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Staying Relevant in Development through Trust Funds

The year 2020 marks three decades of the Bank's first programmatic Trust Fund (TF)—the Policy and Human Resources Development (PHRD) Fund, entirely financed by Japan. Since its inception, the government of Japan has contributed $3.4 billion to PHRD, with over 4,500 projects in 150 countries.

The PHRD fund was established to help boost the skills, know-how, and expertise of government institutions in developing countries so they can better address their key development challenges.

"The idea was to give poor countries access to technical skills and global knowledge so they could build their own human resources capacity to prepare programs and policies that promote economic growth and improve quality of life," said Masanori Yoshida, Japan's Executive Director at the World Bank

As part of celebrating the 30-year milestone, the government of Japan and the World Bank held events in Tokyo from January 8-10. First were thematic seminars on Japan's priority areas of disaster risk management, universal health coverage, and quality infrastructure investment partnership to share results, factors affecting implementation and lessons learned. Then there was a dialogue series on four PHRD projects funded under the West Africa Agricultural Productivity Enhancement Program. The projects supported the development of the rice sector in the four Mano River Union countries: Côte d'Ivoire, Guinea, Liberia and Sierra Leone. Four other west-African countries joined the dialogue. Participating stakeholders in both the thematic seminars and dialogue series included government officials, private sector, academia, think tanks, and development practitioners.

How has PHRD stood the test of time?

Currently one of the Bank's largest programmatic TFs, the PHRD has survived this long because of its flexibility which has made it remain consistently relevant overtime. "As development needs change and new priorities arise, PHRD shifts its focus to enable countries to respond to emerging challenges, while maintaining the knowledge and institutional capacity-building framework," said Helena Nkole, the current and seventh program manager since the Fund was established.

Focusing on country specific challenges and global public goods has helped strengthen the program over time. This has been made possible by the core component of the PHRD fund—the Technical Assistance (TA) program which has programs and windows that respond to emerging challenges and needs. The TA has programs such as disaster reduction and recovery, agricultural productivity, rural access to energy, disability and development, universal health coverage, and improvement of government systems to promote evidence-based decision making.

PHRD also has a graduate scholarship program which provides mid-career professionals from developing countries with direct exposure to world-class knowledge, which they can deploy to accelerate the pace of economic and social development in their countries. Over 5,000 professionals have been trained since the program's inception.

The PHRD has a multiplier effect, helping to leverage additional internal and external resources. For instance, $943 million in PHRD project preparation grants have leveraged more than $100 billion in World Bank investments, significantly improving quality at entry and implementation of larger investment operations, leading to greater development impact. Also, PHRD co-financing projects valued at $149 million leveraged $5.1 billion in IDA/IBRD investments with over 214 million beneficiaries reached.

"The multiplier effect of the PHRD projects I have worked on is astounding," says Somil Nagpal, a Jakarta-based senior health specialist who has led several PHRD projects under the Fund's monitoring and evaluation and universal health coverage windows. In Cambodia, Somil's $1 million PHRD project funded the distribution of tablets and the creation of a mobile application for more comprehensive health care data collection. This led to a $100 million government investment in health care monitoring, which in turn informed the government's $2 billion health budget, vastly improving the effectiveness of expenditures.

In the ensuing years, many other donor funds have been established, following PHRD's precedent-setting example. In fact, such funds have become an ever more critical source of development finance. "One out of every twelve dollars in Bank disbursements comes from trust funds today," said Dirk Reinermann, Director of Trust Funds and Partner Relations in the Development Finance Vice-Presidency.

The catalytic role of PHRD extends to informing new project ideas. In Cameroon, Myriam Chaudron's nutrition-focused PHRD project yielded significant results, benefitting thousands of people including women. Sub-projects emerging from the original enabled better access to clean drinking water for more than 30,000 Cameroonian households. "We are now using our PHRD success story to mobilize other sources of financing and to inform the preparation of two new World Bank projects," says the Cameroon-based senior livestock specialist.

From the beginning, the Fund has enabled TTLs to be creative and maneuver outside the box. Development Finance Vice President Akihiko Nishio, a former PHRD TTL, attended the 30-year celebration event in Tokyo. He says PHRD projects give TTLs the opportunity to challenge long-held assumptions and try out new approaches, potentially leading to major development breakthroughs. 

"My experience as a TTL shows that PHRD has enabled truly transformational change. The fund's streamlined processes and broad project parameters encourage creativity and enable rapid action."
Akihiko Nishio
Vice President, Development Finance

The PHRD program continues its work. Going forward, the fund will maintain and strengthen its flexible approach to changing development challenges in agriculture and rural access to energy supply, monitoring and evaluation for better development results, Universal Health Coverage for all, and pandemic preparedness.