Development administration improvement

PES covers the period 9/80-12/84 and summarizes an external final evaluation (not attached) based on document review and interviews with GOG and donor personnel. The project established an agency, Direccion de Financiamiento Externo y Fideicomisos (DFEF), within the Ministry of Finance (MOF) to manage externally funded development efforts. Most DFEF functions are proceeding well: (1) DFEF is recognized by donors as the central GOG agency for negotiating financing and has been able to negotiate more favorable conditions for some projects; negotiation and legalization of loans (still a lengthy process requiring considerable GOG interagency coordination) has been reduced by 2 to 4 months. (2) DFEF has improved GOG management of development projects - it has increased the accountability of executing agencies, expedited MOF approvals, assisted inexperienced executing agencies, and increased the availability of project information; DFEF has been less effective in monitoring projects and accelerating disbursements (due to GOG budget restrictions, changes of GOG authorities, and bureaucratic inefficiency, disbursement rates remain very low). (3) DFEF has provided timely reports on the external public sector debt, but debts contracted directly by the Bank of Guatemala are not included and considerable work is needed before DFEF will be able to fully utilize the two computerized information systems designed under the project. Training - provided as scheduled - is felt by DFEF staff to have been insufficient, especially hands-on training in systems and procedures designed by consultants. A management seminar conducted by the Central American Institute for Business Administration (INCAE) increased cooperation among DFEF, executing agencies, and other GOG units. Lessons learned are that: all elements affecting an administrative system must be analyzed in the design stage; this project assisted only one part of the GOG"s external finance system, and thus was unable to overcome cumbersome bureaucratic procedures. Action decisions are to continue policy dialogue and to focus future activities on improving GOG interagency coordination.