The Core Learning Partnership

The Core Learning Partnership (CLP) was originally set up in early 2005 and has supported the programme evaluation throughout the process up to this agreement. At the end of the programme evaluation the CLP members were as follows: José Antonio Mendoza Zazueta, Director General, Agricultural Extension Service, Ministry of Agriculture; Claudia Grayeb, Director, International Financial Institutions, Ministry of Finance; Jesús Huerta, Director, Multilateral Organizations, Ministry of External Relations; Timoteo Harris, Director, International Operations, Nacional Financiera (NAFIN); Marco Antonio del Castillo, General Coordinator, Special Projects and Programmes, National Commission for the Development of Indigenous Peoples; Isabel Lavadenz Paccieri, Director, Latin America and the Caribbean Division, Programme Management Department (IFAD); and Rodolfo Lauritto, Portfolio Manager, United Nations Office for Project Services.

Evaluation results

The country programme evaluation (CPE) concludes that IFAD's programme —over 25 years in Mexico— is characterized by contrasts. An analysis of IFAD's portfolio of six projects shows that they have had a positive impact on rural poverty, differentiated by region of project implementation, communities, beneficiary groups and types of production. In the case of individual projects, however, alongside tangible positive results and valuable experience acquired, weaknesses can be detected in terms of both options and forms of intervention. Without minimizing the importance of the real progress made by many beneficiaries in the context of the projects, serious questions remain about the sustainability of the project activities, especially activities generating income for poor producers. The evaluation concluded that project effectiveness is moderate to low and that an overly disperse territorial area could have a critical impact on cost and therefore efficiency.

In most cases, IFAD and the Mexican Government are closely aligned in terms of strategic objectives and policy positions on poverty reduction and rural development. The weaknesses of IFAD's programme in Mexico are therefore related to implementation and, in part, design.

Although Mexico possesses great institutional capacity for formulating and implementing macroeconomic strategies and poverty reduction strategies, as well as for designing and implementing the related programmes and projects, there are a number of opportunities to establish, promote and maintain a dialogue with the Mexican authorities on these matters, particularly in rural areas. This dialogue may be based on "micro" elements, i.e. drawn from lessons learned in the field in the context of specific operations in particular regions and with clearly identified target populations. In a national context that does not permit budgetary additionality in projects, technical value added in terms of innovation is an indispensable element to justify continuing IFAD's programme in the country.

IFAD has comparative advantages and can play an important role in combating rural poverty in Mexico, given one of its core values: "IFAD goes where others do not". Among IFAD's major assets are: (a) flexibility in the design and formulation of programmes and projects; (b) legitimacy and credibility with communities and grassroots organizations; (c) capacity for innovation; (d) the provision of direct technical assistance and advice in various fields, in particular at the micro level to producers and communities; (e) an objective, external view of technical, institutional, administrative, organizational and other problems; (f) communication of lessons learned and liaison with international experience; (g) a catalytic role through coordination among governmental and other agencies, particularly at the decentralized level; (h) upholding of technical standards and norms in resource allocation; (i) introduction of greater discipline in project implementation; and (j) the ability to promote and set up pilot projects in development and innovation. On the other hand, IFAD does not have comparative advantages at the macro level in policy-setting on a national scale, although it can contribute experiences and grassroots dialogue.

Rural poverty in Mexico continues to be a reality of great concern and a formidable challenge. Although great strides have been made in recent years, the poverty levels in all three dimensions - food security, human capacity and access to assets - remain excessive for a country with a development level like Mexico. Poverty has three specific facets in Mexico: rural people, women and indigenous groups. Accordingly, and in view of IFAD's mandate, the organization would clearly be justified in maintaining its interest and commitment to contribute to poverty reduction in rural Mexico. It would seem equally justified for the Government to seek assistance from an institution such as IFAD that has precise comparative advantages.

The Mexico CPE, conversations with the Government of Mexico, the results of the workshop and recommendations made by the CLP have led to the following recommendations:

General recommendations

Analysis of the relationship between IFAD and the Government of Mexico, and defining a new relationship. Through the new country strategy, it is proposed that a new basis be established to govern the relationship between the Fund and the Mexican Government. Critical elements would include: (a) recognition of the normative and regulatory frameworks for national programmes within which it is proposed to include IFAD-financed projects and programmes; (b) IFAD focalization on clearly defined geographical areas and certain types of target populations, such as indigenous peoples; (c) innovative elements in both project design and management/implementation that could contribute to improving living standards and incomes for beneficiaries as well as promoting access to financial services and disseminating knowledge in economic and social development; (d) non additionality of IFAD funds in the budgets of project implementing agencies; and (e) an explicit focus on monitoring and evaluation. The project components supported by the Fund should include activities in the areas of production and marketing in order to boost production and productivity, as well as activities to improve social cohesion and build social capital. The nature and type of project intervention supported by the Fund should demonstrate the sustainability of activities at the end of the investment period, particularly from the technical and financial point of view.

To ensure that the new relationship between IFAD and the Mexican Government is effective, principles and mechanisms for dialogue at the appropriate level are proposed. It is crucial to ensure that dialogue between IFAD authorities and the Mexican Government take place at a sufficiently senior level, periodically and monitored, and in accordance with basic principles. To this end, a formal annual meeting will be held between the Fund's Latin America and the Caribbean Division and Government representatives (Ministry of Agriculture and/or Rural Development, Social Development, Indigenous Peoples, Finance and Public Credit, External Relations, NAFIN and implementing agencies). The meeting will need to comply with three basic requirements: (i) preparation of a formal agenda for the meeting (agenda items must include a portfolio review and discussion, pending operational issues, financial and administrative issues between IFAD and the Government, strategic issues on programme orientation, discussion on future programme, sector policy issues, etc.); (ii) preparation of a memorandum of understanding with meeting conclusions, setting forth next steps and deadlines; and (iii) a means of distributing information on meeting preparations and results and on next steps and decisions made, identifying clearly who is responsible for implementing each one.

The Mexican Government and IFAD propose to formally align the Fund's operating modalities in Mexico. This calls for a formal review of current operating modalities, identifying the main problems and setting forth an agreement by both parties on necessary adjustments. This process can begin immediately and conclude prior to completion of the new country strategic opportunities paper (COSOP) of which it will form a part. The Public Credit Unit of the Ministry of Finance will be IFAD's counterpart in this process.

Specific operational recommendations

Preparation of a new COSOP. A new COSOP should be prepared, in consultation with the Mexican authorities, as soon as possible. The new COSOP will be a vehicle for involving other development partners in the country (inter alia, representatives of civil society, of all three levels of government, and of the relevant international organizations). It should take into account the main elements of this CPE for Mexico. The process of preparing the COSOP should begin once this agreement at completion point (ACP) has been finalized, and should continue through the second half of 2006, taking advantage of the presence of both administrations during the transition period following the July 2006 elections. As of 2007, IFAD will seek to establish a relationship with the incoming administration to complete the COSOP in accordance with the new strategic thrusts. The process of preparing the new COSOP should be complete by the end of the first quarter of 2007.

In the context of preparing the new COSOP, IFAD and the Government of Mexico will identify the gaps and opportunities where IFAD's value added and catalytic role and the investments financed by both can be optimized. IFAD and the Government will clearly identify those national and/or regional programmes in Mexico that offer opportunities for IFAD support in the country. Similarly, IFAD and the Government will reach an agreement, in the context of the COSOP and preparation of any new project, specific conditions for target populations and a clear definition of areas selected. In this regard, it is recommended that the focus on poor populations, and indigenous populations in particular, and the targeting of beneficiaries be based on shared issues (e.g. participation and gender approach) with actions differentiated by type of population, regional characteristics, type of project, etc. Preparation of the COSOP is IFAD's responsibility, and the Government of Mexico's responsibility in this process will include, inter alia: providing all relevant information to facilitate IFAD's work; and determining specific next steps and deadlines to carry out the agreements reached.

In parallel to preparing the new COSOP, the parties agree to conduct a joint review of a monitoring and evaluation system for projects and programmes in Mexico. This review should largely be reflected in the new COSOP.

Project design. It is important for IFAD and the Government of Mexico to establish a clear, reliable technical framework for project preparation, and that this framework be consistent and coherent with the Mexican normative framework. Particular attention should be paid in this regard to IFAD's potential for innovation, in cases where IFAD supported projects can be considered to be pioneering projects that complement national rural development programmes. In the design of projects and the normative and institutional framework in place in Mexico, IFAD should highlight its participation in technical advisory assistance as an expression of its comparative advantages in the areas of training as well as technical, financial, administrative, management and institutional matters. In terms of strategy and programming for the project preparation phase, IFAD and the Government agree to review their operating modality to: (i) substantially reduce project preparation time, particularly the time between ex ante project preparation/evaluation and the time when implementation begins, and more specifically the time between IFAD Executive Board approval and entry into effect in the country; (ii) ensure consistency between the design of projects (and their physical, economic, financial and other objectives) and the ability to implement them; (iii) ensure that the institutional arrangements called for in project design are faithfully reflected in the legal loan documents; (iv) coordinate with the counterpart implementing agencies on setting operating rules for programmes and projects, supporting the financial agency, in this case NAFIN, and the agency responsible for contracting the external financing, in this case the Ministry of Finance.

Implementation and supervision. It is recommended that the Fund maintain a closer and more continuous presence in supporting the implementation of projects and of the programme overall. A distinction is drawn here between project supervision and loan administration, and substantive support for project implementation. This implies that IFAD will participate directly in several visits along with the cooperating institution and with staff who are technically competent in the various activities promoted by the projects. To this end, although it is acceptable to hire consultants with broad experience in various parts of the world, it is advisable to ensure both diversity, so as not to depend on the same technicians who may be overly rigid and unchanging in their recommendations, and a minimum of continuity to avoid inconsistencies, contradictions or simply confusion between successive consultants. In any case, national consultants should be identified since there are many highly qualified individual consultants and consulting firms in Mexico.

Monitoring and evaluation. Based on the indicators defined during project design, the parties agree to work together on effective implementation of the monitoring and evaluation system. One of IFAD's goals is to promote innovation. As a corollary, IFAD should be able to take risks, since innovation is always accompanied by a certain degree of uncertainty and risk. The other corollary is that IFAD has an obligation to measure and evaluate progress and the impact of its interventions. This will facilitate the learning process and making adjustments based on experience to programme management, implementation and evaluation criteria. For instance, a sound understanding must be reached on baseline surveys at the beginning of a project so that its progress may be measured. Generally speaking, much more emphasis must be placed on measuring results and impact, through results-based monitoring and evaluation. Also as a general rule, the quality and format of project progress reports must be improved to allow for proper evaluation.

Strategic partnership. IFAD has not maintained an ongoing, relevant dialogue with other development partners in Mexico, particularly the two major international financial institutions - the World Bank and the Inter-American Development Bank - and the United Nations. It is crucial that IFAD's relationship with these institutions improve, during both preparation and implementation of IFAD's projects and programmes in the country. In addition, IFAD can benefit greatly from much of the work done by these other institutions, especially in dialogue on macroeconomic policy, detailed sector analysis, programme and project evaluation and other activities that can support the Fund in its work. IFAD can and should become better informed about advances made by these institutions on project evaluation criteria (technical, economic, etc.). It is recommended that periodic meetings be held with their representatives, with a clear dual purpose: (i)  to learn from one another and avoid duplication or inconsistency among the institutions' strategies and approaches; and (ii) to consolidate strategies under a vision of complementarity (IFAD has several comparative advantages over the others) rather than competition. It is agreed that the Mexican Government will support this process by favouring greater synergies between IFAD and its programmes with the other institutions and their programmes. In the same way, it is recommended that relationships with non governmental organizations be operationalized in a more orderly fashion. This kind of strategic partnership should also be considered for exchanges on successful experiences between projects in the region and elsewhere in the world.

IFAD's presence in Mexico. IFAD should explore the possibility and viability of maintaining an active presence in Mexico. This does not necessarily mean having a permanent IFAD representative in the country, although that is a highly desirable option that should be given careful consideration. There are other ways of ensuring an effective institutional presence so that IFAD can perform several essential roles: (a) maintain a more effective dialogue with all IFAD's major partners in the country; (b) ensure closer monitoring of ongoing projects, follow-up on IFAD's missions in the context of the country programme (preparation of new projects, supervision of existing ones, project completion reports) in such a way as to contribute enormously to the consistency and permanence of the Fund's vision of the country's development.

Implementation of the CPE recommendations

Based on the above recommendations, agreed upon by IFAD and by the Government of Mexico through the Ministry of Finance, both parties undertake to establish a detailed timetable of specific measures to be taken, with precise deadlines and clearly defined responsibilities for the appropriate units on both sides. This timetable should be prepared within three months following the signing of this agreement.

Read and approved in Mexico City on 14 March 2006.

For the Government of Mexico
Ministry of Finance

Gerardo Rodríguez Regordosa
Head of the Public Credit Unit

For the International Fund for Agricultural Development

Isabel Lavadenz-Paccieri
Director, Latin America and the Caribbean Division
Programme Management Department