDB and World Bank, there is frustration with the bureaucracy associated with their projects. The UNDP's reputation is clouded because it is perceived as being susceptible to adverse political pressure. Advisory group recommendations for gaining credibility:

Focus first five years of IACD's operations on the careful selection of clearly defined/high demand products, the creation of teams of high quality suppliers and the signing of contracts with requesting governments. It is important that the Agency be able to deliver high quality products with out incident and scandals. The lack of transparency in local procurement systems could jeopardize the Agency's credibility.

The Agency should begin by gaining a good reputation among IFI task managers as a reputable repository of high quality best practice products. We should prepare a brief and pithy document outlining the best practices in a few areas and explaining how it will package and deliver these. IACD staff should give priority to tapping task managers knowledge of best practices.

The IACD should take a two pronged approach to developing products: 1. Identify who is supplying the best practices and simultaneously, 2. Canvass governments about what products they need.

Consultation with LAC GovernmentsUnder the SUSTEC Program governments should come to the IACD in the following instances:1. IACD's delivery will be easier and quicker for governments to access generic products and services;2. IACD is the only agency providing high quality products in specific areas.

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In those cases where the governments don't know what the best practices are to address a bottleneck, they'll look to IACD for guidance. In other areas they will continue to use their relationships with other countries to get services.

Establish a framework within which the countries can promote integration in the regulatory area—similar to the Negotiating Groups established in the FTAA Process. Go to the FTAA Services Committee and ask what type of technical cooperation and training is necessary in the various sectors to get them on common ground.

Building Project TeamsThe group debated the manner in which the assessment and project execution teams should be set up.IACD should identify consultants with expertise in technical cooperation and training of high demand by countries and invite them to train and head up teams of best practice suppliers. The key is to create virtual teams that can be deployed rapidly. It is important that these experts have access to a permanent source of income to keep a minimum structure to the team.

The IACD should build a team of experts and best practice suppliers but it must avoid being transformed into an employment agency for pricey consultants.

The Agency should have a variety of team structures to meet a myriad of requests: 1. Formalized teams with clear responsibilities that can be deployed on request to implement project; 2. A database of consultants that can be called upon to head up ad hoc teams in response to requests for a unique product.

It is important that the teams be formalized so that the Agency can effectively market its products and services. The Agency can reduce costs and access expert team leaders is to tap into the local experts trained by task managers at the IFIs.

Practical Product IdeasThe group advised LRS on high demand practical products that would help LAC countries overcome development bottlenecks.

Information Technology and Tax Administration. DFC stressed the need for the use of IT in LAC taxation and payment collection. The ability to collect taxes impacts a government's ability to effectively enforce its laws. RF shared this sentiment citing macro-economic instability as linked to poor tax laws and administration.

Distance Learning/ Education. DFC noted that in order for LAC to compete with its neighbors in Europe and Asia, students and teachers needed easy access to computers and the internet and comprehensive training in their use. JB recommended applying the best practices generated in East Asia to develop a distance learning site for LAC.

Information Technology and Entreprenuership. MH stressed the need to incorporate LAC citizens into the medium where they can expand their business via e-commerce (advertisements and direct sales).

Integrated Markets/ Regulatory Systems. SJB and DFC highlighted the importance of a common standard in LAC regulatory systems to facilitate rapid movement of goods and services across borders. This is particularly important in the de-regulation services (energy, financial services, capital markets, telecommunications, transportation).

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Financing ProjectsThe Agency's relations with OAS member governments can be on a contractual basis because it would provide a more direct link between the executing institution with the executing ministry.

While the contractual relationship fosters a closer relationship between the executing ministry and the project, the project is subject to expenditure rules of the ministry. Thus, if the Ministry suffers from cash flow delays the project may be stalled.

There should be no issue with the Central Bank because the contract will go the finance ministry, which in turn will finance the contract out of the national budget.

The IACD can include a performance clause in the best practice suppliers contract to protect itself against loss should a country refuse to pay the Agency due to poor service on the part of the project team.

A portion of the contract payment (25%) should be put in escrow. If the private sector contractor/ best practices supplier fails to deliver good service, they lose these funds.

Many governments already require private suppliers to provide guarantees. The Agency should do the same thing. Commercial banks also provide performance guarantees for suppliers.

If the Agency is responsible for the contracts (i.e. collecting payment from the countries) then it will be difficult to transfer the performance risk to the suppliers (government or private sector).

IACD can encourage government suppliers of best practices to guarantee their services by selling itself of an exporter of this service. Supplier governments will be willing to guarantee the services they provide to maintain good relations with others in the hemisphere.

While this depends on each individual government, generally if the governments pay the IACD directly, then the Agency will not be subject to withholding tax.With the de-centralization of LAC central governments, sub-nationalities/ municipalities are taking on more responsibilities in are of service delivery. More transparency and efficiency is needed on this level. The IACD can provide technical cooperation and training to these governments on a contractual basis with the use of sub-national governmental certificates.

Sub-national governments in the bigger economies (Argentina, Brazil, Chile, Mexico) are typically responsible for services in education, judiciary and health and thus they are ideal IACD's clients for best practices products in these areas. However the federal government may restrict their purchase of such products to limit sub-national spending in these areas.

To finance this the IACD could pool municipal bonds for a variety of sub-nationalities demanding the same product and guarantee via OPIC's services.

WRAP UPThings to Think AboutAt the close of the meeting the advisory group members proposed areas for the IACD staff to think about:Focus on perfecting 1 or 2 projects.

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Focus on development bottlenecks where there is higher consensus about the best practices (usually greater consensus about micro rather than macro issues).Perfect the Project Team structure to ensure effectiveness.The group should named the IACD Development Opportunities Advisory Group so that it can offer guidance on a range of issues.

Next StepsLRS thanked the participants for their time and asked for their help on local promotion for the IACD. Agreed up on next steps:Change group's orientation from finance to general development opportunities issues,Follow up meeting in 3 months, andConstant consultations with key members

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ANNEX II: PAPERS PRESENTED AT XXI SIRG MEETING

(1) The IACD's New Financial Facility for Implementing Summit MandatesComments by L. Ronald Scheman, Director General, IACDPresented to XXI SIRG Meeting, Thursday, February 1, 2001

The facility established by the new Inter-American Agency for Cooperation and Development of the OAS, tentatively called Sustainable Technical Cooperation, is designed to be a pragmatic response to the need for a new financial mechanism to allow OAS Member States to respond to the mandates of the Summit of the Americas. It will do so by identifying specific issues emanating from the Summit mandates, identifying the countries that are best addressing those issues, and designing a new financial facility to enable those countries to expand technical cooperation to other nations through cost reimbursable mechanisms. It will also establish new mechanisms to facilitate private sector finance of summit mandates, both directly and in co-financing with the international financial institutions, thereby creating a more meaningful, practical private-public sector partnerships for development.

A key component of the IACD’s new facility is the transfer of best practice products and services among the countries of the hemisphere. The Agency will help to ensure that all countries get maximum benefit from best practices through joint committees to identify these practices with the IDB, World Bank, CEPAL and the Sub-Regional development banks. The committees will serve as a pragmatic mechanism for coordinating the programming of the inter-American agencies to implement the Summit mandates. It will work with the countries applying these best practices to prepare pricing structures for the services necessary to implement the projects. This process will be specifically designed to assure the countries access to the highest quality, most fairly priced technical cooperation.

Besides enhancing access to quality services, the new IACD facility will serve another vital purpose. It will help accelerate the delivery of tested development products and services to the countries. The IACD will do this by inviting the appropriate suppliers of technical cooperation to pre-qualify in a system analogous to those used by the central purchasing agencies of many developed countries. It will then enter into “Standing Order” or “Indefinite Quantity Contracts” with the suppliers by which the general parameters of the cost of the services can be determined with reasonable speed. Thus when a country or Ministry decides to undertake a program in response to summit mandates, the Agency will be in a position to provide rapid response.

The IACD plan will also open a new financing option for countries of the hemisphere to access technical cooperation products and services that have been subject to the IACD pre-identification and pre-qualification procedures. It will do so by tapping the vast funding sources of the private sector commercial and investment banks for a new, practical form of public-private sector partnership. The Agency has already set the initial parameters of such a facility specifically to fund summit initiatives. Since its inception this year, the IACD has signed Memoranda of Understanding with the Overseas Private Investment Corporation (OPIC) of the U.S. Government and with a commercial bank for a minimum of US $250M. It is currently negotiating an additional $150M in lines and exploring new modalities of co-financing arrangements with sub-regional development banks such as CAF, CABEI and CDB.

The Agency has tested its thesis with a special committee of ex-finance ministers and experts including Domingo Cavallo of Argentina, Manuel Hinds of El Salvador, Guillermo Chapman of Panama, Richard Fletcher of Jamaica and Javed Burki, former World Bank Manager of Latin American Programs. The program was enthusiastically endorsed as filling a much-needed gap in

development finance and as a pragmatic response to the Summit’s request for greatly increased technical cooperation and new sources of finance. The benefits of Agency’s new initiative: By focusing on specific products and services it will be able to complement the finance of the IFIs focus on broad country issues ‘by expediting deliver of services in specific problem areas such as training of teachers, modernizing legislatures, connectivity in rural areas, implementing e-government advances, etc.By pre-qualifying the “best practices” suppliers and tapping the acquired expertise of countries that have done well in specific areas, it is able to assure better quality to smaller countries that lack the depth of human resources to research and implement new advances and technologiesBy using private sector resources similar to traditional commercial finance used by the countries for infrastructure and budgetary support, it will be able to tap vast new reservoirs of funding for social development, education, poverty alleviation and other summit mandates.

It is expected that this system, when fully operational, will enable the countries of the hemisphere to provide greater technical cooperation to each other in areas in which they have developed special expertise, By providing cost reimbursement to the providing country it will enable provider countries to render more technical cooperation to others without stressing their own limited budgetary resources. It will open the way for increased development grants from supplier countries and from developed countries that will now have a clear understanding of what their money will buy. By doing so, it will change the paradigm of technical cooperation to the “Export of Knowledge.” In short, the new initiative will:Ensure pragmatic cooperation among international agencies in identifying best practices;Open channels for meaningful private-public sector collaboration in areas where it counts most – in technology and finance;Provide a new mechanisms for the smaller countries to be sure they are getting the best value for their development resources;Deliver tested solution to development issues far faster than current procedures; and Take advantage of the real value added of the OAS in its knowledge of hemispheric issues, access, outreach, and credibility.

(2) Connectivity: The IACD and Creating Digital OpportunityComments of L. Ronald Scheman, Director General, IACDXXI SIRG Meeting, Thursday, February 1, 2001

The Inter-American Agency for Cooperation and Development (IACD) was created by the OAS General Assembly in November 1999 to accelerate the development of the OAS Member States through technical cooperation, training and capacity-building instruments. The IACD’s strategic objective is set by the mandates of the Summit of the Americas to strengthen human resources and improve the delivery of technical cooperation services.The creation of the IACD at the beginning of the 21st century represents an important opportunity for the OAS to expedite the implementation of development programs that involve state-of-the-art information technologies. It is devoted to the application of the new technologies. The overarching theme of the IACD’s new strategic plan is the application of information and communications technology to bring the highest quality training and technical cooperation to low income populations and remote communities in the Americas. The Agency has set the goal to deliver all technical assistance, training and publication programs through the Internet by the end of 2002. To this end, the Agency is designing new substantive web-based programs to provide direct access to a wide range of knowledge-based services throughout the Americas.

The IACD initiatives in connectivity will be financed partly by grants and partly by self-sustaining operations financed with the Agency’s new credit lines. The major Phase One efforts are:

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The “Educational Portal of the Americas. ” This Internet-based portal is being developed jointly with the Technological Institute of Monterrey (ITESM) and Microsoft to link the outstanding distance learning programs in all of the countries of the Americas and to make the best of distance learning opportunities available to the most remote communities. It has already obtained over 500 fellowships for qualified individuals and government officials to take advanced degrees in their home country, thereby alleviating the need to travel abroad and lose time away from the job. The Portal will also provide information regarding scholarship and fellowship opportunities, programs of study, and links to best practices in education and training. Upgrading primary and secondary school teachers’ ability to use the computer and Internet as classroom aids. The Agency has a major program in development to work with private-sector entities on innovative distance learning programs delivered via satellite communication and the Internet. The first stage courses are being designed with the Cisneros Foundation, using their tested AME program. The various entities cooperating in the program are the Technological Institute of Monterrey, CREFAL, Motorola, Cisco, and Compaq. The programs will be carried out via the Cisneros Group and Direct TV satellites to teachers throughout the hemisphere. The goal is to have 30,000 teachers trained by the end of 2001.Preparing for E-Government. Because of the profound changes in governance expected during the coming decades, the Agency is developing a project with several high tech companies, including Microsoft, Cisco and Compaq, to create E-government Academies in every member state. The program will be designed to prepare senior and mid-level managers of all ministries and municipalities for the coming changes in management, both as it affects intra-government services and relations with the public. Cooperation with the Technological Institute of Monterrey, Mexico, will assure bringing the best practices in this rapidly evolving field to collaborating institutions in every nation, so as to keep instructors abreast of best practices wherever they may evolve in the world. Special facilities in the Agency’s new financial program will be available to assist governments in applying these best practices. Special emphasis will be placed on upgrading municipal management and improving government procurement practices.NetCorps Americas, the Agency’s public-private sector initiative, is being managed by the Agency’s foundation to encourage private sector collaboration. This program uses a volunteer delivery system to provide IT training for specific target audiences. Recent deployments have trained the disabled, as well as small hotel owners in the Caribbean. The Agency plans to collaborate with Summit mandates by extending the Netcorps to universities and corporate volunteers throughout the Americas. Rural connectivity will be addressed by a special financial facility to identify and install economic, sustainable renewable energy systems coupled with communications infrastructure in rural villages that are not connected to the electricity grid. The Agency is enlisting the collaboration of the international financial institutions to identify the best, most economical and most practical applications to serve small rural communities. Collaboration with the technological resources, knowledge and experience of the private sector and civil society organizations is being enlisted through the Energy Council of the U.S., REIA 2000, and similar organizations. The Agency is proposing to the IDB to devote part of its private sector lines of credit to co-finance a new financial facility devoted specifically to providing renewable energy systems to rural communities.

In sum, connectivity will be the priority theme in the Agency’s strategic plan for 2001-2005. In all of the sectoral issues outlined in the mandates of the OAS and CIDI, whether in education, trade, strengthening democratic institutions, environment, etc, the Agency’s focus will be to finance programs that apply the new technologies and connectivity and to use these instruments to bring the benefits of best practices to all of the communities of all of the American nations.

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ANNEX III: LIST OF UNIVERSITIES CONTACTED FOR INCLUSION IN IACD UNIVERSITY CONSORTIUM

Consortium Correspondence Log

No University Name Contact Person Date Letter Sent

Response

Universities in the US, Canada, the Caribbean and Latin AmericaUSAGeorge Town University

Dr. James Schaefer, Associate Dean of Academic Affairs & Financial Aid

11/16/00 Negative

Duke University Dr. Lewis Siegal, Dean of Graduate Studies

11/16/00 Positive

Florida Institute of Technology

Dr. Ronald L. Marshall, Dean of Extended Graduate Studies

11/16/00 No Response

George Washington University

Dr. Ivy Beatly, Graduate Director of Advising

11/16/00 No Response

Florida International University

Dr. Samuel Shapiro, Dean of Graduate Studies (Dr. Mark B. Rosenberg, Provost & Executive Vice President)

11/16/00 Positive

Columbia University Dr. Eduardo Magaña, Associate Vice President of Arts & Science

11/16/00 No Response

Tufts University Dr. Robert Hollister, Office of Graduate Studies & Professional Studies

11/16/00 No Response

American University Dr. Cornelius Kerwin, Provost of Graduate Studies

11/16/00 No Response

Harvard University Dr. Jerome T. Murphy, Dean of the Graduate School of Education

11/16/00 No Response

Colorado State University

Dr. James Fry, Dean of Graduate School

No Response

Midwestern University

Dr. Bill White, Dean of Graduate Studies

11/16/00 Positive

University of South Florida

Dr. Micheal Coniff, Director of International Program

11/17/00 Positive

The City University of New York

Dr. Jeanne Di Pretoro, Admissions Office

11/17/00 No Response

Yale University Dr. Susan Hockfield, Dean of Graduate Studies

11/17/00 No Response

Rutgers, The State University of New Jersey

Dr. Harvey Waterman, Associate Dean, Graduate School of New Brunswick

11/17/00 Positive

Emory University Dr. Rosemary Haynes, Director of Grants & Fellowships

11/17/00 No Response

New School University

Prof. William Hurst, Dean for the Graduate Faculty

11/16/00 No Response

Pace University Dr. Gail Dinter-Gottieb, Dean, Dyson College of Arts & Science

11/16/00 No Response

Texas A & M Dr. Joseph Estrada 11/17/00 Negative

UniversityBinghamton University

Dr. David Payne, Provost of Graduate School (Allan L. Eller, Associate Dean Graduate School)

11/17/00 Positive

University of California - Berkeley

Dr. Diana Bishey, Director of Graduate Fellowships

11/17/00 No Response

University of California - Irvine

Dr. William H. Parker, Dean of Graduate Studies

11/20/00 No Response

University of Pennsylvania-Wharton

Dr. Patrick T. Harker, Dean of Wharton School

11/20/00 Positive

John Hopkins University

Dr. Steven R. David, Associate for Academic Affairs

11/20/00 No Response

University at Albany Dr. Jeryl Mumpower, Associate Vice-President of Academic Affairs

11/20/00 No Response

Babson College Dr. Larry Carr, Dean of Graduate Studies

11/20/00 No Response

Texas Christian University

Dr. Larry Adams, Associate Provost of Academic Affairs

11/22/00 Positive

University of Texas – El Paso

Dr. John Amastae, Director of Inter-American & Border Studies

11/20/00 No Response

Florida State University

Dr. Allen Mabe, Associate V. P. for Development & Facility Support

11/20/00 No Response

Regent University Dr. Lisa Mosley, Vice President for Development

11/20/00 No Response

Stanford University Dr. Marc Wais, Dean of Students 11/20/00 No ResponseMassachusetts Institute of Technology

Dr. Robert Brown, Provost 11/20/00 No Response

Williams College Dr. Thomas Powers, Director of the Center for Development Economics

11/20/00 Positive

Hunter College of the City of New York

Dr. Iris M. Aroyewun, Director of the International Student Office

11/21/00 No Response

NOVA Southeastern University

Dr. Mariana Munevar-Cabañas, Masters Program

02/1/01 Positive

University of Hawaii at Hilo

Dr. Kieth Miser, Vice Chancellor for Student Affairs

02/1/01 Positive

Georgia State & College University

Dr. Dwight W. Call, Assistant Vice President for International Education

02/1/01 Positive

Murray State University

Dr. Melanie McCallon, Coordinator for the Institute of International Studies

02/1/01 Positive

Viterbo University Dr. Beth Moore, Director, Office of Global Education

02/1/01 Positive

Hillsborough Community College

Dr. Micheal F. Brenan, Director, International Education

02/1/01 Positive

State University of New York, Cortland

Dr. Liz Kopp, Assistant Director, Office of International Program

02/1/01 Positive

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Valdosta State University

Dr. Tracy Harrington, Director, Office of International Program

02/1/01 Positive

Tulane University Dr. Paul Baron, Vice-President for Academic Affairs

11/20/00

Fort Valley State University

Dr. Gerald A. McIntosh, Associate Vice President, International Programs

02/1/01 Positive

CANADAUniversite Laval Dr. Pierre Dedore, Directeur

Department du Management11/20/00 No Response

Universite du Quebec a Montreal

Dr. Gilbert Dionne, Recteur de la Universite

11/20/00 No Response

University of Alberta Dr. Brian Stevenson, Associate Vice President for International Studies

11/17/00 Positive

College Bois-de-Boulogne

Dr. Jean Carpentier, Responsible de l’Amérique Latine (Dr. Nadine Pirotte, President)

12/27/00 Positive

Simon Fraiser University

Dr. John Peirce , Dean of Arts 11/20/00 No Response

CARIBBEANUniversity of the West Indies

Prof. Rex Nettleford, Office of the Vice Chancellor

01/25/01 No Response

LATIN AMERICAARGENTINAUniversidad Nacional de General Sarmiento

Pro. Jose Luis Coraggio, Rector 11/23/01 No Response

Universidad de Buenos Aires

Prof. Alicia W. Cailloni, Secretaría de Asuntos Académicos

11/22/00 No Response

BRAZILUniversidade Federal de Viçosa

Dr. Og Francisco Fonseca de Saoza, Pró-Reitoria de Pesquisa e Pós-Graduaçao

11/20/00 Positive

Universidade Federal de Ouro Preto

Prof. Dr. Neewton Souza Gomes, Pró-Reitor de Pos-Graduaçao e Pesquisa

11/20/00 No Response

Universidade Federal da Bahia

Prof. Jailson Bittencourt Andrade, Reitor de Pos-Graduaçao

11/20/00 No Response

Universidade Federal da Rio de Janeiro

Dr. Antonio MacDowell de Figueiredo, Sub-Reitor de Ensino para Graduados e Pesquisa

11/20/0012/5/00

No Response

Universidade de Sao Paulo

Prof. Dr. Hector Francisco Terenzi, Pro-Reitor de Pos-Graduaçao

11/27/00 No Response

Universidade de Brasilia

Prof. Dr. Ana Maria Fernandes, Decana de Pesquisa e Pos-Graduaçao

11/21/00 No Response

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Universidade Candido Mendes (UCAM)

Dr. Clovis Brigagao, Director, Centro de Estudos das Americas

November 2000 Positive

Pontificia Universidad Católica do Rio de Janeiro

Prof. Jose Ricardo Bergmann, Coordinaçao Central de Pos-Graduaçao e Pesquisa

11/20/00 No Response

CHILEUniversidad de Concepción

Dr. José Sanchez Henriquez, Rector 12/13/00 No Response

Universidad de Chile Dr. German Ferrando Ratto, Rector 12/13/00 No ResponsePontificia Universidad Católica de Chile

Dr. Claudia Rodriguez, Rectora 12/13/00 Positive

Universidad Alberto Hurtdo- ILADES

Dr. Gonzalo Arroyo S. J., Vice Rector 12/01/00 No Response

COLOMBIAUniversidad Jorge Tadeo Lozano

Dr. Miguel Bermudez Portacarrero, Rector

12/13/00 No Response

Universidad Nacional de Colombia

Dr. Dora Bernal Burgos, Directora, Oficina de Relaciones Inter-Institucionales e Internacionales

11/21/00 No Response

Universidad de Antioquia

Dr. Juan Guillermo Hoyos Melguizo, Director, Departamento de Relaciones Internacionales

11/21/00 No Response

COSTA RICAUniversidad Autónoma Centroamericana

Lic. Guillermo Malavassi Vargas, Rector

11/27/00 No Response

Instituto Tecnológico de Costa Rica

Ing. Alejandro Cruz Molina, Rector 11/27/00 No Response

Centro Agronómico Tropical de Investigación y Enseñanza (CATIE)

Dr. Pedro Ferreira Rossi, Director 11/27/00 Positive

Instituto Centroamericano de Administración de Empresas (INCAE)

Dr. Alberto Trejos Z., Decano 11/28/00 No Response

ECUADORUniversidad Tecnológica Equinoccial

Dr. Alvaro Trueba Barahona, Rector de Postgrado

12/13/00 No Response

Universidad de las Américas

Dr. Carlos Larreategui, Rector de Postgrado

12/13/00 No Response

GUATEMALAUniversidad Nacional Autónoma de San Carlos

Dr. Efrain Medina, Rector 11/17/00 No Response

MEXICOInstituto Tecnológico Dr. Enrique Zepeda Bustos, Director, 11/17/00 Positive

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y de Esdutios Superiores de Monterrey, (ITESM)

Relaciones Internacionales 12/01/00

Universidad Autónoma de México

Dr. Carmen Serra Puche, Directora General de IntercambioAcadémico

12/01/00 No Response

Universidad Autónoma del Estado de México

Dra. Luisa Gonzalez, Directora de Intercambio Académico

12/04/00 No Response

El Colegio de Michuacan

Lic. Maria Lopéz Méndez, Jefa del Departameto de Asuntos Escolares

12/01/00 No Response

El Colegio de Postgraduados

Dr. Ignacio Cid del Prado, Coordinador de Estudios de Postgrado

12/04/00 No Response

Universidad Autónoma Metropolitana

Dra. Graciela Sánchez Guevara, Jefa del Departamento de Desarrollo Académico

12/04/00 No Response

Universidad de Baja Califoria

Dr. Moises Rivas Rivas, Director del Instituto de Ingeniería

12/01/00 No Response

Universidad Iberoamericana, Plantel Santa Fe

Dr. Luis Nuñez Gornes, Director de Intercambio y Cooperación

12/01/00 No Response

Universidad Autónoma de Yucatán

Lic. Gabriela Quintal Aviles, Jefa del Departamentode Intercambio Académico

12/04/00 No Response

Centro de Investigación y de Estudios Avanzados del Instituto Politénnico Nacional

Dr. Rene Asomoza, Secretario Académico

12/01/00 No Response

Centro de Investigaciónes y Estudios Superiores en Antropología Social (CIESAS)

Dra. Marta Eugenia Garcia Ugarte, Teaching Deputy Director

12/1/00 Positive

Instituto Tecnológico Autónomo de México

Dra. Maryanne Leenheer, Jefa del Departamento de Intercambio Académico

12/04/00 No Response

VENEZUELAUniversidad Simon Bolivar

Dr. Freddy Malpica Pérez, Rector 11/17/00 No Response

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