Existing Solutions

Core functions, decentralisation, self-sustainable financing, country ownership, Mekong,

policy

Descending order of importance: political – institutional – financial – technical

90% of the financial resources of the Mekong River Commission (MRC) depend on external donors, primarily for the implementation of 5-yearly work programmes and time-bound projects which are paradoxically core functions to the management of the Mekong River Basin – basin hydrological forecasting, basin-wide planning and coordination of water development, environmental monitoring, and knowledge management. Annual contributions of the four Member Countries cover the remaining 10% and are devoted almost entirely to administrative and management functions of the Commission.

The Mekong Agreement on the Cooperation for Sustainable Development of the Mekong River Basin signed in 1995 defines mandates of the Mekong River Commission. However, core functions of the Commission were defined broadly to cover all aspects of IWRM. The activities and services in the MRC are mostly executed on the ground by Member Countries’ line agencies, and coordinated / facilitated by the MRC Secretariat through programme/project arrangements.
Sustainable self-financing has been raised and taken into consideration in the MRC since its inception in the 1990′s. An earlier commitment by MRC Member Countries in 2000 set 2014 the target by when the Commission’s administrative and management costs would be self-funded by its Member Countries. A resolution by the Heads of Government of the MRC in 2010 set 2030 the target by when the Commission’s core functions including river basin management functions would be fully financed by its Member Countries, and agreed to explore decentralised mechanisms in implementation and financing of some core functions.

The MRC has therefore embarked upon a transition process to a decentralised mode of execution of its activities to realise the Summit resolution.

This solution applies mainly to the line agencies of all four Member Countries of the MRC, i.e. Cambodia, Lao PDR, Thailand and Viet Nam. Other nationally designated agencies or bodies such as river basin organisations or river basin committees or communities would also be involved in some countries where decentralization of some activities/functions have already happened.

The process involves developing national road maps for the decentralisation in each country coordinated by the national focal point for Mekong basin affairs i.e. the National Mekong Committee Secretariats which coordinate their national plans and the MRC Secretariat is developing a regional road map.  Strategic to the process are all line agencies or national actors implementing MRC-related core river basin management functions.

Steps already taken:

This change process in the MRC has to be put in a broader context of the Commission over its 15 years of development. It has taken about a decade for the MRC to reach the decision to decentralise selected core functions and an agreement on financial autonomy target.
-    1999: resolution of the Council of Ministers of the MRC requesting a new formula for annual member contribution to overcome the problem of limited operational resources in both the short and medium terms
-    2000: a new formula approved by the Council of Ministers of the MRC, with a note that the self-sustained level of financial requirements for the core (operational) functions of the MRC is estimated at US$ 2.0 million per year and the level is planned to be achieved within 15 years; the formula was constructed using five weighted indicators and with an incremental annual increase of 10%
-    2005: MRC donors offered support for an independent organisational, financial and institutional review of the MRCS and the NMCs to look at the organisational and strategic challenges that the MRC would be facing in the future, including its long-term core functions particularly in basin development, and Member Countries’ financial commitments to the institution
-    2007: Conduct of the review by independent consultants, some related recommendations of which included (i) an in-depth analysis of the long-term core functions of the MRC with a view to full member funding of these functions in the long-term, (ii) a revisit of the allocation formula of annual member contribution agreed in 2000 with an aim to reach the Member Countries’ early commitment to fully finance its core operating functions by 2014.
-    2009: MRC Joint Committee endorsed a generic composition of the MRC core functions in which the core river basin management functions are at the heart of the MRC’s work programme
-    2010: Declaration by Heads of State and Government of the MRC countries agreeing to commit to a process whereby the MRC would be fully financially self-sustained by 2030
-    January 2011: MRC Strategic Plan 2011-2015 by the Council of Ministers of the MRC agreeing to prepare a roadmap for the decentralisation of selected core functions within its first two years
-    Summer 2011: Preliminary assessment of current modalities of the core functions implementation by the MRC programmes

Forthcoming steps:
-    2012: Fully assess to what extent activities are already being implemented and financed by line agencies and the scale of the resources allocated to these tasks
-    2012: Assess institutional, technical and financial capacity of relevant line agencies with greater emphasis and detail given to those activities that are candidates for decentralisation in the first five year period
-    2012: Conduct a detailed assessment of the likely budget allocation needed to the responsible line agencies in each Member Country
-    2012: Assess the overall size of the core budget necessary for the future work of the MRC
-    2012/13: Adoption of the regional decentralisation roadmap by the MRC Council, and national roadmaps by individual Member Countries for integration into national planning and budgeting processes of involved ministries/agencies
-    2012/13: Revise the 2000 formula of annual member contribution with an aim to realise the MRC countries’ earlier commitment to full financing of its core administrative and management functions by 2014
-    2013: Create a “core functions transition fund” as a “bridge” for phasing in greater country contributions and as a “reserve” in the event any of the decentralisation processes experience problems
-    2013/14: Prepare a plan for staff resources at the MRC Secretariat as a consequence of this transition / change

The problem, common to transboundary river basin organisations located in developing countries, is the securing of financial resources necessary to sustain strong support for the coordinated and sustainable management of the joint water resources.
While development partners withdraw development assistance from the region and thus to the organisation, and economic progress as well as capacity of the member countries have grown, supplementary funding from other sources such as fees of water uses is currently limited in the Mekong context. The Solution in the MRC context is to reduce the operational costs of the organsiation by decentralising some of its core functions.

The expected increase in Member Countries’ responsibilities in jointly managing the Mekong water resources through the application of decentralised mechanisms focused on the core river basin management functions will enable:
-    Greater country ownership of the Commission
-    Increased targeted capacities and competencies of the national agencies concerned, thus strengthening overall national capacities in managing their water resources
-    The shift of focus of development partners’ interventions towards fundamental functions of IWRM rather than support for recurrent costs

The expected budget allocation process offers potential for developing greater synergy and prominence within national planning processes for the line agency concerned and potentially also for the planning ministries through national development planning processes.

Indicators of success expected:
-    Approval of the decentralisation roadmap by the MRC Council of Ministers by the end of 2012
-    Approval by the end of 2012 of the individual national roadmaps by legitimate bodies in the Member Countries for in-country implementation
-    Decentralisation roadmaps are integrated in the planning and budgeting processes of the ministries / agencies concerned
-    Adoption of a new formula of member contribution to the MRC by the end of 2014
-    Initial set of core river basin management functions successfully decentralized by the end of 2015

Such a solution may interest all Transboundary Basin Organisations that are involved in IWRM at the basin scale.
For this solution to be of any interest, it is preferable that the following conditions are met:
-    The organisation has reached a certain degree of maturity in terms of organisational structure and expert knowledge and skills
-    Member states have experienced economic progress over a period of 10-15 years with prospects of continued progress in the next decade
-    Capacity of national agencies to undertake the type of work required by the organisation has increased that has both regional and national benefits

For an effective implementation of the solution, it is preferable that the following be taken into account along the process:
-    A clear definition and agreement of member states of the core functions of the organisation
-    Policy support at a highest level possible, such as of Heads of State and Government in the case of the MRC, should be secured
-    Intermediate bodies translating high-level policy recommendations into strategies, programmes and projects are of great importance
-    The definition of member contributions to the organisation is of great importance

This solution is a reform process of such an organisation which would involve a wide range of ministries and line agencies in each of the member states. Political support at the highest level is a prerequisite condition for the solution to be taken seriously by these ministries and agencies. Coordinated facilitation with and between all parties concerned across various political and implementing levels requires specialised staff and secured financial resources. Resources invested to ensure that member states possess sufficient human, technical and financial capacities to fulfil newly gained responsibilities or greater share of responsibilities may be extensive. However, a more coordinated approach to implementation of the core functions of an RBO can potentially lead to resource efficiencies.

In addition to the declaration of the Heads of State and Government in 2010 which provided a political support at the highest level for the core functions decentralisation and financial autonomy target, securing commitments from the high-level officials of the concerned agencies to internalise this change process into their planning and budgeting cycles is of utmost importance. The MRC has been acquiring these commitments through several means and synchronised steps:
-    Subsequent confirmation of the agreement of the Heads of State and Government with implementation details by the Council of (water) Ministers through the approval of the Strategic Plan 2011-2015
-    Involving planning and finance ministries at the beginning of the discussion / consultation process on core functions decentralisation
-    Lobbying key water-related ministries (e.g. environment & natural resources, agriculture, fisheries, mining & energy, transportation) at the highest level of decision making
-    MoUs between the implementing agencies and MRC (through programmes) on the transition arrangements with increased responsibilities of the concerned agencies and phasing out of the MRC support would be signed

1. Mr. Hans Guttman (Chief Executive Officer of the MRC Secretariat)
Email: Guttman@mrcmekong.org — Telephone: +856-21 263 263

2. Ms. Klomjit Chandrapanya (Chief of the International Cooperation and Communication Section, MRCS)
Email: Klomjit@mrcmekong.org  — Telephone: +856-21 263 263